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Why I’m Leaving My UAE Business Behind | Nomad Capitalist | YouTubeToText
YouTube Transcript: Why I’m Leaving My UAE Business Behind
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Core Theme
The UAE is no longer a universally beneficial "tax-free paradise" for entrepreneurs, especially those not residing there, due to new tax regulations and banking complexities, though it retains specific advantages for holding companies and individuals seeking residency.
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I've told you for a while now that the
UAE is no longer a tax-free paradise for
entrepreneurs. And I think most people
are finally catching on to that. And
yet, people are still going to Dubai and
setting up companies while I'm in the
process of closing my UAE company. I'm
going to tell you why and why maybe you
Now, I'm not saying this to be
controversial. I'm not anti-UAE. I'm a
proud UAE golden visa holder. I like
going there. There's certain things I
will always go to Dubai and that's where
I get that thing. That's where I buy
that product, get that service. And yet,
what do I tell you? Go where you're
treated best. And to do that, you have
to pick from the buffet what's best for
your company, what's best for your
banking, what's best for your asset
protection, and quite frankly, what's
best for you on a human level. I'm going
to cover all those things here and tell
you why I'm closing down my UAE company.
I'm also going to tell you what I
believe is the best use case for someone
to set up a UAE company. If that applies
to you, you might want to look into it.
What I'm most excited about is all the
bros who've been slinging to buy to
everyone with a pulse are now having to
admit 0% tax is over. 9% tax is in. And
if you are a successful entrepreneur and
you set a big company there or if you
move there, that is what you were going
to pay on your business. A lot of the
loopholes you hear people telling you
about just pay yourself a big salary. uh
not really going to work anymore. Now,
uh I think people are too invested
moving to where their company is.
There's just some mental block that a
lot of folks have because it's normal.
Uh if you live in the United States, as
I used to, you have a US company, most
often an LLC. You live in the UK, you
have a limited company. Where you live,
that's where your company lives. But
when you go where you're treated best,
you have to change that to saying where
I live is not necessarily where my
business lives. Now the UAE, they're not
stupid and they have figured out, hey,
if you live there, but your company
somewhere else, but you're running it
from there, you could still be sucked
into the tax net. So, it's not just a
matter of saying, I'm going to live in
Dubai, but put the company somewhere
else. That may not work. What I want you
to do is to stop trying to put two goals
into one bucket. Where do you want to
live? And where should your company be
based based on where's the best tax
rate, maybe the the lowest amount of
paperwork, whatever it is that matters
to you. All of our clients have somewhat
different priorities. That's why we make
bespoke plans. We don't just sell the
same thing to everyone because we all
have different goals. And so, if you
want to live in the UAE, uh, then
perhaps in most situations, having some
kind of UAE company is going to be the
best case. That's something that we talk
through clients about if they want to go
to Dubai or Abu Dhabi. Uh, but if you
decide from the lifestyle reason that
you want to go there, uh, then that
might work. However, there still are a
lot of people that they say, you know,
Dubai is in a good time zone. It's
between Europe and Asia. I'm a global
entrepreneur. That's the best place to
set up my company, but I may not live
there. I may travel around the world. I
may follow the nomad capitalist trifecta
method where I've got homes in different
places and I've got a tax residence
that's on paper, but I'm not really
triggering tax residents anywhere just
by living there. Uh people live
different kind of lives and I think
people look at Dubai as this sort of hub
and it is and you know I'm going to be
flying through Dubai in the near future
on my way to another place. It is a
great hub to stop over and get stuff
done. Doesn't mean your company should
be based there. And just because you see
a lot of ads on Instagram and a bunch of
these bros on YouTube tell you that's
where your company is. Do you know why
they tell you that's where your company
should be? Because that's the only place
they sell companies. If you don't want
to live there, the reality is you can go
to other jurisdictions. Some people have
robust enough businesses that Hong Kong
is worth going to and they still have uh
a dual tier tax system where you can pay
zero. Some people have simple enough
businesses where they can go to let's
say the British Virgin Islands or some
traditional offshore jurisdiction. I
think the BVI is one of the more
straightforward ones now is places like
the Sey Shells have gotten kind of
squirly. Um and so that can work for
certain people. Someone who has a
business that requires some patina might
go to the Cayman Islands. Someone who
has a certain kind of business that
involves certain royalty income or
certain connections with Europe or other
things might go and set up a company in
Malta. All of those are going to have a
lower tax rate now than the UAE. And so
if you're not living in the UAE and your
goal is not to become a tax resident
there as an individual, why would you go
and set up a company in the UAE? for me.
