UAE Mainland or FreeZone?

[Don]

You dont need to necessarily open a⁠ branch, but that could help even more.
Its important to consider the legal structure of⁤ the UAE company, e.g., if you can get long term visa in EU for the⁣ director that could be sufficient, or appoint a EU tax resident director.
One of the⁢ simplest solution I can think of is to get a digital nomad visa, e.g. in︀ Estonia.

I have got this information from an EMI, as I wanted to prequalify the︁ company before even incorporating a new company in UAE which will actually do business only︂ in EUR and with EU clients, and it will have UAE citizen and resident directors︃ and shareholders.

 

[SCI]

If you can break up the 2 months in Dubai to 1 month every 6‌ months then that would be your default. UK LLP/LTD is good if you do not‍ do invoice UK Companies.
Thai authorities do not ask for Tax ID but the benefit⁠ of using a UK entity is they issue you one by default.

Freezones in the⁤ UAE to use are IFZA and SHAMS. The others are difficult to get bank accounts.⁣ DMCC is the best but very expensive purelyforprestige. It does come with benefits like being⁢ able to use the DMCC building and lounge depending on your set up.

UAE tax︀ is applicable on profits above the threshold. If you pay yourself a salary (tax free)︁ and minus expenses that it brings you below the threshold "no tax applicable".

For example︂

You made AED 1M revenue

650,000 salary

1,000,000 - 650,000= 350,000

expenses 150,000

350,000-150,000= 200,000︃

You are now below the threshold

Salary is the key to staying below the threshold︄ as you can pay yourself whatever you want.

Not to be confused with dividends as︅ it won't work.

 

[Yakooza]

Another question with WIO can you open a PayPal Business account? PayPal is a must.‌

 

[AtMo]

Hey. I'm‍ planning to form a UK LLP and get a UAE residency certificate as tax ID⁠ in case the EMIs ask for my tax residency.

But as you mentioned UK entity⁤ issues a tax ID, Is it for the UK LLP or is it for me⁣ as UBO as well?

Do you think it is still needed for me to get⁢ a UAE residency certificate in my case please?

 

[lacomaco]

That is quite a dangerous proposition. No︅ company pays out 65% of its revenue to a director as salary, it is against︆ GAAP rules and I think pure tax evasion

 

[Don]

I believe this becomes an issue when you do it⁠ for a few years without proper explanations. One year you can probably get away with⁤ if you have a good story to back that up.

 

[Henn and Rich]

Really? Do you have a list of⁢ EMI's for which this is possible? I have mainland companies in the UAE and I︀ have very big ties to the EU 😀

I would like to explore this, but preferably︁ without establishing any form of branch company in Estonia or in the EU

 

[JimBeam]

Yes, you can.
We have it and use it daily.‍
3 years - 0 issues.

 

[Lord Palmerstone]

Started a︈ FZ company in early June, got the owner (my friend and colleague) medically tested and︉ received Residence and an EID No. within 8 days (the physical card came after 2︊ weeks).
Company bank a/c with Mashreq done (with help) also in a week.
All of︋ this was organised with a lawyer friend --- the cost from the FZ Dhs19,000, his︌ fees Dhs5000.

 

[Henn and Rich]

which FZ? what license activity?

 

[Ancova]

Greetings all!

IFZA has different EMI's that they have partnerships with. I would suggest you‌ to email [email protected] for all information (its a free service for IFZA License holders).

 

[SCI]

So before the new turnover rules came into effect. How⁠ do you think the UAE company owners paid themselves? Please separate Europe from the Middle⁤ East.

The Tax ID would be for the company not a personal one.
In the︂ UAE you would have to do the minimum residency requirements which I think is 180+︃ days.

From the time I spent in Thailand going by what other Expats did They︄ used their UK company Tax ID and never had a problem.

 

[lacomaco]

What you did in⁢ a fully zero-tax system had no consequence whatsoever - except if your auditors wanted to︀ recarachterize the cost. Now it is totally different and I am quite sure that what︁ you propose is very dangerous

And I do not understand this separate Europe from the Middle︅ East remark

 

[SCI]

I would suggest⁤ you check with any local accountant. As it stands right now it works. Of course⁣ there will be pressure from the outside world to change that. There is also no⁢ transfer pricing rules either.

The people who write the script of the new tax law︀ were English or Schooled in the Western World. They knew they had to make it︁ look right but zre not going to advertise the loophole. You have at least 10︂ more years of UAE attraction as a tax haven. With the development of BRICS and︃ more autonomy from the West. Who knows but Qatar and Saudi will do what they︄ want and no one will say anything. Just like it has always been.

Notwithstanding the︅ new Saudi Tax free and Qatar Tax free environment coming into play.

Separate the Middle︆ East from the nonsense in Europe!!

 

[lacomaco]

I have exactly the opposite view with reference to taking this risk: yes, separate the Middle︃ East from Europe on the courts level - if the tax authority will rule against︄ you (for which accounting and audit-wide they would be probably right), how do you see︅ your chances to win against them? UAE courts ruling in favour of this huge (in︆ their mind) tax evasion committed by a foreigner… And BTW I already have 6 years’︇ of audited FS in the UAE so I think I know what I am talking︈ about

 

[SCI]

You are confusing issues here.
The tax was not an exercise to generate revenue but‌ to coincide with FACTA and the rest. Read the law because majority of accountants didn't‍ bother. You will find some interesting night time reading.

I have always audited both my⁠ FZ and Mainland purely for my European banking facilities, it was not a requirement. Again⁤ I do the extra research when I have time.

I would suggest you do the⁣ same.

 

[lacomaco]

Just contrary to︄ be considered as confused about corporate tax matters and the enforcement rules, I do remember︅ how I did accounting for many years and provided international tax advice for more than︆ 20 years. This tax advice you gave to the readers to me looks clearly dangerous.︇ What you suggest is against accounting principles (probably you checked Section 183 of the Ministry︈ FAQ in your spare time), and based on this definition “Tax evasion is the illegal︉ non-payment or under-payment of taxes, usually by deliberately making a false declaration or no declaration︊ to tax authorities – such as by declaring less income, profits or gains than the︋ amounts actually earned, or by overstating deductions”, is clearly overstating deductions. Paying out 65% of︌ the company’s total income as a salary to a director is an artificial or sham︍ transaction - at least part of amount definitely is. Of course I fully understand that︎ tax rules and their enforcement are two different things, but with an untested attitude of️ the tax people and the risk of the UAE courts ruling against a foreigner is‌ not zero. Prove me wrong by showing us a legal opinion stating that your 65%‍ suggestion conforms to the corporate tax law of the UAE, then I will admit that⁠ you are right and I am wrong. Otherwise I stand by my opinion.

 

[SCI]

Your opinion is something you are entitled to.

 

[lacomaco]

Thank you‌

 

[Au999]

I don't think the percentage is an issue rather the amount. You can pay yourself‌ 100% of a company pre tax profits if the number is small.

Look instead to‍ market averages for people in similar situations, roles and positions in the market you're working.⁠

That 65% number given earlier as a salary is not a big wage compared to⁤ what thousands of people earn in the UAE.

One man companies making a million a⁣ year are quite plentiful in Dubai and I'd imagine the vast majority pay themselves a⁢ handsome salary.

Given that as the local market average who's going to insist they only︀ pay themselves a Macdonald's wage? Who in a country of visible consumption can say that︁ you in particular can't earn a similarly high salary?