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Broker for CY / Dubai residents

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bigbite100

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Sep 27, 2022
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#1
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Hi guys,

I have 2 residencys:
-Cyprus
- Dubai (Emirates ID)

1) Which brokers can you recommend?
2) What would you enter as place of residency?
3) If I choose Cyprus as place of residency and the money comes from a UAE account, might there occur problems?

Thank you.
 
#2
UAE has recenlty entered the EU blacklist and any transaction between Dubai and Cyprus may not be possible to be executed.

Brokers for Cyprus:

- Interactive Brokers
-Swissquote
-Saxobank
 
#3
You can get a list of brokers depending on your criteria and place of residency on brokerchooser.com.
For a broker which is licensed in an EU country I would obviously not put UAE as residence.
Moving funds between UAE and EU will become very difficult. You might channel them via a UK account, but you will probably always have to explain the source of funds and if they are coming from UAE it will get difficult with an EU broker.
For UAE you might also try with brokers licensed in UK/US such as tradestation or tradestation global
 
#5
In Cyprus you'll pay less withholding tax on dividends (I think 15% but don't quote me on that) while in UAE you'll get taxed at rate of 30%.

It all depends on where the money you plan to invest is right now.
If you bank in UAE - then open UAE broker and transfer the money to broker from UAE bank account.
In that case do not mention Cyprus. And vice versa.
 
#6
JimBeam said:
In Cyprus you'll pay less withholding tax on dividends (I think 15% but don't quote me on that) while in UAE you'll get taxed at rate of 30%.

It all depends on where the money you plan to invest is right now.
If you bank in UAE - then open UAE broker and transfer the money to broker from UAE bank account.
In that case do not mention Cyprus. And vice versa.
Click to expand...
is that really true? I thought CY and UAE wouldnt have witholding tax

I mean, i thought they can keep 100% of their money earned through stocks or ETFs
 
#7
bigbite100 said:
is that really true? I thought CY and UAE wouldnt have witholding tax

I mean, i thought they can keep 100% of their money earned through stocks or ETFs
Click to expand...
I'm 100% sure about the UAE as I these get deducted from my dividends.
So 30% WHT for dividends from US stocks and 15% for most other countries (Canada, Netherlands)

Not sure about the situation with Cyprus.

And this is why this matters:
taxes.jpg



If you don't want to pay that you can invest only in growth stocks that do not pay dividends like Tesla (but that has other risks)...
Also, there are ETFs that do not distribute dividends instead they invest them back: accumulating vs distributing)
 
#8
bigbite100 said:
is that really true? I thought CY and UAE wouldnt have witholding tax

I mean, i thought they can keep 100% of their money earned through stocks or ETFs
Click to expand...

Yes it is true, if you use UAE as your residency the Broker will withhold 30% of the dividends that you get from US companies, there is no double tax treaty, if you use Cyprus the Broker will withhold 15%

When it comes to Capital gains both are the same, you already know that if you are a non-dom in Cyprus as long as you don't remit that money you will not have to pay Capital gains tax, so definitely Cyprus in my opinion.

Brokers:
Charles Schwab if you plan to invest only in the US, it's a bit cheaper that IBRK, great customers service.

Interactive Brokers if you plan to invest international and in different currencies, customer service is not great.

You can transfer stocks from IBKR to Charles Schwab free of charge, but not the opposite.

There are other brokers but with those two is more than enough and both have SIPC protection.
 
Last edited:
#9
Radko said:
When it comes to Capital gains both are the same, you already know that if you are a non-dom in Cyprus as long as you don't remit that money you will not have to pay Capital gains tax, so definitely Cyprus in my opinion.
Click to expand...
That's only partially true. It depends on with what instruments on what underlying's and at what frequency you trade. While trading with instruments on "titles"/securities is generally not taxable high frequency trading with other instruments on forex/crypto/commodities can be considered as self-employed income and taxable at high rates for individuals in Cyprus.
 
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#10
algotrader said:
That's only partially true. It depends on with what instruments on what underlying's and at what frequency you trade. While trading with instruments on "titles"/securities is generally not taxable high frequency trading with other instruments on forex/crypto/commodities can be considered as self-employed income and taxable at high rates for individuals in Cyprus.
Click to expand...

Well that would be different, in that case they would try to get you to pay taxes by alleging that you've been working from Cyprus, I would definitely keep my time spent in Cyprus for no more than the 90 days they require to qualify as a Non-dom.
But for someone that is living from dividends then no doubt Cyprus would be much better, the 30% withhold if you live in Dubai is just too much, I'm in a jurisdiction where the withholding is 10%, so from 15% to 10% does make a difference, I need to find a way to get to 5% or 0% if there is one?
 
#11
algotrader said:
can be considered as self-employed income and taxable at high rates for individuals in Cyprus
Click to expand...
There is no such thing "can be", when it comes to the law. There are clear criteria, and there are only two situations: either by law they should tax, but they don't enforce it, or they shouldn't at all. Otherwise, why are we discussing here if there is no clear answer? It is better to write nothing than to write such vague phrases that only mislead.
 
#13
I don't think anyone involved in high frequency trading has to worry about having to pay taxes in Cyprus as long as they don't remit that money, as if the Cyprus authorities can track that, if anyone is paranoid then don't stay in Cyprus for too long, but there's no need to be paranoid, plenty of people around the world working online from their homes and not paying a dime in taxes, go to Thailand and you'll be a small fish in a very big pond.
 
#18
jafo said:
Will I get those back?
Click to expand...

You don't get those back, unfortunately the UAE has no double tax treaty with the US, therefore the US will automatically withhold 30% of all the dividends you get from US companies. That's the main reason why I opted out of Dubai.
You can go to a country with a tax treaty with the US and then instead of 30% it will be 15%, most countries that have a tax treaty with the US get a 15% withholding rate, and then there are 6 countries that have an even lower rate, 10%.

Hope that helps
 
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#19
Radko said:
You don't get those back, unfortunately the UAE has no double tax treaty with the US, therefore the US will automatically withhold 30% of all the dividends you get from US companies. That's the main reason why I opted out of Dubai.
You can go to a country with a tax treaty with the US and then instead of 30% it will be 15%, most countries that have a tax treaty with the US get a 15% withholding rate, and then there are 6 countries that have an even lower rate, 10%.

Hope that helps
Click to expand...
If you have your personal tax residency in UAE, it might be worth setting up a holding company for your US dividend stocks in another jurisdiction (Estonia, Cyprus, etc.). Estonia is most straightforward as the US will withhold 15%, which can be used as a tax credit in Estonia, and at the same time, you can pay yourself a tax-free salary from your Estonian company. Also, no tax until you distribute dividends.

Generally speaking, remember the Treaty rate with US + withholding tax.
Some jurisdictions might have a lower (e.g., 10% US withholding rate) but have a higher tax rate on a local level.
 
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#20
I opted for Mexico, 10% withholding rate from the U.S., low cost of living, great people, perfect weather, I speak Spanish so that helps.

Thanks for the information.
 
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