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Get residency in Dubai and reduce your tax bill now!
Crypto currencies are in another bull-market. Many investorshave made good gains on Crypto. If you are one of them, you mightbe looking to cash out some in order to rebalance your portfolio.Dubai offers great tax benefits for crypto investors.
How do Dubai Tax authorities treat gains inCryptocurrency?
Dubai has currently zero percent personal income tax. This meansthat if you are a tax resident in Dubai, no matter how much gainsyou make, there is zero percent income tax.
Whether you actively trade or hold; there are zero percent taxeson capital gains, on business income and on salary. Bottom linenada. Your Gross salary figure matches your Net salary figure.
Most other tax authorities treat gains from crypto currencieswith a capital gains tax. Seems like an easy way to collect moneyand fill the coffers. Moreover, they often require extensiverecord-keeping and the tracking of all your transactions. Not inDubai.
How Can You Benefit From Low Bitcoin Taxes in Dubai?
It is important to understand that tax laws generally focus onfacts. The tax authority of the country you are currently livingin, likely has the right to tax your income, based on the local taxlaws.
Most personal taxes are levied based on the residency situationof the taxed person. Each country has their own laws to determinetax residency; they can look at the amount of days you spend there,if you own a house, or if you have economic or social ties.
If you wish to benefit from low Dubai crypto taxes, you simplyhave to migrate from your current place of residence to Dubai.
Moving Tax Residency to Dubai
When the facts change, so do the tax laws that apply to you. Byfactually migrating you can change your tax residency.
The only real question is what do you need to do to no longer bea tax resident according to your current country's rules. Ifthe facts truly change, this is surprisingly simple in most cases.In some cases, there could be an exit tax.
So in order to become a tax resident you need to move toDubai.
Why Dubai?
Dubai is one of the emirates of the United Arab Emirates (UAE).The UAE are a first class country with great infrastructure, afavourable tax system, warm pleasant weather and home to a skilledand multicultural workforce. It is a great country to live in anddo business. It is modern and clean, and everybody speaksEnglish.
It has a favourable tax system of zero corporation tax and zeroincome tax. And there are no capital control restrictions. You cansend and receive as much as you please.
Moreover, Dubai has a well-established regulatory framework forcryptos. Cryptos are legal here. What this means is that Dubai isthe only country for crypto investors that is easy to move to withlegal certainty, no income taxes and no reporting requirements.
Ok, How Do I Become Resident of Dubai?
Every country has requirements for people to become a resident.This could either be an investment in real estate, or starting abusiness.
The most straightforward method to become a resident in Dubai isto setup a company in one of the free zones. Freezone companies canrent office space in the UAE, and based on this office space yourcompany is intetltes to apply for residency visas for you, yourfamily, and your employees (if you have any). That means it givesyou the right to stay in the UAE. And there are affordable officesolutions called: flexi-desks.
After you have moved to Dubai, you become subjected to Dubai taxand reporting requirements on your personal holdings.
Ok, Fair Enough. How is This Applied to Crypto Investors?
Simple really. You have to begin by setting up a freezone entitywith the correct trade activity. There are many activitiespossible. If you do consulting work, you can start a consultingcompany. If you are a software developer, you can start a softwaredevelopment company. You can also start a trading or holdingcompany for your assets.
In any case, you have to set up a company to obtain residency,so you have to choose something. You will be the shareholder andmanager of this company. Once the company is established you canapply for a residency visa with the company as sponsor.
Since there is zero corporation and income tax in UAE there isno reporting requirements of your personal investments in crypto toany authority in the UAE. The only catch is that you have to renewthe company every year and pay the appropriate licensing fee. Andyou should maintain any obligations regarding the visa.
Our office can help you out form the company in Dubai. It takesroughly a month to get the company and your residency visa runningas soon as the correct documents are filed to the free zoneauthorities.
And a Working Bank account?
Yes, banking is important. Our office is a bank introducer tomany banks in UAE as well as Electronic Money Institutions. Our aimis to find the appropriate bank that works for your best interest;not the other way around. Bank account opening in the UAE takes twoto three months.
It is worth noting that when you setup a business in Dubai, youneed to open a business account. You best also setup a personalbank account for local expenses. But next to that, you are notobliged to use exchanges or banks inside the country. You likelywill be able to keep using your favourite exchange andinternational banking solutions such as Wise.
I heard that I could do the company formation by myself is ittrue?
Yes, you can do it yourself this is true. However, by goingthrough us can potentially save you a lot of trouble going back andforth with the authorities. As well as getting our invaluableadvice on the best structure applicable to you.
There are over 50 free zone registrars in the UAE, each onehaving different business activities offered, requirements,documents, cost and time line of completion. We have more thantwenty years of experience in this line of business workingdirectly with the Authorities. Our seasoned experts can advise youthe most flexible, economical option matching your businessrequirements.
Freemont provides all the services under one roof. A true onestop shop.
Our service offering ranges from advising/consultancy,incorporation, residency and subsequently banking, accounting,legal services and any additional services required.
Remember that just like everywhere else that discussing cryptowith the wrong bank or free zone employee could result in a lot ofquestions. Bank employees dealing with foreign investors usually donot work in the front office. Dubai is a networking place andthrough the right agent you will talk to the right people.
This saves you a lot of time. Time that you can spend ondifferent things such as managing your investments. Opportunitycost, basic economics.
How can I get a tax residency certificate of the UAE?
In particular cases, an exiting country could request a taxresidency certificate. This is official proof issued by theauthorities confirming you are a tax resident in a particularcountry.
The instructions from the Ministry of finance of the UAE areclear: you cannot obtain a personal tax residency certificate fromthe UAE unless you have spent at least 183 days there.
If you need a tax residency certificate of the UAE to your nameyou have to abide by this rule. However, no crypto investor everconsidered relocating to Dubai a punishment.
Dubai and the UAE is a growing hotspot for Crypto meetings andongoing exhibitions. It is home to Expo 2020 so this year is goingto be extra busy. More people, more meetings, more opportunitiesand business going on.
Relocating to Dubai may be just the push you needed. It is asafe place to be and recently it proved itself by dealingeffectively with COVID-19.
Get your affairs sorted; optimize your tax billnow!
Contact us for a free consultation! We bring a depth ofexperience to our work and dealings with clients. Our executivesconsist of chartered accountants, lawyers, financial advisors, taxspecialists, administrators and company secretaries.
The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circ*mstances.
