UAE the New Switzerland
DOING BUSINESS IN THE UAE
The United Arab Emirate (UAE), and more precisely Dubai, is the only destination that has all the potential in becoming the New Switzerland, after the majority of international hubs have failed to do so after last week’s announcement that Switzerland and Singapore have fallen. Clients and investors have been advised to enter the UAE immediately, before demand and costs soar.
The characteristics needed to establish the UAE as the most attractive financial centre in order to attract wealthy individuals and investors are simple, they seek that their personal and business interests are met.
Oxford Tax Solutions, based both in Cyprus and Dubai, specialise in UAE company incorporation and opening bank accounts in Dubai.
Oxford Tax Solutions anticipates that Dubai will experience a sharp increase concerning company start ups or formations as well as opening of accounts in Dubai. It is also estimated that many will repatriate to Dubai or other emirate cities in the area, where individuals will not necessarily live all through the year, but rather establish their resident base in between travels.
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UAE KEY BENEFITS
The following features are offered by the UAE:
- Beneficial Tax Regimes;
- Low Rate or No Personal Income Tax;
- Low Rate or No Corporate Tax;
- Free Repatriation of Profits, with no restrictions;
- Simplistic Procedure of setting up Company in Dubai and Ras Al Khaimah;
- Complete Bank Confidentiality/Anonymity-no bilateral agreements with other countries for exchanging information (under the condition not client is not involved in financing terrorism and drug trafficking);
- Safe, Stable, Healthy and Economically Developed Environment and Society-provision of resources, government cash surplus, long-term growth potential;
- Banking Sector-stable, efficient, expanding and sufficiently capitalised;
- Stable and Healthy Local Banks- which are independent from international banks and do not have foreign subsidiaries beyond the Gulf region;
- Efficient Banking System-allowing 24/7 banking activities (i.e. online cash withdrawals and transfers) without legal restrictions;
- Jurisdiction that Forbids Unethical and/or High-Risk Activities (i.e. pornography);
- Low Crime Rate;
- Liberal Religious Rights and Freedom;
- Jurisdiction without Social and Community Troubles or Problems;
- Diverse Range of First-Rate Infrastructure (i.e. shopping, road network, entertainment, marinas, public transport etc);
- Fully-Active Financial and Economic Hub (not similar to OECD blacklisted offshore islands present in the past) where diverse range of companies run with provision of efficient office space, highly-developed infrastructure, industrial centres, option to settle with limited barriers as well as successful company incorporations for both offshore and company set ups in all free zones, provision of sufficient and efficient employees and managers;
- First-Rate Health System;
- First-Rate International Schools and Universities;
- First-Rate Telecommunications System;
- First-Rate Flight Connection Network-allowing individuals to reach largest cities internationally in no more than 8 hours;
- Beneficial Time Zone;
- Temperate Climate-stable weather conditions, no natural disasters;
- Strong Political System- leaders make decisions efficiently and quickly, introduce measures and policies without facing political barriers and troubles, control abuse is prevented;
- Implemented Legislations against money laundering, undertakes effective methods to ensure due diligence.
As outlined above, the only jurisdiction that offers all the required characteristics that make up a first-rate financial and economic hub is the UAE, and more precisely Dubai, as it is the only Emirate city that offers the provision of all the features priory mentioned.
Literally all international offshore hubs are facing troubles and battling with attacks- either outside pressure, sanctions and legal restrictions as well as banning. The only logical solution is the UAE, which is politically untouchable and is not being pressurised by neither the USA nor EU. In fact, the USA is one of the UAE’s friendliest and biggest allies, although the UAE do not permit opening American Bank Accounts in order to ensure USA laundering and black money does not enter the country.
Experts measure the success of a country by measuring its Gross Domestic Product (GDP) and Growth of Population rate. Statistics have revealed that over a decade (2003-2013) the UAE’s GDP has increased from USD35,000 to USD67,000 reflecting a 90% increase. Similarly, the UAE’s population has also risen from 3.55 million inhabitants in 2003 to 5.7 million in 2013.
WHAT IS THE NEXT STEP?
The next period many will relocate to Dubai, which will act as their permanent base between their travels. Also a significant increase in the use of UAE Bank Accounts, Companies and Structures will be noted.
In spite of anti-avoidance efforts made by countries with high-tax rates, it is anticipated that other attractive jurisdictions like the UK and Cyprus will still be open, which also comprehend the need of tax planning and asset protection measures.
Overall, attractive EU companies and structures like the UK and Cyprus regimes will still remain attractive, being tremendously beneficial; nonetheless several significant measures will be taken and introduced so as to ensure more substance, careful planning and control especially concerning money laundering. The attractive EU structures are necessary as investors from the UAE will be able to invest in EU Holding Companies as those located in Cyprus and the UK.
FUTURE OF BANKING AND EXCHANGE OF INFORMATION
- Beneficial Owners’ Details and Information-exchanged quickly, efficiently, internationally, without troubles and obstacles;
- Private Bank Accounts-only possible in an individual’s resident-country. In countries where an individual is not a resident (offshore), private bank accounts may be opened under the condition the individual proves to maintain a strong interest and personal relationship with the jurisdiction like owning real estate property;
- In the foreseeable future, Private Bank Accounts Abroad will only be opened if the holder of the account: i) Is a permanent resident of the country and/or ii) Owns real estate property and/or iii) Owns a business/company in the specific country
- Corporate Accounts-can only be opened in their resident-country. Opening Corporate Accounts in other jurisdictions is not allowed unless the holder proves they have personal interests like a branch of the company;
- In order to enjoy permanent Tax Benefits, Discretion/Confidentiality and Security- local businesses and companies are required to either set up independent companies or establish branches in jurisdictions that offer low-tax regimes, so as to make business transactions and hold or secure assets;
Such jurisdictions must obtain commercial and economic substance, similar to Dubai and Ras Al Khainmah Free Zones. The latter free zones exercise resident-tax policies for the purpose of double taxation agreements as well as not being shell companies, as companies either have office premises or flexi-offices.