{"id":4062,"date":"2022-04-23T01:37:13","date_gmt":"2022-04-22T23:37:13","guid":{"rendered":"https:\/\/alexandererber.com\/en\/?p=4062"},"modified":"2022-06-05T14:48:26","modified_gmt":"2022-06-05T12:48:26","slug":"how-to-pay-no-corporation-tax","status":"publish","type":"post","link":"https:\/\/alexandererber.com\/en\/how-to-pay-no-corporation-tax\/","title":{"rendered":"How to Pay No Corporation Tax: Form a Company in Dubai"},"content":{"rendered":"
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Do you look forward to paying your taxes? That\u2019s a question that would make most of us laugh out loud. While we all know what taxes are for, we don\u2019t enjoy paying them, and often, we don\u2019t know or don\u2019t agree with where our money is going.
\nWhile taxes on some level are unavoidable, you can take steps to minimize the amount of tax you pay. One of those things you can do is to form your company in a country with a more favorable tax system.
\nOne of the best countries to form a company in is the UAE, and so there\u2019s no better place to form a new company than in Dubai.<\/p>\n

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Do you have to move to Dubai to form a company there?<\/h3>\n

You don\u2019t need to be a permanent resident, but you will likely need to spend some time in the UAE each year, and so most people choose Dubai, for reasons we will look at momentarily. The visa you choose will dictate how many days a year you can spend here.<\/p>\n

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Why Dubai & the UAE?<\/h3>\n

The Big Picture<\/h4>\n

Dubai is famous for its ultra-modern buildings, thriving economy, and purposeful design. The city benefits from many green spaces and a higher quality of life than most other cities. Most people in Dubai speak English, so you won\u2019t need to master Arabic just to get by.
\nDubai is home to largely high-net-worth individuals, so you\u2019ll be surrounded by wealth and people who conduct themselves (and business) in a certain way. You won\u2019t see homeless people on the streets and crime rates are extremely low compared to other major cities.
\nThe UAE\u2019s rise to financial success has made it a big player on the international stage. As a country, its political system is stable without any extremist views that would make it an undesirable place for a foreigner to reside and trade.<\/p>\n

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Business-Friendly<\/h4>\n

The government here is looking to welcome in more outside investment, and so they\u2019re currently very welcoming to foreign businesses and business people looking to start a business in the UAE. They make it easy to set up, move, and live here. They allow 100% foreign ownership of many types of businesses here in over 13 sectors, including logistics, hospitality, manufacturing, and renewable energy. You can set up a new business in just days.<\/p>\n

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Easy to Become a Resident<\/h4>\n

It\u2019s easy to become a permanent resident in Dubai, with the average cost per person of between $10,000 \u2013 $14,000 (USD). It\u2019s easy to set up a bank account (for both individuals and businesses).<\/p>\n

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Wealth-Friendly<\/h4>\n

Because so many people living in Dubai have a high net worth, banks are used to dealing with large sums and will move money quickly and easily, even internationally. The businesses in Dubai are largely focused on making life easier for you and other wealthy clients.<\/p>\n

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Low Tax<\/h4>\n

We\u2019ll look at the specifics of taxes in the UAE momentarily, but one of the biggest draws to Dubai is the UAE\u2019s reasonable tax rates. You are free to retain most (if not all) of the money you make in the UAE, and the government is focused on strengthening the economy more than taxing companies for doing so. You don\u2019t pay personal tax on income from any source.<\/p>\n

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How much corporation tax do you pay in the UAE?<\/h3>\n

Currently, none \u2013 the current corporation tax rate is 0%. That said, the rate is set to\u00a0rise to a reasonable 9%<\/a>\u00a0for businesses with income exceeding 375,000 UAE dirhams (around $102,000 USD) on June 1, 2023. This move is to strengthen the economy and help the country move away from its reliance on its hydrocarbon revenue.<\/p>\n

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How much income tax do you pay in the UAE?<\/h3>\n

If you spend more than 6 months of the year in the UAE, you\u2019re considered a tax resident. The good news is, however, that the income tax rate in the UAE is 0%, and that isn\u2019t going to change any time soon. The only income that is taxed is rental income, though this is minimal. There\u2019s also council tax to pay (called property tax in the US).<\/p>\n

\"How<\/p>\n

So I won\u2019t need to pay any tax for my business in Dubai?<\/h3>\n

No \u2013 at least, you won\u2019t until June 1, 2023. However, there are some circumstances where there will be a tax to pay \u2013 just not a corporation tax. Here are the other circumstances where a business may be taxed in the UAE:<\/p>\n