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EU national, UAE freelancer visa, conducting business through a US LLC?

Trashy

Trashy

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Feb 13, 2020
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#1
Hello,

In short, as title says. I'm an EU (Hungarian) national, working as a freelance software developer, doing both contract works and developing my own apps, services. Lately, my country has been becoming less and less livable; higher taxes, lower quality of public services, more corruption and an ever-increasing authoritarianism by the government.
I'm looking to move to the UAE. I would still spend a considerable time in my home country, but I'd rent an apartment in Dubai, move my permanent residence and spend the winter months there. There is a double tax agreement between the UAE and Hungary.

So, my first question: provided I inform the tax authorities in my home country that I'm moving, get the residency visa in the UAE (and also tax domicile certificate), am I, in theory, "safe" from my local tax office? Do I still have to pay attention to spending at last 183 days away? I mean, normally I travel a lot, but I also like to spend time with friends and family here.

The second question: I would like to set up a US LLC, and conduct business through that. Since it is a pass-through entity, does that mean I only have to pay taxes in the UAE (which I don't, because of the 0% tax rate), and *not* in the US?

Thanks, and feel free to ask for clarification.
 
#2
You don't need the US LLC as your UAE set up will suffice as you get a company and visa all together. This also cuts down on paperwork that you will be required to fill with the US authorities.
You cant have anything in Hungary like gym membership phone bill or anything that links you back to have some part of your life back there.
If you have an house you need to rent that out and declare that for your Hungarian Tax.
Double check what the maximum stay is for a non dom in Hungary, so so long as you are out of the country for that period you should be fine.
 
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#3
CaptK said:
You don't need the US LLC as your UAE set up will suffice as you get a company and visa all together. This also cuts down on paperwork that you will be required to fill with the US authorities.
You cant have anything in Hungary like gym membership phone bill or anything that links you back to have some part of your life back there.
If you have an house you need to rent that out and declare that for your Hungarian Tax.
Double check what the maximum stay is for a non dom in Hungary, so so long as you are out of the country for that period you should be fine.
Click to expand...
Hello Captk,
Which Dubai free zone would you advise for a dropshipping business (selling to americans)?
Thanks
 
#6
There is a double tax treaty between Hungary and UAE. If you will spend in Hungary 183 days, or if you will have a valid residency registered there, or if you have any tie which can be considered as to have Hungary as having child or wife there, or having the main business activity tehere etc, you will be also resident of Hungary as well as UAE.

Base ond double tax treaty, you will be taxted there, where you have a valid residence permit. If you have a valid resicence permit in both countries, you will be taxed in a country, where you have real estate where you live or can live permanently. If you have a real estate in both countries, you will pay taxes in a country where you have more tight ties. If you have the same ties in a both countries, tax authorities has to sign a contract which country will tax you. This is what double tax treaty between UAE and Hungary says.

So, the best for you will be to withdraw your residency in Hungary and return hungarian national ID. You can travel to Hungary with hungarian passport any time., You will be still citizen of hungary but you will be not a resident of Hungary. If you have any real estate where you can live, you have to sell it, or transfer ti to a company. And do not spend 183 days per year in Hungary. That is all.
 
#7
LoveMyLife said:
There is a double tax treaty between Hungary and UAE. If you will spend in Hungary 183 days, or if you will have a valid residency registered there, or if you have any tie which can be considered as to have Hungary as having child or wife there, or having the main business activity tehere etc, you will be also resident of Hungary as well as UAE.

Base ond double tax treaty, you will be taxted there, where you have a valid residence permit. If you have a valid resicence permit in both countries, you will be taxed in a country, where you have real estate where you live or can live permanently. If you have a real estate in both countries, you will pay taxes in a country where you have more tight ties. If you have the same ties in a both countries, tax authorities has to sign a contract which country will tax you. This is what double tax treaty between UAE and Hungary says.

So, the best for you will be to withdraw your residency in Hungary and return hungarian national ID. You can travel to Hungary with hungarian passport any time., You will be still citizen of hungary but you will be not a resident of Hungary. If you have any real estate where you can live, you have to sell it, or transfer ti to a company. And do not spend 183 days per year in Hungary. That is all.
Click to expand...

