United Arab Emirates: Economic Substance Rules

[Martin Everson]

See direct link to⁤ what I wrote already in this thread.

https://www.offshorecorptalk.com/th...es-economic-substance-rules.26779/post-103824
If your not resident in UAE with⁣ a UAE offshore company then the place of operation is where the effective place of⁢ management control is which is the resident country of the director. Same like any other︀ Caribbean IBC. If management in UAE then no issues.

 

[BlueMist]

How is your experience with⁠ Fimbank Malta? I just saw they have representative office in Dubai DIFC. Their fees however⁤ are on a much higher side compared to e.g. BOV... Basically SEPA outward transfers above⁣ €10,000 are 0.1% max EUR 60, compared to €4 at BOV...

 

[hernanday]

This post is correct. I'd⁣ just add, with Canada, there is a special exemption for countries with the tax sharing⁢ ITEA agreements that make the dividends remitted untaxed on CFCs in some certain circumstance. So︀ it is probably worthless for taxation everywhere now except Canada.

 

[Martin Everson]

No recent experience as bank gone through changes. What⁤ kind of account are you looking for there?

 

[BlueMist]

Corporate bank account for Malta company with‍ non resident UBO.

 

[Martin Everson]

You normally have to go in person to open an account and they prefer Malta‍ resident directors. However with DIFC office you should be able to liaise there and sort⁠ out paperwork to send to Malta. However from my experience they are looking for middle⁤ east clients of means to place large deposits with them which they use to back⁣ their trade finance business. Not sure what specifically attracts you to this bank other than⁢ a local Rep office in Dubai.

 

[BlueMist]

I do have⁢ a Malta resident director, just the UBO is non resident. I need to open a︀ corporate bank account and just checking the options that would be the easiest and least︁ time consuming to proceed. BOV after 8 years are closing the corporate bank account (not︂ personal though), although everything was transparent, revenues coming from within EU from the same companies︃ for years. They are de-risking on a massive scale, even legit running businesses with local︄ offices are being shown exit doors.

I don’t want to lose time with HSBC, as︅ even many years before it was hard to open corporate account with them.

The situation︆ in Malta when it comes to banking is not the greatest at the moment. I︇ don’t care if the bank has presence in DIFC or not but I saw your︈ post which mentioned them, so wanted to get some feedback.

 

[MarkusM]

Why do you say it’s pointless for a non redident? As long as that UAE offshore‍ company have a non-resident director and you are only the shareholder of it, what would⁠ be the problem??

 

[Martin Everson]

CFC rules

 

[MarkusM]

Well, yes, I know about the CFC‌ rules, but a company is not controlled by its shareholder, it is controlled by its‍ directors, so the management and the control of the company will be where the director⁠ it is resident, not where the shareholder is resident.

 

[Martin Everson]

Not entirely true. CFC rules are about controlling owner/person⁤ with significant control. This does not automatically mean it is the director. It is about⁣ where significant control is exercised. If it was that easy then every shell company with⁢ a nominee/paid director would meet CFC rules and a person hiding behind being just a︀ shareholder could avoid CFC rules...lol. Unfortunately you need to look into each CFC rule set︁ your up against. Some look at who the UBO is and also where and who︂ actually is making the decisions for the company. This may show up as who has︃ signatory powers over bank accounts and other assets etc etc. Plus if it is the︄ shareholder who has to sign off everything then this is the person who is exercising︅ significant control of the company and not the directors.