Shocking Truth: Dubai's Luxury Ghost Towers & Looming Bankruptcy!

[koohl]

I just watched a video about the situation in Dubai! When you hear about the problems they're facing in generating enough revenue for the area, it completely surprises me, but I'm starting to understand why they're softly introducing a 9% corporate tax! They risk going bankrupt in the UAE if they don't generate enough income by 2030, by which time oil is expected to be sold at spot prices due to the green transition with electric cars and renewable energy.

I don't know about you, but for me, the part about running out of money in Dubai sounds incredible and it completely took me by surprise. The fact that they underpay all the Indian and Pakistani guest workers is by now known, and that they also don't care about how they treat these people (whom they probably treat mostly like pests) doesn't surprise me either.

Moreover, more and more of these huge buildings with luxury apartments are standing empty, and they can hardly be sold now due to interest rate increases and other factors making it unattractive to buy a luxury apartment in Dubai. I didn't know this until now either.

The only option they have to further increase revenue is to introduce personal taxation, which would likely just cause the ultra-rich to move out and find other areas where they are not taxed, resulting in a total disaster for Dubai.

This provides a pretty good explanation for why there has been so much drama about the 9% corporate tax and broken promises in many threads here on OCT.

What's the status in Dubai, I know there are quite a few people here who live and work in Dubai on a daily basis, you must know what the conditions are?

 

[JosephLL]

by which time oil is expected to be sold at spot prices due to the green transition with electric cars and renewable energy.

lol

 

[Sols]

People who fawn over Dubai as some sort of rock-solid capitalist marvel, often tend to not know — or try their best to forget — that in 2009, Dubai was bailed out by Abu Dhabi to the tune of 10 billion USD to avoid defaulting on its debt. And that wasn't the only time or the only loan/bailout like it. IIRC, the total debt amounted to around 20 billion USD in total before Dubai in 2022 finally started repaying Abu Dhabi and the Central Bank.

If you scrape away the facade and take UAE for what it is, it's a medium-sized economy with limited diversification. In terms of GDP, UAE is comparable to for example Singapore, Austria, Sweden, Switzerland, and Thailand — all of which have more diverse economies than UAE. Diversification isn't inherently good or the best solution, but it adds resilience in response to global market changes.

If there is a real estate bubble and drop in demand/price for fossil fuels, UAE doesn't have much else to lean on. What industry is there? What manufacturing is there? What services are there? How reliant are they on the real estate and/or fossil fuel markets?

What higher education and scientific research does UAE have to offer? Compared to its peers.

I don't think there's doom and gloom ahead for UAE. Just a slow, gradual response to the reality of the situation it's got itself into. Market adjustments will come. Some luxury high rises might dilapidate.

Personal income tax has been discussed but rejected each time. They know that the revenues from that tax would likely be less than the revenue lost from people leaving UAE. If it's not tax free, why live in UAE? The 9% corporate tax is easy enough to avoid, or simply accept if it's the only tax you pay.

 

[koohl]

The 9% corporate tax is easy enough to avoid, or simply accept if it's the only tax you pay.

how do you go about to avoid it?

lol

That's what I read, I'm as much surprised as you are. But makes sense if by 2030 we have 80% e-cars and the number of Gasoline / Diesel is reduced the same, why would it not hurt them.

 

[Sols]

how do you go about to avoid it?

Same way you avoid corporate tax anywhere else. Establish substance somewhere else, don't be too involved in the business, insert a holding company if necessary, and pay yourself dividends (insert a holding company if necessary). That way your income is just personal income and the company (probably) isn't in scope for UAE tax.

Difficult to do legally if you're actively running the business. It probably ends up being tax evasion then.

 

[JohnLocke]

Difficult to do legally if you're actively running the business. It probably ends up being tax evasion then.

Ouch, tax evasion in Dubai, I personally wouldn't dare. What's the penalty, stoning or some other form of capital punishment?

 

[Sols]

Ouch, tax evasion in Dubai, I personally wouldn't dare. What's the penalty, stoning or some other form of capital punishment?

Whatever they feel like. There's no appeal process anyway. Probably not death penalty, though. Taxes (plus interest), fines, and maybe prison time if it's really bad.

 

[JosephLL]

That's what I read, I'm as much surprised as you are. But makes sense if by 2030 we have 80% e-cars and the number of Gasoline / Diesel is reduced the same, why would it not hurt them.

That's a fairytail of those Brussel's soyboys who are versed in psychology not physics. And, no the oil does not come from dead dinosaurus. Anyway, It's a whole different topic...

 

[Nomado]

I just watched a video about the situation in Dubai! When you hear about the problems they're facing in generating enough revenue for the area,

Sounds interesting !
Do you have the link or the title of the documentary by chance?

 

[koohl]

Sounds interesting !
Do you have the link or the title of the documentary by chance?

 

[bubbledouble]

I tell you, Dubai will be the Kingdom of this world!

 

[jafo]

Yikes!
This thread gave me anxiety!

