Dubai is dead, any alternative to the free zone 9% tax?

[supreme]

The main issue with this non sense juristictions is the missing support from Banks / Payment Gateways.

Even Bahrain is not supported by stripe at the moment even tho bank are not bad.
Seychelles is basically not supported by anyone.

Hong Kong looks way more interesting at this point than Dubai to me.

Even without the offshore status approved it's still 8.5% (0.5% less than Dubai) and waay more cheaper to incorporate and manage, Dubai free zone licenses are starting at 4k$ a year, where HK can be as low as $600.

just fyi , this is only for the first 2 mil hkd , after that would be taxed at ~16% ish . The most difficult and time consuming part is also getting bank account

 

[Howl]

Freezones don't pay tax in Dubai, only mainland companies

 

[TRGali]

Freezones don't pay tax in Dubai, only mainland companies

You seem a little late to the party sadly. This is not true unless the FZ company does a qualified activity + have PE in dubai.

 

[Ann1892]

In order to claim the payments from the company to you as dividends, you can't do anything for the business. Otherwise you're considered as a "foreign employee" of the company and you must pay a flat tax rate of 12% on your income (using a separate business in another country could help but it depends)... What most people do is that they assign themselves a local rate salary for managing the business (for example ~50k a year) so they only pay 12% on that and later in a few years they withdraw the earnings

Could you explain this in detail please

 

[Howl]

You seem a little late to the party sadly. This is not true unless the FZ company does a qualified activity + have PE in dubai.

When it comes to TAX in Dubai, mainland companies pay tax. For Freezones nothing has been implemented officially yet.

 

[uplana]

Is paying a bit of tax (2-8%) really THAT bad honestly? Especially as if you take out a salary, unless disproportionate would be untaxed, so you would be looking on the low end of 2-3%, unless you are pulling millions and millions every year. And in that case it would be generally unwise to take everything out from the company, you can invest it in a sister company thru a holding in real estate, stocks etc...

second that, can't see why it is a huge problem to pay tax below 10% from your profits in the company which easily can be reduced.

 

[Checkmelater]

When it comes to TAX in Dubai, mainland companies pay tax. For Freezones nothing has been implemented officially yet.

Wake up we are in 2024 and since 6 months everybody knows that free zone has to register for CIT and pay it for unqualified activities.

 

[Howl]

What unqualified activities are you talking about?

 

[Tomy223]

Wake up we are in 2024 and since 6 months everybody knows that free zone has to register for CIT and pay it for unqualified activities.

Maybe she run a whorehouse there

Wake up neo

 

[Cloudbanck]

What unqualified activities are you talking about?

The qualified activities are essentially: Manufacturing of goods and materials, shipping, reinsurance, aircraft leasing, regulated fund/investment management, logistics services, and holding companies.

Pretty much everything else is taxed, including social media marketers, influencers, drop shippers and the like.

 

[Nickster]

Freezones don't pay tax in Dubai, only mainland companies

Wrong. Please tell me you are not advising clients of this.

 

[StMark]

For me, it's NOT the 9% at all. I pay that in Zug, CH. It's being targeted by authoritative tax authorities there for missing a deadline or someone wanting me "gone". Also, I dig Zug. It's just so peaceful!

Agree, the problem is not really the 9% but it is all the reporting / auditing that is attached to that, making it a whole mess

 

[Nickster]

Agree, the problem is not really the 9% but it is all the reporting / auditing that is attached to that, making it a whole mess

If you mean for Dubai Freezones then there is no auditing requirement unless the company is one of the qualifying activities (0% tax).

And, if your revenue (not profit) is under 3 million AED then you can report on a cash basis only, so no real accounting necessary, only keeping proof of relevant invoices, bank statements etc.

Further details: Corporate Tax FAQ – Ministry of Finance – United Arab Emirates

 

[GPT]

Look into setting up a Romanian micro company. You could combine it with residency in the UAE, Switzerland or pretty much any EU country as long as you own the shares through a local legal entity (0% WHT in that case).

Can you elaborate on RO microcompany with Swiss residency? I'm curious?

 

[Jerry1911]

Can you elaborate on RO microcompany with Swiss residency?

There is nothing special about it. Instead of paying 9% in the UAE, you pay 3% in Romania, but you need a bit of substance... which costs the same as all the licenses, permits, audits and whatnot for a UAE company.

 

[GPT]

There is nothing special about it. Instead of paying 9% in the UAE, you pay 3% in Romania, but you need a bit of substance.

Thanks. Reason for me to find it interesting is that RO is part of the EU and therefore it could proof to be convenient with VAT. Ill look into the substance part.

 

[JackieTsan]

where you mean "there" it's first time i hear this... you must not do anything for the company to get dividends otherwise you are considered as employee. is this generic rule? or in a specific country? and which?
thank you

Wrong! 9% for every company, offshore, onshore, mainland etc! I think it's over the 375K AED (that makes over 90K USD?. Then 9%.
Unless something changed again.
Indeed, seems that Dubai is dead.
I am talking about the offshore Rak/Asjman, Jebel Ali etc.

If you mean for Dubai Freezones then there is no auditing requirement unless the company is one of the qualifying activities (0% tax).

And, if your revenue (not profit) is under 3 million AED then you can report on a cash basis only, so no real accounting necessary, only keeping proof of relevant invoices, bank statements etc.

Further details: Corporate Tax FAQ – Ministry of Finance – United Arab Emirates

do you have this somwehere officially please?

 

[JonnyStekkino]

I've evaluated romania but it's just too hassle: non english papers or support, a lot of bureaucracy, substance needed etc.. at the end you really better keep Dubai and try to minimize the profits to the minimum.

Also considering the 9% is on what is over 375k AED, so very much depends on the revenue.

I'm very curious about Bahrain too, seems like starting a company there is around 1.5k USD, and so far it's completely tax free.
Anyone had experience with Bahrain? How's the accounting/things required there?

 

[TheCryptoAnt]

Seychelles how?
how will you bank with syechelles ibc?

check EU EMIs theres a few that will onboard an IBC no problem.

 

[sergeylim88]

that is true, but they won't be able to provide visa debit cards in usd