DUBAI - AN EFFECTIVE DESTINATION FOR OFFSHORE BANKING

Analysing the implementation of new taxation policies and automatic exchange of information among other major global offshore jurisdiction centers as well as economies creating hike demand for UAE offshore companies. As per the market research there will a drastic trend go on in the offshore industry and choosing the offshore jurisdiction. Studies reveal that offshore company structures are emerging tremendously, embracing better regulation, more transparency and a higher degree of professionalism.

Offshore companies are playing a vital role in the global financial supply chain, comprises of asset management, international trade, wealth management etc. Developing economies, including Africa, Asia, Middle East and Latin are now a days tremendously using offshore entities for asset protection and wealth management in individual level

Survey studies found that the Middle East will be preferable offshore jurisdiction locations in coming future. UAE offshore jurisdictions ratings are recently increasing among other jurisdictions like Hong Kong, BVI, China, UK and Singapore. There is a hike utilization of a wide range of legitimate wealth protection strategies by the individuals & families in the Middle East and outstanding growth performance of UAE among the global financial and trade center is the key driving force to choose the investors, UAE as their preferable offshore location.

Increased regulatory and compliance standards like Foreign Account Tax Compliance Act (FATCA), Taxation Policies and Automatic Exchange of Financial Account Information among the nations have had a significant impact, with demand switching among offshore jurisdictions.

Think Business Think Dubai

   

Dubai - Located within the United Arab Emirates, Dubai is a not only a traveller’s paradise but also a growing business hub. Housing traveller’s delight like the Burj Khalifa, which is the tallest building in the world, Dubai continues to captivate travellers. This is also done with the objective to lure travellers so that Dubai can maintain the inflow of foreign cash into the economy. Travellers revel in the delightful shopping plazas and that is an attraction which fuels the economy of Dubai. In 2010, a survey found Dubai to be the 7most visited city in the world. Reason enough for you to start thinking about doing business in Dubai.

By 2015, it is expected that Dubai will accommodate about 15 million tourists. With such factors that contribute to the development of Dubai’s economy, doing business in Dubai is a safe and rewarding proposition. If you think that shopping, travel and tourism are the only factors that can draw investors to the idyllic city of Dubai, think again. Another credential that Dubai can be proud of is being chosen the host of 2020 World Expo. In 150 years since the inception of the World Expo, it is the first time that a Middle Eastern country has been chosen to play host.

Dubai bagged this opportunity to host the World Expo 2020 by ousting the bids from the likes of Turkey, Brazil, and Sao Paulo etc. The three rounds of voting by the delegates who belong to the 168-nation Bureau International des expositions in Paris, decided in favour of choosing Dubai as the next host. The authorities in Dubai have inkling that this could mean generating revenue of $ 23 billion between the years 2015 and 2021, and the cost of organizing this event will be close to $ 8.4 billion. Doing business in Dubai never saw a more opportune moment.

TAX RESIDENCE CERTIFICATE IN DUBAI

Tax residence certificate is a certificate issued by the UAE authority to take advantage of double taxation avoidance agreements signed by the UAE. Apart from UAE residents, onshore and free zone entities registered in UAE can also obtain the certificate of tax residency in order to gain the advantages of the double tax treaties signed in between UAE and rest of the countries.  Tax residence certificate certificates can be issue by the authority with the clear indication in respect to the Double Tax Treaty (DTT) agreement with which country it refers to. UAE Offshore entities are not eligible to obtain tax residence certificate.

Requirements for TAX Residence Certificate for Corporate Entity              

1. Trade license. (Note: license should be valid for more than a year) 
2.  Lease contract. 
3.  Copy of the passport and residence of the company director.
4. Request letter from the company. 
5.    Bank statement for the last 6 months

Requirements for TAX Residence Certificate for Individuals

1.  Passport copy and valid visa copy 
2. Request Letter from the person
3. Bank statement for the last 6 months. 
4. Source of income with attested certificate. 
5. Certificate from the sponsor stating the individual activity and source of income.

For consultation:

Davis V Kadavan

Mob: 00971509330152

Email:davis@hlbhamt.com / davis@nexconsultants.com
Website : www.nexconsultants.com

DOING BUSINESS IN DUBAI

Located within the United Arab Emirates, Dubai is a not only a traveller’s paradise but also a growing business hub. Housing traveller’s delight like the Burj Khalifa, which is the tallest building in the world, Dubai continues to captivate travellers. This is also done with the objective to lure travellers so that Dubai can maintain the inflow of foreign cash into the economy. Travellers revel in the delightful shopping plazas and that is an attraction which fuels the economy of Dubai. In 2010, a survey found Dubai to be the 7^thmost visited city in the world. Reason enough for you to start thinking about doing business in Dubai.

