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How to best set up your taxes, residency and and business as a digital nomad?

 

by @theglobalcitizen | 6yr  | 60 comments

The purpose of this post is to discuss the benefits, downsides, and challenges of setting up an international business.

Comment with what you want to know, or with what knowledge you can offer others based on your experience.

  • Do you want to set up an offshore company but donโ€™t know
    where to start?
  • Do you have questions with setting up legal entities or bank accounts?
  • Do you have questions with regards to paying taxes and residency.

Before becoming a DN I worked in Dubai as a corporate service provider. I helped 100s of international entrepreneurs to set up their companies, engage in tax planning and obtaining residency. Most of them in Dubai, but also in other jurisdictions like Panama, Hong Kong & Seychelles.

Share your biggest struggles or tips!

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@karenchen | 4yr

I think setting up a company in Hong Kong is definitely worth looking into as there are so many foreign businesses set up there. Low corporate profit tax rate of 16.5% maximum (in some cases can be as low as zero) and simple tax system. No VAT; no sales tax. Company set up and maintenance costs are low. Business system is flexible and very easy to understand. Many foreign businesses (small or large) find it extremely beneficial (financially and operationally) to use Hong Kong company as a hub to operate their international business.

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Like everything, it depends on the needs/requirements of the business. For some, it may make sense to incorporate there. For Digital Nomads though, I still donโ€™t see the advantage the place offers. I lived and worked in Hong Kong for a number of years and found it to be quite backward outside of the financial services space.

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@karenchen | 4yr

That is very interesting to hear. Curious to know in what ways do you think HK is not an ideal place to incorporate company.

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@flyonthewall | 4yr

@ksl This article about Digital Nomad taxes explains a bit of the trouble involved with HK and why you might not need it. In general the annual company maintenance and upkeep can be quite challenging. Furthermore, youโ€™ll always be worried about whether the HK tax authorities will agree to your offshore profits claim. Itโ€™s just a lot of back and forth for perhaps very little gain in general. Might be better to reconsider incorporating or incorporate elsewhere.

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@karenchen | 4yr

@flyonthewall

Interesting insights. I think the problem in many instances, lies on the quality of the corporate services provider that one is using. The issues that you raised actually shouldnโ€™t be issues at all as they are fairly simple with the exception of offshore tax claim. However, once the offshore claim is approved, it is good for a good period of time.
It would be interesting to know where you think is a good place to incorporate.

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@ksl

  • Opening up a bank account, for a local company, is very difficult. Even as a resident (at the time) they said there was no guarantee.
  • No accountants/auditors up to speed with Xero (this has changed now).
  • Annual audit and filing of accounts (enough has been said on this subject already).
  • Offshore profits claim (enough has also been said on this subject already).
  • Labour Surveys.
  • MPF and other headaches when hiring local staff.
  • Tax. Yeah, it seems attractive until you get smacked with principal and provisional taxโ€ฆfor the company and you personallyโ€ฆ all payable within 30 days.

Iโ€™ve countless other examples, but some of the above could have been avoided with better planning, but the point is that I donโ€™t see how HK is a suitable business flag for a Digital Nomad. The offshore route is still doable and itโ€™s nice and simple. I still maintain a virtual office in Hong Kong so my customers believe that that is where Iโ€™m based.

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@karenchen | 4yr

Level of difficulties or easiness depends on individual perspective. We are still seeing many digital nomads operating their business via their HK companies.

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@stewartpatton | 4yr

. . . and hating every minute of it . . .

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@nickdanforth | 4yr

Makes sense.

So youโ€™d run every venture through the same IBC which would then be the sole member of multiple Wyoming LLCs?

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@stewartpatton | 4yr

Yep, as long as each of those businesses work for this structure.

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@stewartpatton | 4yr

Hereโ€™s the structure I use for my US citizen digital nomad clients, from the top down:

  1. Youโ€™re the sole shareholder and sole director of a Belize IBC;
  2. The Belize IBC is the sole member of a Wyoming LLC;
  3. Youโ€™re the sole manager of the Wyoming LLC; and
  4. The Wyoming LLC has a US bank account.

This structure really provides the best of all worlds. You get the US tax benefits of operating a business through a non-US corporation, combined with the operational benefits of using a US bank account. You avoid the hassles of Hong Kong, both for the corporation and banking.

It works great for Amazon FBA, SaaS businesses, really any type of location-independent business.

