I am planning to start a company in Estonia. Let's call it EsCo.
I have a free-zone company in Dubai, UAE. Call it DFZCo. I will be moving to Dubai in a few months with a residency visa.
Both EsCo and DFZCo will be 100% owned by me.
I am a freelancer and the purpose of DFZCo is to start billing my freelance customers located outside UAE, move to UAE and over a period of a year become a tax non-resident from the current country I live in.
The purpose of EsCo is to work on non-consulting stuff. Like blogs, courses, ebooks, affiliate marketing, micro-SaaS︀ billing, etc. I have experience is making a tiny income through such activities - but︁ never good enough compared to my consulting income.
Now, to receive money from EsCo, I︂ am thinking of billing EsCo from DFZCo.
Why I do not want to do EsCo︃ activities from DFZCo:
1. UAE has a lot of licensing fees for new activities that︄ I will be "trying". Relatively, the revenue may not be enough to break even these︅ license costs.
2. I have heard about troubles getting good banking in UAE with a︆ free zone co.
3. I believe I cannot bill UAE customers from a freezone co.︇
4. I, in my own name, do not have a trade license (to draw a︈ salary from EsCo). My understanding is that I can only bill via my owned DFZCo.︉ I may be able to apply for another license - but then it adds to︊ my costs.
If I bill EsCo from DFZCo, ultimately I receive the money. And since︋ UAE does not have any income tax - all the received money is tax free.︌
That sounds wonderful, but it also sounds like tax evasion. Because if I were to︍ get paid by EsCo, there would have been a 20% tax paid to Estonia.
My intuition is that I should be taxed 20% on the payments made to DFZCo. But︎ not sure how that would occur.
1. My intention is not to wilfully evade tax.️
2. I don't mind having zero-tax either (legally).
One legal option is to
(A) Have the EsCo owned by my spouse, and DFZCo bills EsCo
- or -
(B) My spouse, who is on a dependant visa, could take a very low cost freelance UAE license and bills EsCo.
[Obviously the scenario changes if EsCo starts making a lot of money. That is, if that happens in the future]
Thoughts?
P.S: I have already setup the UAE freezone company, and will be fetching my e-residency card within a week
I have a free-zone company in Dubai, UAE. Call it DFZCo. I will be moving to Dubai in a few months with a residency visa.
Both EsCo and DFZCo will be 100% owned by me.
I am a freelancer and the purpose of DFZCo is to start billing my freelance customers located outside UAE, move to UAE and over a period of a year become a tax non-resident from the current country I live in.
The purpose of EsCo is to work on non-consulting stuff. Like blogs, courses, ebooks, affiliate marketing, micro-SaaS︀ billing, etc. I have experience is making a tiny income through such activities - but︁ never good enough compared to my consulting income.
Now, to receive money from EsCo, I︂ am thinking of billing EsCo from DFZCo.
Why I do not want to do EsCo︃ activities from DFZCo:
1. UAE has a lot of licensing fees for new activities that︄ I will be "trying". Relatively, the revenue may not be enough to break even these︅ license costs.
2. I have heard about troubles getting good banking in UAE with a︆ free zone co.
3. I believe I cannot bill UAE customers from a freezone co.︇
4. I, in my own name, do not have a trade license (to draw a︈ salary from EsCo). My understanding is that I can only bill via my owned DFZCo.︉ I may be able to apply for another license - but then it adds to︊ my costs.
If I bill EsCo from DFZCo, ultimately I receive the money. And since︋ UAE does not have any income tax - all the received money is tax free.︌
That sounds wonderful, but it also sounds like tax evasion. Because if I were to︍ get paid by EsCo, there would have been a 20% tax paid to Estonia.
My intuition is that I should be taxed 20% on the payments made to DFZCo. But︎ not sure how that would occur.
1. My intention is not to wilfully evade tax.️
2. I don't mind having zero-tax either (legally).
One legal option is to
(A) Have the EsCo owned by my spouse, and DFZCo bills EsCo
- or -
(B) My spouse, who is on a dependant visa, could take a very low cost freelance UAE license and bills EsCo.
[Obviously the scenario changes if EsCo starts making a lot of money. That is, if that happens in the future]
Thoughts?
P.S: I have already setup the UAE freezone company, and will be fetching my e-residency card within a week
