Goodbye Dubai - Will 9% Corporate Tax Hurt Dubai and UAE?

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UAE has recently announced that they are introducing a 9% corporate tax rate, effective June 2023.
UAE, and especially Dubai has been considered a modern tax haven where many wealthy ex-pats from around the world would settle to live. And it doesn't surprise why.
Dubai is a modern first-world city, with all the conveniences that you could get in Paris, New York, or London but with one big difference. You don't pay any tax, meaning you get to keep everything you make! No other world-class city offered such a benefit, and on the other hand, all the low or zero tax places weren't nearly as appealing as Dubai.
Dubai seemed to have it all.
However, due to the global pressure, they've decided to give in and introduce 9% corporate tax. Will this hurt them in the long term? If yes, how so? What is the future of UAE with taxes, and will it mean that fewer people will be moving here? These are questions that I've been getting a lot lately, so I'll try to cover them all today.
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[@mouhammad2578]

Good info! How do you think this would affect the real estate market in UAE?

[@globalpropertyinvestment]

There is no tax on salaries however so all you would have to do is pay yourself a huge salary and remain free of the tax burden.

[@dlukton]

Yep; that would work for anyone.... anyone who's unburdened by US citizenship.

[@brentcooper9175]

Thats a quick way to bring in Personal Income Tax in the UAE

[@Cxnxr]

yeah you could do that but for big companies and corporations don't think that'll be an option tbh

[@EnderViBrittania]

The video already said that…

[@damienlewis1605]

Dubai is not super expensive to live in. Fair comparison is only to similar sized global cities and Dubai is more affordable than San Francisco, New York, Zurich, London, Singapore, Hong Kong, Tokyo, etc.

[@Motivation2ActOn]

I believe this is UAE following the Singapore and Monaco model. They are imposing a certain amount of tax to restrict access to only invite big fish to come into UAE and at the same time appease large banking institutions and Western brand companies. It's important to remember that UAE is a strategic military location for USA. When you work with the USA, their policies are soon to follow.

[@lightbeings6243]

Dubai is not expensive in living...but education n now this 9 % corporate tax is definitly high.

[@NomadicJulien]

It seems like there's a premium to pay to live in the UAE and people were willing to pay that price because of that 0%. Really wonder how it will affect real estate. I'm pretty sure the demand will start falling slowly after the expo.

[@karanchandnani8169]

Also people were willing to own only 49% of their company because 0% tax. They do collect tax in a way, you have to pay high annual or bi-annual fee to run a company over and above that you have to pay to the local partner who holds majority of the percentage in a company. Everything was fine and workable until this 0% tax was there. Free zone companies won't be affected much but inland companies, i pray for them.

[@afora1413]

Dubai still remains attractive in my opinion, great connectivity, great service, between africa, asia and europe, amazing winters, extremely safe. Its a great place to optimise your earnings and preserve if you are a double digit millionaire. But, if you are young and have a family then I think ireland or UK is better with their non dom tax and take advantage of amazing healthcare and education system in my opinion and you dont have to live in the big cities like london or dublin.

[@OffshoreCitizen]

UK and Ireland non Dom assumes you've already got money though and in that case UAE might be fine

[@hellophoenix]

I’m surprised at the amount of attack on Dubai, every time Michael post any thing about it.

[@OffshoreCitizen]

Why do you think that is? What's your take on this situation?

[@danielvanderlinde3260]

"You cant set up easily a company in most cases in the caribbean" Why is that? What has changed?

[@OffshoreCitizen]

Quality banking is virtually impossible and many countries have blacklisted these havens

[@fritzmetzger22]

If you don't need a company and just use it to get UAE residency, much easier for a stock/FX trader to just move to Cyprus/Malta. Pay no tax, don't pay expensive yearly fees to keep a company you don't need alive, and don't worry about taxes. Plus pay much lower rent and other costs. If you love the Dubai lifestyle just come for a few months a year. It's not liveable in the summer anyway.

[@OffshoreCitizen]

Yeah if you like life in those places that's an option especially if you're an EU citizen. More of a hassle with residency if you aren't an EU citizen and there's a minimum tax in Malta so probably not as good an option

[@tlevans62]

I agree with you on your take on this.