The US tax aspects are easy: You simply pay US tax on your salary thatโ€™s in excess of about $100,000 a year. The company can invest the excess earnings on a pre-tax basis. Then, 100 years from now when you return, you have to pay US tax on dividends from the company (so, overall the company works like a traditional IRA that you can contribute way more than $5,500 per year to).

Happy to answer any questions about how this structure works.

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@opt | 4yr

This is very clear and helpful. Sounds complicated, thoughโ€“Wyoming/Belize, who am I, where am I?! :wink:

I imagine youโ€™re well aware of this, but one thing I think is glossed over sometimes when people mention the foreign earned income exclusion, is that if youโ€™re running your own business then youโ€™re still on the hook for self-employment tax for that first $100k or so, ~15%, correct? (Up to $118,500 for 2015? https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes)

Thatโ€™s less about your posts, but something I see all the time on message boards: no federal tax on 100k! Not exactly true, if self-employed. (If full-time employed, then the employer should be taking care of that, so it would be true.)

Of course thatโ€™s still a substantial savingsโ€ฆ

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@stewartpatton | 4yr

Thanks @opt. :slight_smile:

Youโ€™re absolutely right that the foreign earned income exclusion doesnโ€™t apply for self-employment tax purposes. (Self-employment tax is 15.3% up to $118k, then 2.9% over that.)

And thatโ€™s not even the half of itโ€“self-employed expats are also subject to the 30% rule and the scaleback rule, both of which can severely limit the foreign earned income exclusion. More detail here: http://ustax.bz/reduce-or-eliminate-your-u-s-tax-with-the-foreign-earned-income-exclusion/

But, when you use the structure I outlined above, you arenโ€™t self-employed for US tax purposes. Youโ€™re simply an employee of a foreign corporation. So, neither the self-employment tax nor the other FEIE-limiting rules apply under this structure.

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@opt | 4yr

I see the 30% rule applies to business where โ€œcapital investment is an important part of producing income,โ€ explained in your article and here: https://www.irs.gov/publications/p54/ch04.html#en_US_2015_publink100047456.

So it seems that if one is in the services business (like many freelancers, I presume), then, from the IRS examples: โ€œIf capital is not an income-producing factor and personal services produce the business income, the 30% rule does not apply. The entire amount of business income is earned income.โ€

I wonder how that applies to software businesses, where personal services arenโ€™t necessarily being provided, but there is no investment in inventory, potentially no investment in employees or real estate and low or no infrastructure costs if solo (and personal time isnโ€™t a capital investment?), etc.

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@stewartpatton | 4yr

Yeah, the 30% rule is definitely clear as mud.

For a SaaS or Swas business with the characteristics as you described, Iโ€™d probably be able to get comfortable that the 30% rule doesnโ€™t apply.

But that rule definitely hits the Amazon FBA and other e-commerce people right in the softies.

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@nickdanforth | 4yr

Great info, @stewartpatton. Iโ€™m pretty intrigued. Could you use this sort of set up as an โ€œumbrellaโ€ of sorts for multiple different businesses/income streams?

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@stewartpatton | 4yr

Thanks @nickdanforth.

Yes, you can use this structure for anything that qualifies (i.e., location-independent business, no US employees or dependent agents).

Youโ€™d want to fire up a new LLC for each business to keep things separated. Then, different investment types may require different holding structures underneath the IBC.

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@bobz_zg | 4yr

I personally have registered Ltd in my home country (Croatia) and an accountant that lives across my street, he handles everything for me and I pay everything in my home country, tax, health insurance, pension fund.
I was thinking to open a company elsewhere maybe, but then instead of doing what I do I need to worry about being legit and not to get in trouble with tax, etc โ€ฆ
This is why I decided to stick to my home country where iโ€™m most familiar with everything, I donโ€™t need to worry about other things and I can focus on doing my work.

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@ride | 5yr

Hey @TheGlobalCitizen @FlagTheory @freedomsurfer @manu @nomadcapitalist

If I understand correctly, you guys are not a lawyers, is that correct? So, you donโ€™t give legal advice/sell legal advice on your respective websites. Itโ€™s OK with me, just to set the records straight.

Still, two questions come to my mind:

  • Whatโ€™s the legality of the advice you give/sell? Do you give any guarantee for any legal (but you are not lawyers, if I understand) recommendation or structure you devised is solid?

  • How do you self-educate yourself to be ahead of the curve?

Iโ€™m asking in good faith, in a positive vibe.

