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UAE crypto trading company with personal funds only. What are my options?

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Morzo15

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Feb 13, 2024
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I'm looking to establish residency and investment company in UAE for crypto.

Income is derived mostly from airdrop farming, defi and some from crypto trading.

I have two options -

1. Freezone Company - I'm concerned about banking options in UAE for my type of business. I don't care about taxes at all. It's just 9%, but I have heard that crypto banking is a no go in UAE.

2. Freezone Company which holds another company in some other jurisdiction that has weak regulations regarding crypto.

Which option do you think is best for me?

I will be controlling this company from UAE.
 
This set up is common but we dont‍ know yet how they are gonna police it now with the new regulations coming into⁠ place.

We still dont know how they are gonna tax trading yet if trading through⁤ a personal account.
 
What about the accounting for tax purposes in UAE? It will be hard to do‌ audit/accounting for high volume of transactions, i.e. 100k+ per year.

Spoke to a UAE accountant‍ recently, they said that trading on personal account isn't taxed.
 
Yes, no‌ limits, no reporting. That accountant went to many workshops about corporate tax and everywhere it‍ was said that personal trading isn't taxed.

Also another friend's accountant said the same thing.⁠

Though I'm still waiting for the government clarification, who knows accountants might be wrong. But⁤ what they say sounds promising.
 
Crypto trading on⁤ personal account isn't exempted

Moreover crypto is regulated in UAE, many OTC desks were closed⁣ recently by the government.
 
Privacy was the main consideration, but ease of incorporation and minimal bookkeeping also factor in.‍ I also wanted to keep the activity separate from myself.
 
well they have⁤ this nice little passage which translates into business-like endeavors run by natural persons is equally⁣ liable for tax and reporting.

One difference tho is whereas in europe they have clearly⁢ specified where to draw the line between active trading / trading as a business vs.︀ trading as ones private investment activity / ones private wealth management, none of this separations︁ exist in uae, so Id say one can argue in a 0% tax as of︂ now or equally its not if you're running your trading as a business.
At the︃ end of the day, it boils down on how your trading activities look like to︄ be able to make this distinction.
 
What about living in UAE with a single family office (e.g. at DWTC) manager investing‌ in the offshore trading company (and other things)? Could a UAE company provide IT services‍ to the offshore company, say billing cost+20%?

Would this put enough of a buffer to⁠ avoid the offshore trading company having a PE in UAE (if at some point the⁤ UAE actually care about PEs)?
 
I have talked to some service providers and I have two questions for you.

You structure is UAE company holding Seychelles company and the money flow was trading using Seychelles⁠ company and then profits are dividends to UAE company?

Some service providers said banking is⁤ difficult and some said it's not that much a worry. What has your experience been⁣ like on the banking front?
 
Correct.

Not extremely difficult, even with UAE banking. The most difficult part was finding⁤ banking for the IBC but theres a few options (not cheap tho). You could also⁣ just send the divis to the holding as USDT too to lower fees and rather⁢ use a local exchange (some banks are ok with that) or through a collection acc︀ thats cool w crypto.
 
the one I used back then went awol lmao.

You can use‍ the one in the forum, their prices are good.
 
does anyone have‍ further information about this, a lot of conflicting information.

will there be any clarification from⁠ the authorities?
 
If it is a service on the forum you are welcome to mention‌ or tag them here. It would be helpful for the rest of us 🙂
 
Is there an update on the situation in UAE?

I'm more or less in the‌ same situation as OP.
Having tax residency in Thailand and with new regulations from 1st‍ Jan and now also the possibility of taxation on ALL income abroad no matter if⁠ it's transferred to Thailand or not, I'm looking for another tax residency.
Preferably a country⁤ I don't have to move to for 180 days to become a tax resident.
 
you dont need another tax residency if all you worry about⁣ is a southeast asian banana republic 😉.
Just reduce time there.
 
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