[@OffshoreCitizen]

Thank you, Trevor! Anything you'd like to see next from us?

[@tlevans62]

@@OffshoreCitizen I enjoy everything I see from you. It would be good to get an update on Malaysia, Singapore and HK for setting up business.

[@KA-dg4oi]

uae is smart

[@jhonl4542]

Amazing video! Thinking about recording a video about trademark registration for those who have offshore and what are the best ways to do that?

[@OffshoreCitizen]

Thank you and thanks for the suggestion! How do you see Dubai in the future?

[@UnitedChristians.Academy]

Nice! Make a video talking about creating a company in Sweden!

[@OffshoreCitizen]

Is that something you're planning to do? Why do you think Sweden may be an interesting choice?

[@ethanmandel2413]

UAE was very smart in setting this new corp tax - because as you say, "Where are you gonna go instead?"

[@OffshoreCitizen]

Haha any ideas on your side?

[@karanchandnani8169]

Dubai is extremely expensive, its cheap in comparison to UK or USA or Monaco but still very expensive. The rent is going through the roof in Dubai, overhead expenses are at all time high, expats let all this slide under the bed because of no tax. But now if corporate will get taxed it will directly or indirectly affect everyone. Still if anyone wants to settle in Dubai, go with freelance visa. Or another option is Bahrain with 0% tax. My plan is to open a company in Bahrain and live in Mauritius. I'm a Forex trader. For any kind of trader(stock, crypto or forex), Mauritius and Bahrain is heaven compare to Dubai.

[@karlsvensson1766]

The rents in Dubai has in fact gone down a lot past few years. But yes... still pricy.

[@karanchandnani8169]

@@karlsvensson1766 I was in Dubai till 2019. So don't know the latest rent. Cost of living is extremely high. Not as high as USA. I was in new york and maimi for few months and the exorbitant prices and rents made me s*** bricks. Anyways, on to Dubai, Rent plus EWA plus tax plus service charges for apartments. And now corporate tax. God forbid if they introduce income tax for individual. Dubai will be dead.

[@kw9494]

Countries which have zero tax are considered as money laundering and criminal havens. By imposing some tax , Dubai is trying to Improve it’s image. There is also pressure from OECD to impose some tax. So soon you will have income tax also. The minimum will soon rise to 15 percent. However, there will many opportunities to buy pass the tax.

[@OffshoreCitizen]

What opportunities are you referring to?

[@torontovoice1]

So Monaco is a criminal tax haven?

[@karanchandnani8169]

Bahrain 0% corporate tax.

[@krustyaxelrod]

Could you explain why the most rich people in the world live in New York or California where taxes are on fire? We know that they use corporates to avoid taxes in Panama, Caymans etc BUT why they dont live there the month that the country required for taxs issues? I dont understand

[@torontovoice1]

I think that's a simple answer that a lot of people don't understand. It really depends what you're doing. If you're doing things that are based on you and the internet and the computer, you can basically live anywhere. But if you're doing business in a particular country, being in that country gives you access to a market to sell to, access to financing, and access to like-minded people that you can interact with. Some of the best ideas come with interaction, and you're not going to get that by living in isolation.

[@dlukton]

Many of the wealthy in NY and CA are "tethered" to their businesses, i.e., they have to be physically present in order to run their business or to be an employee at the business. California has its tech companies, and NY has its financial services companies. And there's another issue as well; and that is the issue of annual tax obligation VERSUS total net worth. If you've got an annual tax bill of, say, 10 million dollars, but your total net worth is four billion dollars, that 10 million is going to be a very small fraction of your total net worth. That is VERY DIFFERENT from the situation where a person has a total net worth of, say, 5 million dollars, and at the same time, his annual income is one million dollars and his tax obligation (federal + state) is $450,000. Also, a person who has a very large total net worth (a billion dollars plus) will have to pay a large exit tax in order to renounce. And yes, his heirs will have to pay an estate tax, but there's also the issue of charitable contributions to consider.

[@MartinZhel]

Rich people know how to write off their profits so they don’t pay taxes

[@tinglestingles]

Too busy today to listen - I'll listen tomorrow. I understood it didn't affect the freeport/free area corporate structures?

