United Arab Emirates: Economic Substance Rules

Martin Everson

HNWI Offshore Consultant
Business Angel
Mentor Group
UAE offshore companies don't have to maintain economic substance because offshore companies have a non resident status in UAE and by law they cant maintain economic substance. UAE offshore company don't benefit from any double taxation treaty as well and can't get tax residency certificate like freezone and mainland company can.
See direct link to what I wrote already in this thread.


If your not resident in UAE with a UAE offshore company then the place of operation is where the effective place of management control is which is the resident country of the director. Same like any other Caribbean IBC. If management in UAE then no issues.
 

BlueMist

Building Trust
Entrepreneur
For an EU setup then setup a local Malta company with foreign shareholders (5% tax rate after full imputation) and use Fimbank in Malta. They have very tough compliance but setup works well.
[...]
How is your experience with Fimbank Malta? I just saw they have representative office in Dubai DIFC. Their fees however are on a much higher side compared to e.g. BOV... Basically SEPA outward transfers above €10,000 are 0.1% max EUR 60, compared to €4 at BOV...
 

hernanday

Building Trust
Entrepreneur
The first sentence in most post says a lot. You also need to consider CFC rules which makes these companies pointless for tax purposes for non-residents of UAE.



No substance in UAE then your taxed in country where the center of activity and management control takes place. This has been standard practice for a while now.



A UAE offshore company for a non-resident is pointless for tax purposes. Any country with CFC rules will tax it so why bother.
This post is correct. I'd just add, with Canada, there is a special exemption for countries with the tax sharing ITEA agreements that make the dividends remitted untaxed on CFCs in some certain circumstance. So it is probably worthless for taxation everywhere now except Canada.
 

Martin Everson

HNWI Offshore Consultant
Business Angel
Mentor Group
How is your experience with Fimbank Malta? I just saw they have representative office in Dubai DIFC. Their fees however are on a much higher side compared to e.g. BOV... Basically SEPA outward transfers above €10,000 are 0.1% max EUR 60, compared to €4 at BOV...
No recent experience as bank gone through changes. What kind of account are you looking for there?
 

Martin Everson

HNWI Offshore Consultant
Business Angel
Mentor Group
Corporate bank account for Malta company with non resident UBO.
You normally have to go in person to open an account and they prefer Malta resident directors. However with DIFC office you should be able to liaise there and sort out paperwork to send to Malta. However from my experience they are looking for middle east clients of means to place large deposits with them which they use to back their trade finance business. Not sure what specifically attracts you to this bank other than a local Rep office in Dubai.
 

BlueMist

Building Trust
Entrepreneur
You normally have to go in person to open an account and they prefer Malta resident directors. However with DIFC office you should be able to liaise there and sort out paperwork to send to Malta. However from my experience they are looking for middle east clients of means to place large deposits with them which they use to back their trade finance business. Not sure what specifically attracts you to this bank other than a local Rep office in Dubai.
I do have a Malta resident director, just the UBO is non resident. I need to open a corporate bank account and just checking the options that would be the easiest and least time consuming to proceed. BOV after 8 years are closing the corporate bank account (not personal though), although everything was transparent, revenues coming from within EU from the same companies for years. They are de-risking on a massive scale, even legit running businesses with local offices are being shown exit doors.

I don’t want to lose time with HSBC, as even many years before it was hard to open corporate account with them.

The situation in Malta when it comes to banking is not the greatest at the moment. I don’t care if the bank has presence in DIFC or not but I saw your post which mentioned them, so wanted to get some feedback.
 

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