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elieelia

New member
Hi,

I currently run an e-commerce dropshipping business which sells home lighting, and it has reached a point where I would like to incorporate and I am looking at offshore options.

I am a Cyprus citizen and tax resident, and was looking at incorporating in the Dubai freezone to benefit from the 0% corporate tax rate. I currently use transferwise to receive shopify payments and pay for goods from suppliers.

I had a few questions please:
1. Would I avoid paying corporate tax rate in Cyprus given that the UAE has signed a double tax treaty with Cyprus?
2. Will opening a corporate bank account in dubai allow me to continue processing payments and paying for facebook advertisements? ie. Will they be able to offer debit/credit cards? Is there an issue with pursuing dropshipping activities in the Dubai freezone?
3. Are there any other banking solutions I could use instead of opening a bank account in dubai? Could I use something like bankera?
4. Are there any reputable companies that offer incorporation services in the dubai freezone?
5. Are there any better alternatives for an offshore company?

Thanks!
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Hi,

I'm original from the E-Commerce and have an E-Commerce Company in the UAE since 2016.

1.) Yes - if the whole UAE setup is done right
2.) Yes - in case you have your AdSpend in EUR you can open a Paysera Business Bank Account in EUR and get a Visa Debit Card in EUR as well for your Dubai Company.
3.) Like mentioned in 2.) Paysera is your best available option for a Dubai Company that needs SEPA/SWIFT for EUR and a Visa Debit Card in EUR at a good cost structure - Paysera is around since 2005 and the best replacement for Transferwise when it comes to EUR transactions - keep in mind TrasnferWise is no longer working with UAE residence / company. Beside of that our recommendation is always to transfer the funds to a real UAE Business Bank Account to keep significant amount of money.
5.) When it comes to payment processing with Merchants like PayPal the UAE is the best available offshore jurisdiction with all the classic aspects like 0% tax, no accounting, no audit requirements (for E-Commerce License).
There is no other offshore company with the reputation, setup price and easy way like the UAE and same time provides you with a residence visa to get local UAE bank accounts.

Possible alternatives for people that want to stay in the EU are Malta and Cyprus - both come with taxes and headache and in your case it's not an option if you are already on living on Cyprus as a citizen.

Beside of that there is only Singapore left - it is not much more expensive but requires much more preparation for the company setup like you need a local Singapore Resident director and of course Singapore isn't tax free.

All the UK LLP and US LLC options don't grants you access to real banks - it's important to don't store significant amounts of money with EMI. Hong Kong was an option in the past but nowadays you can't really receive a local HK bank account without any local substance and the local substance comes with tax liability in HK - no 0% tax setup.

That's pretty much it you have in options.
 

elieelia

New member
Hi,

I'm original from the E-Commerce and have an E-Commerce Company in the UAE since 2016.

1.) Yes - if the whole UAE setup is done right
2.) Yes - in case you have your AdSpend in EUR you can open a Paysera Business Bank Account in EUR and get a Visa Debit Card in EUR as well for your Dubai Company.
3.) Like mentioned in 2.) Paysera is your best available option for a Dubai Company that needs SEPA/SWIFT for EUR and a Visa Debit Card in EUR at a good cost structure - Paysera is around since 2005 and the best replacement for Transferwise when it comes to EUR transactions - keep in mind TrasnferWise is no longer working with UAE residence / company. Beside of that our recommendation is always to transfer the funds to a real UAE Business Bank Account to keep significant amount of money.
5.) When it comes to payment processing with Merchants like PayPal the UAE is the best available offshore jurisdiction with all the classic aspects like 0% tax, no accounting, no audit requirements (for E-Commerce License).
There is no other offshore company with the reputation, setup price and easy way like the UAE and same time provides you with a residence visa to get local UAE bank accounts.

Possible alternatives for people that want to stay in the EU are Malta and Cyprus - both come with taxes and headache and in your case it's not an option if you are already on living on Cyprus as a citizen.

Beside of that there is only Singapore left - it is not much more expensive but requires much more preparation for the company setup like you need a local Singapore Resident director and of course Singapore isn't tax free.

All the UK LLP and US LLC options don't grants you access to real banks - it's important to don't store significant amounts of money with EMI. Hong Kong was an option in the past but nowadays you can't really receive a local HK bank account without any local substance and the local substance comes with tax liability in HK - no 0% tax setup.