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@manu | 4yr

You canโ€™t be a lawyer in X different countries. So you wonโ€™t find many lawyers in this area. Iโ€™m not giving legal advice and never charged for any advice.

Myself, I just set up 5-flag theory and registered for all required local taxes. I have good relationships with all countryโ€™s tax departments. They exactly know what I earn, send me letters and I use their online platforms or call them when there are problems. Hiding would be way more stressful and expensive than doing it legally.

I started by reading the general blogs for pointers and ideas. Then schedule meetings with local service providers and ask them lots of questions.

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@zsoltee | 4yr

@manu itโ€™s good to see that you already set up 5 flags. Could you please share where did you plant you flags to help us discover potential good combinations? Thank you in advance.

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@mule5 | 5yr

I am struggling with this question as well, how to best get setup. I am currently a self employed American/Italian citizen, and I canโ€™t escape the SE tax on the 1040. I havenโ€™t claimed the FEIE credit as I havenโ€™t been out of America for more than 6 months in a given tax year. Iโ€™d like to understand how to get setup correctly. If I am understanding correctly, Iโ€™d need to setup a corporate entity in a zero or low tax territory, then have my clients pay that entity instead of myself directly. That entity would then pay expenses, 401k, salary, etcโ€ฆ When filing the US tax return, Iโ€™d claim the income as I would from any employer? Is that correct?

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This article has a lot of interesting information for American Citizens:
http://hodgen.com/how-digital-nomads-can-avoid-paying-social-security-tax/

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@mule5 | 5yr

Thanks for the link - I have this information starred and in my bookmarks.

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@jcglobal | 5yr

I have a digital consulting business and am I torn between setting it up as a limited company in Hong Kong or Panama as I feel like if clients see Panama they will not trust me as much plus I do spend a lot of time in Asia

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Hi, you make a very good point. In the end, you are the only one who can make that judgement. I would try to ask some of your clients if they would have a problem with wiring funds to Panama. Maybe they donโ€™t. It also depends on the clients. If they deal with a lot of international entrepreneurs.
But in Asia having a Hong Kong company does secure you a decent image.

Benefits of Panama will be lower costs and less strict bookkeeping requirements (can save a lot of time and costs). Opening bank accounts in Panama, requires a lot of paperwork.

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@manu | 5yr

The Middle East is not the most reliable offshore destination. My friends had issues remitting their earning abroad. The bank just kept asking for more documents. That was in the UAE.

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@poppyjikko | 4yr

RAK or Dubai or else ? :slight_smile:

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@poppyjikko | 6yr

You make sure that you become resident in a jurisdiction with no taxes (like Dubai or Cayman Islands) or with a territorial based tax system (like Panama, Costa Rica, Philippines, Malaysia, Hong Kong, Nicaragua) and you work while you are on the road.

I still canโ€™t see the right solution for a nomad. Which country to choose without investing too much and spending 6 month there ? I check all of those countries plus some other and it seems a lot of hassles and money for any of them.

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Hi,
That is true. But think about the rewards. As a simple exampe: in Europe you pay up to 50% of income tax. That means 6 months of hassle right there. Every year. For the rest of your life.

Yes, if you plan on making a few thousand Euro while traveling Asia it might not be a reward to do this. But if you are serious about building your life, the costs and hassle are a fraction of what you will earn in the long run.

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@vpazionis | 6yr

Hey Julius (and other awesomely helpful nomads),

my plan is to begin travelling through South America after the upcoming summer and I would like to work while doing so. Currently I am based in London, so I have my bank account in the UK, and will hopefully have some remote work from here while I am travelling. I read that as long as Iโ€™m not the UK for more than 180 days I will not have to declare my taxes (is this true?), however if I pick up some work from say a Colombian client am I required to declare that payment anywhere?

Thanks for any advice

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Hej Vasilis,
It is not always as easy as just not being 180 days somewhere. As a UK resident you are forced to pay taxes on worldwide income. If you want to get away from that you will likely have to first proof that you are no longer considered resident for tax purposes. I have once read the exact requirements for the UK, but could not find them quickly and do not want to give half information. But look into that direction.

In case you simpy go away for 180 days without making arrangements and have funds wired to your UK bank account is in most cases not enough to get away from your tax obligation.

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@vpazionis | 5yr

Hey Julius,
letโ€™s say Iโ€™m travelling with no permanent base and I am no longer registered as a citizen of any country where would I register a business so I can make money via freelancing? Is it even mandatory for me to register a business somewhere or can I just make money and pay it in to my bank account?

