Dubai Business Setup: A Goldmine for Americans

Anyone who's born in the USA, anyone who holds a USA green card, anyone who holds US citizenship, when you open your bank account in the UAE, there are reporting requirements. We notify the IRS of the transactions that are happening. We as US citizens have to legally report our worldwide income. So what is the tax benefit once you get your residency and you have your UAE Pass? You can do absolutely everything. You can open a bank account, you can be overseas, you can transfer a property. Some free zones are considered free zones for taxation. When we talk about tax, we're going to look at direct and indirect taxes. You don't have to be here, but yet you're able to benefit from the tax benefits of setting up as you said, a tax haven, with over 1,500 American companies that have already set up in the UAE and double digit surge of American companies setting up their corporations and their businesses in Dubai. We wanted to answer why this is happening and how you can do the same. So today on The Dubai Connect, I'm going to have those answers for you. Stay tuned. Today I would like to welcome back a prominent figure here in corporate structure and international tax, an attorney who's been on a previous podcast, but has so many answers for you. With passion, I welcome Nadia Alamri to the show again. We're going to be doing a series, Nadia, because you are a wealth of resource and information. Thank you. You know, I've been talking about investments and real estate now for a couple of years, right? But what I'm having a lot of questions about is, okay, great, we get it. Invest in Dubai real estate. It's the best place right now to make money off your money. But we want bigger. We want more than that. We want to open up companies here, create corporations here, be a part of it, benefit from the tax situation. And I thought no one better than you. So may you share a little bit about your background and who you are? First of all, thank you for having me back. My pleasure. Hopefully we're going to make tax talk not boring. So how I connected with you was actually through Instagram. I was captivated by one of your reels by chance. It had come up in my feed. So when I saw that you had created the series and this podcast about Dubai Connect, I thought, what better way to bridge the gap between North Americans and what we have going on here in the UAE? My background actually started out in finance and economics, started out in banking, private banking to be specific. And then asset management comes with that. Real estate comes with that. You know other alternative investment tools. So on the back of that, I ended up reaching out into taxation and then law. Once you bring corporate law into all of this, it's a one-stop shop. We're here to make money. We're here to preserve your wealth, make that generational wealth, make sure you're paying the minimum taxes on that the right way. And the UAE is the best place to do that, actually. Can you also share what was your role with the taxes here in the UAE, the whole incorporating taxes? Okay, so back in 2017, I joined the Federal Tax Authority, and we were part of the team. We did road shows, we did a lot of seminars, we did a lot of public events where we would assist the public, let them know what is coming, when is it coming. We were publishing guides and so many laws and so many updates on the laws, what was happening. And after a while, I felt like being on that side, where as a government employee was great, but I also wanted to do a little bit more. So I branched out and I opened my own tax consulting firm, continued my studies as well simultaneously. And now we're across seven Emirates and international. So we have partner companies in Saudi Arabia. We have a partner company in the UK. So we're able to bridge that gap. So hopefully soon we'll be there in the USA with you, huh? I love the fact that you have of course the economics and finance background, firsthand knowledge of the taxation situation, which is such a huge draw and hook for people from all over the world, as individuals and as companies, to come set up here, right? You've obviously, with your private banking, have the experience with ultra high net worth individuals and all this. To say that you understand the pain points and you understand high net worth individuals' desires to minimize, create, make money as you said, and preserve wealth. So I would like to really know from you on this episode what I want to be able to share with my audience that already understand real estate, that they get it. But from a business setup, right? Share how, let's say, an American or Canadian can set up a business here. What are the different types of entities? What are the features and benefits of each? What are free zones? Could you walk us through basically steps A through Z about how to create a business in the UAE and particularly in Dubai as a foreigner? Okay, so you've actually got me on a topic that excites me. It may be very boring for others, but it's great for me. Now let's take a step back and look at why. And I will not keep it only based on Dubai because our tax laws are federal. But within that, we have seven separate Emirates. Let's look at the Emirates similarly to what you do in the US as states. So we have seven Emirates in the UAE. Our capital actually is Abu Dhabi, while Dubai may be the business capital. The official capital is Abu Dhabi. Now while we have federal tax laws, the Ministry of Economy has given each and every Emirate its own authority to have its own Department of Economic Development. So while you have mainland companies that come under the incorporation of the economic department of that individual emirate, we also have free zones. Now the UAE has over 30 free zones. Each free zone has its own specialization. For example, some may have free zones within airport free zones, some may have free zones around the ports, some may be industrial free zones, and some are for like media, some are for IT. All having a different benefit or different specialization for what type of businesses they're looking to attract and what benefits they're offering for those types of businesses. Now within the UAE, as I said, we have over 30 free zones. Some free zones are considered free zones for taxation. When we talk about tax, we're going to look at direct and indirect taxes. Some are considered as VAT free zones, okay? Where VAT, in certain situations, and I need to be very clear, disclaimer here, in certain situations, when you meet the requirements, when you're in that free zone and trading in a certain way, whether it's offshore or within the free zone, that is actually out of scope of VAT. So we consider that as not even part of the scope. There's no recording or reporting requirements for that. We just need to make sure that we're continuing the compliance requirements to show that it's out of scope. When we look at corporate tax, the free zones do also have some requirements to make sure that you are considered as a qualifying free zone person. That is to make sure that we are not coming under the scope of having 9% on our profits at the end of that financial year. Because that's new, right? 