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offshoreavatar

New member
Hi
I'm finding the BVI & UAE Freezone comanies to be both great solutions for an ecommerce business.
But the UAE is a lot more expensive when it comes to annual renewals.
Was just hoping for peoples opnions on this.
Is the UAE now seen as more respectable maybe?
Banking isn't an issue these days with Transferwise / Worldfirst etc. So I don't think it's that.
Thanks
 

CaptK

Nominee Company Bank Account Real Estate Passport
Mentor Group Gold
The UAE is not seen as a Tax haven in the same light as BVI. You will find it easier sending and receiving money from the UAE then from BVI.

Bank account opening is easier plus access to PSP's and additional services.
 

offshoreavatar

New member
Thank you CaptK.

That's helpful. If I was only concerned with government regulations (e.g. not general public current opinion) what problems would that cause?

The thing is with Transferwise / Worldfirst etc Business accounts banking isn't an issue.



For anyone ever reading this that might be thinking similarly. CFC tax issues become an issue if in certain countries not implementing flag theory type strategies etc. I wasn't aware of this until a bit more reading just now.
 

offshoreavatar

New member
Thank you JustAnotherNomad.

It's probably not going to be an issue for me as I'm moving to Thailand. But I do find it interesting so..
It's interesting that you might be able to structure things in a way to mitigate this but my reading leaves me to beleive for the current country I'm in it all leads back to the person.
Yes thanks, I have a few appointments lined up today & tomorrow.
 

JustAnotherNomad

Mentor Group Gold
It's probably not going to be an issue for me as I'm moving to Thailand.

Probably depends on what you do. I’ve heard that the Thai authorities usually turn a blind eye, as long as you don’t compete with any locals. But it would be wise to talk to a Thai tax lawyer about the details, at least if you want to move there permanently.
 

offshoreavatar

New member
Oh right I see. Yep, good point but that shouldn't be applicable here due to selling in other countries. The products sold are only sold elsewhere in other countries. It's all online also, drop shipping methods.
 

JustAnotherNomad

Mentor Group Gold
I would talk to a lawyer anyway just in case. But I think you’ll be fine. If you do, please let us know what they told you, I’m sure it will be relevant for others here.
 

Hanif

New member
Banking for UAE based companies, especially Free-zone locations is not easy. Even with Transferwise.
We operate a similar structure and I am aware that our nature of business and resident location in Europe has been the asset to ensuring the account does not face blockages or greater scrutiny. (fingers crossed ) So far it has been OK for a few years.

BVI has reputation issues and that itself may create banking issues for you wherever you go.
I would take advice from (NON UAE) based professionals about your nationality, residency in Thailand as you are planning, together with the UAE Freezone and Transferwise banking..
It may be OK at first but like most institutions they are reviewing rules frequently. Transferwise I expect have policies they implement.
I know when I ask then very specific questions I get feedback very quick and detailed.. Better than other banks we have dealt with in UAE and UK.
We also work in a drop ship way but larger items to many countries. So we understand the outline structure your aiming for.

Your products which you sell will also have an impact on the total mix, so this is where real good advice tailored to your needs is important.
You have been given a lot of information from others on the forum and my 2 cents worth.
You need an expert and go into greater detail beforehand otherwise things could get delayed and become a costly exercise.
UAE as a whole does have more compliance with global business and banking as you will read in many places on the forum.. But things are not always consistent..
They also make it harder and costly to close a business, in case you face issues later on, You can read more about this on the forum pages .. There are many options so take your choice according to the advice already shared.

Cheers
 

offshoreavatar

New member
Thanks Hanif.

Ah I think I undertand why people think banking is an issue. They think the income is going in and out of the UAE / BVI etc.
Banking isn't an issue because I don't need any money going in or out of the UAE. It all goes into accounts in different currencies in the business name which several companies offer (there are many more than Transferwise now).

I will have to read up on account blockages as I'm not doing anything illegal. I'm just a drop shipper (in its most simple form) so at this point I have no idea why I would get my accounts blocked.

Why would companies stop banking with me if my company is in the UAE?

Yes, definitely will be speaking with various professionals. If anyone has any recommendations please let me know! :)

Appreciate the advice, thank you.
 

Hanif

New member
Hi,

The reply from 'crsp' underlines the many complexities which affect offshore structures and banking.
Your ethics and perspectives are never taken into account by authorities and banks..
Your structure covers many countries and seems simple in today's world.. Sadly not so straightforward as we all might wish things to be.

I don't work professionally in this field, there are many here online who do.

And after some research you will get a better understanding of what advice you need to seek.
 

boomy

Mentor Group Gold
Not saying you can't get away with dodging the issue but...
I know a few guys relocated to Thailand, they don't even signed up there with the authorities and live tax free for several years already!
 

offshoreavatar

New member
My guess is they'll tell you that, due to domestic and DTT Permanent Establishment rules, you're due to pay corp' tax in Thailand. Not saying you can't get away with dodging the issue but...
Sorry I somehow missed these notifcations!
Do you mean CFC rules? I was under the impression Thailand didn't have any.
I thought DTT was more in relation to personal income?
(Also all of the income would be deferred to the next year).