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Hej,
Nobody forces you to set up a company. You can get income wired to your bank account no problem.
Note that with opening an account most banks ask for a utility bill in your name, which may be difficult to obtain as a DN.
You are not registered as a citizen. You ARE a citizen. I am assuming you have a passport since you want to travel. What you mean is resident.

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@replay | 5yr

Thanks for this opportunity to ask questions. I am looking into getting a tax residency in Hong Kong, because currently I have no residency (nor a tax residency) but I would like to make my income legal. Iโ€™ve read itโ€™s easy to create a company in HK, but itโ€™s a little harder to get the tax residency there, even if I own a company that doesnโ€™t mean I can get it.

Do you have tips regarding whatโ€™s the easiest path to a tax residency in HK?
Am I going to be required to live in Hong Kong for a defined amount of time? I wouldnโ€™t mind if it wasnโ€™t that expensive:)

Thanks!

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Hi Replay,

If you do not mind I have a number of questions.
What do you mean with making your income legal? Legal where and to whome? Is it a requirement of an exiting country?

It is not โ€œillegalโ€ to live without residency or tax residency. What is illegal is for example living somewhere and not paying taxes when you are obliged by law. But those are two different things.

If it is wise to get residency in Hong Kong depends also on your business model. Remember that Hong Kong has territiorial income tax. So that means that income generated inside Hong Kong is taxed. This might be the case when you are living there.

And for going from a no-tax situation to a taxed (and high paperwork) situation you should have a good reason.

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@replay | 5yr

Hi @TheGlobalCitizen

Thanks for replying. I donโ€™t think my income is currently illegal, but Iโ€™m also not sure if itโ€™s completely legal, it feels more like some grey state actually because I never pay taxes anywhere.
This isnโ€™t a requirement of a country Iโ€™m exiting, nor is it extremely pressing for a particular reason, but I would really like to make sure that nobody can suddenly pop up and claim taxes on my income of the past few years (like for example the Swiss government because thatโ€™s my nationality).

I think you are right that probably Hong Kong isnโ€™t the right solution for me, basically I was just looking for something that allows me to reply to anybody who claims taxes like โ€œlook, itโ€™s taxed alreadyโ€. So actually I was more looking for an insurance that guarantees that I can keep what I have on the bank account.

I actually wouldnโ€™t mind paying taxes in Switzerland, since they are relatively low anyway. So today morning Iโ€™ve contacted the Swiss government tax authorities and explained my entire situation to them, their reply was kind of funny saying โ€œAs far as we know in your situation you do not need to pay any income tax in Switzerland, and Iโ€™ve never heard of a case of somebody volunteering to do so beforeโ€ lol. So that makes me worry less at least :slight_smile:

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Great post! Volunteering. That was what I was thinking.

I am giggling in an internet cafe and the staff is looking at me funny. Maybe I am a bit of a weirdo.

Look, the most important aspect of their answer is this: โ€œyou do not need to pay any income tax in Switzerlandโ€. This is all they can answer. There is no international organization that keeps track over every human being.

Any other government could only claim you as a tax resident when the facts tell them that you are.

That, you have in your own hand.

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@vpazionis | 5yr

Haha nice one! :sunglasses:

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@vpazionis | 5yr

Oops. Yes I meant resident! Great thanks again for the advice!

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@vpazionis | 5yr

Thanks Julius I will look in to it!

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I also read about the VAT.
Sounds great.
Wish you all the best!

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Hi Don Lee,

Well done on the location independent lifestyle!

One remark:

"Nobody is asking me for any tax or has an intention to do that, it means Iโ€™m legal to not pay taxes in my situation. "
This is not a logical conclusion. The fact that no-one is asking does not make it โ€œlegalโ€. No-one from the government ever knocked on your door to tell you that you are not allowed to rob your neighbours. Yet, you can safely assume that when you do, you break the law.

In most countries the burden of reporting your income is simply on you.

Like most of the world, Vietnam taxes on worldwide income for residents (which you are). I found the following document that seems accurate:

http://www.expat.hsbc.com/1/PA_ES_Content_Mgmt/content/hsbc_expat/pdf/en/global_tax_navigator/vietnam.pdf

Clearly showing that there is a progressive income tax that goes north of 30%, on โ€œas well as income from independent practiceโ€โ€ฆ

I understand that there are a lot of countries that do not have the mechanics in place to collect taxes in non standard situations. But this is not something that I would advice someone from the high taxed Western world should try in this day and ageโ€ฆ

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@freedomsurfer | 6yr

Big banks in Hong Kong open foreigner accounts (even on a tourist visa). You need a passport, a proof of address and around 10000HKD (around 1250$US) for the opening deposit. The easiest banks to work with are HSBC, Standard Chartered and Citibank.

