How about someone (resident in another tax free country) owning a freezone company but not resident in Dubai?
Your freezone company will be subjected to 9% CIT since the company has no substance in UAE if the director/owner of the company (you in this case) is resident in another country.How about someone (resident in another tax free country) owning a freezone company but not resident in Dubai?
If you live in a tax free company that has territorial taxation it may make sense to adopt other solutions, like a passthrough US LLC.
He said he is from a tax-free country so in theory this won't be an issue. Clearly if he enlightens us of what country that is a better advice can be givenThis coud be a good or bad advice depending on the territorial jurisdiction.
There are some territorial countries that don't give a damn if you manage a foreign LLC from there and some that will immediately consider income from the foreign LLC as local source income and taxed at normal rates.
Thailand and some other countries in South East Asia for example.what countries would be a good option to run the us llc from?
can you list them please???
what countries would be a good option to run the us llc from?
Thailand and some other countries in South East Asia for example.
Costa Rica also may be an interesting solution.
And if you are not considered a tax resident because you do not pay taxes in Costa Rica, but you reside the whole year there (and maybe also own a property), where are you consider tax resident? In your home country even if you de-registered from the local population, do not own anything, and haven't spent a single day during the year there?It's not an option because you are tax resident only if you are taxed.
where are you consider tax resident?
Your freezone company will be subjected to 9% CIT since the company has no substance in UAE if the director/owner of the company (you in this case) is resident in another country.
If you live in a tax free company that has territorial taxation it may make sense to adopt other solutions, like a passthrough US LLC.
If no country considers you tax resident, you will be considerd tax resident in your home country because of your citizenship.
And if you are not considered a tax resident because you do not pay taxes in Costa Rica, but you reside the whole year there (and maybe also own a property), where are you consider tax resident? In your home country even if you de-registered from the local population, do not own anything, and haven't spent a single day during the year there?
That may be the case for some countries
You may end up in a position where you're tax resident nowhere.
As more and more people have made the jump to a nomadic lifestyle, governments have paid more attention and these folks are now hearing from them. Because they never met all of the requirements to become a tax non-resident in their home country, they now owe thousands in back taxes.
They did not realize that leaving their home country was not enough to avoid paying tax.
This is the nomad tax trap!
I follow these cases and the biggest thing that I have seen in the rulings is that the court wants to know where you live. Where is your center of life? Do you have a home somewhere else? Do you have an apartment lease? Have you set up a tax residence in another country? Do you have some type of connection to another country?
The folks who have been unable to show proof of any of these things are the ones who have had to pay back taxes to their home countries.
This is exactly his case: to be de-registerd you need at the same time be registered somewhere else.
If you don't become tax resident somewhere else they won't let you go.
This is a quote from Andrew Henderson and while i don't agree on many things he says, I do 100% agree on the nomad tax trap.
Are you going to tell me that person owes taxes in Brazil, the UK and Switzerland, despite never having set foot into any of those countries? What is their "home country"?
But that's specific to those countries and it usually has nothing to do with your citizenship - but rather with how long you have lived in that country.
I was thinking about all the people who have one passport from the country they lived in until they moved.
And even there are plenty of countries that - as of now - are fine with you leaving to live on a sailboat in international waters for the rest of your life.
UK, and Ireland would. You have to give them an address abroad somewhere, but what matters is the time (not) spent in Ireland / UK, not the address abroad. Same thing with Estonia. And for Sweden/Denmark/Finland, it's similar - just give them an address somewhere - , but they have tougher rules on severing the connection. Probably most of Eastern Europe is like this.
Scandinavia may be stricter, there was a thread a while ago from someone where I did some research (not sure exactly which country it was). They still consider you tax resident for up to 3-4 years after you leave, unless you move to a country with a tax treaty which would allow you to sever the ties earlier.