Dubai better than a tax haven
Traditional Tax Havens
Although this name describes in short what it does, it also conjures up shady connotations which at best are seen as dodgy or worse illegal. So let’s use a less invoking more technical term, zero tax jurisdictions. Some examples of traditional tax havens are such places as the British Virgin Islands (BVI), Seychelles, Belize and Panama. If your geography is any good you would understand from the short list the type of places where the vast majority of tax havens are located, small countries or islands usually not to far from the equator with nice sunny climates and not too much in the way of high rise buildings. So what is it that might attract international business’s to set up in one of these remote less than prime business locations.
Why do people use tax havens?
Well of course the biggest draw for these international companies is by far the tax advantages that they bring after all who wouldn’t enjoy a 0% tax rate, but that is not the only reason. Tax haven companies do tend to be cheaper and easier to set up, so for international companies that are on a budget, tax havens can be a good option at least in the first tough year of starting a business.
Disadvantages of traditional tax havens
In the 80’s 90’s and even the naughty’s times were good and tax havens worked. But in today’s ever smaller global economy and especially after the recent financial problems, the spot light has been placed on these huge international companies, or to be more precise where they pay their taxes. With the governments of the world needing to increase their own revenue and with a public outcry of double standards and unfairness the larger economies of the world have started to close the “loop holes” that these international companies were using, therefore making it more problematic to operate out of your traditional tax havens. Another issue brought about by the modern wonders of the internet is reputation, no decent upstanding international company wants to be seen with one of those shady looking tax havens as a business address. I mean would you want to buy medical equipment from a company that is based in some tropical island renowned for money laundering? Whilst we are talking about reputation it is definitely worth knowing that many traditional tax havens are on black lists, making things like banking much more difficult.
If we were to say to you that you could have an international company based in one of the world’s prime business cities, with way in excess of 400 high rise office buildings, and bang in the middle of a global business hub that has been purpose built with your industry in mind, all this whilst keeping all the tax advantages that you would expect of a traditional tax haven, you probably wouldn’t believe us. Well we would like to turn your attention towards the UAE, the United Arab Emirates in particular Dubai and Ras Al-Khaimah (RAK).
Advantages to business in Dubai
Geographically it is situated in the middle of Europe, Asia, the Middle East and Africa. Which also means it is never more than a few hours in front or behind of your time zone. It is a world renowned business capital with a great reputation and does not appear on any black list, therefore making working with financial industries much easier. It is a very modern vibrant city with great infrastructure including massive international airports, seaports, rail system and high speed internet connections. It has very strict privacy laws and is out of the reach of many other older economies. Governmental paper work that is required is simple and straight forward and in most cases extremely swift. If visas are required the process is also straight forward and relatively simple. It has a booming property market. It also boasts a good variety of options for renting of office space. It is a true international jurisdiction with many nationalities making up the local population and English is widely spoken. The law is civil law. There is 0% tax, no corporate tax, no personal tax, no limits on repatriation of capital or profits.