Working for my UK company remotely in Dubai

[Walter Rowe]

Quick question for the forum

If i have a UK company with UK clients - can i work remotely in Dubai and take all the profits out as a salary? Or do i have to do it as dividends ( i currently take the max tax free allowance @£12K and then payout as dividends for the rest )

I'm looking at the idea that if i pay it all as a big salary ( eg going from £12k to £100K), if I'm a Dubai tax resident, I'd be taxed at 0%.

I'm currently in the UK but am able to work remotely with very minimal UK time involved ( eg <30 days a year).

I am also aware that if i was working for those 30 days while in the UK then i am subject to UK tax on those days - presumably pro rata my salary.

 

[Au999]

If you're going to actually live in Dubai it's probably better to just set up Dubai freezone company out here and carry on as normal. This way you'll have no corporate or income tax.

I was in a similar position, UK ltd co, UK and US clients but my work is wholly online - moved out here with a FZCO and never looked back.

Only downside is some clients don't like dealing with a foreign company or banks, so a local bank account for a local company to act as your payment processor, receiving client money then immediately forwarding to Dubai and you should be good.

 

[ShillGates]

If you're going to actually live in Dubai it's probably better to just set up Dubai freezone company out here and carry on as normal. This way you'll have no corporate or income tax.

I was in a similar position, UK ltd co, UK and US clients but my work is wholly online - moved out here with a FZCO and never looked back.

Only downside is some clients don't like dealing with a foreign company or banks, so a local bank account for a local company to act as your payment processor, receiving client money then immediately forwarding to Dubai and you should be good.

what reliable emis do you use for european clients, as its tricky sending money to dubai

 

[Au999]

what reliable emis do you use for european clients, as its tricky sending money to dubai

I actually stopped doing UK work when I moved out here but during the transition I used Currenxie for UK payment.

 

[ShillGates]

ah yes currenxie didnt want to board me lol

 

[Au999]

ah yes currenxie didnt want to board me lol

CurrencyFair are good (despite heavy AML) and SwissQuote have been very helpful. Both were opened by me in Dubai. I have accounts at most places in case any path of money flow breaks.

 

[Walter Rowe]

"so a local bank account for a local company to act as your payment processor, receiving client money then immediately forwarding to Dubai and you should be good."

My UK clients aren't going to go for a Dubai company.

So i open a freezone company and bill my UK company for services? Resulting in no profit for the UK company and no tax and everything going to Dubai and then other than this new 9% tax thats still working its way through - - thats it?

 

[Sols]

You have to be careful of things like BEPS (Base Erosion and Profit Shifting). If you artificially lower the tax base of your UK company, the HMRC might come knocking. They rarely do, but the risk is there.

This is only a problem if the salary you pay yourself vastly exceed market rate for the work done. For example, if the typical salary for your work is 100,000 GBP/year and you're taking out 800,000 GBP/year in salary from a company which just so happens to drain the company's coffers, you might run into problem. Especially if you're the company's only shareholder, director, and/or UBO/PSC.

Similar provisions apply in case your UAE company bills the UK company for an artificially large amount.

If your clients won't enter into agreements with a UAE company and you need a UK legal entity, consider a UK LLP instead. You need two partners, but the partners can be you personally and your UAE company. LLPs are tax transparent so the income isn't subject to corporate income tax. The partners are instead taxed on personal income, which is zero in UK and zero again in UAE.

 

[Au999]

"so a local bank account for a local company to act as your payment processor, receiving client money then immediately forwarding to Dubai and you should be good."

My UK clients aren't going to go for a Dubai company.

So i open a freezone company and bill my UK company for services? Resulting in no profit for the UK company and no tax and everything going to Dubai and then other than this new 9% tax thats still working its way through - - thats it?

That's pretty much what I do between a US LLC and the Dubai FZCO that owns it.

There's an exemption for FZCOs on the 9% tax

 

[tolstoy]

"so a local bank account for a local company to act as your payment processor, receiving client money then immediately forwarding to Dubai and you should be good."

My UK clients aren't going to go for a Dubai company.

So i open a freezone company and bill my UK company for services? Resulting in no profit for the UK company and no tax and everything going to Dubai and then other than this new 9% tax thats still working its way through - - thats it?

If its a freezone company then you dont have any 9% tax