Question Business in Dubai - Living in Europe

[businessLB]

Now to come back to my original questions, I want to explore something here.

As I said before, I'm French and live in France at the moment.
It seems the best for me to incorporate in Dubai.

So let's say I do that (I have all the steps figured out about this with my contact), but I don't move there for some time and stay in France, for let's say 6 months.

Does France has a taxing power on the business (as @Mr Gus explained for the example with Romania) or only on the money I bring back in France via salary/dividends?
I'm also putting myself in contact with either a tax advisor or a lawyer to properly figure this out but I would love some input here.

 

[Mr Gus]

That is what I said, in Dubai you spend money you get a great life. In Bucharest you can spend a bit money and life well also, but you quickly hit the ceiling of lifestyle after which more money doesn't improve your life anymore.

In Dubai you can easily rent nice studios with gym, pool, parking etc in locations like silicon oasis or production city for 1k USD/month. Say you love marina area but don't wanna spend the money, just rent a car for 400 and a studio in production city for 1k, then head over to marina within 15min when you feel like it.

Value for money wise Dubai isn't a great place

Now to come back to my original questions, I want to explore something here.

As I said before, I'm French and live in France at the moment.
It seems the best for me to incorporate in Dubai.

So let's say I do that (I have all the steps figured out about this with my contact), but I don't move there for some time and stay in France, for let's say 6 months.

Does France has a taxing power on the business (as @Mr Gus explained for the example with Romania) or only on the money I bring back in France via salary/dividends?
I'm also putting myself in contact with either a tax advisor or a lawyer to properly figure this out but I would love some input here.

Why is Dubai the best place to incorporate?

 

[benbao]

Now to come back to my original questions, I want to explore something here.

As I said before, I'm French and live in France at the moment.
It seems the best for me to incorporate in Dubai.

So let's say I do that (I have all the steps figured out about this with my contact), but I don't move there for some time and stay in France, for let's say 6 months.

Does France has a taxing power on the business (as @Mr Gus explained for the example with Romania) or only on the money I bring back in France via salary/dividends?
I'm also putting myself in contact with either a tax advisor or a lawyer to properly figure this out but I would love some input here.

Yes, the risk will be there that France will claim your UAE company is a French tax resident if you live in France and have no substance in the UAE. Also it would be by fair easier and cheaper for you to incorporate and manage your business from Romania.

Value for money wise Dubai isn't a great place

Highly subjective to everyones personal perception and lifestyle. I find Dubai worth every dirham.

 

[zzzzzz]

Freezone company visa is now renewable every 2 years (down from 3 years). Do you have to do medical test every time you renew visa in UAE?

 

[businessLB]

Why is Dubai the best place to incorporate?

You're right @Mr Gus, right now I don't have the exact answer to this. Just based on my preliminary research, it seems the best.

But I'm going to crunch all the numbers, with my projection for next year (at least), and see what might be the most interesting.
I'll post my findings on which one might be the most interesting in my situation.

Thanks for the insights, it's helping me a lot to question everything and make the best decision!

 

[Konstanz]

I suggest contacting @Gediminas. He will find you some cheap solution. With Dubai or without Dubai.
There are also other possibilities in Europe

 

[businessLB]

I suggest contacting @Gediminas. He will find you some cheap solution. With Dubai or without Dubai.
There are also other possibilities in Europe

I will reach out, thanks!

For Romania, I think it's not looking good with the upcoming changes in the way a micro-company works.
It will not be possible to have one without an employee, and they plan to reduce from 1M to 500k (January 1st 2023) to 200K (January 2024).

So this company scheme is not for me anyway.
I reached out to a tax advisor in Romania to see the options, but it doesn't look good so far.

 

[JimBeam]

If you run the UAE company from Romania it will be deemed tax resident in Romania, meaning 16% corporate tax + 8% dividend tax + all the cost for incorporating in the UAE and annual costs to maintain the company. The 10% flat income tax is right but you will also have to pay socials which will end up a lot higher then 10%.

