Shareholders borrow funds from FZ Dubai company

[bandanna]

Hello,

I’m a shareholder of a company based in Dubai FZ and would like to ask if, and how, can I borrow money from the corporate account/funds?

Is there a way to facilitate/document the loan? Is there a limit, and where it should have interest rates?

Thanks!

 

[CyprusLawyer101]

Generally, you should be able to take a shareholder's loan.

There shouldn't be any limit other than what would not have a detrimental effect to the cash flow of the company.

With respect to interest rates, this should normally reflect an arm's length transaction if taxes are incurred. Taking into consideration recent amendments to corporate taxes in Dubai, this is a question to be answered by a local tax professional.

 

[sergeylim88]

can you take a no interest loan from your company?
even in cyprus that shouldn't be a problem, right?

 

[CyprusLawyer101]

can you take a no interest loan from your company?
even in cyprus that shouldn't be a problem, right?

In Cyprus an interest rate of 9% should be applicable to such instance as this is regarded as a benefit in kind.

 

[sergeylim88]

what if shareholder is loaning money to the company?
does company have to pay interest or it is interest free loan possible?