What I want to achieve?
I want to be able to move around freely & with peace of mind to ultimately satisfy all parties, be it the governments, my partner & the business needs.
My main concern is that I fear not seeing possible flaws in my approach and possible consequences resulting from that and do not understand the likelihood of a best- or worst-case scenario and what they would mean to me or the business.
Ultimately I want to find a strategy that works legally and mixes well with my life.
My idea:
UAE Freezone with real office & substance over time, while I personally remain flexible through:
First - For as long as management & control remains in my hands I fully disclose my foreign FZE company to the country I reside in (if required) and pay their corporate tax rate, while having the advantage to move out personally whenever I want to without affecting the business
Second - Slowly hiring great talent & building a C-Level team in UAE focussing on long-term growth that ultimately takes over management and most of the control while
Third - Remaining majority or 100% shareholder & UBO once the company runs without me
About my past:
- EU national of HT country Belgium
- Successful experience with digital advertising online in various fields & day-trading
- was highly profitable in the 7 digits yearly (was only working alone on the main parts, with easy tasks outsourced to freelancers)
- Lived as digital nomad since 2016 & operated with a Free Zone (Flexi Desk, Ajman) using EMI's
- spent ~4 months/year in Cyprus as non-dom
My problem with UAE only:
- Can't move UAE forever due to a relationship, where my loved partner (not official, meaning not married, not engaged) is still going to college in Denmark until mid of 2021
- partner does not want to move to UAE ever due to known human rights issues & would not want to visit me if I had an apartment in UAE
My problem with Cyprus:
Disclaimer: my partner and I love CY personally for its good weather, slow-paced life and our few friends there. All problems listed are business-related.
- CFC rules: unclear if / very unlikely that CY remains tax-free for individuals using offshore entities due to (I would be fine with 12.5% tax, hear me out...*)
- CY residents/companies do not get USD details with Transferwise, *which was the main bank-replacement I used in the past...
- lack of talent in CY (correct me if I am wrong please) I feel the need to establish something real where there is lots of talent & opportunity
Why UAE?
- Access to anything needed, from easy banking (with substance only) to top-notch talent and international relationships
- 0% tax company
Life Preferences: Productivity, Health & Seeing partner
Due to productivity reasons I do not want to travel a lot anymore. I rather prefer having 2 - 4 home bases and easy access to an office, cafe or coworking space. UAE being one of them, Denmark being the second for this & next year. 3-4 months time in each of them. Obviously the less travel & home bases the better. My only criteria would be health & productivity and to see my partner as much as possible during these startup times. I like sun, good food & fitness, not much more that I need.
Questions about potential home-bases:
About CYPRUS
1 a) - Do I need to pro-actively disclose company profits / losses to Cyprus? What is the worst that can happen if I don't?
In case of Cyprus, I got told by a Cypriot consultant I don't trust, that there is likely no one asking and in case they find out about it ther is supposedly no fine and just paying due corporate taxes with some interest is enough. That would be ideal, but I doubt that it works like this.
1 b) - If I do not get tax resident in Cyprus on purpose by not paying social security & staying less than f.e. 3-4 months while renting a holiday appartment there available year-round to me, am I disregarded for tax purposes or not?
The same Cypriot consultant I don't trust, told me that renting a "vacation home" in Cyprus and staying there for less than 183 days a year does not make you taxable. Since I know CY already, it is a candidate (but not the only candidate) for a home base.
2) In case I do become a tax resident of any country other than UAE or Cyprus, is operating a foreign company okay while disclosing and paying the corporate tax pro-actively enough or is it a bureaucracy hell that I should avoid? Will they let me move away freely or charge exit tax as well?
If I were able to send the audited financials and just pay my fair share and they leave me alone I would not be bothered too much with that. I want to find out how flexible I can be with being transparent operating a foreign entity.
3) - If I spend equal time in say 3-4 countries each year and I only have a furnished apartment in a no tax country (f.e. UAE), how likely is a HT country claiming tax successfully?
4) What combination would work?
I hate bureaucracy and would prefer a way where I only have to disclose to UAE. If that is not possible, I am looking for the best alternative.
I mean I have a lot of options, which is making it very hard ultimately. All the countries I mention now, I want to have an appartment/office in to "be at home".
I thought about combining
A - UAE, Georgia & Cyprus. 3 months in each.
B - UAE, Georgia, another country of choice with flexible long-term rental (Thailand, Bali, ...). 3 months in each.
C - 6 months Cyprus & paying 12.5% on foreign company profit
D - 6 months Cyprus not paying corporate tax on individually-owned foreign entity
D - Your suggestion is highly welcomed
Sorry that I bombarded y'all with tons of info and dragged you into my own dilemma. The matter is very complex to me and I struggle finding a clear solution that I can follow in the future for full peace of mind and a quality life with my partner while building a meaningful business.