This is true! Or, in other words, if your company is in country A and you live in country B - taxman will consider that your company is tax resident of country B and you'll have to pay the taxes as if the company is in country B. There aren't a lot of ways you can avoid this especially in France and you need to plan things very carefully. So you either leave France or you pay taxes in France. No other (legal) way of doing it. So don't expect to have a company in Dubai or in Romania and to live in France. That's not going to work (at least not in the long run).

Also, wroth mentioning that you'll setup company in Dubai in a week, but opening a bank account could take couple of moths. So factor that in.

Dubai is an interesting place to live but it's getting quite expensive.
Here are some rough estimates on expenses you'll have there (from my personal experience):

• company setup - €10-15k
• company renewal - €5k
• accounting - €2-5k/year
• average 1BR flat rent - €20k/year
• average car rental - €10-12k/year
• monthly expenses (bills, groceries, gas etc) - €2-3k

Also, Dubai is a dollar place. So if most of your earnings are in USD - you'll be fine as exchanging USD for AED will typically cost you 0.25% or so.
However, situation with EUR (or most of other currencies is quite different) and you could lose 3-5% for exchanging EUR to AED each time!

You could also consider Bulgaria 10% CIT tax + 5% dividends (effective 14.5%). But it's a real company (LLC) so you can deduct expenses (so it will be effectively less than 14.5%) and you can scale it up without any limits. It's also a cheap place to live. Probably roughly 5x cheaper than Dubai and roughly 2-3x cheaper than France.

 

[Mr Gus]

This is true! Or, in other words, if your company is in country A and you live in country B - taxman will consider that your company is tax resident of country B and you'll have to pay the taxes as if the company is in country B. There aren't a lot of ways you can avoid this especially in France and you need to plan things very carefully. So you either leave France or you pay taxes in France. No other (legal) way of doing it. So don't expect to have a company in Dubai or in Romania and to live in France. That's not going to work (at least not in the long run).

Also, wroth mentioning that you'll setup company in Dubai in a week, but opening a bank account could take couple of moths. So factor that in.

Dubai is an interesting place to live but it's getting quite expensive.
Here are some rough estimates on expenses you'll have there (from my personal experience):

• company setup - €10-15k
• company renewal - €5k
• accounting - €2-5k/year
• average 1BR flat rent - €20k/year
• average car rental - €10-12k/year
• monthly expenses (bills, groceries, gas etc) - €2-3k

Also, Dubai is a dollar place. So if most of your earnings are in USD - you'll be fine as exchanging USD for AED will typically cost you 0.25% or so.
However, situation with EUR (or most of other currencies is quite different) and you could lose 3-5% for exchanging EUR to AED each time!

You could also consider Bulgaria 10% CIT tax + 5% dividends (effective 14.5%). But it's a real company (LLC) so you can deduct expenses (so it will be effectively less than 14.5%) and you can scale it up without any limits. It's also a cheap place to live. Probably roughly 5x cheaper than Dubai and roughly 2-3x cheaper than France.

As a freelancer you can pay 7,5% + socials which are capped quite low

 

[businessLB]

As a freelancer you can pay 7,5% + socials which are capped quite low

Based on my current income (around 100k - 125k), I would be capped at around 12% (socials and personal income taxes), which is not bad at all.

That's very interesting! And as soon as I want to operate the Amazon Business or other bigger investments, I can open an LLC for it.
I'm going to look into this!

 

[Mr Gus]

Based on my current income (around 100k - 125k), I would be capped at around 12% (socials and personal income taxes), which is not bad at all.

That's very interesting! And as soon as I want to operate the Amazon Business or other bigger investments, I can open an LLC for it.
I'm going to look into this!

Yeah basically the more you earn the less tax you pay

 

[rowena]

• company setup - €10-15k
• company renewal - €5k
• accounting - €2-5k/year
• average 1BR flat rent - €20k/year
• average car rental - €10-12k/year
• monthly expenses (bills, groceries, gas etc) - €2-3k

It is a good summary to see the big picture. Your minimum expenses for a proper Dubai setup will be $50-60k annually. If you make at least $250k profit annually, then Dubai makes sense otherwise just pay the taxes because it will be less than a Dubai setup.

