13 March 2024

Tax Insights for Setting Up a Company in Dubai: Q&A | EP 16

Discussing tax insights and requirements for setting up a company in Dubai, addressing two common questions and misconceptions from viewers of the channel in this first Q&A video.

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Opportunity Awaits podcast Episode Transcript

[00:00:00] So I started off recording this video with the mic off, silly me, so I'll start again. Essentially what I'm doing is I've decided to change it up a bit and answer some of your questions directly through a video instead of in the comments and also the Instagram messages I get. Somehow people WhatsApp me. I don't know where to get my number from. I've had emails as well. So I'm going to start off with some of the common questions I get, but I'm not just going to run with Dubai. It's going to be anything that's entrepreneur ship related, anything business related. marketing, sales, whatever, that sort of comes up that I may have some knowledge of. So if this is something that you find useful, of course, leave it in the comments and, let me know so that I can know how to best answer your questions that you may have from any videos that I may put up that are not like Q and A type questions, to Q and A type [00:01:00] videos. So yeah, with that, I'll just get stuck in with one of the questions that. we get quite a lot. And this one is from Zaki Jamil8986. He says, do you pay 0 percent tax now that you set up your company? And did you need to renounce your UK passport? Now this is in relation to the Dubai Free Zone, business setup video. This is not about a UK passport. Base company. so do you pay 0% tax now that you set up your company and did you reannounce your UK passport? I'll start with the first one. Sorry, with the last bit of the question is, did I renounce my UK passport? Absolutely not. you don't need to announce your UK passport and in fact, setting up the company has absolutely nothing to do with your citizenship at all. It's got nothing to do with your UK passport. That may have been more relevant of a question in [00:02:00] relation to the visa process. But if you're assuming that you've got the visa set up as well, then the answer is still no. You keep your UK passport. but the setting up of a company itself in Dubai in a UAE free zone, doesn't. affect your UK passport at all, or whatever passport you've got anywhere else in the world, unless they've got some funky rules. so do you pay 0 percent tax now that your company's set up? No. So this is something that is still floating around. some people think that paying, having a company set up in the UAE or Dubai, Dubai is in UAE obviously, but some people seem to think that It's 0 percent tax across the board. So 0 percent corporation tax and 0 percent income tax. Both of those are false. with a caveat. so the corporation tax in the UAE is 9 percent [00:03:00] for nearly all types of businesses. There are some exclusions, but you know what? I'm not even going to go into them because 99. 9 percent certain it's not going to apply to anyone who is watching this. unless you're in the business of setting up a shipping company. And when I mean shipping, like actually having boats and stuff. And there's a couple of other obscure ones then you're not going to be exempt from the 9 percent UAE corporation tax. In relation to your income tax, the reason why I said it's no for both is yes, in the UAE income tax is still 0%. However, whether you need to pay Excuse me, whether you need to pay tax on your income will rely on whether or not that you qualify for you a, tax residency status. And that will depend on what country you're from and your country's rules. So [00:04:00] you tend to find, for example, people from the United States, I'm really sorry, but you don't tend to qualify anywhere for tax residency anywhere. as long as you hold your citizenship, as far as I know, The UK and a lot of Europe, they've got other rules that apply. So for example, for me, I can't spend less, sorry, I cannot spend more than 90 days in the UK, in any tax year, which runs April to April. If I spent 91 days, I would still pay tax on my income. In the UK, despite the fact that I've been paid salaries from abroad. So it's not, it is definitely not a 0 percent tax regime as people think, just having your company there doesn't suddenly, mean you don't pay any tax anywhere. It is complicated, and it does depend on your own individual circumstances, as I keep saying, and it sounds like a [00:05:00] bit of a wishy washy, bullshit statement, basically, oh, passing the buck, but it does depend on your individual circumstances. And so I would suggest that if you're thinking about setting up a company in the UAE because you don't want to pay any tax, then get a qualified accountant where you're from. And also from the UAE. but with that, I've heard people complaining about. oh, it's 9 percent tax corporation tax. Oh my god. So what do you know what that is still so ridiculously low And then there's no income tax if you qualify for tax residency in the uae That is ridiculously low compared to anything else Anywhere else that I'm aware of in the West, anywhere. for people that complain about 9%, honestly, get over it. I would love to be paying 9 percent overall tax on [00:06:00] my, on my, profits and, my, my salary. I would love that. I'd be living so much better than I currently do from my UK income. So I would say don't worry about it is 9 percent not 0 percent and Whether or not you pay that al that tax on your income will depend on whether or not you qualify for UAE tax residency status. And one more thing, just one more thing on this of course, and I don't know why it's been left so widely open with the UAE right now. Because the tax that's that the tax on the corporation tax, I believe came in July 2023 around then. and the need to register it comes from then, but there's a different, or is it July this year? It might be July this year. But the, need to register For [00:07:00] your for corporation tax is already there. You do need to register. what I would say with this, though, is there is obviously you can pay yourself a salary. So if you've made 100, 000 in profit and You paid 100, 000 in salary, then really you haven't shown any profit, which you normally would pay tax on your profits. So I don't know how that will, how