Uh we moved part of Nomad Compl's
structure uh a number of years ago to
the UAE to one of the free zones and the
original appeal was um minimal filings,
easy setup. The setup is still easy
enough. I I don't doubt that. I mean,
their uh their handling of bureaucracy,
especially for those who pay more, is
incredibly efficient, and I give them
all the credit in the world. They've
done a fantastic job at making it easy,
making it comfortable. I mean, there's
some countries that I speak very highly
of where when you've got to go and renew
the residence permit once a year, uh,
you're sitting in some dusty office, uh,
with somebody, you know, some bureaucrat
back behind the glass with a bad cough.
I mean, the UAE has done a great job.
So, some of that still remains. Let me
be clear, I'm not talking about the
government. I'm talking about an
ecosystem of people who all moved to
Dubai and basically tried to lead this
new gold rush and marketed everything as
plugandplay. You form a company, you get
a residence visa, you open a bank
account, that was it. The issue is no
one ever questioned any of that. There's
plenty of entrepreneurs like myself who
said, "I'm not moving to Dubai. I just
want a convenient hub for my company,
for my international lifestyle. Do I
need a bank account in Dubai? Do I need
a residence permit?" And I think what
happened is, you know what what I've
seen the biggest challenge is is with
the banks. People can sell the
jurisdiction and the government is being
friendly. We flagged this in Hong Kong
many years ago where Hong Kong very much
wants people to come and set up
companies there. And I'm I'm a believer
in Hong Kong. Uh I I very much disagree
with people in the West who think uh
that Hong Kong has just totally lost its
luster. I think it's really actually
regaining luster right now for a number
of reasons. The problem in Hong Kong for
some time now has been the banks. Now we
have connections at a couple of banks.
We can still do it. We also figured out
you can go to other countries and get
bank accounts for Hong Kong companies.
So you can go to Singapore in some
cases. You can go to Switzerland. I mean
there's there's places around the world
that respect Hong Kong companies. Uh
what we've seen is that uh banks in the
UAE more recently have become more
difficult for certain free zones and so
the cheap plug-andplay option doesn't
always work as well for banking and
people are getting some more questions
now. Uh the other issue is the banks
never entirely understood people who
don't live in Dubai. This is one thing
again I I I think the government has
done an incredible job but some of the
people there uh who run things many of
whom are not western can't understand
why anyone doesn't want to live in Dubai
and so if you don't live in Dubai what
do you mean you don't live in Dubai and
so having the residence permit became
pretty much an obligation and so the
challenge is what people used to market
was back in the day form a company get a
residence permit you've got to go every
180 days or else they cancel then you've
got to go through a process of asking
and why I haven't come and so if you're
a global entrepreneur I know it every
180 days doesn't sound that unmanageable
let me tell you from experience when
you're you know running a global
business and you're living an
international life uh that adds up as
much as you think it's not that far away
you probably have other obligations as
well and so I understand now there's
more ways to get golden visas I've
talked to you about them I'm a big
believer if you have money in the bank
go and get a UAE golden visa just put
two million dirhamms in the bank you You
don't have to buy property, you don't
have to do anything else. Why not just,
you know, take some cash from over here,
put it over there, go to Golden Visa.
