A business without taxes — not clickbait, but an entirely realistic scenario. It is especially feasible for those living in the UAE and deciding to conduct business through a legal entity in the USA. In this article, we share how this structure works and why it is becoming increasingly popular among entrepreneurs.
To run a tax-free business, you need to open an LLC (Limited Liability Company) in the USA.
This is beneficial for several reasons:
- The registration cost for an LLC is approximately $1500, including a fast EIN and opening a bank account, and it can be done entirely remotely. An LLC with a foreign owner is not subject to U.S. taxes as long as the company has no office or employees in the United States. You can also open a business account remotely in both online (neo) banks and traditional banks such as Bank of America or Chase, facilitating the management of international financial operations.
- Anyone who resides in a country not on the sanctions list can open an LLC in the USA. Therefore, if you are a citizen of Russia but a resident of Georgia, Spain, Israel, the UAE, or any other non-sanctioned country, you can easily conduct business in the USA — establish an LLC and open business accounts.
- For those who wish to run a business and are residents of the UAE, the tax conditions are even more appealing: the UAE has no personal income tax. This means that when you transfer your profit from the American company to yourself, it will not be taxed. No tax in the USA (if there is no office and employees in the USA) on the legal entity and no tax in the UAE on the individual — do you see the benefit?
This approach allows for completely legal tax avoidance and accumulation of profit in the American company, which can then be transferred as personal income, creating ideal conditions for running an international business.
What if you already have a business in the UAE? Should you shut it down?
Your company in the UAE can become “dormant,” generating no income and used solely for obtaining a visa and residency, while all business operations are conducted in the USA. This allows you to leverage the benefits of both jurisdictions while minimizing tax obligations.
Are there any pitfalls?
At first glance, no, but of course, everything depends on the specifics of your business. Schedule a free consultation with Konstantin Kharitonov, the founder of ptc.tax, to learn how to optimize your business specifically.