In the ASEAN region thereโ€™s Singapore where itโ€™s relatively easy to open a US dollar account on a tourist visa (same requirements as HK along with a recommendation letter from your current bank showing 2 years of history). The most important thing in Singapore is the reason why you want the account. Find a legitimate reason why you need the account and explain it to the bank (show supporting documents, invoices, proof of your workโ€ฆ).

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@freedomsurfer | 6yr

Don_Lee, to be on the safe side you could open a bank account in another country and leave your money there (use a debit card to access it in Vietnam). That way you would leave fewer traces and could benefit from the stability of your banking country (Hong Kong for example).

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@digital | 6yr

Nice to meet you. It seems to be great :slight_smile: So, you can earn money without declaring it ? Here, in France, after all things done and fixed charges paid, the government took me a bit more than 30%โ€ฆ

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@digital | 6yr

Hello Don Lee ! Wow, your government seems to be great ^^ Where are you from ?
And where do you receive your money from your work ? Have you got any company in a given country ?
Thank you for your help, it could be very helpful :wink:
:smiley:

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@digital | 6yr

Hi Julius,
Nice to meet you.
Iโ€™m a French young digital entrepreneur and I earn revenue on the Internet.
Iโ€™m really interested about offshoring in Dubaรฏ and I have also family there (they are Emirati and have the nationality so maybe they can help me with my project ?).
Could you give me some advice on where to start ? And I would also know if I can create a company there without living there, and earn money directly on my bank account ?

Thank you very much for your help Julius,

:smile:

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Hi digital,
Nice to meet you to.
There are a number of ways to set up in the UAE and become full owner yourself. Internet based businesses are particularly fit to set up in the UAE. You can setup a company without living there or even visiting the UAE. But if you want to have a bank accout you HAVE to visit to meet the banker in person.

You can earn funds directly in your company bank account in an USD of EUR account. You can take the funds out with an ATM card, but these are always in AED, so there will be conversion charges.

Depending on the turnover you can use something like a prepaid debit in Euros to access your funds.

Keep in mind that if you remain living in France and receive income from this company in normal circumstances this income is taxed. Even when you manage the company from France the case could be made that it is a French company for tax purposes because it has its permanent establishment (PE) in France.

You could reduce this problem by having a local family member be the director of this company and having the rest of PE offshore. But knowing Emiratis, it will cost youโ€ฆ :wink:

In any case, everything is possible and I helped quite a number of French people. I especially saw an increase after that rediculous statement about 75% income taxโ€ฆ

If you have more specific questions let me knowโ€ฆ

Good luck!

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@digital | 6yr

Thank you very much for your answer Julius, itโ€™s always helpful :smiley:

According to your experience, how is the average cost of conversion charges from AED to USD or EUR ?

I do not really understand what you meant here, Iโ€™m not bilingual yet ^^, I did research on the internet but what is a โ€œprepaid debit in eurosโ€ and why will it be great to access my funds ?

But, if all my money stay in Dubai and in other countries except France, my government will know nothing about my foreign activities, no ? Or is there any contract between the governments of UAE and France to share informations ?

Family is family man :slight_smile:

Thank you so much for your help, I will see with my family there, and I send you a PM for further details about my aim :smiley:
D.

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ATM: The exact conversions I cannot tell, it always depends on bank, the amount and the current rate. AED - USD conversions are cheap, because the AED is pegged to the USD. Gonverting to the EUR will be a bit more costly. I would say 1-3% in total, but this should be verified.
Note that the cards are in AED, but you can have a bank account in EUR and USD.

Prepaid card: there are cards out there that you can charge by wiring an amount in Euros to them. And then just taking it out of the wall. But there is a cost to these cards which is likely higher than taking the conversion when you are even talking about modest amounts.

Exchange of information: I spoke to the head of the AML department of the UAE central bank. Information IS being exchanged already under certain conditions. And it is likely there will be much more transparancy in the future. I wrote about that here: https://theglobalcitizen.co/oecd-anti-money-laundering/

It is easy to set up company with an account and the French government not knowing. But you will create what is called black money and this may come back to bite you in the future. 5-10 years ago you could walk into a Swiss and Luxembourg bank with a bag of money and no questions would be asked, and no-one could find out. Now these countries signed up for automatic exchange of information and all those clients are being kicked out and do not know what to do with their money. Some get into serious trouble.

