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

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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Dubai Free Zone Business Set Up Process: What You Need To Know | EP 14 https://aaronhenriques.com/OAP016

 

⏱ CHAPTERS:

0:00 Tax Insights for Setting Up a Company in Dubai: Q&A

01:06 Q1 - Do you pay 0% tax if you have a Freezone company in Dubai?

01:38 Do you have to give up your UK passport if you set up a business in Dubai?

07:50 Q2 - Do you need to file a tax return with an IFZA free zone company in Dubai?

12:59 Wrapping Up

 

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I'm Aaron Henriques, a British entrepreneur, business investor, private pilot, and former police officer from London. For over a decade, I've operated remote service-based businesses, gaining expertise in leadership, strategic thinking, digital marketing and idea generation. Sharing my journey and lessons learned, I hope to help others succeed faster than I did.

 

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Episode Transcript

(00:00):
So I started off recordingthis video with the mic off,
silly me, so I'll start again.
Essentially what I'm doing is I'vedecided to change it up a bit and answer
some of your questions directly througha video instead of in the comments
and also the Instagram messages I get.
Somehow people WhatsApp me.

(00:21):
I don't know where to get my number from.
I've had emails as well.
So I'm going to start off with someof the common questions I get, but
I'm not just going to run with Dubai.
It's going to be anything that'sentrepreneur ship related,
anything business related.
marketing, sales, whatever,that sort of comes up that I
may have some knowledge of.

(00:42):
So if this is something that you finduseful, of course, leave it in the
comments and, let me know so that I canknow how to best answer your questions
that you may have from any videos thatI may put up that are not like Q and A
type questions, to Q and A type videos.
So yeah, with that, I'll just get stuckin with one of the questions that.

(01:06):
we get quite a lot.
And this one is from Zaki Jamil8986.
He says, do you pay 0 percent taxnow that you set up your company?
And did you need torenounce your UK passport?
Now this is in relation to the DubaiFree Zone, business setup video.

(01:28):
This is not about a UK passport.
Base company.
so do you pay 0% tax now thatyou 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 questionis, did I renounce my UK passport?
Absolutely not.
you don't need to announce your UKpassport and in fact, setting up

(01:49):
the company has absolutely nothingto do with your citizenship at all.
It's got nothing to dowith your UK passport.
That may have been more relevant of aquestion in relation to the visa process.
But if you're assuming that you'vegot the visa set up as well,
then the answer is still no.
You keep your UK passport.

(02:10):
but the setting up of a company itselfin 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, unlessthey've got some funky rules.
so do you pay 0 percent taxnow that your company's set up?
No.
So this is something thatis still floating around.

(02:35):
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 taxand 0 percent income tax.
Both of those are false.
with a caveat.

(02:56):
so the corporation tax in theUAE is 9 percent for nearly
all types of businesses.
There are some exclusions,but you know what?
I'm not even going togo into them because 99.
9 percent certain it's not going toapply to anyone who is watching this.
unless you're in the business ofsetting up a shipping company.

(03:19):
And when I mean shipping, likeactually having boats and stuff.
And there's a couple of other obscureones then you're not going to be exempt
from the 9 percent UAE corporation tax.
In relation to your income tax, thereason why I said it's no for both is
yes, in the UAE income tax is still 0%.

(03:40):
However, whether you need to payExcuse me, whether you need to pay
tax on your income will rely onwhether or not that you qualify
for you a, tax residency status.
And that will depend on what countryyou're from and your country's rules.
So you tend to find, for example, peoplefrom the United States, I'm really

(04:03):
sorry, but you don't tend to qualifyanywhere for tax residency anywhere.
as long as you hold your citizenship, asfar as I know, The UK and a lot of Europe,
they've got other rules that apply.
So for example, for me, I can'tspend less, sorry, I cannot spend
more than 90 days in the UK, in anytax year, which runs April to April.

(04:30):
If I spent 91 days, I wouldstill pay tax on my income.
In the UK, despite the fact thatI've been paid salaries from abroad.
So it's not, it is definitely nota 0 percent tax regime as people
think, just having your companythere doesn't suddenly, mean
you don't pay any tax anywhere.

(04:52):
It is complicated, and it does dependon your own individual circumstances,
as I keep saying, and it sounds likea bit of a wishy washy, bullshit
statement, basically, oh, passingthe buck, but it does depend on
your individual circumstances.
And so I would suggest that if you'rethinking about setting up a company

(05:14):
in the UAE because you don't wantto pay any tax, then get a qualified
accountant where you're from.
And also from the UAE.
but with that, I've heardpeople complaining about.
oh, it's 9 percent tax corporation tax.
Oh my god.
So what do you know what that isstill so ridiculously low And then

(05:38):
there's no income tax if you qualifyfor tax residency in the uae That
is ridiculously low compared toanything else Anywhere else that
I'm aware of in the West, anywhere.
for people that complain about9%, honestly, get over it.
I would love to be paying 9percent overall tax on my, on

(06:02):
my, profits and, my, my salary.
I would love that.
I'd be living so much better thanI currently do from my UK income.
So I would say don't worry about it is9 percent not 0 percent and Whether or
not you pay that al that tax on yourincome will depend on whether or not you

(06:24):
qualify for UAE tax residency status.
And one more thing, just one morething on this of course, and I
don't know why it's been left sowidely open with the UAE right now.
Because the tax that's that the taxon the corporation tax, I believe
came in July 2023 around then.

