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DMCC and UAE

omaozeko

New member
Hi there,

I am a UK resident, and looking at various ways of optimising taxes.

I am invoicing non UK companies for consulting and thinking about setting up a DMCC company in the UAE free trade zone. I would get tax residency and a local bank account, which means that in the eyes of the UAE there is no reporting to be done to the UK as I am a local resident (by going once every 6 months). I will still be reporting the income to the UK and pay taxes locally, but I want that flexibility of being offshore if I decide to move overseas.

Why is this a terrible idea? What could go wrong?

Thanks,
 

Martin Everson

Offshore Retiree
Mentor Group Gold
Elite Member
If you remain tax resident in UK and continue to report income to UK then no issues.

However why spend in excess of $20,000 to do this and gain no tax advantage. You are talking about company setup with visa plus apartment rental etc which is all needed to open a local account. Unless you know how to open a local business bank account for company easily as a non-resident.

Why is this a terrible idea?
Waste of money for no gain

What could go wrong?
You don't decide to move. Then its like buying a holiday home you never use.
 

omaozeko

New member
If you remain tax resident in UK and continue to report income to UK then no issues.

However why spend in excess of $20,000 to do this and gain no tax advantage. You are talking about company setup with visa plus apartment rental etc which is all needed to open a local account. Unless you know how to open a local business bank account for company easily as a non-resident.



Waste of money for no gain



You don't decide to move. Then its like buying a holiday home you never use.
What if you only declare a certain amount back in the UK but leave the rest in the UAE? Given you are tax resident there so there is no CRS / no reporting applicable.
 

Martin Everson

Offshore Retiree
Mentor Group Gold
Elite Member
What if you only declare a certain amount back in the UK but leave the rest in the UAE? Given you are tax resident there so there is no CRS / no reporting applicable.
Well you committed tax fraud as you are also tax resident in UK where you are subject to tax on worldwide earnings unless you are a non-dom. HMRC is not stupid and your the perfect candidate for them to sodomize with your level of understanding of cross border taxation....lol.

P.S You can be tax resident in more than one country you know.
 

JustAnotherNomad

Entrepreneur
I guess it probably wouldn’t be discovered automatically, but if one of your customer is audited, then HMRC may very well ask who’s behind that UAE company. And your client will be happy to explain that it was you, a UK resident, who working for them from their London office.
That’s probably the most realistic risk.
 

rowena

Active Member
DMCC is one of the most reputable, developed FZ in the UAE but it is not cheap and highly regulated. You need to consider accounting, audit and other ongoing costs also if you want to close the company there is a very long/expensive liquidation process. There are lots of discounts for business packages right now(because of covid19) but expect min $15k per year for ongoing years.

Another problem is ESR started in the UAE. You need to demonstrate a relationship with the UAE. It depends on the business but expect some proof like manager's residency and utility bill, office space, employees etc...
 

cyprus123

Silver Member
Many companies are not happy to pay invoices from UAE. You could have a look into obtaining tax residence in Georgia, which requires no physical presence or open a company in any EU jurisdiction like Cyprus, Bulgaria and Malta.
 

JimBeam

Active Member
If your turnover is less than 300k USD/EUR/GBP per year - I guess it's probably not worth it.

Setting up things in UAE might not be that simple and can take some time.
It took us about 6 months to get our bank account approved.
You're also required to visit UAE once in 6 months to preserve your visa.

I just got back from Dubai couple days ago...
If you have any specific questions feel free to PM me...
 
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