By 2015, it is expected that Dubai will accommodate about 15 million tourists. With such factors that contribute to the development of Dubai’s economy, doing business in Dubai is a safe and rewarding proposition. If you think that shopping, travel and tourism are the only factors that can draw investors to the idyllic city of Dubai, think again. Another credential that Dubai can be proud of is being chosen the host of 2020 World Expo. In 150 years since the inception of the World Expo, it is the first time that a Middle Eastern country has been chosen to play host.  

 

Dubai bagged this opportunity to host the World Expo 2020 by ousting the bids from the likes of Turkey, Brazil, and Sao Paulo etc. The three rounds of voting by the delegates who belong to the 168-nation Bureau International des expositions in Paris, decided in favour of choosing Dubai as the next host. The authorities in Dubai have inkling that this could mean generating revenue of $ 23 billion between the years 2015 and 2021, and the cost of organising this event will be close to $ 8.4 billion. Doing business in Dubai never saw a more opportune moment.

 

If your heart is set on setting up a business in Dubai, you can take heart in the fact that Dubai is emerging as a commercial hub with the infrastructure you need for your business to gain a foothold.  For a multinational business, Dubai is a favoured location because of factors like a strategic location, nil corporate or personal income tax, and a value-added platform. If you are on the lookout of a city where doing business would mean easy access to markets in the countries of Central Asia, East Africa or the Middle East, Dubai is where you should consider setting your foot first. The cosmopolitan environment and business-centric ambiance aside, the combined GDP of $ 6.7 trillion, makes Dubai a destination to watch out for. 

WAGE PROTECTION SYSTEM (WPS) IN DUBAI

WPS - At Glance

Wages Protection System (WPS) is an electronic salary transfer system that allows institutions to pay workers’ wages via banks, bureaux de change, and financial institutions approved and authorized to provide the service.

The system, developed by the Central Bank of the UAE, allows the Ministry of Labour to create a database that records wage payments in the private sector to guarantee the timely and full payment of agreed-upon wages.

The WPS covers all institutions registered with the Ministry across all sectors and industries and will benefit different categories of labour.

 Requirements of WPS

1. The company needs to be registered with the Ministry;

2. The company should have a bank account with one of the banks operating in the UAE;

3. The company should enter into contract with any bank, bureau de change or financial institution approved and authorized by the Central Bank of the UAE to provide the service. The two parties shall agree on any service fees and charges.

4. Workers’ wages will be transferred via WPS by the deadlines specified in the Ministerial Resolution No. 788 of 2009.

5. The institution will have to transfer workers' wages via WPS within two weeks of their due date, or on the dates specified in the work contract if wages are paid more frequently than monthly.

6. The employer will be responsible for all expenses incurred upon joining WPS, including bank fees, service provider charges, and all other costs. Employers are not allowed to share any costs with workers' by any means, including deducting from their wages, directly or indirectly

Consequences of  Failing  to Join WPS

Institutions failing to transfer workers' wages by the deadlines specified above will be denied the right to have new work permits. This ban will only be lifted in the month following the transfer of workers' wages in full.

Institutions that delay wages’ payment more than one month of the due date will be denied the right to have new work permits, along with all institutions owned by the owner of the violating institution, and to refer all those responsible for the violation to the court, in accordance with Ministerial Resolution No. 788 of 2009.

 

REGISTERING A DUBAI OFFSHORE COMPANY

 Offshore Company  
An offshore company is a business entity that is formulated in a low tax or no tax jurisdiction for the purposes of legally minimizing tax payment and improving the investor’s wealth management primarily one would open an offshore company to gain confidentiality over one’s financial affairs and grow wealth without intrusion.

Offshore Jurisdictions in Dubai
Besides the traditional advantages of total tax /duty exemption and cooperative regulatory regime. Offshore companies established under the offshore Regulations can enjoy added benefits from Dubai’s reputation for commercial transparency and it is strategic regional location.