9%? New. Which you'll have people that say, oh, the tax-free ride in Dubai is over? Now they're incorporating taxes. 9% compared to other countries and other domiciles for taxation, 9% on corporate tax, or the first direct tax we have in the UAE, is quite low. And that's great. But you can still use the UAE as a tax-free zone. When I mentioned to you that there is something called a qualifying free zone person, the free zone setup is still very attractive in the UAE, regardless whether you're industrial, regardless whether you're in e-commerce, logistics, whatever it may be. We are, our firm, could guide you, advise you, look at which is the best setup, which is the best requirement. Now a lot of companies incorporate their companies offshore, regardless whether it's a BVI company or a Jersey company or some type of offshore company as a tax haven. The UAE is so competitive on that front now, and it's much cheaper as well. And we are globally, much easier to reach, sorry, geographically much easier to reach. Getting a flight to the Caribbean is not easy. It'll take you two days. We have the most logistically functional location. We have flights coming into Dubai from anywhere in the world. In fact, the Dubai airport is going to be the largest in the entire world, physically and by number of travelers as well, yes? So that is one of the benefits. We have multiple free zones that are allowing companies and corporations to do things on a next level global level. We offer very fast turnaround times as well. So opening your company or setting up a company in the UAE, whether it is a branch of a foreign entity, whether it is a brand new establishment, whether you're headquartering companies that are based all over the world, it is that simple and that easy and that fast to do. We have a very fast electronic government. And this is something that across all seven Emirates has been shown to be super fast, very clear. We have very simple reporting requirements as well. And we are a smart government. So I mean, I want to just take a second or moment to absorb everything that you just said, because I find it all fascinating. You're absolutely correct that one of the major benefits is the ease of getting here. But even for those who don't travel here, the fact that everything is digitized, correct? Even the banking system, that it's so simple to transfer and wire money. You don't find that to be the case in a lot of other countries, right? You can even get your bank account open in a day. So once you become, it's very important to note something. When I talk about or mention that we have electronic government, we have something amazing called UAE Pass. Once you get your residency and you have your UAE Pass, you can do absolutely everything. You can open a bank account. You can be overseas. You can transfer a property. You can be online and have a meeting with a notary public, authorize someone to go and do whatever you need done. Everything is doable. You can be sitting on your phone enjoying a cocktail or something on an island somewhere while you're running your business that's based in the UAE. And that is such a huge advantage. Because you don't have to be here, but yet you're able to benefit from the workforce here, the workforce in this area, appealing to the whole Middle East MENA region, even Asian region, correct? And then really importantly, of course, the tax benefit of setting up as you said, a tax haven. And this is the reason why you're seeing an exponential number of Fortune 500 companies setting up their headquarters here. As you said, new companies coming and starting fresh here. Whether they have a division here, whether they just want a place and a foothold in the Middle East, Dubai or the UAE is where they choose to do it. Or they're even moving, let's say, from the UK, for example, their entire operations. Record numbers, correct? Yeah, and so I love that you help strategize as a business which of the free zones make the most sense for a corporation. 100%. Let's even simplify it a little bit more. So let's just say I'm in San Diego, right? And I have somebody that wants to open up a restaurant here. Sure, okay. How simple is that? First of all, we want them to book a flight, come over here, and have a look at where they want to be, sure. So we'd obviously look at feasibility studies. We'd look at all the numbers, because numbers make sense business plan wise. We do all of the projections, all of these types of things. You find your location, you make an offer on that place. Once you have a preliminary offer, we add those numbers, we go for a preliminary approval, we get that trade license initial approval. You go and get your lease. Your license is issued within a few days, at max. So the KYC requirements, all of these things, is super simple. Your license, your residency visa, and all of that, coming on the back of becoming an investor here, is so fast. We get your fit out done. Getting suppliers here in the UAE is absolutely one of the easiest things. Everything is available at your fingertips. We have fresh produce coming in. We have cargo coming in through land, through air, through sea freight. Everything you can think of. Supply chain management in the UAE is phenomenal. And the trade routes are being constantly opened up. New trade routes, right? For that reason. Is it true that you have to have a sponsor to be able to open up a business here? Not correct. So it's actually been about we're in 2025, so approximately 3 years, where many of the approved business activities no longer need to have a local partner. So you can be a 100% owner of your own company. This is there for the