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UAE clarification of Freezone Qualifying Income

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So did I! As a matter of fact, on‍ the advice of counsel a few decades ago, I sought a declaratory judgment on an⁠ issue. Got it from the head of the agency. The agency then sued claiming "the⁤ head of the agency had NO authority to bind the agency"! The judge agreed. I⁣ was SCAMMED millions of dollars by a top 3 law firm and the lawyers on⁢ my case were a former federal judge, a former agency director, and a former prosecutor.︀

All these people are a CANCER on society!
 
Well after Fred saying good bye to DLS Dubai....
Seems there is no hope now‌
Better to accept reality....and move on...
..If they want to give tax free status to‍ tech and eCommerce....they will mention it on rule very clearly......sector is huge
Dubai CommerCity
Dubai Internet City
Dubai media city
Whole freezone is based on these sector....Seems all company in⁠ these zones are subjected to Tax...

Now let's see how Pavel Durov of telegram will⁤ react to this Corporate tax.....It is Telegram HQ after all....
 
It's not handwavy. It's‌ as precise as one can be right now. As a general rule, though, you would‍ not need to be personally tax resident in a place to trigger "doing business in"⁠ type regulations.

You're conflating⁣ you (the human being, the natural person) with how corporate income tax is applied for⁢ legal persons (companies) doing business in a location.

Welcome to UAE, where the implementation of︀ CIT is an absolute disaster handled about as poorly as possible by the government. If︁ you want certainty, stay away from UAE for now.
 
I agree
Most of forum members live in Dubai and run fzco
I wonder︀ what's going to be everybody's new destination
 
What? @Fred is not around anymore? 😳

This is a great point! I failed to connect the dots here. This is⁤ HUGE! What will he do?
 
Couldn't one just operate‍ the US LLC as a passive entity and the UAE company as the active part⁠ of the business?

It might not work for everything, but let's say you operate a⁤ info business, selling courses.

The US LLC sells the courses and owns the IP but⁣ has no operations. Instead the UAE company is under contract by the US LLC to⁢ manage the day-to-day business and gets paid for that and by doing this, a decent︀ chunk of the income would remain in the US LLC?
 
I'm staying in Dubai.‌ 9% tax on profits is not a deal breaker and there are so many legitimate‍ ways and valid business expenses to bring this down to almost zero.

Probably get a⁠ golden visa in a few years and lose the FZCO, by which time all my⁤ income will be passive anyway so zero tax.

Autumn and winter in Dubai, spring and⁣ summer on a boat someplace nice.

Think that's a decent plan.
 
Most of the expats in UAE with real money are not running low-cost "self-employment" FZCOs,‌ they are either employed by big corps or on "golden" visas.
So no, Dubai won't‍ notice the exodus of digital nomads or one-man show companies, at least as long the⁠ Ukraine war is here and Russian money keep sales pumping.

On personal lever there are⁤ only few jurisdiction that have a high quality of life and 0 personal taxes -⁣ namely Monaco and Dubai. Everything else is a either a compromise or requires a clever⁢ tax structure that can be not reasonable for many.
 
Yes, I think UAE government is thinking that current inflow of Russians and Ukrainians will cover︀ a lot for very few who will leave

I still think Caribbean is quite good︁ alternative, but also few places. Maybe Cayman, St Barts. Some places in Bahamas. Others is︂ not so nice..
 
Hmmm.... I don't know about others, but my personal issue with this is TRUST!!! They promised︀ 50 years tax free! They broke their promise without even an apology!

Hear me out:︁

Say you marry a girl who promises to be faithful for at least 50 years.︂ You go all in! You invest heavily in a marital home in her home country.︃ You establish your business in her home country! Then all of a sudden, on your︄ third wedding anniversary, she flips on you and tells you: "Dear husband, starting in 2024,︅ I'll be faithful with the exception of 9 guys per year. Look at it this︆ way, honey...other wives are sleeping with at least 50 other guys per year, so you︇ don't really have a better choice." 🙄

It's NOT the 9% that bothers me. It's the︈ lack of integrity and honor! Our word should be our bond! Once a traitor, ALWAYS︉ a traitor!

If they scribble some words on paper today and can all of a︊ sudden charge you an extra 9%, what stops them from scribbling some more words on︋ paper e.g. in 2026 and charge 45% CIT, 25% PIT, and an exit tax of︌ 50%???cry&¤
 
Can not agree more....UAE for company registration is hopeless now ........It⁤ is trap now
 
@troubled soul let's go to cayman islands. Buy home on‍ beach with crypto. Register at enterprise city. Use Emi for business. Visa 5 years. Tax⁠ free 100%
 
Are you sure you want to commit tax evasion in UAE?︀ They aren't exactly known for fair rule of law.

If you can't︃ trust a totalitarian monarchy, who can you trust? 😉
 
Yep, and US dollar was once backed with gold. And 15 years⁠ ago you could get a Swiss bank account for a banana island company with a⁤ bearer share.
Rules change, adapt of die.
 
I'm not sure about anything‍ about this lol

But if it's inline with transfer pricing, I'm not sure what would⁠ be wrong about it.
 
Horrible outlook on life!
US dollar⁠ = Don't trust them anymore
Swiss bank account = Don't trust them anymore
banana island⁤ company = Don't trust them anymore.
Rules change = Don't trust them anymore!
Ever heard⁣ of the Fair-Warning Doctrine? 🙄

I WILL NOT violate my principle because others with NO principle⁢ engage in synthetic happiness to cope with a lack of morality!

I can't even believe︀ this has to be explained! stupi#21

PS. I will REFUSE to talk or do ANY business︁ with anyone who takes this stance! As Charlie Munger used to say: "You can't unring︂ that bell!"
 
And neither‌ is UAE!

OK, let's break it down a little.⁠

LLCs are normally pass-through entities, meaning they do not retain the︃ profit. You cannot defer distribution. At least that's how it's viewed under US law. Unclear︄ how UAE will interpret LLCs, though.

If this is a one-man operation, the US LLC︅ has its nexus, permanent establishment, center of economic interest, place of effective management, and so︆ on in UAE. This means the US LLC is subject to UAE corporate tax, unless︇ it's treated as as pass-through entity, in which case only personal income would apply, which︈ for the time being remains zero in UAE.
 
If it's treated as pass-through by the UAE⁣ doesn't that mean it's like a natural person doing business. Then UAE corp tax applies⁢ but only if turnover is above 1M AED.

Just to add to how unclear things︀ are! I think I'll stay below 91 days in the UAE until we know what︁ happens in practice with the UAE corp tax.
 
Don't marry to a‌ country, that's it. Consider everything a tool, use the tools that suit your interest best,‍ change them when they break and don't get attached to anything. I spent a lot⁠ of time in the UK with the most straightforward and reasonable government-business approach as far⁤ as I know. And yet, in the last 10 years they changed the rules so⁣ many times I lost count. Don't let me start on EU or any "developing" country.⁢

Some people here are lauding Cyprus and somehow forget to mention the banking crisis 14︀ years ago where many lost their life savings. Nothing lasts 50 years these days, in︁ 20 years there will be CBDC everywhere, cash will be abolished and all the tax︂ heavens out of business. You will end up in one or another power alliance (USA,︃ China or whatever there will be by then) or find yourself completely off-grid.
 
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