UAE clarification of Freezone Qualifying Income
- Thread starter joffreylol
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As far as I know, before the first declaration. So basically September 2025 for most companies.
UAE CT applies to juridical persons incorporated in the UAE and juridical persons effectively managed and controlled in the UAE, as well as to foreign juridical persons that have a permanent establishment in the UAE.
Individuals will be subject to CT only if they are engaged in a business or business activity in the UAE, either directly︀ or through an unincorporated partnership or sole proprietorship.
Will a sole proprietorship or civil company︁ be treated as a juridical person for CT purposes?
No, but individuals who conduct business︂ in the UAE through a sole proprietorship or civil company may be subject to CT︃ where a relevant business or business activity is undertaken.
So if there are no activities︄ performed in UAE there is no need to register an unincorporated partnership for UAE CT︅ Tax.
So you can create a partnership between a foreign LTD and a natural person︆ in UAE.
LTD with an outsourced director will manage the partnership and be eligible for︇ a fixed fee or 0.01% of the profits, while the passive natural person partner will︈ get 99.9%.
Managing partner of the Partnership could contribute to the management and representation functions︉ of the Partnership e.g.,:
One legal entity could have 100x partnerships (e.g., with slightly different wordings, for different projects) with the same person at no added fees.
Individuals will be subject to CT only if they are engaged in a business or business activity in the UAE, either directly︀ or through an unincorporated partnership or sole proprietorship.
Will a sole proprietorship or civil company︁ be treated as a juridical person for CT purposes?
No, but individuals who conduct business︂ in the UAE through a sole proprietorship or civil company may be subject to CT︃ where a relevant business or business activity is undertaken.
So if there are no activities︄ performed in UAE there is no need to register an unincorporated partnership for UAE CT︅ Tax.
So you can create a partnership between a foreign LTD and a natural person︆ in UAE.
LTD with an outsourced director will manage the partnership and be eligible for︇ a fixed fee or 0.01% of the profits, while the passive natural person partner will︈ get 99.9%.
Managing partner of the Partnership could contribute to the management and representation functions︉ of the Partnership e.g.,:
- provide a legal entity under which the Partnership shall act in︊ relations with third parties;
- review and accept/reject the contracts with 3rd parties
- manage the Partnership's︋ assets;
- make other management and representation decisions and activities
The natural person as the partner︌ of the Partnership will contribute with capital or activities aimed at actual and successful provision︍ of the services to the customers, including finding the customers and preparing and providing the︎ services.
One legal entity could have 100x partnerships (e.g., with slightly different wordings, for different projects) with the same person at no added fees.
The thing is, whatever you set up, it's probably useless in the UAE.
Yes, in the future you should be able to receive advance rulings even, but I wouldn't even trust that.
They can simply say you have to pay anyway because that's how it is. There is no rule of law, you would never win against the government. And even if there was, lawyer fees are incredibly high.
It's simply a very bad place to do business.
Yes, in the future you should be able to receive advance rulings even, but I wouldn't even trust that.
They can simply say you have to pay anyway because that's how it is. There is no rule of law, you would never win against the government. And even if there was, lawyer fees are incredibly high.
It's simply a very bad place to do business.
The Dubai fanboys here are really becoming a cult...
The authorities can pee on your face and you will say "oh It's nothing, it's just rain"
The authorities can pee on your face and you will say "oh It's nothing, it's just rain"
Yes it seems no matter what new taxes UAE government would introduce - they would still say there are "workarounds", "you will see there will explanations and exemptions", "Dubai is still the best, because tax is not 50%", "there is no better alternative than UAE", "don't worry this tax will not be enforced in practice", "this tax is only because to satisfy EU" 😀
But the reality is that UAE understand that oil︀ will end sooner or later. They have to search alternative ways to fill the budget︁ to make desert green.
But the reality is that UAE understand that oil︀ will end sooner or later. They have to search alternative ways to fill the budget︁ to make desert green.
Do running Estonia company and receiving salary from this as a single owner also trigger PE rule ?
Do Estonia company also subjected to UAE tax or registration ?
Do Estonia company also subjected to UAE tax or registration ?
Reasonable = market rate
Its often not totally compliant and sort of hybrid mismatch type of exploitation on a personal level, which works with certain jurisdictions that do not tax foreign source income and/or are perpetual travelers.
Paying too high salary can be a bit risky if you are also the only director and shareholder.
For others we have set up compliant structures and personal tax residency with 0.01%-10%︀ tax, which can be more practical.
Its often not totally compliant and sort of hybrid mismatch type of exploitation on a personal level, which works with certain jurisdictions that do not tax foreign source income and/or are perpetual travelers.
Paying too high salary can be a bit risky if you are also the only director and shareholder.
For others we have set up compliant structures and personal tax residency with 0.01%-10%︀ tax, which can be more practical.
https://worldsalaries.com/average-salary-in-estonia/http://www.salaryexplorer.com/best-paying-jobs.php?loc=68&loctype=1
By looking at this data
EUR 10k per month reasonable ?
@Don
what is the "real" cost of running this company remotely including all charges audit, filing, fees etc?
