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Why is it better to live in Dubai/Monaco than in Thailand/Philippines for tax reasons?

DaveFischer

New member
  • Dubai and Monaco have extremely low taxes for everything.
  • Thailand and Philippines have 0 taxes on foreign sourced income.
Doesn't that mean that almost always for tech entrepreneurs, real estate entrepreneurs or even sports superstars, both countries almost wouldn't charge you any taxes on your personal income?
 

Sols

Entrepreneur
There is more than tax to consider.

A big one is costs of living, which in Dubai and Monaco are several times higher than in Thailand and The Philippines.

In addition to other things like language, culture, religion, personal liberty, freedom of speech, corruption, climate, politics, regionality of business, ease of doing business, and so much more, which can influence one's decision of where to settle down.

It can also make a difference how and what type of income you earn. There can be an important difference between personal income (salary), corporate income, and dividends and capital gains.
 

Gediminas

Offshore Tax Advisory
Mentor Group Gold
Commercial Service
Business Angel
Safety for me is a very important factor. If I had to choose only of those, I would never ever go to Thailand or the Philippines.

Also, Dubai or Monaco is a much more business-oriented place rather than the other two.

The better comparison could be Monaco/Dubai vs Singapore (if Asia region matters) because taxes in SG are also source based.

Also, Dubai would be a better fit for the 20s-40s, whereas a Monaco would be a better place for retirement.
 

JustAnotherNomad

Entrepreneur
Be careful with the definition of "foreign-sourced" income. If you work or manage the company from Thailand, it will be local income. Most countries have a similar definition.
 

manwithtoupe

New member
Be careful with the definition of "foreign-sourced" income. If you work or manage the company from Thailand, it will be local income. Most countries have a similar definition.
That implies they have CFC rules in place for individuals. Many countries do not. The gold standard is either:

0% tax

or

Territorial taxation + no CFC rules

or

Territorial taxation + 0/30/60/90 day residency (not 183 days, as that will trigger CFC)
 

JustAnotherNomad

Entrepreneur
CFC rules are just one possibility to ruin this for you. There is also permanent establishment and the place of effective management and control.
 

Konstanz

Active Member
Obviously, the real gold standard is 0% income tax.
Do anybody know any decent country options besides UAE and Monaco? I am not talking about some remote Islands in Caribbean or Pacific.
 

JustAnotherNomad

Entrepreneur
You don’t have to live in a country that doesn’t have an income tax. It’s enough to live in a country that has territorial taxation or that lets you receive dividends for free. Then there are suddenly many options. Provided that you set everything up correctly.
 
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Konstanz

Active Member
Well. usually with Cyprus, Portugal and similar is not that simple.
As you told above, these countries has permanent establishment and the place of effective management rulings.
You have to hire lawyers and structure everything to make sure you have no tax or little tax.
It's not like that you can move to Cyprus, incorporate offshore company in Seychelles and work online with it..
The real peace of mind is 0% income tax :)
 

GrumpyMess

Entrepreneur
Yes, you will need to hire a lawyer
The lawyers are not wizards. In case of Cyprus some rules are not being enforced at the moment, but that doesn't make them reliable. I haven't heard of any options to live in Cyprus tax free legally in 2020. It refers to any other EU country as well.
 

Konstanz

Active Member
The lawyers are not wizards. In case of Cyprus some rules are not being enforced at the moment, but that doesn't make them reliable. I haven't heard of any options to live in Cyprus tax free legally in 2020. It refers to any other EU country as well.
I totally agree. If it's not proactively enforced now it does not mean that in the future they won't wake up to collect taxes...
To sum up Dubai in reality is not so expensive... Monaco yes, it's more expensive, but for obvious reasons..
 

Hanif

New member
UAE is now more expensive to live than in many parts of Europe. There are more hidden taxes Disguised as fees and charges, with promises which don't match up to 'your possible reality', (lost in translation).. a common daily occurrence in UAE.
Don't get fooled by the Marketing its all from self serving people who need more companies and individuals to move there or set up operations there. Once your money is in the country's bank accounts then you are at their whim. Access to your own funds can sometimes be tricky. Not what you expect, however is increasingly becoming more and more prevalent with those investing lower amount of money.
I lived there for over 13 years and still retain a business and many personal / professional connections in UAE at many levels which has allowed me to keep updated and follow issues there. I now choose to live in Europe, where I find overall cost of living lower than UAE. We lived a modest life there and the same again now.

Things are not rosy there and now there are fewer expatriates, and an even bigger "local" (UAE national) wage & social assistance bill to pay.
Expo 2020 can possibly be written off, so making the biggest anticipated show to be a blip due to Covid fallout.
Improvements to lower cost of living are now a dream, and reserved mainly for locals, with expatriates paying a higher percentage in costs, to subsidise the local consumption. Too many locals are used to a higher standard of living and want even more modern wealth related materialistic 'charms' trinkets' 'toys' etc. Rolex, iPhone 22 in solid gold, pimped up Ferrari etc etc..

On the forum most people still searching for the magic solution of living well and paying as little tax as possible. Yes its hands up for all.
The reality is so different and now an ever changing global platform, which is not going to get easier.

Its more a realistic question should be: of how to limit your tax exposure to a lower amount as possible and limit your compromises which effect you and your family as much as possible?
That is the more realistic compromise for many to find.
Unless you have a huge budget to set up a protected legal framework with a lot of legal verification. Such a solution will provide you with a good base to start with, however would require regular updating to keep with the changing times.

UAE will suit a percentage of people and is becoming lower down the list for many investors seeking tax beneficial solutions. Unlike 10-16 years ago when opportunities and favourable working/banking and other options were suitable. The rest of the world was also very different to what it is now.

UAE has to tow the OECD line more and more, so tax complexity and variation will come in as they want to have a stronger voice in the world, In turn they have to accept the rules imposed on everyone else who has that voice. The 1st being Tax. There are more duty levies on more and more products these days, and more to come. With their aim for diversification from oil based economy, they have to compete with the rest of the world, unlike years ago when they had many of the Aces in their deck, now the playing field is levelling out more and more.

Its going to be what suits 1 person to still remain in Europe or USA and another to want to make a move to UAE of be a digital nomad.
There is no one size for all. not anymore for the UAE.
 

bimbambem

New member
That implies they have CFC rules in place for individuals. Many countries do not. The gold standard is either:

0% tax

or

Territorial taxation + no CFC rules

or

Territorial taxation + 0/30/60/90 day residency (not 183 days, as that will trigger CFC)
Which countries would fall in these brackets?
 
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