[@MichaelRosmer]

Not necessarily true. They have made a vague statement that Freezone companies will be able to enjoy tax benefits but nothing about the details of how that will play out so we'll see, I doubt it will be a full unlimited exemption but time will tell

[@emmanueljames2487]

Now with the new Global Minimum Corporate Tax it will impossible to find a jurisdiction with zero tax on corporation for my LLC? Is it time to be worried?

[@torontovoice1]

I think your best comment in the whole video was, where you going to go? I've asked myself the same question. I know the services and many other things about the UAE are super expensive and restrictive. You're never going to get a citizenship there, and it's not a democracy. I could go on but I'll leave it at that. The other options you talk about are Cyprus and the non-dom, which is very attractive but it's not as simple as getting a residence permit as in the UAE for example. And I think given the fact that it's an island, you might go bonkers with the lack of activities. You didn't mention Malta, but it's similar to Cyprus albeit a bit smaller and more expensive. Portugal does not seem like a good option from a tax perspective because they tax capital gains at 28%, sure they don't tax crypto but that's a whole other discussion. Monaco has real estate that is truly off the charts. And I think unless you were a really big spender, you would feel kind of isolated in a place like that. Sure you could venture into France, but I have heard they track extensively ins and outs, and insist that you're there for at least 183. Malaysia I wouldn't go to, it's just not suitable for me. Not very many other places to go to, and I suspect this time goes on, the list will be ever decreasing. Especially now with the global minimum tax provisions that the oecd is coming up with, and the centrally European government being very against people jumping the queue based on wealth. I think they said it wasn't the European value! Now the only advantage in Cyprus is that you only have to be there for 60 days, of course the UAE you only have to be there once every 6 months so it's only technically only two days. But I think if you travel and use that as a base, it might be a viable option

[@kurt755]

What about Thailand and crypto taxes over there?

[@zackeryzackery9381]

What about setting up a crypto related business in Dubai? Will this get taxed? What if I have a free zone company?

[@iqbalrock123]

Companies will move abroad soon like Europe and North America since UAE never gives citizenship or permanent residence benefits like other countries.

[@OffshoreCitizen]

What countries are you hinting at?

[@iqbalrock123]

@@OffshoreCitizen most western countries.

[@RobRoy619]

You didnt mention Bahrain surely at this point that is a better option than Qatar?

[@brentcooper9175]

Difficult to set up a business in Caribbean?? Im sure you misspoke there

[@gambaownsus]

Does it affect cryptocurrencies in Dubai?

[@4evahodlingdoge226]

Unless you own a crypto business why would it?

[@karstent.66]

If you only had more commercial knowledge, then you would have an idea about the true reason... But a youtube comment is not the right place to provide an explanation.

[@fahadsaifkhan1222]

Dubai tax heaven hurray......everbody talking now look what happen they finally impose tax on u

[@OffshoreCitizen]

Is this something you've expected to happen? How do you think it will affect them?

[@DJ-uk5mm]

El Salvador will become the new Dubai…. Bitcoin city. Will be tax free

[@chocmilkisgood]

I am still waiting for Latin America to get their act together....any day now, right?

[@karanchandnani8169]

If latin america does that, I'm moving there, great place to live, great people too. Lived in Costa Rica for 15 months. Damn, best days of my life.

[@kallaji7383]

I think the answer is YES. In the long term it will hurt the UAE because every small country can and will eventually discover the lucrative offshore game. I think the only challenge today is BANKING (as discussed in length on this channel). Once the global fiat monetary regime collapses (and i see this happening in the near future), taxes will race towards 0% globally. The "legacy brand countries" (to borrow a term from nomad capitalist 😉) will of course try to impose sanctions on the so called "tax havens". This is of course a silly and ridiculous game! Those who are well versed in Geopolitics and Geostrategy will know that sanctions achieve absolutely nothing, but making the targeted countries even more resolute and even potentially hostile! The list of countries that are being sanctioned by the west is growing every year. Do these countries really care? Not really. Moreover, we are seeing how the west is losing respect as the number of foreign policy disasters mount, and those same coveted western "democracies" are starting to unravel and become unlivable.

[@unknowninfinium4353]

First.

[@OffshoreCitizen]

How did you like the video? :D