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It's not zero tax unless it's an exempt activity, it's 9%. Generally, hosting companies are not exempt from tax.
oh...i guess then usa llc is better after all.
I've never really understood why certain people seem to think such structures help save taxes. As far as I know, the saved money would still be taxed somewhere else down the line, unless you're into tax evasion (read: not tax avoidance).
its not for saving tax...its for getting stripe and paypal services. eventully you have to pay taxes if you go for LLC.
Dubai has betrer laws, specially for crypto , so choose dubai if you want peace of mind , tax almost same as usa
Yes, there's a 9% corporate tax in the UAE, but it only applies after your first AED 375,000 in profit. Anything below that isn't taxed.
When setting up your company, you'll need to choose between a Mainland or a Free Zone LLC.
Either way, you'll have to visit the UAE. That's because opening a bank account (with banks like HSBC, FAB, or Wio) requires an Emirates ID, and to get that, you need to be there in person. Part of the process includes doing a fingerprint scan and a basic medical check, which is a chest X-ray and a blood test.
Thats what i thought too, but good luck with filing federal taxes
thanks @rdpis can you just highlight me what is the bare minimum cost of maintaining a dubai based LLC other than taxes.
It depends on the amount of visa's you need as well as in which Emirate's Free Zone/Main Land you form it, Free Zone is recommended unless you plan to trade within the UAE. Pricing for a single visa company is around 15'000 AED, this is a yearly recurring cost. You also have to visit the UAE every 6 months otherwise your visa will be cancelled.
took about 2 months to open mine in Ras Al Khaimah (free zone) from first submission to bank account being active
i can put you in touch with the firm i used, drop me a PM
free zone is annually
How much was the pricing? And any reccuring charges?
Maybe check out https://flagtheory.com/incorporation-banking/
So.. no more Wyoming ?
The federal taxes and forms you have to fill make it not worth it tbh, specially having to wait on the ohone with irs for hours…
Free zone licenses are approx 5,000 to 7,000 AED annual.
@mw pm'ed you.
doesn't that filing agency / accountant does it for you? i assume it can be managed by someone for a reasonable charges.
And don't forget, going bankrupt is a jailable offense.
Wasn't it 0% state tax and 0% federal tax if no income from within US ?
Paypal recently stared 5-10% GST Tax extra on the TRX if NTN is not updated Annual renewl of the company is around 5k AED + You need physical office its cost is around 800-1200 AED depends on location
From what I can see on my residence permit, it says six months https://imgur.com/a/arpn8t3
RAK freezone is slow, IFZA/SHAMS/AFZ are always faster. It takes 2-4 weeks at most - from company to opening bank account.
You have to visit very 180 days! It's not 6 months. Beware about exactly 180 days otherwise you are marked as absconding and then the company and you, both are fined. It's the same law for Freezone or LLC.
Adding to it, the average company setup cost goes up to AED25k and then it's a yearly renewal of contract around AED12-15K. So basically you end up paying for these renewal fees instead of tax.
It is, but you still gotta do the dreaded forms
Not as seamless as in Dubai.
It's just known as a pass through. Unless you're engaging in fraud, you will still pay tax on that income wherever you are tax resident.
So if someone is looking to reduce taxes, they need to look for citizenship, not incorporation, options.
A Dubai LLC will still be a pass through and is actually not worth the operational cost for this reason if the only purpose is to avoid tax / VAT and open a bank / EMI account.
Most people incorporate in Dubai as they are also after citizenship and a business makes this easier (VISA / application).
It can however, put a layer between yourself and your clients in terms of liability.
Not quite true. If you are operating as a foreign LLC in Wyoming, you only need to file forms 1120/5472. These are informational only.
Only other thing is registering the UBO to meet new laws. This isn't actually more lengthy than setting up or maintaining a Dubai LLC. There's also the difference in cost - a Wyoming is $150 or so to incorporate and about $150 a year to maintain including using an agent to file your taxes (so your name stays off the public record).
Wyoming companies who use office address rather than registered agents can still get Stripe accounts and some bank accounts (Mercury / Relay).
Seychelles has next to no requirements but very few will open an account for a Seychelles IBC anymore.
Why can't your UK limited company obtain these?...
UK companies have a very strong reputation and don't struggle to open accounts with most service providers. Why don't you just open another UK? Most banks and service providers aren't friendly to anonymous / offshore companies but I'm sure you can understand why.
Using a USA LLC, you can avoid paying VAT on a lot of invoices though. So, it isn't necessarily an expense.
But you still have to submit ID to the bank, so your name is not so much off the record...
I was requested to file 1065 and a plethora of other forms tho, and some are per partner. Any ideas?
It all depends at what scale you're at. If you're printing $500k+/yr in profit, it may make sense to find a legal loophole. Many of them exist.
Frankly, even registering in another country does not mean you're free from tax due to the CFC rules. If you're an American, register in Dubai, you're still subject to US tax on your business as long as you're controlling it from America. The same goes with many other countries.
The only benefit you gain is if you move, or have favourable CFC rules.
Some countries have FIPA rules that state as long as it's not passive income from investment, real estate then it's exempt from the local country taxes however you still need to declare any cash up to a certain amount even if exempted from the countries tax laws.
Frankly, the concept of "tax havens" was once a thing but these days is largely bullshit. If you're printing enough serious cash, then move to a territorial tax country (while they still exist), leverage the 0% PIT/CIT rules.
Frankly, the Caymans is probably one of the only great ones left due to the 0% dual, and the fact that they're no longer on the grey list for money laundering. If your purpose is legitimate, why not?
Open a Special Economic Zone (SEZ) corporation through a firm like CEC (cost less than $10k of which frankly 90% is the visa cost), you get granted a visa for you and up to 4 additional people (side note: yes, your family can come on the same visa issued to you, it's just more paperwork, tell your formation provider first), then you could bring your staff to the Caymans as well. Visa's are valid for 5 years.
Rent in the Caymans is quite affordable, housing prices (depending where you look) is quite affordable too. I would strongly avoid the Cayman banking system, however. You'd want to utilize US banking (non-residents can open, take a flight from EWR to KY, first open a bank account) for your personal account.
For your business account, you could open with any of the local banks, but you could also utilize brokerages to hold your money but they generally require mid-5 to low-6 figures to be held in the account at any time, but again if you're printing $500k/year+ that's not a problem.
Dubai and their Golden Visa is all very similar, but has arguably higher long-term costs.
Nevertheless, if you did move to a territorial tax country like the Caymans, you can still utilize standard payment processors (Stripe -> Paddle/GCL), plus you'd enjoy a lot of decent weather -- maybe it's nicer than your countries?
So, in summary, it makes a a lot of sense at a certain scale point, but it makes zero sense if your goal is to just get a payment processor.
Most people prefer to just register UK LTD shells, open Revoult or Wise accounts, most UK law firms will offer nominee services too for opening those, which frankly is a bit stupid that the UK permits that, but whatever.
No ideas. If you are required to file form 1065, then you have income from US sources. I was referring only to pass through entities.