Why You Should Maintain Offices in Dubai
As one of the fastest growing cities in the United Arab Emirates – one of the most stable environments in the Gulf region and around the world in its own right – Dubai is an ideal place to maintain a corporate office.
Unlike some other offshore jurisdictions, the UAE is a major international economic player, with a population in excess of four million, and has a long-standing reputation for being a hub of international business, finance and trade for centuries, let alone decades. Dubai is one of the shining jewels of the UAE, and it boasts excellent opportunities for principle offshore uses such as personal and corporate tax planning, ship management and yacht owning, copyright, patent and royalty holding, professional consultancy or services, financing, investment, holding and trading, but this is true of many offshore jurisdictions. However, there is one way that the UAE and Dubai excels, and that’s in the region of international regulation.
Not Subject to EU or US Directives
Thanks to a joint US and EU ruling in 2005, one that does not apply to Dubai or the UAE, many banks now have no choice but to disclose information to tax authorities upon pain of punishing withholding taxes levied on their clients. Specifically geared towards residents of the Eurozone, a growing number of banks in so-called “tax havens” have additionally agreed to sign on to the new regulations and provide customer information with relevant tax authorities. These jurisdictions include San Marino, Monaco, Liechtenstein, Switzerland, the Cayman Islands, the Isle of Man,
Guernsey, and Jersey
At first, the withholding tax levied against bank customers was relatively low. At the inception of the new banking rules, customers saw a 15 per cent tax on their savings. However, from 2005 to 2011 this tax rate rose slowly but steadily to first 20 per cent and then to 35 per cent, causing a mass exodus of banking customers – and many of them found their way to banks in Dubai or in other locations within the UAE.
Secure and Tax Free
The UAE has always prided itself as providing a tax-free and secure jurisdiction for the incorporation of companies and for international banking. This has not changed since the US-EU withholding tax regulations, and as a result there is an increasing number of high net worth individuals and international businesses that have gravitated towards the personal and corporate banking options available from banks in Dubai. This is unlikely to change any time soon, as the UAE is not governed by this most recent directive. Additionally, the country has never agreed to cooperate with the Organization of Economic