Your help is highly appreciated
I want to be able to move around freely & with peace of mind to ultimately satisfy all parties, be it the governments, my partner & the business needs.
My main concern is that I fear not seeing possible flaws in my approach and possible consequences resulting from that and do not understand the likelihood of a best- or worst-case scenario and what they would mean to me or the business.
Ultimately I want to find a strategy that works legally and mixes well with my life.
My idea:
UAE Freezone with real office & substance over time, while I personally remain flexible through:
First - For as long as management & control remains in my hands I fully disclose my foreign FZE company to the country I reside in (if required) and pay their corporate tax rate, while having the advantage to move out personally whenever I want to without affecting the business
Second - Slowly hiring great talent & building a C-Level team in UAE focussing on long-term growth that ultimately takes over management and most of the control while
Third - Remaining majority or 100% shareholder & UBO once the company runs without me
About my past:
- EU national of HT country Belgium
- Successful experience with digital advertising online in various fields & day-trading
- was highly profitable in the 7 digits yearly (was only working alone on the main parts, with easy tasks outsourced to freelancers)
- Lived as digital nomad since 2016 & operated with a Free Zone (Flexi Desk, Ajman) using EMI's
- spent ~4 months/year in Cyprus as non-dom
My problem with UAE only:
- Can't move UAE forever due to a relationship, where my loved partner (not official, meaning not married, not engaged) is still going to college in Denmark until mid of 2021
- partner does not want to move to UAE ever due to known human rights issues & would not want to visit me if I had an apartment in UAE
My problem with Cyprus:
Disclaimer: my partner and I love CY personally for its good weather, slow-paced life and our few friends there. All problems listed are business-related.
- CFC rules: unclear if / very unlikely that CY remains tax-free for individuals using offshore entities due to (I would be fine with 12.5% tax, hear me out...*)
- CY residents/companies do not get USD details with Transferwise, *which was the main bank-replacement I used in the past...
- lack of talent in CY (correct me if I am wrong please) I feel the need to establish something real where there is lots of talent & opportunity
Why UAE?
- Access to anything needed, from easy banking (with substance only) to top-notch talent and international relationships
- 0% tax company
Life Preferences: Productivity, Health & Seeing partner
Due to productivity reasons I do not want to travel a lot anymore. I rather prefer having 2 - 4 home bases and easy access to an office, cafe or coworking space. UAE being one of them, Denmark being the second for this & next year. 3-4 months time in each of them. Obviously the less travel & home bases the better. My only criteria would be health & productivity and to see my partner as much as possible during these startup times. I like sun, good food & fitness, not much more that I need.
Questions about potential home-bases:
About CYPRUS
1 a) - Do I need to pro-actively disclose company profits / losses to Cyprus? What is the worst that can happen if I don't?
In case of Cyprus, I got told by a Cypriot consultant I don't trust, that there is likely no one asking and in case they find out about it ther is supposedly no fine and just paying due corporate taxes with some interest is enough. That would be ideal, but I doubt that it works like this.
1 b) - If I do not get tax resident in Cyprus on purpose by not paying social security & staying less than f.e. 3-4 months while renting a holiday appartment there available year-round to me, am I disregarded for tax purposes or not?
The same Cypriot consultant I don't trust, told me that renting a "vacation home" in Cyprus and staying there for less than 183 days a year does not make you taxable. Since I know CY already, it is a candidate (but not the only candidate) for a home base.
2) In case I do become a tax resident of any country other than UAE or Cyprus, is operating a foreign company okay while disclosing and paying the corporate tax pro-actively enough or is it a bureaucracy hell that I should avoid? Will they let me move away freely or charge exit tax as well?
If I were able to send the audited financials and just pay my fair share and they leave me alone I would not be bothered too much with that. I want to find out how flexible I can be with being transparent operating a foreign entity.
3) - If I spend equal time in say 3-4 countries each year and I only have a furnished apartment in a no tax country (f.e. UAE), how likely is a HT country claiming tax successfully?
4) What combination would work?
I hate bureaucracy and would prefer a way where I only have to disclose to UAE. If that is not possible, I am looking for the best alternative.
I mean I have a lot of options, which is making it very hard ultimately. All the countries I mention now, I want to have an appartment/office in to "be at home".
I thought about combining
A - UAE, Georgia & Cyprus. 3 months in each.
B - UAE, Georgia, another country of choice with flexible long-term rental (Thailand, Bali, ...). 3 months in each.
C - 6 months Cyprus & paying 12.5% on foreign company profit
D - 6 months Cyprus not paying corporate tax on individually-owned foreign entity
D - Your suggestion is highly welcomed
Sorry that I bombarded y'all with tons of info and dragged you into my own dilemma. The matter is very complex to me and I struggle finding a clear solution that I can follow in the future for full peace of mind and a quality life with my partner while building a meaningful business.
Your help is highly appreciated