So, yes, you can do that now. But back
in the day, the reasoning of just get
this kind of company formation, you
know, company owner uh residence permit
doesn't work as well anymore for someone
who's truly global. Uh but also the
banks never really understood you
without that. And uh I was in Dubai uh
about five or 6 months ago now handling
a lot of the paperwork with the bank
where they don't understand remote. So
if you've got banks let's say across
Asia or in Switzerland or in Panama. I
mean those are very common jurisdictions
for offshore companies. They largely
understand remote. The banks in the UAE
don't. And so you've got incredible
government services, but you've got
banks that are really based on we want
you to be here uh in large part. Now if
you start putting in more money, can you
do better? Uh some cases yes, some cases
no. I mean uh you know Nomad Capitalist
in the UAE was probably bigger than a
lot of businesses that our business
bankers uh dealt with. The the great
focus in my estimation is um the appeal
of you know to be here doesn't exist.
What the UAE has done a great job is
bring your business here and bring
yourself here. Buy some real estate.
Now, there's talk that the market's
overheated, might drop 15% in the next
year. Let's see. People are always
trying to get headlines. Maybe that's
correct, but it is a pretty hot market
right now. Fundamentally, I think it's
worth considering why are we going all
in on one place. So, that was the
original appeal. The reality being that
bank accounts uh aren't as good to
manage remotely. Compliance was slower,
uh expensive, and not necessarily in a
reasonable way. Okay, so I recently
canceled a power of attorney for someone
over a fiveminute Zoom call and it cost
800 bucks. Now listen, uh you know,
people on YouTube think Nomad Capitalist
is an expensive service. When I compare
us to highlevel firms that ultra high
net worth individuals work with, we're
actually pretty competitive and we've
we've analyzed ourselves recently. No
doubt we're more expensive than some
companies that advertise on Instagram,
for example. Now, I think we offer a
more holistic bespoke service than
someone just slinging company formations
on Instagram. You can learn more about
that at nomadcapitalist.com/apply.
We'd love to help you. Uh, but I just
found it was expensive for things uh
that maybe didn't need to be expensive.
Hong Kong fits into the same category.
The British Virgin Islands fits into the
same category. So, to some extent, this
is just an issue with offshore
jurisdictions. I mean, if you want to
hire a lawyer in the British Virgin
Islands, you might pay $800 or $900 an
hour to talk to a good one. uh and so
that's partially just an issue of
offshore but I found it to be more of an
issue there. The other issue that I
found in reality is uh if you look at
Hong Kong for example, you have a whole
ecosystem around Asia of uh payment
processors, merchant accounts, currency
conversion services. Uh our company
being the offshore business is not
accepted by wise for example. So we've
got to go to other companies to service
those kinds of needs. process credit
cards, uh, etc. You have fewer of those
services in the UAE. Now, it is getting
better. I'm not saying there's none.
There's a decent ecosystem there. I know
plenty of people are going to disagree
with me. I think that banks and finance
companies in Asia uh, are in many ways
more forward thinking. I'm an investor
in certain UAE banks very proudly. Uh,
but I just think it is not truly as
global as people think that it is. And
so, you really have to keep things.
There's a lot of brokerage accounts that
will open an account for you. Let's say
you have passive investments. Hong Kong,
BVI, Maitius, good to go. Fewer of them
will open for UAE companies. So, you're
more locked into one ecosystem. Uh,
which to me goes against go where you're
treated best unless you're just moving
there and you just want to have one
place where all your stuff is, but then
you don't have diversification. If you
want to live there and you're
comfortable with that, I would tell you
fine. But you still want to have a
brokerage account perhaps somewhere
else. You still want to have a bank
account somewhere else. And so what's
changed now is you have the 9% tax. If
you live there, you're going to pay it.
What I tell people is 9% tax. Sure, if
you're fleeing the US, if you're fleeing
the UK, Australia, Canada, 9% ain't bad.
