License needed to trade stocks/cryptos with own funds in Dubai/UAE?

[Thomas67]

I read all the above.
I learned nothing.

I reside in the region.
I know around 50 or so traders in UAE.
Nobody pays tax. Everyone understands and is 100% certain their profits are tax free.

Most have been in Dubai for 10+ years.
A few just come i the recent crypto bull market purely to cash out tax free and settle down in Dubai.

What the exact legal rules are, I expect there will never be a clear answer.
I expect it's also by design.

If you know 50+ traders living/working in UAE I'd be interested to discuss with some of them. In particular, It would be quite valuable to know if they have consulted a lawyer (not only a tax advisor) rather recently, and which decrees/rules the latter relied their position on.

Please note that this thread is not about taxation, it is about licensing and compliance. Though, if you/your friends have sources justifying an exemption (for full time traders) I'm more than interested.

 

[gaz0001]

If you know 50+ traders living/working in UAE I'd be interested to discuss with some of them. In particular, It would be quite valuable to know if they have consulted a lawyer (not only a tax advisor) rather recently, and which decrees/rules the latter relied their position on.

Please note that this thread is not about taxation, it is about licensing and compliance. Though, if you/your friends have sources justifying an exemption (for full time traders) I'm more than interested.

No offence,but I doubt my Associates would be interested in talking to an Internet stranger. It's also something I don't have any desire to get involved in.

Not sure if you have ever spent any time in UAE or any of the GCC countries?
The idea is,that you don't ask any questions,you just get on with it.
I would not need to ask anyone if they have consulted a tax advisor or lawyer.
The answer is no.
If you were to consult a tax expert, they would simply not reply to you, ignore all your calls and emails.
There would be not a single word of feedback.
This is common in this part of the world - it is part of the charm I guess.

With regards to licencing.
You can do a few things.
Few guys work part time and trade part time. So no form of license to trade.
Few guys do not work,and just have a property, which gives you an investor visa.
And then a few people wanted to open companies so that they could take equity against their company and trading profits.
You can do a few things here.
Stay under the 100k usd Profit and pay 0%, and anything else ontop you earn through personal and not company, or go over the 100k and pay the corp tax. Depends what the books need to say to secure funding for property or whatever they are up to.

 

[daniels27]

But would you hang out with us in Oman on a good Friday? Where in GCC are you from?

 

[gaz0001]

But would you hang out with us in Oman on a good Friday? Where in GCC are you from?

Meet you on the service road,just off Nov 18th.

We'll light a BBQ, sit on fabric chairs, eat mishkak and pretend we are not retards.

 

[daniels27]

Meet you on the service road,just off Nov 18th.

We'll light a BBQ, sit on fabric chairs, eat mishkak and pretend we are not retards.

Sure, that's almost my birthday. Do you have GPS?

 

[Thomas67]

No offence,but I doubt my Associates would be interested in talking to an Internet stranger. It's also something I don't have any desire to get involved in.

Not sure if you have ever spent any time in UAE or any of the GCC countries?
The idea is,that you don't ask any questions,you just get on with it.
I would not need to ask anyone if they have consulted a tax advisor or lawyer.
The answer is no.
If you were to consult a tax expert, they would simply not reply to you, ignore all your calls and emails.
There would be not a single word of feedback.
This is common in this part of the world - it is part of the charm I guess.

There's no offense, no worries. So your answer is that none of your associates or contacts has ever consulted regarding this matter, fair enough. And that lawyers do not provide any advice or, more formally, legal opinions as services in the country, well noted.

With regards to licencing.
You can do a few things.
Few guys work part time and trade part time. So no form of license to trade.
Few guys do not work,and just have a property, which gives you an investor visa.
And then a few people wanted to open companies so that they could take equity against their company and trading profits.
You can do a few things here.
Stay under the 100k usd Profit and pay 0%, and anything else ontop you earn through personal and not company, or go over the 100k and pay the corp tax. Depends what the books need to say to secure funding for property or whatever they are up to.

Looks like the sense of my question about the license requirement for full time traders (incl. cryptos) hasn't been well understood, but that's fine, thank you for your time and reply. I won't further comment on this.

 

[gaz0001]

@Thomas67 & @daniels27 - this conversation is turning a bit weird. I really have no skin in the game, so i need not get too involved.

