UAE freezone company audit

[lifeisfun]

200K will be the lowest reasonable treshold just in case if you are not ecommerce business.⁠ Costs of accounting and audit for high amount of transaction will be too high and⁤ CC processing costs are too high for UAE.
Fro ecommerce business UAE will be uncompetitive⁣ any more.

 

[Fred]

Your numbers are absolutely rubbish!

No of our clients has to pay 7000 USD for Substance - that's what we pay⁠ in Dubai Marina in a Tier 1 Location in the Marina Plaza Tower.

What's this?⁤

Thanks!

Alex @alexrinse how many 100k USD you are paying⁢ each year for your substance?

@lifeisfun new member joined last week saturday doing math based︀ on nothing and is bashing Dubai - love it.

@James Spader keep an eye on︁ such guys ruining with spam posts massively the content quality here in the forum.

 

[JimBeam]

I don't really think it's important in⁤ what's business are you in.
Total income - business expenses = net income.
It's the⁣ same for every business. That's what your business have earned you in a given year.⁢

On 100k / year profit in EU one would have to pay 21% CIT tax︀ (I took 21% as that's the EU average CIT).
So that's 21k in tax savings︁ compared to the EU. That's about enough to break even.
With 200k that's about 42k︂ in less tax paid and than it starts to make sense.

If you make 500k︃ / year that's 100k savings per year.
That's like a new Porsche for you each︄ year.
Or would allow you a to live a really nice lifestyle in UAE compared︅ to just handing over that money to the taxman for basically nothing in return somewhere︆ else...

 

[sergeylim88]

@Fred
do you actually need other office then the flexi desk if it is a‌ one man show, and that person lives in Dubai? i am talking about CIT 0%,‍ not for banks
Most likely the answer will be that it is still not know,⁠ but just your thoughts....
i think it won't be needed

 

[madihrb]

I am living in UAE for more than 6 years, I am considering to move‌ out. I came here to save tax and have better quality life with quality banking‍ but soon realized opening bank was tough I have to go through 14 banks and⁠ finally I opened in ADIB. I soon realized that exchange rate was 3%, so technically⁤ it would be like I receive payments in USD from clients, convert it to AED⁣ for 3% and then for USD Payment via Visa Card I have to pay again⁢ 3%. So it was average 4-5% additional fees for all my revenue. Not many banks︀ provide Debit Card with USD accounts here.

Banking in UAE was also slow that time︁ Friday was public holiday and in rest of world it was Sunday so in many︂ cases I have to wait 3 days to receive the wire transfers. So in total︃ I am having problem of paying high fees i.e 200 AED monthly fees + 150︄ AED Internet banking fees then on top of 4-5% of revenue on exchange fees cost.︅

Currently I have annual revenue of around $450k, and my clients pay via crypto, UAE︆ banks dont work with crypto. I use EU banks for the banking purposes, now with︇ introduction of corporate tax and audit etc it had became more complicated as many of︈ accounts in EU were personal accounts in my name.

Seriously now I am thinking to︉ even move Portugal and pay 42% tax on my profit, atleast life will be easy︊ and banking will be not problem. I dont know whatt to do next, UAE is︋ becoming expensive and tough day by day.

 

[JackAlabama]

That does not make their work better or worse than others esp⁤ if you have seen the big4 works from the inside.

Can you enlighten me with⁣ your infinite wisdom then, why here (official source) nothing is being written about it?
https://mof.gov.ae/corporate-tax-faq/

 

[Fred]

You are right - no official clarification on this yet.

My personal opinion is that⁣ no one cares about a one man show company - they have big companies to⁢ look for first - if even there.

Then you did setup more then a half decade ago and⁤ if you never changed something against the ADIB Rip Off FX Rates - no one⁣ can do something about it.

You have Citi Bank with a Global Wallet which actually⁢ allows you to spend in USD without FX - further you have international Banks in︀ US and Mauritius onboarding Dubai Freezone Companies with USD Debit Cards - no recommendation as︁ core bank for your Business but I see this the smaller downside then moving to︂ Portugal and paying 42% Tax on 450k$.

I suspect this is a Company not setup︃ in Dubai which no other bank wants to onboard as there are several banks who︄ did launch good Business Products with Corporate Service Provider access to the Compliance over the︅ past 3 years.

