Suggestion for Tax free Jurisdiction for Software company....Dubai Freezone Alternative

[Gediminas]

As Dubai Free zone is best solution for zero tax ...As it become complicated...What are the good alterative for tax saving ? Simple solution not complex...
What are your suggestion ? Singapore, HK or any other

@Martin Everson What will be your advice for this ? Dump Dubai and Pay tax in some reputable country.....or You can still take risk of using Dubai free zone....

Yes, indeed, on 1 June UAE authorities announced that most free zone companies will become subject to tax, it was like U-turn from the previous communication.

As you ask for a simple solution (one company) it might be a non-resident HK company, tax transparent US LLC, or other non-resident entity which is registered in a high-tax country but does not have tax residency status.

But they have a disadvantage – treaties for the avoidance of double taxation basically do not apply to such companies. It might impact mainly passive income: dividends, royalties, and interest (due to withholding tax).

 

[bru1234]

only if there is no substance, of course.

 

[sergeylim88]

@Sols maybe you can give us some ideas about the alternatives?
it's not only about corporate tax, it's also about with holding tax for dividends (lets keep this in mind).

 

[Marzio]

This entire thread is about alternatives which aren't that many.

Either you operate from a tax free jurisdiction like Cayman, Bermuda, Bahamas, Anguilla and so on or you exploit temporary incentives like Georgia Virtual Zone person (that at some point will cease to exist).

At some point you'll need to weight cost/benefits because Malta at 5% is nearly half of UAE's CIT.

 

[JustAnotherNomad]

As you ask for a simple solution (one company) it might be a non-resident HK company, tax transparent US LLC, or other non-resident entity which is registered in a high-tax country but does not have tax residency status.

But then where would you want to have personal tax residency for such a company? I've really grown to like the UAE, it was a perfect base for my lifestyle. But now with 9% corporate tax, it doesn't make that much sense anymore.

 

[Clearsky Network]

I would do Hong Kong or Singapore. 0% if your income is generated outside of these countries.
Very reputable jurisdictions if you will need to open bank/EMI accounts.
Im not a tax advisor, for more professional answer maybe worth consulting with one.

 

[JustAnotherNomad]

I would do Hong Kong or Singapore. 0% if your income is generated outside of these countries.

100% false.

 

[Clearsky Network]

100% false.

will be happy to know why

 

[JustAnotherNomad]

Because you're wrong, that's why.
Singapore has some exemptions for foreign-sourced capital gains (passive income), if you have paid tax somewhere else, but if you have active income, it's taxable in Singapore.

IRAS | Income received from overseas

Earned income overseas? Learn what's taxable and what's not. Get clear about your overseas income for taxes.

www.iras.gov.sg

IRAS | Taxable & Non-Taxable Income

Determine the taxability of income earned by companies and the existence of trade, as well as the tax treatment of grants/payouts and digital tokens.

www.iras.gov.sg

Singapore is not some banana republic where you can live in the country and not pay tax, just because you travel around sometimes.
No, it's not "foreign income" just because you were working while traveling.

I believe HK may have been less strict, but it seems like they're tightening the rules as well:

Hong Kong tax update on foreign-sourced income

With the Legislative Council’s passing on 14 December 2022, the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Ordinance 2022 took effect on 1 January 2023.

hongkong.dentons.com

 

[Clearsky Network]

Because you're wrong, that's why.
Singapore has some exemptions for foreign-sourced capital gains (passive income), if you have paid tax somewhere else, but if you have active income, it's taxable in Singapore.

IRAS | Income received from overseas

Earned income overseas? Learn what's taxable and what's not. Get clear about your overseas income for taxes.

www.iras.gov.sg

IRAS | Taxable & Non-Taxable Income

Determine the taxability of income earned by companies and the existence of trade, as well as the tax treatment of grants/payouts and digital tokens.

www.iras.gov.sg

Singapore is not some banana republic where you can live in the country and not pay tax, just because you travel around sometimes.
No, it's not "foreign income" just because you were working while traveling.