That's pretty much it you have in options.
Thank you for your reply Fred.

Are there any reputable companies that could offer these incorporation services? I was looking at SFM but was then made aware of all the issues many users on this forum were facing with their service.
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Thank you for your reply Fred.

Are there any reputable companies that could offer these incorporation services? I was looking at SFM but was then made aware of all the issues many users on this forum were facing with their service.
We can help you with the Dubai Company Formation, residence Visa and local UAE bank accounts + Paysera like mentioned.

Everything regarding Dropshipping is my free advise I give to you as I'm from the Dropshipping and have already worked out everything.

Avoid Company Service Provider that sell you any possible Offshore Jurisdiction like in a Catalogue. You end up banking this companies in Belize, Dominica and Puerto Rico. Of course no Merchant processing available.

Send me PM if interested.
 

elieelia

New member
We can help you with the Dubai Company Formation, residence Visa and local UAE bank accounts + Paysera like mentioned.

Everything regarding Dropshipping is my free advise I give to you as I'm from the Dropshipping and have already worked out everything.

Avoid Company Service Provider that sell you any possible Offshore Jurisdiction like in a Catalogue. You end up banking this companies in Belize, Dominica and Puerto Rico. Of course no Merchant processing available.

Send me PM if interested.
Would it be possible to incorporate without obtaining a visa and utilize some online banking solution for payments?
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Would it be possible to incorporate without obtaining a visa and utilize some online banking solution for payments?
Of course it would be possible but this would be a trash setup because you have to mention all the EMI around your home address and they will be forced sooner then later to report you under CRS.

Paysera for example can be opnened with your Emirates ID only - without the need of a private Apartment in Dubai.

I doubt that you really want to keep significant amount of money on the EMI and the local UAE banks require the residence Visa to open the Business Bank Account.

If you really want to bank with EMI only and not go with the Visa the Company grants you anyway - the setup would be slightly cheaper.

We don't recommend to go that way.
 

elieelia

New member
Of course it would be possible but this would be a trash setup because you have to mention all the EMI around your home address and they will be forced sooner then later to report you under CRS.

Paysera for example can be opnened with your Emirates ID only - without the need of a private Apartment in Dubai.

I doubt that you really want to keep significant amount of money on the EMI and the local UAE banks require the residence Visa to open the Business Bank Account.

If you really want to bank with EMI only and not go with the Visa the Company grants you anyway - the setup would be slightly cheaper.

We don't recommend to go that way.
Thanks for the response.

In the case that I do obtain a Visa in the UAE, would you happen to know how double tax treaties apply between Cyprus and UAE? I won't be spending any time in the UAE, and I am a tax resident of Cyprus as well. Would they just tax me the corporate tax in Cyprus instead?
 

Fred

Dubai Expat
Mentor Group Gold
Commercial Service
Thanks for the response.

In the case that I do obtain a Visa in the UAE, would you happen to know how double tax treaties apply between Cyprus and UAE? I won't be spending any time in the UAE, and I am a tax resident of Cyprus as well. Would they just tax me the corporate tax in Cyprus instead?
What you mentioned would be the case if you would be a Citizen and Resident of Country with hard CFC rules like Germany.

As you are a Cyprus Citizen and Resident you enjoy the easiest CFC rules in whole Europe.

No issue at all - beside of that keep in mind that the local UAE bank account opened with the residence Visa don't report your financial statements to Cyprus under CRS.

You just have to make sure to be every 6 months for 1 day in the UAE to keep your residence visa active.
 

elieelia

New member
What you mentioned would be the case if you would be a Citizen and Resident of Country with hard CFC rules like Germany.

As you are a Cyprus Citizen and Resident you enjoy the easiest CFC rules in whole Europe.

No issue at all - beside of that keep in mind that the local UAE bank account opened with the residence Visa don't report your financial statements to Cyprus under CRS.

You just have to make sure to be every 6 months for 1 day in the UAE to keep your residence visa active.
Thanks for your reply Fred. Could we arrange a meeting to discuss the services you may have to offer?
 

honeysyed

New member
Another benefit of incorporating in Dubai for dropshippers is the availability of Stripe atlas. In 2016, Paypal limited my account and held all my money and Stripe Atlas saved us.

If you do get the setup done, I would highly recommend you to get Stripe Atlas too.
 
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