 

[Martin Everson]

Dubai was built on sand with the philosophy that if you build it they will come. And people did come but what they failed to realize is that people can leave. Endless flipping of property and selling fossil fuels is not a long term solution for the Kingdom. As someone who lived there many years ago I have seen the changes. The USP of no taxes and wild west attitude to doing business have now long gone as I predicted. Just enjoy what you have there while it lasts.

 

[uranium]

Thanks for this informative video
It brought up very important point
Climate change would make it imberrable to live there even in winter
Imagine +40c in winter and 60c in summer
On the other hand, Saudia arabia is big threat to UAE. Imagine if they setup freezone with 0% tax and copy same exact UAE model with good banking.
Would you all move to Saudia arabia.?
Anyways for now we only have UAE and no other alternative.

 

[JohnnyDoe]

When you start seeing all those kids flocking in (plus the whores and their pimps), thinking that they are the smartest and richest, it’s time to leave. Like it happened in London.

 

[hlepic211]

it was too easy to relocate, pay 0% tax, do your crypto cashouts and launder everything through property purchases. Now people realize they are stuck there without any legit SoF and running to other countries or at least planning to. Lol at how quickly the tables turned.

 

[JohnnyDoe]

it was too easy to relocate, pay 0% tax, do your crypto cashouts and launder everything through property purchases. Now people realize they are stuck there without any legit SoF and running to other countries or at least planning to. Lol at how quickly the tables turned.

That’s what happens when you trust psycho beduins.

 

[wellington]

I just watched a video about the situation in Dubai! When you hear about the problems they're facing in generating enough revenue for the area, it completely surprises me, but I'm starting to understand why they're softly introducing a 9% corporate tax! They risk going bankrupt in the UAE if they don't generate enough income by 2030, by which time oil is expected to be sold at spot prices due to the green transition with electric cars and renewable energy.

I don't know about you, but for me, the part about running out of money in Dubai sounds incredible and it completely took me by surprise. The fact that they underpay all the Indian and Pakistani guest workers is by now known, and that they also don't care about how they treat these people (whom they probably treat mostly like pests) doesn't surprise me either.

Moreover, more and more of these huge buildings with luxury apartments are standing empty, and they can hardly be sold now due to interest rate increases and other factors making it unattractive to buy a luxury apartment in Dubai. I didn't know this until now either.

The only option they have to further increase revenue is to introduce personal taxation, which would likely just cause the ultra-rich to move out and find other areas where they are not taxed, resulting in a total disaster for Dubai.

This provides a pretty good explanation for why there has been so much drama about the 9% corporate tax and broken promises in many threads here on OCT.

What's the status in Dubai, I know there are quite a few people here who live and work in Dubai on a daily basis, you must know what the conditions are?

1) Dubai makes very little of its revenues from oil
2) Dubai makes most of its revenues traditionally from its ports/maritime position
3) That region is unstable (Iran, Yemen) which are two important passages for any activity transmitting from the Atlantic (ZA) RedSea/Mediterranean (Yemen), Indian Ocean (Gulf).
4) with shipping being impacted at two major points that either need to be transited through (Gulf) or port activity before or after Red Sea that business / industry has taken a hit.
5) UAE makes a lot of its secondary revenues through arbitraging which requires a global economy in the + side ~ most of which in the West is in the - side currently (services industry).
6) Dubai as a transit hub (Air) is reliant on stable region and stable airspace - the world will increasingly have destabilized airspace as well as destabilized water ways as the US cedes from being the global maritime and air power and concentrates on the pacific where its interests are at risk (it’s already pulling out of Ukraine for the same reason - it can’t afford so many battles on so many fronts).

They were looking at a casino set up but even if that’s passed you are reliant on stable airspace, and wealth - most of the wealth in the west (Europe specifically) is in the elderly and they are now drawing down their savings due to cost of living increases and as age travel less - so that’s not going to flow to Dubai - US also ruled out as they don’t need to with Vegas etc, likewise Thailand trying to do similar - but in Asia you have Macao and Laos/Cambodia?

So apart from a tax haven which they can’t afford due to their own commitments there really isn’t anything near term going for Dubai and as there’s a recession not recession in the west Dubai gets hit the hardest.

The oil business represents less than five percent of the economy. Dubai's thriving maritime activities are a great source of the city's wealth. Jebel Ali, the city's massive trading port, is the busiest port in Africa and the Middle East. Dubai's position makes it ideal for maritime business.

 

[JackAlabama]

it was too easy to relocate, pay 0% tax, do your crypto cashouts and launder everything through property purchases. Now people realize they are stuck there without any legit SoF and running to other countries or at least planning to. Lol at how quickly the tables turned.

what is "any legit sof" in your opinion?

 

[hlepic211]

what is "any legit sof" in your opinion?

1) Your tax declarations before you moved to Dubai
2) Transfer receipts of your first crypto purchases
3) Your statements from crypto exchanges