UAE company and fiscal residency.. Stuck?

[SasuT]

Hello, here is my situation :
I set up my company in the UAE in July 2023. I've got my Emirates ID, opened bank accounts, and have started doing business. Even though my business is here, I haven't taken any salary for myself because I've still been a fiscal resident in my EU country (I've been in this EU country for more than 183 days this year, have my 'old' company here that will be closed in December etc.).

Now, I'm facing a problem: my personal bank account in the EU is running low on funds, and I'll close it anyway. On the other hand, my business account in the UAE has a good amount of money. I'm thinking about transferring some of that money as a salary to my personal UAE account, but I'm worried. I fear my EU country might ask for taxes or something because I was still a fiscal resident there in 2023.

What do you think I should do? I need money for my personal expenses, and I don't want to misuse my business account too much.

Second question

I have a self-employment contract, that says that my company should send me a monthly salary. That wasn't done for obvious reason for the months of july, august, september, october.. and probably nov/dec of this year.

In january, can I pay myself all those salaries at once? With a note "Delayed salary" in the salaries certificates

 

[Sols]

It's probably fine to take out a salary or dividend from the company, if your intention is to stay in UAE indefinitely. The 183-day rule is unlikely to be enforced if you're moving money from company account in UAE to your personal account in UAE. Your home country is extremely unlikely to find out about it. However, you could structure it as a repayable loan from the company. That might not be considered income - but make sure to pay it back.

Second question

I have a self-employment contract, that says that my company should send me a monthly salary. That wasn't done for obvious reason for the months of july, august, september, october.. and probably nov/dec of this year.

In january, can I pay myself all those salaries at once? With a note "Delayed salary" in the salaries certificates

If your home country for some reason goes after you, simply deferring the payment may not be sufficient. The income was still earned while tax resident back home. I don't think a six month deferral is enough.

Just pay yourself a dividend for the period after you become tax non-resident in your home country. Void the employment agreement, and sign a new one with a start date after your old tax residence ends.

 

[Mike Forman]

Sending money from UAE to your personal EU bank account is the same as yelling on the street, AML or tax authorities please investigate me.

If you are already habigng income in UAE you should technically report it for this fiscal year to the local tax authorities and pay tax. Also here reporting that you have income in UAE is yelling you want them to investigate you. UAE is as far as I know still blacklisted in EU and every transaction from or to UAE will be considered suspicious and will be reported, especially to a personal account.

Adding a note, dividend, loan etc won't do any good nor is of any help.

I would stay far away from transferring money from UAE to your personal EU account if you don't want to risk tax authorities go after you (even let's assume you declare your UAE income correctly in the EU, they will still go after you and investigate you). UAE is synomym for tax evasion in EU.

Play it smart and be safe, lend some money from a relative or friends and return it. Or get a debit/credit card in UAE (which nonetheless is also not safe as this data gets reported) or take a flight to UAE, take out some cash and bring it to EU. Not sure if 500EUR bills are still available as these made it easy to fly around with a few 10k EUR.

 

[wellington]

Sending money from UAE to your personal EU bank account is the same as yelling on the street, AML or tax authorities please investigate me.

If you are already habigng income in UAE you should technically report it for this fiscal year to the local tax authorities and pay tax. Also here reporting that you have income in UAE is yelling you want them to investigate you. UAE is as far as I know still blacklisted in EU and every transaction from or to UAE will be considered suspicious and will be reported, especially to a personal account.

Adding a note, dividend, loan etc won't do any good nor is of any help.

I would stay far away from transferring money from UAE to your personal EU account if you don't want to risk tax authorities go after you (even let's assume you declare your UAE income correctly in the EU, they will still go after you and investigate you). UAE is synomym for tax evasion in EU.

Play it smart and be safe, lend some money from a relative or friends and return it. Or get a debit/credit card in UAE (which nonetheless is also not safe as this data gets reported) or take a flight to UAE, take out some cash and bring it to EU. Not sure if 500EUR bills are still available as these made it easy to fly around with a few 10k EUR.

Surely just do a loan, or dividends to a EMI and then a Bank in Europe.

File your accounts and add the information in to support it.

Bank would cause headaches (grey list) EMI would offset that (Neobank) and then it's covered for paperwork at the end of the year which should settle things with the local tax gestapo.

Having said that, owning a profiting company in Dubai whilst resident in Europe - surely you have to pay the tax in Europe as the company is operating in Dubai but the decision making is happening in Europe ?

 

[SasuT]

Ok guys thanks.
I think I’ll wait January to start paying myself and be clean.

About the months in 2023 where I made money with my UAE company, it’s unlikely that the EU asks me to pay company taxes because I was EU resident ?

Also another question..

My EU company is closing in 1 month. It has around 100K on it that I'll receive as a "boni", and pay 30% tax on it (like dividends).
How can I transfer this money from my EU personal bank to my UAE personal bank without triggering a big warning ? It's a transfer between two personals account, in theory there is no problem.. but when the receiving bank is in UAE.. it's another story.

Maybe I can make the transfer EU personal bank -> UAE business as a "loan", that my UAE company will pay me back in my UAE personal bank ?

 

[Mike Forman]

About the months in 2023 where I made money with my UAE company, it’s unlikely that the EU asks me to pay company taxes because I was EU resident ?

It is unlikely as long as they are not aware you have any business or income in UAE, that's why you want to be thoughtful of anything that can trigger them to look more into this.

Also another question..

My EU company is closing in 1 month. It has around 100K on it that I'll receive as a "boni", and pay 30% tax on it (like dividends).
How can I transfer this money from my EU personal bank to my UAE personal bank without triggering a big warning ? It's a transfer between two personals account, in theory there is no problem.. but when the receiving bank is in UAE.. it's another story.

Maybe I can make the transfer EU personal bank -> UAE business as a "loan", that my UAE company will pay me back in my UAE personal bank ?

It can and will trigger almost certainly questions. Your bank in EU or authorities will ask you the purpose of this transfer. Since you move to UAE and have residence proof this should be no problem. Best is to transfer this when you are already living in the UAE and cut all Residencial ties. Your EU bank might want you to require to update your address details to your new place of residence and close your personal bank account, as some banks have no appetite to cater bank account for customers residing abroad.

In UAE the bank might ask to explain the source of your income which you can proof by dividend payment of your previous corporation

 

[Lord Palmerstone]

I have just received from my company in UK a fairly large amount (GBP180k) and this is the second large tranche without any particular difficulties. The difference is, I have been a Resident here for 29 years and have a Driving Licence older than many 'locals' I deal with, ............ so I am ''known''. You have heard of 'KYC'? Well they certainly know this client.
Basically in UAE the Banks especially ENBD from Dubai will not hinder you (I was previously talking about an Abu Dhabi bank). Their problems stem from the ar-s==h--ol--es who come here to insist/bully/beg/plead to follow their rules (I am talking e.g. Christine Lagarde, who was always here at one time), and for many complex and varied reasons, including their willingness to appear internationally law abiding, they try to show their compliance.
My advice is 'make friends' with your Asst. Bank manager (usually an Egyptian or Palestinian) above him is a local - forget him, be upfront, ask his help and advice. In my 29 year experience they are usually very cooperative within their scope.