Will this setup work?

[mlmtl]

Hello,


New here, but have a bit of experience on the subject. Still I want your input to know if this setup will work:


Canada 1 Corp.


This corp. offer web service to profesionnal in a specific business aera. Sale force will be in canada, hosting and minimal tech employe.


Canada 1 Corp. will enter in a licensing agreement With Offshore 1 Corp.


Canada 1 Corp. will pay a 75% licensing fees on revenue to Offshore 1 Corp.


Offshore 1 Corp. provide technical services from india/pakistan/... to Canada 1 Corp.


Offshore 1 Corp. provide the rights tu use the technologies to Canada 1 Corp.


Offshore 1 Corp. transfer profit to Offshore 2 Corp.


Offshore 2 Corp. loan money to Canada 2 Corp.


Canada 2 Corp. use the loan to buy real estate, do developpement projects...


Canada 2 Corp. pay interest and do the full repayment to Offshore 2 Corp.


Thanks

 

[zack]

Consult a local tax consultant to help you out.. it seems the structure is OK‌ and can work. But when the source of funds is Pakistan and India it may‍ turn on some red lights somewhere.

 

[craigs]

You simply need a legal tax adviser to check what the laws and regulations in‌ Canada are towards such a setup. Otherwise the setup seems pretty good, thank you for‍ the lead actually.

 

[alain]

I consultatet a legal adviser in business and loan agreements are legal tools to be‌ used to transfer money non taxable between 2 comapanies. He recommends the loan document get‍ apostilled and notarized.

 

[JohnLocke]

I agree with you, if the company⁠ is setup accordant and the loan agreements "real" you should not have any problems by⁤ using a loan as an instrument to transfer money between 2 entities.

 

[CaptK]

You will need to prove that especially to Denmark as they are super aggressive.
You will need to have a tenancy agreement, utility bills and a UAE phone number that‌ is always active. That's the number you put on all the forms and UAE is‍ your correspondence address.

180 days of the year need to be spent in the UAE⁠ or the majority of your time.

 

[Petersvenson]

Okay, in theory i could save up a lot of cash in the UAE company‌ then move down there for 12 months pay out the money to myself as salary‍ and then go back ? Do i need to show any documentation when i return⁠ with the money?

 

[Gediminas]

Overall, your plan sounds good. Spain has a treaty for︇ the avoidance of double taxation with the UAE, while Denmark does not have it. It︈ means that as regards potential Permanent Establishment (PE) risk it is important that most important︉ decisions on behalf of UAE company would be made while you are not in Denmark.︊ From a Spanish perspective, it is also important to demonstrate that you have a certain︋ level of the substance in the UAE. So if you meet the above, most likely︌ there should not be negative tax consequences (on the level of operating profit).

However, when︍ you plan to distribute dividends, real-time spend in UAE is a must.

In case you︎ hire us, we would arrange a tax residency certificate before the reception of dividends and️ discuss with you other important aspects. We can set up your UAE company with Emirates‌ ID and provide general support and advisory throughout the process. Also, we can help with‍ other local matters, related to economic substance and other practical questions in UAE.

 

[CaptK]

In theory yes but you personally need⁤ to build substance in the UAE