HK company + residency in territorial or no tax country.

[batak]

Hi,

Can someone help we clarify if I am correct here?

Let's say that you operate an offshore business with an HK or BVI company (therefore not taxable) and you reside (and receive your salary in Panama (for instance) or Dubai.
Does that means that you pay zero corporate taxes and zero incomes taxes?

Then let's say that you spend over 184 days in Dubai (when weather is perfect) or Panama and the rest of the time in Europe to visit friends and family (but your close family does reside with you and not in EU).
Will it change your tax situation?

Thanks

 

[Martin Everson]

Let's say that you operate an offshore business with an HK or BVI company (therefore not taxable) and you reside (and receive your salary in Panama (for instance) or Dubai.
Does that means that you pay zero corporate taxes and zero incomes taxes?

No.

Then let's say that you spend over 184 days in Dubai (when weather is perfect) or Panama and the rest of the time in Europe to visit friends and family (but your close family does reside with you and not in EU).
Will it change your tax situation?

No.

 

[batak]

Thank you
To make sure I understand you correctly : Is it "no your assumption is not correct" (no, you would pay taxes) or "no, you would not pay taxes" ?

 

[Error404]

Hi,

Can someone help we clarify if I am correct here?

Let's say that you operate an offshore business with an HK or BVI company (therefore not taxable) and you reside (and receive your salary in Panama (for instance) or Dubai.
Does that means that you pay zero corporate taxes and zero incomes taxes?

Then let's say that you spend over 184 days in Dubai (when weather is perfect) or Panama and the rest of the time in Europe to visit friends and family (but your close family does reside with you and not in EU).
Will it change your tax situation?

Thanks

Hi Barak,

Hope you are doing well,

Let me explain you in HK there is NO CORPORATE TAX they have Profit Tax, Property Tax and Salary Tax and the annual tax go from 12 to 18 months.

The profit tax is 8,5% for < 260k profit and 16,5% >260k profit, but in the meantime if your HK company is a vehicle to reduce your tax burden and you will not do business in HK but all outside the country you are allowed to request after 1 year the OFFSHORE STATUS.

If you reside in Panama or Dubai you are right you do not pay taxes on your income.

Regarding your last question first of all I highly recommend to consult a business consulting company like us cause you need to check the double taxation treatment from your tax residency country to the country of your Family (close if we mean your wife and your children)

if you mean your parents will not change your tax situation.

Hope I answered all your questions

 

[Martin Everson]

Thank you
To make sure I understand you correctly : Is it "no your assumption is not correct" (no, you would pay taxes) or "no, you would not pay taxes" ?

Its "no your assumption is not correct".

Economic Substance alongside place of effective control and management is what you have not considered. Just think through your plan again with these in mind and see if you come up with same result .

 

[batak]

Hi Barak,

Hope you are doing well,

Let me explain you in HK there is NO CORPORATE TAX they have Profit Tax, Property Tax and Salary Tax and the annual tax go from 12 to 18 months.

The profit tax is 8,5% for < 260k profit and 16,5% >260k profit, but in the meantime if your HK company is a vehicle to reduce your tax burden and you will not do business in HK but all outside the country you are allowed to request after 1 year the OFFSHORE STATUS.

If you reside in Panama or Dubai you are right you do not pay taxes on your income.

Regarding your last question first of all I highly recommend to consult a business consulting company like us cause you need to check the double taxation treatment from your tax residency country to the country of your Family (close if we mean your wife and your children)

if you mean your parents will not change your tax situation.

Hope I answered all your questions

Thank you very much for your clear reply.
As you mentionned to consult with a business consulting company like yours, can you tell me more? Is your company specialized in offshore taxation?

 

[JimBeam]

Why complicate things with HK or BVI?

Why not choose UAE directly if you're okay with spending 184 days in the desert?

 

[batak]

That's a good option indeed to spend the best time of the year > 184 days and the rest where summer is cooler. I had that in mind too

 

[TheCryptoAnt]

Its "no your assumption is not correct".

Economic Substance alongside place of effective control and management is what you have not considered. Just think through your plan again with these in mind and see if you come up with same result .

While this is true, nobody is looking at this in Emirates.

In practice you can own and control whatever you want from Dubai and its all fine.

 

[Martin Everson]

While this is true, nobody is looking at this in Emirates.

Emirates signed and committed to doing so more than a year ago. See below and get up to speed.

Twelve no/low tax countries share data on companies with no substance with UBO's country

Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident. I think non-resident folk with companies in the below countries may be in for a letter from their tax man. Anguilla Bahamas Bahrain...

www.offshorecorptalk.com

 

[TheCryptoAnt]

Emirates signed and committed to doing so more than a year ago. See below and get up to speed.

Twelve no/low tax countries share data on companies with no substance with UBO's country

Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident. I think non-resident folk with companies in the below countries may be in for a letter from their tax man. Anguilla Bahamas Bahrain...

www.offshorecorptalk.com

'Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident.'

Yeah but even my cat knows how to circumvent this.

Also hes talking about living in UAE, where reality is that nobody cares where your business is located and/or if you trigger any PE there

 

[JimBeam]

'Since March 2021 twelve countries now automatically share information on companies with no economic substance and where beneficial owners are non-resident.'

Yeah but even my cat knows how to circumvent this.

Also hes talking about living in UAE, where reality is that nobody cares where your business is located and/or if you trigger any PE there

But it the owner of the company (UBO/Director/Shareolders) has UAE visa and is employed within the company (has visa and emirates id) he would be then considered a resident and that won't be an issue (at this point but maybe they can complicate things along the way/later on).

 

[Martin Everson]

Yeah but even my cat knows how to circumvent this.

You have a very smart cat then....just saying.

But in real world things have moved on.

 

[TheCryptoAnt]

You have a very smart cat then....just saying.

But in real world things have moved on.

with no economic substance

Most UAE companies have that sorted out already.

Also the dude is talking about living in UAE, where reality is that nobody cares where your business is incorporated.

 

[Martin Everson]

Also the dude is talking about living in UAE, where reality is that nobody cares where your business is incorporated.

As always I will let people find out the hard way how things really work.