Will this setup work?

[Petersvenson]

Hi OCT

I have a trading company in Spain and do business with most of EU. A lot of our revenue is generated trough affiliate sites that I own. I was thinking of setting up a UAE company to manage the affiliate sites and make an agreement with the Spanish company that they pay a commission on the sales generated from the affiliate sites. This way i can save up some cash in the UAE company. I live most of the time in Spain, but also in Denmark, if i get residency in Dubai and i spend my time less than 180 days in each country i could be Dubai resident and just travel between the 3 countries troughout the year? This way is will not be tax liable in Spain or Denmark right?

If this does not work i was also thinking of just saving up in the UAE company and then at some point move down there for 6-12 months and pay out the company profits to myself and move back to Spain or Denmark within a years time.

What do you think are these feasible options or you guys have better ideas.

 

[CaptK]

You will need to prove that especially to Denmark as they are super aggressive.
You will need to have a tenancy agreement, utility bills and a UAE phone number that is always active. That's the number you put on all the forms and UAE is your correspondence address.

180 days of the year need to be spent in the UAE or the majority of your time.

 

[Petersvenson]

Okay, in theory i could save up a lot of cash in the UAE company then move down there for 12 months pay out the money to myself as salary and then go back ? Do i need to show any documentation when i return with the money?

 

[Gediminas]

Hi OCT

I have a trading company in Spain and do business with most of EU. A lot of our revenue is generated trough affiliate sites that I own. I was thinking of setting up a UAE company to manage the affiliate sites and make an agreement with the Spanish company that they pay a commission on the sales generated from the affiliate sites. This way i can save up some cash in the UAE company. I live most of the time in Spain, but also in Denmark, if i get residency in Dubai and i spend my time less than 180 days in each country i could be Dubai resident and just travel between the 3 countries troughout the year? This way is will not be tax liable in Spain or Denmark right?

If this does not work i was also thinking of just saving up in the UAE company and then at some point move down there for 6-12 months and pay out the company profits to myself and move back to Spain or Denmark within a years time.

What do you think are these feasible options or you guys have better ideas.

Overall, your plan sounds good. Spain has a treaty for the avoidance of double taxation with the UAE, while Denmark does not have it. It means that as regards potential Permanent Establishment (PE) risk it is important that most important decisions on behalf of UAE company would be made while you are not in Denmark. From a Spanish perspective, it is also important to demonstrate that you have a certain level of the substance in the UAE. So if you meet the above, most likely there should not be negative tax consequences (on the level of operating profit).

However, when you plan to distribute dividends, real-time spend in UAE is a must.

In case you hire us, we would arrange a tax residency certificate before the reception of dividends and discuss with you other important aspects. We can set up your UAE company with Emirates ID and provide general support and advisory throughout the process. Also, we can help with other local matters, related to economic substance and other practical questions in UAE.

 

[CaptK]

Okay, in theory i could save up a lot of cash in the UAE company then move down there for 12 months pay out the money to myself as salary and then go back ? Do i need to show any documentation when i return with the money?

In theory yes but you personally need to build substance in the UAE