If that's the lifestyle you want, pay
it. But understand you can live in
Ireland and pay probably half that under
the nondom regime if you structure your
company properly and you get citizenship
in five years. If you're Kevin Olri
they'll give you UAE citizenship but
most people they will not. The rumors
are that you're looking at investing
somewhere in the mid eight figures
before someone would put you up for
citizenship. And so uh listen not
everyone wants to live in Ireland. Of
course the point is there are high tax
countries where you could pay less
through certain tax incentives. uh
Malta, Cyprus, Panama, Malaysia. I mean,
we've helped our clients move to a
couple dozen of them. And so before you
go and pay 9% tax, consider the
alternative. Banks are becoming more
picky, as I mentioned. Audits are
creeping in. Substance rules are an
issue in a number of places including
Hong Kong. Again, I think perhaps it's a
bit more manageable in Hong Kong. If you
are in Dubai, if you want to have some
business in Dubai, then the substance
rules to me are rather flexible. Why
people are still going in my mind is
following the herd, the marketing of
it's tax-free, no questions asked. We
have to understand the latest
information. Uh and so where I think
there could be a use for a UAE company
is they're doing a great job at their
tax treaty network. And so particularly
for a holding company where you're
looking at investing in equities, good
tax treaties with Europe, great tax
treaties within Africa. I'm a big
believer in investing in Africa and I'm
doing more of that this year. Probably
no better holding company in my opinion
to invest in African equities uh than
the UAE. For Europe, for someone who
owns stocks and you don't want them in
your personal name, but you want them in
some sort of asset protection or trust
structure, the UEE could be a great
holding company for those European
stocks where if you create a little bit
of that substance, you're going to get a
better deal perhaps than even holding
those stocks in your own name in some
countries. and you're going to have the
estate tax and asset protection benefit
of having it in the structure. So the
UEE is a holding company uh for those
jurisdictions could be great if you have
a holding company investing in
businesses around the world. I mean
there's even a tax treaty coming on
board uh with Colombia
uh likely in the next year. So the UAE
has done a great job not only
negotiating visa-free travel for their
own passport holders, which likely won't
matter to you, but negotiating great tax
treaties. They're one of the best
negotiators in the world at going around
and becoming friends with people and
enhancing the power of what they do. If
you start a an entrepreneurial business
like let's say like Nomad Capitalist, I
don't see the advantage of a UAE company
if you're not living there. If you're
starting a passive holding company
owning shares in public equities or in
companies that you're investing in, a
Bergkshire Hathaway type setup, then it
could be a very interesting uh place to
go. So, people often misunderstand me
where, oh, he just doesn't like the UAE.
I'm going to Dubai. I'm very proud of
it. But what I'm telling you is there's
no one-sizefits-all. So, you've seen for
active business owners that are
processing credit cards, getting wires
from their clients, all of that. The UAE
has a use for some who want to live
there, not a use for the person who
wants it as a hub. For holding
companies, depending on what you own,
there may not be anything better
depending on your assets. There's always
something different. That's what we help
people figure out as our clients. Go to nomadconultus.com/apply.
nomadconultus.com/apply.
We put every service under one roof.
We're always looking to add more
services. We're always expanding our
network of people that help you as part
of our holistic service. Reduce your
personal and your business taxes for
real. Not just looking at the headline
numbers, but actually the reality.
Making sure you're compliant with your
taxes and tax treaties and how you're
leaving your country. Making sure your
company's structured properly. A lot of
people now are looking more at trusts.
Maybe your company should be set up if
you're moving it offshore in a trust
structure. Uh you can be looking at
residence. The UAE gives you that. You
should obviously be looking at
citizenship. It does not. And so there's
a whole slate of services you need to
create your own personal sovereignty
that the UAE has marketed itself for.
But you want to understand where it fits
and where it doesn't. We can help you
with that. Go to nomadc.com/apply.
We work with seven and eight figureure
entrepreneurs and investors. I'm closing
my company down because it no longer
serves as part of my structure for a
international business where I nor my
employees work in the UAE. If you want
to be in the UAE, again, that's going to
be different. But don't chase what was
good 5 years ago. Build structure around
where you live, where your customers
are, and where you want to go. And
you'll decide whether you want to set up
a company there or not. Not just because
you're following my lead or any
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