In the end, you will earn much more in life when you focus on running your business, instead of running for the tax-man.

Those are just my two silver coinsโ€ฆ

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@veggienomad | 6yr

Move completly to UAE (company formation in RAK is more cheaper than dubai) or move your residence location to a low tax country (cyprus, bulgaria). I know germany, austria, french, uk are very strong with taxes and offshore constructsโ€ฆ Itยดs legal to open a offshore company in uae, but with french residence, you will need paying taxes in french.

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@freedomsurfer | 6yr

Howโ€™s the quality of life in Dubai? Iโ€™ve been thinking of setting up a freezone company there for a while and getting the residency permit but I have no idea if Iโ€™d like living there.

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Hi Freedomsufer,
First of all I like your website and what you are doing (for what thatโ€™s worth).

Live in Dubai is not bad at all.

But it is a bit of a country of extremes and not for everyone.

Benefits:

  • The country is made for business owners: low regulations and no taxes. No taxes on income or for your business. Often no audits. No tax reporting. Nothing.
  • It is not just glamour. 90% expats make that it is the place is filled with young people trying to make something of their lifeโ€™s.
    It will be one of the most international places and you can find nice people you hang out with. There is a disproportional amount of materialism and shallowness though.
  • There is a lot of money switching hands and the economy is booming again. Opportunities everyhwere.
  • Labour is cheap and you can basically outsource everything.
  • Crime is non existent, and as long as you bother no-one, there is no one telling you what to do.
  • It is one of the easiest places to obtain residency. And this is not just for Westerners. People from everywhere can come here and start a business.

Downsided:

  • The summer is terrible. There are 4 months that you have to stay inside because it is to hot.
  • In some cases starting out requires some investments not all digital nomads will be willing/able to make.
    Also, rents are really rising, and if you want your own place to rent, you have to pay one year in advance (in the form of post dated checks, but if a check bounces you have a month to fix it or go to jail)
  • There is sharia law. They are liberal compared to other places, but it creates uncertainty because judgements are completely arbitrary. Government control is strong and big brother is watching. You have to especially be careful not to offend something or someone (like posting on facebook, being loud and drunk, and kissing in public). Now, in the three years I have been there I have never knew someone who has gotten into trouble (the only time when I spoke to a police officer is when he was bored and wanted someone to talk to). But once you cross the line you will be found, thrown in jail for a few months and send back where you came from.
    And do NOT get into a dispute with a local.

Let me know when you have more questions.

P.s. resident permit stays valid for three years as long as you visit the country once every 6 months.

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@freedomsurfer | 6yr

Thanks for the reply Julius, itโ€™s much appreciated.

Iโ€™ll go to Dubai later this year (after the summer, probably in October) and try it for a month or two to see if I like it there. If youโ€™re in the area at that time it would be fun to meet for tea (have to get used to saying that instead of beer hehe).

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Tea and dates ;). I will keep it in mind. But likely will be hanging around Asia.

Most countries get a tourist visa for a month. You can go to Oman to do a visa run, and get a new month.

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@busdriver | 4yr

For Dubai: They might not charge taxes, but they do have fees (like for a trade license) that you have to pay. Iโ€™d call that a tax :wink:
For my off shore company needs I would still come to US$10,000 set up costs. (PLS compare with HK for example)
Of course no auditing is a plus, but how much is that really worth? $1000? $3000?

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@elena | 6yr

Iโ€™m from Panama and for some reason I donโ€™t want to set up my business there (maybe Iโ€™m overacting?). What is the average cost for opening/registering a business in another country? (lawyer fees, permit fees, etc.)

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Hi Elena,

Actually, being from Panama, it makes a lot of sense to setup an offshore company. Because Panama has territorial taxation. So you could have significant tax savings if your income comes from abroad. You will have to remember โ€œsubstanceโ€ though. As I explained here:

Having said that, a question like this is impossible to answer. Because there are to much options.
You also have to look at what you want in terms of banking and some banks require minimal deposits as well.
Another major difference is if you are doing business locally, or not.

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As popular as Panama is, I really wouldnโ€™t recommend it as an option for you offshore bank account.

I actually wrote an article about this back in 2014.

If you havenโ€™t already, I would go with Hong Kong.

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by @larsheather | 1yr 1 year ago | 2 comments

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