the UAE will handle that one, because I can imagine people will start paying themselves extortionate amounts of money as a salary to get around paying the corporation tax, even if it is just 9%. Anyway, let me move on to the next question that come up, and this one's quite recently, some three days ago. it's from Jesse Livermore 9285 on YouTube. so they were in. Hey, mate, can I ask you a [00:08:00] question about your UAE free zone company? I've been looking into a new. into the new corporate tax rules and free zone companies are liable for the new corporate tax as far as I can see. What is your understanding in terms of what they call free zone qualified income and tax exempt activities? From what I can see, all free zone companies are subject to corporate tax. Do you need to file an annual audit report and tax returns with an IFSA company? That's an if it's a free zone company. Also, do you have to be getting on with UAE banks? So Let me start with that bit again. Also, how have you been getting on with UAE banks? Has it been an easy or a difficult process? Cheers, all the best. Okay. So thanks for that question, Jesse. I did reply in, which actually wrote that on one of my helicopter videos, but anyway, I did, I did reply to that, but any case for the rest of you. [00:09:00] We've already just spoken about the corporation tax and just to be clear, it does apply to free zone companies as well. There is a big myth out there that it doesn't. It does, just the same as a mainland company. so that one's covered off. In terms of filing annual audit reports and tax returns with an IFSA company, IFSA is the free zone. If you haven't seen it about the corporate Company, the Dubai setup process, watch the Dubai, set up process video. If you're interested in setting up a free zone company, I'll put the link in the description, to that one. but you can, an audit in the UK means something different just to filing your return. So you do need to file the tax return. I haven't done one yet in the UAE. I've not been beyond a year, from when it's needed to be filed. So I haven't actually done one yet. It does need to be done. It [00:10:00] doesn't matter if the free zone is IFSA or any other free zone. It's still going to need to be done. also, how have you been getting on with UAE banks? Has it been an easy or difficult process? Now, lots of people have messaged me about the banks and what I think I'm going to do is I'm going to do a separate video, although it won't be long, it just needs to be a bit more thought out than me just saying it off the cuff. But in short, I did have a problem until I had the stuff I needed, which was basic in terms of, having a company set up, having my ID, having a phone number in the UAE that was active, and then also physically being there at the time. So they're the things that needed to be done. Otherwise, it wasn't that difficult. It was done really quickly. I set mine up with Weo Bank. It's like a challenger bank. and that's for both the business [00:11:00] account and the personal account, but I will do a separate video on that. Now, if there's any questions on the banking that you want to hear about that, any questions that you have about it, put it in the note in the comments, please, because I may not cover off the things that you want. But generally I held off from doing a video on the bank banking set up because I just didn't really know what I'd have to add like any sort of value. But there have been a couple of questions that have been asked, which I will cover. But if there are more, please ask them and I'll see what people are confused about or what, Scary things you've heard because there are people out there who've literally set up companies to help you to set up a bank account and they charge you extortionate amounts of money for doing that. And I don't really understand why because it was no more difficult, honestly. Then me setting up a bank account [00:12:00] in the UK, which actually, to some extent, I think it was more difficult. I had to answer more questions, have more back and forth with the banks, have to gone for appeals for one of my companies, a cleaning company, going for an appeal to get a bank account open in the UK is ridiculous. yeah, I don't think it's as challenging as perhaps it maybe once was, which is why these other companies exist or, It's just not that challenging and people are just trying to rip you off just like the reason why did the Dubai free zone set up process because there are a lot of companies out there, although it might be more convenient and fine. If you want the convenience, go and set it up with them. No problem at all. Go and do that. I like convenience as well and I'll pay for it. But when they're trying to sell it on the premise that, oh, it's so difficult to set up the company and you'll get it wrong and all this other stuff. Okay. and that's their reason for charging you stupid sums of money, maybe not in the first year, but in the renewal, then it doesn't really make much sense. So [00:13:00] if you're interested in setting up a video in setting up a free zone company, watch the video. I'll link that in the, description and I will get around to the bank video. Anyway, that's it. I'm going to do finish off with two Q and A's because I've got a steak to cook. It's been sat there, coming to room temperature and I really want to cook it and eat it. So I'm going to go, but definitely leave your comments. in a, not in the, in a description, obviously you can't leave comments in the description. Just leave your comments wherever you can leave your comments on YouTube. and yeah, let me know if this was helpful for you. If it was helpful, Let me know if it wasn't helpful. Let me know. I'm sure you will. and if you want to see more of them, also let me know that other things that you might be interested in, whether it's about, Dubai business stuff, if it's around just general business, which I actually have a lot more knowledge of than specifically about setting up companies in Dubai, but they're the videos that a lot of you have come from. So [00:14:00] quite happy to talk about it and share my experience that I have, which isn't much. But I understand for a lot of you that have none, my not much is many steps ahead from where you are now. So yeah, anyway, good. Thanks for watching.

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