You do not have to return your ID but you would need to rent out your property if you own it. It can't stay empty and at your disposal when you come.
All subscriptions such as TV and gym needs to be closed. If you have a partner and children they would need to come with you.
If you are no longer with the spouse and they have custody of the children then it's fine.

Plus as @LoveMyLife has said.
 
#8
CaptK said:
You do not have to return your ID but you would need to rent out your property if you own it. It can't stay empty and at your disposal when you come.
All subscriptions such as TV and gym needs to be closed. If you have a partner and children they would need to come with you.
If you are no longer with the spouse and they have custody of the children then it's fine.

Plus as @LoveMyLife has said.
Click to expand...
He will has to return his ID. To have a legal right to posses an national ID, person has to have a citizenship as well as residency registered within a country. If person does not have a residency registered within a country, there is ibligation to return national ID card. Hungarian national ID card contains address. And when person terminates residency, this data are void and person has to return his ID.
If he does not return his ID, Hungarian authoriuties will see his situation as he did not intent to terminate his residency in a country in reality and he will be considered to be a hungarian tax resident.

Hungarian law says, that just ownership of residential real estate is enough tie. So renting it out is not what he can do. He has to transfer it to a company, which can be his own and rent it out. Ownership of a company is not cinsidered a tie for personal tax residency in a Hungary.
 
#9
LoveMyLife said:
He will has to return his ID. To have a legal right to posses an national ID, person has to have a citizenship as well as residency registered within a country. If person does not have a residency registered within a country, there is ibligation to return national ID card. Hungarian national ID card contains address. And when person terminates residency, this data are void and person has to return his ID.
If he does not return his ID, Hungarian authoriuties will see his situation as he did not intent to terminate his residency in a country in reality and he will be considered to be a hungarian tax resident.

Hungarian law says, that just ownership of residential real estate is enough tie. So renting it out is not what he can do. He has to transfer it to a company, which can be his own and rent it out. Ownership of a company is not cinsidered a tie for personal tax residency in a Hungary.
Click to expand...

He can keep his ID, but he'll need to get a new Address Card (lakcímkártya). Other countries just put a sticker on the ID card to cover the address.
 
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#10
Corno said:
He can keep his ID, but he'll need to get a new Address Card (lakcímkártya). Other countries just put a sticker on the ID card to cover the address.
Click to expand...
Hungarian law exactly says, that if person does not reside within a country, ID card has to be returned. But this all does not matter. Passport is absolutely valid and functional form of identification..
 
#11
LoveMyLife said:
Hungarian law exactly says, that if person does not reside within a country, ID card has to be returned. But this all does not matter. Passport is absolutely valid and functional form of identification..
Click to expand...

You mean the Address Card. Yes, he needs to return it and get a new one if he moves abroad. The ID Card he'll keep since it doesn't have an address on it.
 
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#12
If you require merchant accounts like PayPal and Stripe your setup with the combination of US LLC and UAE makes sense.

We recommend you to go with a company in Dubai as it makes the bank account opening a little bit easier and what many peaople forget is that you get your VISA issued in Dubai as well. Dubai have all VISA services digitalized compared to other emirates

Nearly all our clients spent there time in Dubai and some have Freezones established with other agents in other emirates and if they have a complex case with their VISA they have to drive to other emirate all the time because the freezones don't have a rep office in Dubai or they have but need several days for services like VISA shifting.
 
#13
Fred said:
If you require merchant accounts like PayPal and Stripe your setup with the combination of US LLC and UAE makes sense.

We recommend you to go with a company in Dubai as it makes the bank account opening a little bit easier and what many peaople forget is that you get your VISA issued in Dubai as well. Dubai have all VISA services digitalized compared to other emirates

Nearly all our clients spent there time in Dubai and some have Freezones established with other agents in other emirates and if they have a complex case with their VISA they have to drive to other emirate all the time because the freezones don't have a rep office in Dubai or they have but need several days for services like VISA shifting.
Click to expand...
How much will the cheapest Dubai freezone cost approximately?
Ecommerce license + 1visa + no desk

Thanks
 
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