Definitley don't want to dodge anything in any illegal sense. I know this can be done all by the book I'm just learning how at the moment.
 

offshoreavatar

New member
Hi,

The reply from 'crsp' underlines the many complexities which affect offshore structures and banking.
Your ethics and perspectives are never taken into account by authorities and banks..
Your structure covers many countries and seems simple in today's world.. Sadly not so straightforward as we all might wish things to be.

I don't work professionally in this field, there are many here online who do.

And after some research you will get a better understanding of what advice you need to seek.
Thanks Hanif. I've spoken with a few international tax agents so far.
The best solution so far seems to be a Nevis IBC. Works with my banking partners (World First & Transferwise), Paypal, Amazon, eBay etc.
I'm finding it difficult to find people to be honest so please feel free to message me with any recommendations.
 

offshoreavatar

New member
I know a few guys relocated to Thailand, they don't even signed up there with the authorities and live tax free for several years already!
Thanks boomy, although that is pretty interesting I'm definitely not that type of person.

I really do love Thailand and would want to contribute and pay taxes. I'm simply trying to put myself in a position to pay the way I want to. If at all possible! With the amount of knowledge and advice out there it does seem very possible.

If anything it makes me want to pay taxes more, coming from one of the highest taxed countries in the world to a country that recognises digital nomads / the need for countries to create a system for people who earn purely online and can be located anywhere etc. They are hurting their own economies not catering to this. The internet has been around for many many decades now and there still isn't anything that has been done for this. How is someone who gets taxed 30% company tax & nearly 50% personal income tax supposed to compete?
 

JustAnotherNomad

Mentor Group Gold
Do you mean CFC rules? I was under the impression Thailand didn't have any.

CFC rules are mostly about passive income. It’s so that you can’t hire one guy as the “director” of your license company in the Caymans who then bills your company millions in “licensing fees” to shift profits into a tax haven.

What he meant is permanent establishment/place of management rules. That’s different. It’s about where the company is actually operating. With the license company, you could always claim it’s actually operating in the Caymans since there’s an employee and you don’t need a lot of staff to manage licenses. That’s why CFC rules are needed to hinder tax evasion. But when you only register your company in the Caymans and you really do everything from your home country, it’s very easy for them to say that the company is only registered in the tax haven country, but all it’s operations are taking place in your home country - so it should be taxed as a local company. This is the norm for high tax countries that tax worldwide income. With countries with territorial taxation, you’d have to check how they handle it. They could do it just like high-tax countries (I believe Singapore does this for example), or they could be really lax (like Panama).
 

offshoreavatar

New member
CFC rules are mostly about passive income. It’s so that you can’t hire one guy as the “director” of your license company in the Caymans who then bills your company millions in “licensing fees” to shift profits into a tax haven.

What he meant is permanent establishment/place of management rules. That’s different. It’s about where the company is actually operating. With the license company, you could always claim it’s actually operating in the Caymans since there’s an employee and you don’t need a lot of staff to manage licenses. That’s why CFC rules are needed to hinder tax evasion. But when you only register your company in the Caymans and you really do everything from your home country, it’s very easy for them to say that the company is only registered in the tax haven country, but all it’s operations are taking place in your home country - so it should be taxed as a local company. This is the norm for high tax countries that tax worldwide income. With countries with territorial taxation, you’d have to check how they handle it. They could do it just like high-tax countries (I believe Singapore does this for example), or they could be really lax (like Panama).
Hi JustAnotherNomad, appreciate the response but I’m pretty sure everything you described is CFC. Place of management is what CFC is about. Where the company is controlled from.
 

sinos

New member
CFC rules are mostly about passive income. It’s so that you can’t hire one guy as the “director” of your license company in the Caymans who then bills your company millions in “licensing fees” to shift profits into a tax haven.

What he meant is permanent establishment/place of management rules. That’s different. It’s about where the company is actually operating. With the license company, you could always claim it’s actually operating in the Caymans since there’s an employee and you don’t need a lot of staff to manage licenses. That’s why CFC rules are needed to hinder tax evasion. But when you only register your company in the Caymans and you really do everything from your home country, it’s very easy for them to say that the company is only registered in the tax haven country, but all it’s operations are taking place in your home country - so it should be taxed as a local company. This is the norm for high tax countries that tax worldwide income. With countries with territorial taxation, you’d have to check how they handle it. They could do it just like high-tax countries (I believe Singapore does this for example), or they could be really lax (like Panama).
Even if someone actually implements a structure that has the licensing option, my question is what about UBO and bank accounts. Ultimately I will be the UBO and funds will end up in an account controlled either directly by me or through a trust. That means the licensing aspect will be of no use, and the caymans company will also come under CFC rules. After CFC, economic substance and CRS, accountants aren't just ready to work with offshores. Its very difficult now and race against time, one by one all the countries will get into CRS. The only option is to physically relocate.
 
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