By looking at this data
EUR 10k per month reasonable ?
@Don
what is the "real" cost of running this company remotely including all charges audit, filing, fees etc?
Depends how strict the UAE interprets the rules. In theory, it could trigger a PE, but it's probably difficult for them to prove if you have a director in Estonia and you don't have UAE clients.
I would say it's probably one of the better setups. Make sure you have a very good employment contract that is checked by a tax lawyer.
I would say it's probably one of the better setups. Make sure you have a very good employment contract that is checked by a tax lawyer.
Any growing interest in soccer is a sign of the nation's moral decay, but there might be more to this.
It's a way of structuring. Especially appealing if you get your hands on endless taps of public money and want to direct some of it into your pocket.
It has nothing to do with 22 men running chasing a leather ball and︀ thousands of people cheering to it while drinking beer.
https://sumsub.com/blog/money-laundering-football/
It's a way of structuring. Especially appealing if you get your hands on endless taps of public money and want to direct some of it into your pocket.
It has nothing to do with 22 men running chasing a leather ball and︀ thousands of people cheering to it while drinking beer.
https://sumsub.com/blog/money-laundering-football/
It was kind of joking post from my end, but the matter could be worth opening up a separate thread. After all blessed is he who, in the name of charity and goodwill, shepherds the weak through the valley of darkness, for he is truly his brother's keeper, and the finder of lost children.
In regards to UAE, its still︀ an amazing place for personal tax residence and if your activities qualify for 0% tax.︁
It used to be the top straightforward 0% tax solution available. For many its about︂ time now to look into more complex structuring.
In regards to UAE, its still︀ an amazing place for personal tax residence and if your activities qualify for 0% tax.︁
It used to be the top straightforward 0% tax solution available. For many its about︂ time now to look into more complex structuring.
Totally agree!
Off-topic, but inextricably intertwined (?):
When there is an option to "sneak/bypass" into a country and then only pay a fine on the way out (passport not stamped at entrance, for example), I will ALWAYS choose this option. I shun each and every interaction with public "servants". I despise them so much, that my disdain is so evident to them. I rather PAY money than have to deal with anyone who is entitled & unproductive...︀
Off-topic, but inextricably intertwined (?):
When there is an option to "sneak/bypass" into a country and then only pay a fine on the way out (passport not stamped at entrance, for example), I will ALWAYS choose this option. I shun each and every interaction with public "servants". I despise them so much, that my disdain is so evident to them. I rather PAY money than have to deal with anyone who is entitled & unproductive...︀
That's the philosophy I share as a personalized advisor working with HNWI, but not only.
As our fortunes soar, an intriguing phenomenon emerges︀ - a desire for reduced human contact in our daily interactions. While it's commonly assumed︁ that people thrive on extensive human engagement during travel and financial dealings, I respectfully challenge︂ the status quo.
I believe that such interactions can prove both draining and inconvenient, impacting︃ not only introverts but individuals from all walks of life. They consume valuable energy that︄ could otherwise be channelled into more productive, income-generating endeavours.
The allure of minimal human interaction︅ extends far beyond the realm of the wealthy; it is a universal preference. The more︆ we invest in premium services, the more convenience we gain and the fewer interactions we︇ seek to endure.
Consider luxury hotel check-in, personal shopper, concierge, first-class air travel, and private︈ banking services. They are all about cutting down useless socializing. The inclination toward fewer human︉ interactions and greater convenience is a shared sentiment that transcends economic status. As soon as︊ individuals have the means, they instinctively gravitate toward services that offer this liberating approach.
This preference extends to the world of professional services as well. High-net-worth individuals (HWNIs) increasingly seek︋ alternatives to large firms, where reaching their advisor requires navigating auto-attendants and gatekeepers. Instead, they︌ are drawn to smaller, more personalized operations where they can effortlessly call or text their︍ advisor and swiftly get things done.
As our fortunes soar, an intriguing phenomenon emerges︀ - a desire for reduced human contact in our daily interactions. While it's commonly assumed︁ that people thrive on extensive human engagement during travel and financial dealings, I respectfully challenge︂ the status quo.
I believe that such interactions can prove both draining and inconvenient, impacting︃ not only introverts but individuals from all walks of life. They consume valuable energy that︄ could otherwise be channelled into more productive, income-generating endeavours.
The allure of minimal human interaction︅ extends far beyond the realm of the wealthy; it is a universal preference. The more︆ we invest in premium services, the more convenience we gain and the fewer interactions we︇ seek to endure.
Consider luxury hotel check-in, personal shopper, concierge, first-class air travel, and private︈ banking services. They are all about cutting down useless socializing. The inclination toward fewer human︉ interactions and greater convenience is a shared sentiment that transcends economic status. As soon as︊ individuals have the means, they instinctively gravitate toward services that offer this liberating approach.
This preference extends to the world of professional services as well. High-net-worth individuals (HWNIs) increasingly seek︋ alternatives to large firms, where reaching their advisor requires navigating auto-attendants and gatekeepers. Instead, they︌ are drawn to smaller, more personalized operations where they can effortlessly call or text their︍ advisor and swiftly get things done.
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