(06:49):
and the need to register itcomes 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 yourfor 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.

(07:11):
So if you've made 100, 000 in profit andYou paid 100, 000 in salary, then really
you haven't shown any profit, which younormally would pay tax on your profits.
So I don't know how that will, how theUAE will handle that one, because I

(07:32):
can imagine people will start payingthemselves extortionate amounts of money
as a salary to get around paying thecorporation tax, even if it is just 9%.
Anyway, let me move on to the nextquestion that come up, and this one's
quite recently, some three days ago.
it's from Jesse Livermore 9285 on YouTube.

(07:56):
so they were in.
Hey, mate, can I ask you a questionabout your UAE free zone company?
I've been looking into a new.
into the new corporate tax rules andfree zone companies are liable for the
new corporate tax as far as I can see.
What is your understanding in termsof what they call free zone qualified

(08:16):
income and tax exempt activities?
From what I can see, all free zonecompanies are subject to corporate tax.
Do you need to file an annual audit reportand tax returns with an IFSA company?
That's an if it's a free zone company.
Also, do you have to begetting on with UAE banks?

(08:37):
So Let me start with that bit again.
Also, how have you beengetting on with UAE banks?
Has it been an easy ora difficult process?
Cheers, all the best.
Okay.
So thanks for that question, Jesse.
I did reply in, which actually wrotethat on one of my helicopter videos,
but anyway, I did, I did reply tothat, but any case for the rest of you.

(09:00):
We've already just spoken about thecorporation tax and just to be clear, it
does apply to free zone companies as well.
There is a big myth outthere that it doesn't.
It does, just the sameas a mainland company.
so that one's covered off.
In terms of filing annual auditreports and tax returns with an

(09:20):
IFSA company, IFSA is the free zone.
If you haven't seen it about the corporateCompany, the Dubai setup process,
watch the Dubai, set up process video.
If you're interested in setting upa free zone company, I'll put the
link in the description, to that one.
but you can, an audit in theUK means something different

(09:44):
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, fromwhen it's needed to be filed.
So I haven't actually done one yet.
It does need to be done.
It doesn't matter if the free zoneis IFSA or any other free zone.
It's still going to need to be done.

(10:08):
also, how have you beengetting on with UAE banks?
Has it been an easy or difficult process?
Now, lots of people have messaged meabout the banks and what I think I'm
going to do is I'm going to do a separatevideo, although it won't be long, it
just needs to be a bit more thought outthan me just saying it off the cuff.
But in short, I did have a problem untilI had the stuff I needed, which was

(10:33):
basic in terms of, having a company setup, having my ID, having a phone number
in the UAE that was active, and thenalso physically being there at the time.
So they're the thingsthat needed to be done.
Otherwise, it wasn't that difficult.
It was done really quickly.
I set mine up with Weo Bank.

(10:55):
It's like a challenger bank.
and that's for both the businessaccount and the personal account, but
I will do a separate video on that.
Now, if there's any questions on thebanking that you want to hear about
that, any questions that you haveabout it, put it in the note in the
comments, please, because I may notcover off the things that you want.

(11:17):
But generally I held off from doinga video on the bank banking set up
because I just didn't really know whatI'd have to add like any sort of value.
But there have been a couple of questionsthat have been asked, which I will cover.
But if there are more, please ask themand I'll see what people are confused

(11:38):
about or what, Scary things you'veheard because there are people out
there who've literally set up companiesto help you to set up a bank account
and they charge you extortionateamounts of money for doing that.
And I don't really understand why becauseit was no more difficult, honestly.
Then me setting up a bank accountin the UK, which actually, to some

(12:02):
extent, I think it was more difficult.
I had to answer more questions, havemore back and forth with the banks,
have to gone for appeals for one ofmy companies, a cleaning company,
going for an appeal to get a bankaccount open in the UK is ridiculous.
yeah, I don't think it's as challengingas perhaps it maybe once was, which is

(12:22):
why these other companies exist or, It'sjust not that challenging and people
are just trying to rip you off justlike the reason why did the Dubai free
zone set up process because there area 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 aswell and I'll pay for it.

(12:43):
But when they're trying to sell it onthe premise that, oh, it's so difficult
to set up the company and you'll getit wrong and all this other stuff.
Okay.
and that's their reason for chargingyou stupid sums of money, maybe not
in the first year, but in the renewal,then it doesn't really make much sense.
So if you're interested in settingup a video in setting up a free
zone company, watch the video.

(13:04):
I'll link that in the, description andI will get around to the bank video.
Anyway, that's it.
I'm going to do finish off with two Qand A's because I've got a steak to cook.
It's been sat there, coming toroom temperature and I really
want to cook it and eat it.
So I'm going to go, butdefinitely leave your comments.
in a, not in the, in a description,obviously you can't leave

(13:27):
comments in the description.
Just leave your comments wherever youcan leave your comments on YouTube.
and yeah, let me know ifthis was helpful for you.
If it was helpful, Let meknow 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, whetherit's about, Dubai business stuff, if

(13:49):
it's around just general business, whichI actually have a lot more knowledge
of than specifically about setting upcompanies in Dubai, but they're the
videos that a lot of you have come from.
So quite happy to talk aboutit and share my experience
that I have, which isn't much.
But I understand for a lot of youthat have none, my not much is many

(14:10):
steps ahead from where you are now.
So yeah, anyway, good.
Thanks for watching.