• International trading
• Investment in property and land
• Portfolio Investment
• Supply of professional services and consultancy
• Yacht ship and aircraft ownership
• Intellectual property royalty and trademark operations
• Estate planning as an alternative to trusts

Feature of Offshore Companies in Dubai

• 100% foreign ownership permitted
• 100% repatriation of profits
• No minimum capital requirement
• Total Tax and duty exemption Can conduct international business
• Can maintain corporate bank Account in Dubai
• There is no requirement to deposit the capital in bank
• No physical office required
• An efficient regulatory regime
• Minimum share capital can be US$ 1.
• May own shares in other companies in Dubai/U A E

Further details contact : davis@hlbhamt.com
Contact : 00971509330152

 TRUST FORMATION

The most widely used vehicle for asset protection is a Trust. A variety of assets can be held in a trust, including immovable assets, stocks and shares, investment products, real and intellectual property, bank deposits and life insurance policies. We can assist you to protect your wealth & assets and save estate duty.
   

Advantages of Trust

Trusts are a powerful planning tool. While each case is different and must be evaluated on its facts, some of the more common trust uses are described below. The examples below are provided simply for guidance and sound professional advice must be sought before anyone considers establishing a trust for whatever purpose.

(1) Asset protection

Trusts can be used very effectively to protect assets. In simple terms, this feature of a trust is based on the division of ownership described above. Generally, assets transferred to a trust no longer form part of the property owned by the Settlor. Should the Settlor subsequently experience financial problems the trust assets cannot be used to satisfy the creditors of the Settlor. Those assets would be sheltered from creditors. It is vital that trusts for this purpose are established when the Settlor is financially secure and does not anticipate future creditors. It is important to note that these trusts are ineffective in defeating creditors of the Settlor who are known or anticipated at the time the assets are transferred and have strict financial requirements of the Settlor.

(2) Tax Planning      

 
Assets transferred into a trust structure are, in simple terms, no longer considered as belonging to the Settlor. In theory, the income and capital gains generated by those assets should be taxed according to the rules in the country of residence of the legal owners - the Trustees. As the Trustees are often resident in an offshore jurisdiction that imposes no tax, the income and capital gains should be tax-free offshore. However, the advice of a professional tax adviser in the Settlor's and Beneficiaries' home jurisdiction should be sought to ensure that anti-tax avoidance legislation in the country of residence or domicile of the Settlor does not operate to reduce or eliminate the effectiveness of a trust for tax planning purposes.

(3) Avoiding Probate 

In most common law jurisdictions the estate of a deceased must go through a probate procedure often entailing much delay, expense and publicity in the distribution of the estate. By establishing a trust, probate can be avoided as ownership to the trust assets has been transferred during the life of the Settlor rather than on death.

(4)Confidentiality

Generally, offshore trusts, their establishment and the assets they own are a private matter between the Trustee, the Settlor and the Beneficiaries. There are no public records or reporting of details of offshore trusts and they are often the subject of strict confidentiality rule in the relevant jurisdiction.

(5) Avoiding forced heirship

In some jurisdictions there will often be questions of forced heirship to consider. This means the deceased will not be permitted to leave property to anyone he wishes on his death and the law will deem the deceased to have made certain mandated dispositions. This issue is of particular concern in continental European countries and other civil law jurisdictions as well as in countries of Islamic tradition. A trust can be used to overcome the issue of forced heirship but care is needed in selecting a jurisdiction for the trust that has an appropriate trust law.

(6) Estate planning

Many people do not wish their assets to pass outright to their heirs, whether chosen by them or as prescribed by law, and prefer to make what they feel are more suitable arrangements. These arrangements might involve providing a source of income for a widow for life, making provision for the education of children or providing a fund to protect members of the family in the event of sudden illness or other disasters. A trust is probably the most satisfactory and flexible way of making arrangements of this kind.

(7) Long term care

A trust provides a vehicle by which a person can provide for those who may be unable to manage their own affairs such as infant children, the aged, the disabled and persons suffering from certain illnesses.

(8) Preserving family assets

preserving family assets or increasing them is often a motive for setting up a trust. An individual may wish to ensure that wealth accumulated over a lifetime is not divided up among the heirs but retained as one fund to accumulate further, with provision for payments to members of the immediate family as the need arises while also preserving assets for later generations.

(9) Business succession

A person who has built a business during a lifetime will often be concerned to ensure that it continues after death. If the shares in the company are transferred to the Trustees prior to death a trust can be used to prevent the unnecessary liquidation of a family company. The terms of the trust will ensure that the individual's wishes are observed. These might include provision for payments to be made to members of the family from dividend income received by the Trustees but that the Trustees retain the shares and keep the company running save in special circumstances justifying sale of control or liquidation. This approach may be particularly advantageous where the family members have little business experience of their own or where they are unlikely to agree on the way to manage the business.