majority of activities. There are some activities that, for safety reasons, for security reasons, you still require to have an authorized local partner, at least to be the majority holder of at least 51% of those shares. And having that is a benefit for some and for others it's a requirement. That is not a requirement at all. So you do not need to have a local partner. There are some businesses or some activities that do require. We're happy to share those lists if anyone wants to have any more information on that. We can share that emirate wise. But you know, even when you're having foreign entities that want to open up here, those foreign entities still own 100% shares of their companies here. So there's no issue on ownership there. Another misconception. Can the government just close down my account and take confiscate my money? Why would they? What are you up to, Ghada? They don't. So no, they don't. Why would they, right? We want to encourage business continuity. We want to grow our GDP. We want to encourage you to do business. We're not here to you know. Not yet. I'm sure you're watching the news to see that there's instability going on in the United States right now, and there are people that are making money that are scared about their money. How do you find that to be affecting people here in Dubai or corporations here or Americans coming here? We've definitely seen an influx of North Americans coming to the UAE given the political environment and the changes that have happened recently with the election and whatnot. We have probably in the last 12 months, I personally have seen, especially from a client base, a big increase of US citizens. Yeah. Not only because we have great weather, a lot of Canadians coming through as well. So a lot of skilled workers coming here, a lot of people who are in the IT sector, e-commerce businesses, a lot of people who are in working in AI and all these types. Let's call it the IT bubble. Yes, they're headquartering their businesses here in the UAE now. While they may not work in the UAE as a number or as a population, it may not be big. We're only reaching about 11 million at the moment. But that has had a massive growth in the last few years and will continue to grow. But the UAE's attraction is lifestyle, security. Government is very stable. We have very easy laws to set up your companies. Our taxation is very clear, very low impact. So a lot of companies set up their operations here, a lot of people come to set up their companies here to live here, but their actual work isn't here. Even you'll see a lot of these influencers, bloggers, TikTokers, all of these things. They're actually based out of the UAE. A lot of their content is created here, but their income is not sourced from here. So we have seen the political environment in the USA impact the UAE in a positive way. 100%. You know, the UAE is complying with FATCA requirements. We do all of those reporting. Yes, please. So FATCA requirements is a federal requirement by the IRS. It's something that is there linked with the International Monetary Fund, central banks, and obviously the UAE Federal Reserve. So when you open your bank account in the UAE, as part of your onboarding, as part of the KYC requirements, that is part of the due diligence. Anyone who's born in the USA, even if you're not a tax payer in the USA, anyone who holds the USA green card, anyone who holds US citizenship, we must go through the reporting requirements where we notify the IRS, or the banking system here automatically notifies the IRS of the transactions that are happening. So that's from a banking perspective. But there's also W9 reporting. So, you know, Mr. Uncle Sam, we speak about him again. He knows what's happening, and he is watching. And obviously that differs, like from individuals to companies to different types of companies, to whatever income you have all over the world. Your US tax attorney or your US chartered accountants would be able to guide you the best way to strategize that. But there is a very clear reporting requirement between the UAE and the USA. But that is for your benefit. So then, if there's the requirement to report, and if we as US citizens have to legally report our worldwide income, right? Then what is the tax benefit or savings for setting up a business here? Not obviously the growth and making money. We know. Now you're touching a whole another part of the world, correct? But what is the tax saving specifically? And does it matter on what, how you engineer and structure your business with regards to what type of corporation? 100%. So obviously, you know, we want to move away from sole proprietorships. We always look at LLC companies. We also look at holding companies once you're on a bigger level, you know, having obviously the correct amount of assets and whatnot. But we also have something called tax residency. So you can also apply for a tax residency. So that minimizes your exposure offshore. So once you become a qualifying tax resident in the UAE, it's actually going to give you more, let's say, leverage back home, okay? So you now become a UAE tax resident. You're more liable to pay UAE taxes. Again, you're only paying 9% on profits. Corporate is that. With that, I feel that whole topic of taxes, especially with the position you hold and your expertise, deserves its own episode coming up next. So coming up next, and I want to thank you for coming on. I know that I will have probably more questions. We'll continue to meet and be able to answer those questions as they come up. But you know, you see the record numbers. You see what's happening. You see very big American companies coming. Huge names. The biggest names. You know, I won't even talk about the political players and how much they believe in the UAE because you can see that all over the news as well. Great political and so I want to thank you because this is exactly what I'm trying to do. Is provide as much information to my viewers and listeners so that they can capitalize on the opportunities. Not just for real estate, but for business as a whole here in the city of the future. We're waiting for your inquiries. So questions related and indirect, ready here to answer them all for you. Thank you, Nadia. My pleasure. I hope you were able to gather some relevant information for yourself on this episode. Please make sure to like, subscribe, follow, and stay tuned for the next topic we're going to hit up.