I would like to re-clarify my overall point though, because it seems it was lost in the sillyness.

In the GCC where a law is not 100% clearly understood, it will be interpretted differently by everyone, until there is a practical implementation of the law/ruling.

Practically, what this means on the ground - you do whatever is most logical and in line with what is already known.

So - whats happening today.

Personal money, personal trading, no cgt, no income tax, no licence.
Company money, company tax, company license.

If you ask 10 different tax lawyers in UAE about this 1million AED Turnover & 9% Corp Tax rule, you will get 8 no replys, and 2 polar opposite answers. (Go ahead and give it a shot).

What i have shared is purely practical knowledge from feet on the ground.

 

[daniels27]

@Thomas67 I have no heat in this either. But I can tell you something. @gaz0001 is right. We discussed similar things many times. You don't need to worry. But don't look for a definite confirmation as you will not get that. And btw this is not only like this in the UAE, there are also things in the US which with like this. As a general rule, as long as there is no court case not a law requiring you to do anything if let anything, you probably are safe to go. If there was only one case, the world would be taking about.

 

[Thomas67]

Actually I believe the answer to the main question of this thread is more simple than expected.

It is provided by combining the commercial transaction law and the decrees related to the corporate tax:
- Investing, holding, swing trading over several days/weeks or more (what most people do in Dubai/UAE) => personal investment => no license, no CIT
- HFT, day trading, scalping, using sophisticated tools, (likely) trading derivatives, (likely) trading Forex (can't be seen as an investment) => a commercial business => license required (as for any business), and CIT applies (with possible exemptions - threshold on income/sales proceeds, small business tax relief)

 

[Thomas67]

*Forex: unless long term positions/hedging obviously

 

[Thomas67]

Actually I believe the answer to the main question of this thread is more simple than expected.

It is provided by combining the commercial transaction law and the decrees related to the corporate tax:
- Investing, holding, swing trading over several days/weeks or more (what most people do in Dubai/UAE) => personal investment => no license, no CIT
- HFT, day trading, scalping, using sophisticated tools, (likely) trading derivatives, (likely) trading Forex (can't be seen as an investment) => a commercial business => license required (as for any business), and CIT applies (with possible exemptions - threshold on income/sales proceeds, small business tax relief)

A source as a complement, slightly different perspective emphasizing the frequency, organized activity level, continuity, etc... https://houranipartners.com/navigating-the-uae-corporate-tax-as-a-natural-person/

 

[RAGAV]

Actually I believe the answer to the main question of this thread is more simple than expected.

It is provided by combining the commercial transaction law and the decrees related to the corporate tax:
- Investing, holding, swing trading over several days/weeks or more (what most people do in Dubai/UAE) => personal investment => no license, no CIT
- HFT, day trading, scalping, using sophisticated tools, (likely) trading derivatives, (likely) trading Forex (can't be seen as an investment) => a commercial business => license required (as for any business), and CIT applies (with possible exemptions - threshold on income/sales proceeds, small business tax relief)

It makes sense to take a license to defend ourselves. But the problem is I am not sure which license is the most suitable and appropriate that covers my trading activity. Most of the freezones did not have an activity that covers stocks, equity derivatives on international regulated exchanges.
I was concerned about potential misuse of license in case it was discovered by authorities at a later point of time.

If only there was a specific license issued by any of the freezones for Freezone LLC for
"1. Trading in securities, all kinds of derivatives (equity, currency, commodities, OTC) on local and international regulated exchanges. "
it would have been far more clearer and straightforward.

 

[Thomas67]

It makes sense to take a license to defend ourselves. But the problem is I am not sure which license is the most suitable and appropriate that covers my trading activity. Most of the freezones did not have an activity that covers stocks, equity derivatives on international regulated exchanges.
I was concerned about potential misuse of license in case it was discovered by authorities at a later point of time.

If only there was a specific license issued by any of the freezones for Freezone LLC for
"1. Trading in securities, all kinds of derivatives (equity, currency, commodities, OTC) on local and international regulated exchanges. "
it would have been far more clearer and straightforward.

I understand your concerns but it goes beyond the scope of this thread - feel of course free to create one if useful for you. But to answer your question, I'm pretty sure DIFC and DMCC cover these activities, also depending on the instrument, just ask them; Interactive Brokers (broker for local and international regulated exchanges) has set up its branch at DIFC.