UAE company and living in Cyprus

[Enterprising]

Hello everyone,

I'm delighted to join this wonderful community.

As an EU citizen, I've been considering the possibility of establishing a UAE offshore company and relocating to live in Cyprus. My plan involves appointing a nominee director in the UAE to create the appearance that the company's operations are conducted from the UAE. The ultimate goal is to receive dividends in Cyprus from the foreign company, thereby taking advantage of a 0% tax rate.

Is this a feasible strategy, or does it sound too good to be true?

 

[Sols]

Nominees aren't substance. The company is still effectively controlled and managed from Cyprus, which makes it tax resident in Cyprus.

However, the Cypriot tax authority is very likely to not bother you. You can quite safely join the many hundreds if not thousands doing the same, and just declare your dividends on your tax returns, pay zero income tax, and enjoy it.

If Cyprus changes its attitudes and comes after you, the nominee could very easily be disregarded and you'd owe corporate tax (plus penalties). But that doesn't seem at all likely to happen anytime soon.

 

[Enterprising]

Thank you so much for your quick answer! And what about appointing a nominee shareholder, would that change the situation?

 

[Sols]

No.

 

[Enterprising]

Thank you!
Do you think it is necessary at all to appoint nominees?

 

[Sols]

Nominees are pointless if you're trying to use them for substance, and if your counter party is aggressive.

 

[JustAnotherNomad]

And what about appointing a nominee shareholder, would that change the situation?

No.

 

[JohnLocke]

It is a really good idea, if not a must, to make sure that the company has an office with a telephone, water, and heating, and then you can use nominees for that matter.

 

[ferchina]

Nominees aren't substance. The company is still effectively controlled and managed from Cyprus, which makes it tax resident in Cyprus.

However, the Cypriot tax authority is very likely to not bother you. You can quite safely join the many hundreds if not thousands doing the same, and just declare your dividends on your tax returns, pay zero income tax, and enjoy it.

If Cyprus changes its attitudes and comes after you, the nominee could very easily be disregarded and you'd owe corporate tax (plus penalties). But that doesn't seem at all likely to happen anytime soon.

But if you don't live in the Emirates, don't you have to apply the 9% CIT? Or because you live and control the company outside the Emirates, the 9% does not apply?

 

[Sols]

But if you don't live in the Emirates, don't you have to apply the 9% CIT? Or because you live and control the company outside the Emirates, the 9% does not apply?

Who knows? UAE tax law is such a mess...

 

[CyprusLawyer101]

Aim for a cheaper offshore juriadiction and spent the difference in creating the necessary or at least some substance to guard yourself better. Your business operation would determin that. CY authorities do not appear to be willing to start scrutinizing such structures any time soon. Better put the offshore set up together before moving into the country.

 

[Enterprising]

Aim for a cheaper offshore juriadiction and spent the difference in creating the necessary or at least some substance to guard yourself better. Your business operation would determin that. CY authorities do not appear to be willing to start scrutinizing such structures any time soon. Better put the offshore set up together before moving into the country.

What jurisdiction would you recommend for this? And when you say substance, do you mean things like office in that country? When it comes to offshores, I’m still a novice. My business will be related to consultancy in the beginning, and later selling digital products too.

 

[digger]

I use Gibraltar (non-resident) company and personally residing in Cyprus as non-dom.
My income is not generated, sourced or even remitted to Gibraltar, so it is not taxable in Gibraltar for corporate tax.
It is a fairly new setup so I can't say for 100% that it is bulletproof, but after consulting with several Cypriot accountants - they all agreed it should work.

I use Wise for banking with the Gibraltar company.

 

[CyprusLawyer101]

As digger is mentioning Gibraltar could be a good option !

 

[Enterprising]

I use Gibraltar (non-resident) company and personally residing in Cyprus as non-dom.
My income is not generated, sourced or even remitted to Gibraltar, so it is not taxable in Gibraltar for corporate tax.
It is a fairly new setup so I can't say for 100% that it is bulletproof, but after consulting with several Cypriot accountants - they all agreed it should work.

I use Wise for banking with the Gibraltar company.

Thank you so much! Could you possibly share with me in the private message contact details of the agency that helped you to open a company there? The agency I wanted to hire does not offer Gibraltar.

 

[Onassis]

These guys were recommended on the forum already Form-A-Co (Gibraltar) Limited – Gibraltar Companies, Trusts, Yacht Registration, Residency, Offshore

 

[curiousmarv]

Offshore and Cyprus only works legally and risk free if your company has really multiple persons involved who reside outside of Cyprus and work actively for you (ideally in that countries where you offshore). Imagine you have your World Wide company empire and don't work active from Cyprus and just collect the dividends: that works for sure. Everything else is just a bet against the lazyness or effectiveness of Cyprus tax office and when you operate a offshore company from within Cyprus you are already violating Cyprus income tax law (if Management and Control is exercised from Cyprus a company has to be taxed in Cyprus). As far as I know the Cyprus tax officers don't look into offshore companies outside of Cyprus usually. But who knows, maybe that will change in future.

You always want to assume the worst case that tax people put your whole setup on audit. Better pay 12.5% corporate taxes in Cyprus or go out of European Union to make your wanna-be offshore setup work out in my opinion.

 

[JohnLocke]

These guys were recommended on the forum already Form-A-Co (Gibraltar) Limited – Gibraltar Companies, Trusts, Yacht Registration, Residency, Offshore

There were a few people around here at offshorecorptalk representing firms enabling you to incorporate a company in Gibraltar. Beside that there are listed a few on the trusted list of providers inside the mentor group gold as well as the resource database inside.

 

[digger]

Thank you so much! Could you possibly share with me in the private message contact details of the agency that helped you to open a company there? The agency I wanted to hire does not offer Gibraltar.

I contacted a few agents from this post: Reputable Gibraltar agent?
Eventually I went ahead with Octopus and I can recommend them (in no way affiliated with them).

 

[jkl197]

in Cyprus, if applicable to your business, you could also use the ipbox and pay 2.5% instead of 12.5%