I believe HK may have been less strict, but it seems like they're tightening the rules as well:

Hong Kong tax update on foreign-sourced income

With the Legislative Council’s passing on 14 December 2022, the Inland Revenue (Amendment) (Taxation on Specified Foreign-sourced Income) Ordinance 2022 took effect on 1 January 2023.

hongkong.dentons.com

Dont get mad, as stated above im not a tax advisor

 

[JustAnotherNomad]

If you live in Kazakhstan and are an resident employee of a legal entity in the Astana Hub then that income is exempt from personal income tax is my understanding. I have only started looking into Kazakhstan since someone mentioned it in MentorGroup so I could be wrong.

Seems like there are quite a bit of additional social security taxes:

Kazakhstan - Individual - Other taxes

Detailed description of other taxes impacting individuals in Kazakhstan

taxsummaries.pwc.com

 

[Cryptohodler]

Feel free to reach out if you want to get started in Georgia.
The country offers vast benefits and special tax zones/regimes:
STC (Special Trade Company)

STC regime is designed for Georgian companies dealing with international trade. The company is structured in the same way as the local LLC and the STC license issued by the Revenue Service.

The condition for obtaining the STC certificate is trading outside Georgia.

Example: a company established in Georgia buying goods from China and selling them to Poland. Taxation: exemption from corporate income tax in Georgia.

International Company (IC)

IC regime is designed for Georgian companies dealing with IT services and/or commercial and maintenance services by a shipowner and/or services related to ship ownership. The company is structured in the same way as the local LLC and the IC license issued by the Revenue Service.

The condition of obtaining the IC certificate is for the LLC which has at least two years of experience in carrying out the permitted activities or which is a representative of a non-resident enterprise in Georgia; if the non-resident enterprise has at least two years of experience or more than 50% of shares are owned by partner enterprises independently (each partner separately), and which has at least two years of experience.

Example: a company established in Georgia performing IT or vessel maintenance services

Taxation: exemption from Dividend tax, VAT and property tax; Reduced tax for CIT and PIT in Georgia.


IT VIRTUAL ZONE (VZ)

VZ regime is designed for Georgian companies dealing with IT (information technology) services exported outside Georgia. The company is structured in the same way as the local LLC and the VZ license issued by the Revenue Service.

The condition of obtaining the VZ certificate is performing IT services to entities located outside Georgia.

Example: Georgian company performing software development services to a Polish company. Taxation: exemption from corporate income tax in Georgia.


FREEZONES:
All Free Zones provide generous investment incentives such as the possibility of 100% foreign ownership, no corporate taxation, no restriction on repatriation of capital and profits, no exchange control, and no restrictions on investment in any industrial sectors.

Important considerations:

• Importing goods from Georgia to Free Zone is exempt from all taxes except 4% duty
• Importing goods from countries other than Georgia is exempt from all taxes
• Exporting goods abroad are exempt from all taxes
• Exported products to the territory of Georgia should include VAT and 4%

For such a company will georgian banks be willing to open corporate account ? If ubo is non eea non resident?

 

[Don]

For such a company will georgian banks be willing to open corporate account ? If ubo is non eea non resident?

It is tricky but possible.

We have one Georgian bank that opens account in 24h, but this is a premium service and for wealth management only (not transactional account)

 

[uranium]

It is tricky but possible.

We have one Georgian bank that opens account in 24h, but this is a premium service and for wealth management only (not transactional account)

Please dm I'm interested

 

[Clearsky Network]

For such a company will georgian banks be willing to open corporate account ? If ubo is non eea non resident?

Would a bank in Georgia open an account for a foreign company that has no activity or employees in Georgia?

 

[Don]

Would a bank in Georgia open an account for a foreign company that has no activity or employees in Georgia?

Georgian banks open accounts for any corporation, onshore or offshore if you use it for wealth management (not operational) and last time you needed to park at least 3M GEL. The exchange rate to USD is 2.59. Georgia joins CRS in 2024. It's still possible to use a UK trust solution not subject to CRS.