 

[Parsifal]

Also there is a cheap Paraguay residency program. I didn't take it myself, but from what you can read online it costs 4.5kusd once and you have to freeze another 4.5k in hte bank. Taxation seems to be territorial, so good for you. You would have to cut all ties with France, but it applies to all your options.

 

[RealDude]

Also there is a cheap Paraguay residency program. I didn't take it myself, but from what you can read online it costs 4.5kusd once and you have to freeze another 4.5k in hte bank. Taxation seems to be territorial, so good for you. You would have to cut all ties with France, but it applies to all your options.

Your sources are probably out of date?

 

[Mr Gus]

Also there is a cheap Paraguay residency program. I didn't take it myself, but from what you can read online it costs 4.5kusd once and you have to freeze another 4.5k in hte bank. Taxation seems to be territorial, so good for you. You would have to cut all ties with France, but it applies to all your options.

You don't have to cut all ties if you have treaty protection.

 

[JimBeam]

It is a good summary to see the big picture. Your minimum expenses for a proper Dubai setup will be $50-60k annually. If you make at least $250k profit annually, then Dubai makes sense otherwise just pay the taxes because it will be less than a Dubai setup.

Exactly!

At 100 - 150k/year someone would be at around zero or with minimal savings (depending on his expenses) but once you scale that up than the advantages of UAE start to express themselves.

I wrote this as many people are not aware of the costs other than forming and renewing the company.
And in Dubai there are no taxes but there are a lot of fees and expenses that you need to factor in especially if you plan on living there full time (or 6-7months/year).

 

[businessLB]

Exactly!

At 100 - 150k/year someone would be at around zero or with minimal savings (depending on his expenses) but once you scale that up than the advantages of UAE start to express themselves.

I wrote this as many people are not aware of the costs other than forming and renewing the company.
And in Dubai there are no taxes but there are a lot of fees and expenses that you need to factor in especially if you plan on living there full time (or 6-7months/year).

Yes thanks for clearing this out.

Right now, I'm looking at Bulgaria. It seems very interesting, very cheap to live in and the best in my current situation.
Of course, I need to do more research but it's promising.

 

[Don]

Yes thanks for clearing this out.

Right now, I'm looking at Bulgaria. It seems very interesting, very cheap to live in and the best in my current situation.
Of course, I need to do more research but it's promising.

Bulgaria is perfect for a freelancer for tax purposes. However, don't get too audacious and stick to safer locations unless you're willing to pay extra tax to the guys in black leather jackets. It's better to keep a low profile and be properly equipped.
I had some occasions of blackmailing myself after I decided not to work with a person that was supposed to fill the position of director.
Someone I know ordered a taxi in Sofia, and instead of the ordered destination the driver just took him to a deserted field and tried to extort money.
The lawyers I've met in Bulgaria have shared some very interesting stories. One of them explained to me how it's normal there that after you grow your business in a neighborhood of 1.5-2 m EUR in assets you will become subject to blackmail by the state authorities.

 

[SunayB]

The guys with the black leather jackets are not relevant anymore , it's not the 90's anymore in Bulgaria. The mafia moved their money in big , legit businesses .

The worse the taxi driver can do is pump up the trip price , however i'd avoid living in Sofia and driving expensive cars if you're not local.

 

[Don]

This may sound ridiculous, but the unpaid tax levels that trigger criminal responsibility in Bulgaria are indeed ridiculously low. Only 1534 EUR in unpaid taxes can result in jail sentence. 6135 EUR or more is considered as “heavy crime”.

Always be aware of your exposure and take calculated risks. - my two cents

https://bglaw.eu/articles/bulgarian-caretaker-government-2021-tax-evasion-combat/

The guys with the black leather jackets are not relevant anymore , it's not the 90's anymore in Bulgaria. The mafia moved their money in big , legit businesses .

The worse the taxi driver can do is pump up the trip price , however i'd avoid living in Sofia and driving expensive cars if you're not local.

Yes the same leather jacket guys have put on suits now. Racket is in the form of tax authority.