Again dig a bit deeper and you end up paying almost no︆ FX - even for EUR to USD you can endup paying 0.5% which is a︇ Wise / Revolut FX Rate.

Dubai is becoming more popular then ever and new constructions︈ are starting every day - some like it and some hate it - like in︉ every place where you gonna live you have developments you like and some you don't︊ like.

But again - moving to Portugal to pay 42% in Tax? I don't know︋ - I see a lot of clients just moving around in South East Asia and︌ South America and spending there 3 months in Dubai - still better then paying 42%︍ Tax.

That's true - we discussed this already internal as well - you‌ have conflicting or at least lack of information on the different Government Websites itself.

 

[turtle]

I already shared an official document written by MoF but somehow you are⁠ obsessed with the FAQ page instead of the actual law. I understand that you never⁤ experienced FTA tax audit before, good luck.

 

[GeneralGogol]

Yes

 

[hernanday]

So where would you recommend for a business doing 100k.
With all those cost Dubai is︄ basically running a tax anyways.

 

[Don]

There's no universal answer‍ to this as it depends on your business specifics. For small businesses there are better⁠ options available in many cases.
When you start making decent income UAE becomes more and⁤ more attractive.

 

[turtle]

You shouldn't look for‍ offshore company strategies at that profit level. Simply pay taxes in your country, focus on⁠ your business and check after $200K+

 

[JimBeam]

Exactly or if you know you'll get to $200k+ now as you're set up -⁠ focus on actually getting there.

 

[hernanday]

Like a business in⁠ a high tax country that is doing 100k.

 

[blockchain4ever]

What you are︌ saying is a little strange.

You are complaining about business being closed on Fridays when︍ that was changed years ago. How could something that is fixed make you move out?︎

For FX rates, even exchanging crypto to AED CASH costs 1% in Dubai, so why️ are you paying that much? This is from 30 seconds of Googling. Are you saying‌ that Dubai banks do not accept cash deposits?

Have you actually tried to lower your‍ costs?

 

[madihrb]

What I am saying except one⁢ or two banks they dont provide you debit card with USD accounts. So you have︀ to open AED accounts if you need debit card and if you business is in︁ USD i.e you receiving payments from Paypal, you will convert USD to AED which will︂ have FX of 3%. Then if you have to make payments to online suppliers ie︃ Google Ads which do not accept Paypal you pay them another 3% FX as payments︄ will be USD so your AED is again converted back to USD.

Wio Bank is︅ offering 1% and Wio Bank opened last year I have account with RAK Bank they︆ are still charging 3%. Regarding holidays Banking holiday from Friday to Sunday was changed last︇ year, even without holiday the banks are too slow. International transactions are slow even today,︈ in EU you have SEPA which are done in 24 hours many times even faster︉ than that.

I transfer from AdvCash to my local bank in home country Pakistan, transactions︊ are completed within 12 hours. Last time I transferred from Paypal to Wio Bank, it︋ took 3 days to complete the transaction. Also these banks not even open bank accounts︌ easily then again I work with crypto they are not crypto friendly either.

 

[JimBeam]

PayPal fees are quite high!
So if you're converting/sending USD from PayPal to your bank‌ account - you're being charged the PayPal fees.
That has nothing to do with your‍ UAE bank.

UAE banks do not offer cards in USD but the FX rate between⁠ AED and USD is always pretty tight and is in range 0.5 to 1%.
I've just checked rates I get with Emirates NBD personal account an they are Sell 3.685⁤ / Buy 3.653 or about 1% spread.
The rates for business accounts are usually better⁣ and with some banks I can negotiate the FX rate in case I got more⁢ currency to convert.

 

[madihrb]

FX rate at RAK Bank shows 0.99︁ charges when I make payment online via there debit card ie 100 USD they will︂ deduct 103.15 usd some thing equivalent AED.

 

[JimBeam]

This is correct.
FX rates on debit cards with most of⁠ UAE banks are about 2-3%.

 

[FantomOffshore]

I read about a‍ structure on this forum that involved setting up a St. Vincent & Grenadines company with⁠ freelancer license, then just managing it from the UAE. Maybe others can shed their light⁤ on the viability of this structure this year.

Better to sent USD from PayPal to an EMI that︁ allows for cheap FX swaps from USD to AED.