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Why Millionaire CEOs Choose UAE for Tax Optimization
If your business is doing well already, read this.
872 Words | 3 min 37 Sec Read
Welcome to another issue of Passionate Income.
Today we’ll be discussing the top six reasons millionaire CEOs are setting up a business presence in the UAE.
Sure, most people associate Dubai with supercars, influencers and melting heat. If you dig deeper, however, setting up shop in the United Arab Emirates offers a variety of wealth protection and tax benefits.
Which, if you’re business is doing well already, could be highly attractive.
After a recent interview with a variety of 7-8 figure producing CEOs, here are the top six reasons they gave for establishing a business presence there.
#1 - Geographic Diversification 🌍
Most anyone with a decent net worth understands the importance of diversifying their assets inside their home country.
But doing so fails to take geopolitical risk into account.
From Argentina in the 1980s to Turkey’s currently ongoing collapse, there are countless examples of successful individuals whose purchasing power has dropped by 90-95%.
One could argue most of these happen in developing and 3rd world countries, so business owners in the West shouldn’t have to worry.
But remember: Prior to its collapse, Argentina was an international powerhouse.
And with US government debt spiraling out of control, many macro-analysts believe an inflation driven currency collapse is likely to happen before 2030.
#2 - Asset Protection 💰
Once again, it’s similar to see asset seizures as something that only happen in third world or developing countries. A good example being Lebanon’s 2022 bank account freezes.
But as we saw with the Canada trucker protest last year, first world governments are in fact capable of freezing their citizens’ accounts (with no due process and no immediate recourse).
On the flip side, your home country’s government has zero authority over a foreign country’s banking system. And because of that, holding a portion of your wealth in a (politically stable) foreign country provides a massive layer of security in the event of a black swan / emergency.
#3 - Better Interest Rates 📈
As of today, the average APY in a US-based savings account is a measly 0.57%. That’s $5,700 for every million you give the bankers (which they then lend out nine times over to make huge profits). However…
When you go overseas, it’s common to earn much higher interest rates.
As an example, UAE-baesd Enterprise Growth Partners help their clients find interest-bearing savings accounts that pay as much as an 18% APY.
4 - Currency Diversification 💶
As you may or may not know, the US dollar - traded on the stock market using the symbol $DXY - is down 10% since it’s September 2022 high.
At the same time, the Euro and Pound are up against the dollar anywhere from 12 to 20% over that same time span.
Long story short, while 99% of Average Joes bank in their home currency, investing into a diversified basket of currencies can bring outsized returns. And with the US govt. having no choice but to print more money to pay for its outsized spending, it’s likely the dollar declines over time.
5 - Banking Security 🔐
During the Great Recession of 2009, a whopping 372 Americans banks failed within one year. And it wasn’t just the US.
The same happened in the UK, Germany, Australia, Andorra and Panama.
Sady, the FDIC (department of the American government responsible for insuring bank deposits) only has $128B on hand despite there being well over $11 trillion in deposits. Meaning, if there was an actual banking crisis in the US, most people would totally effed.
On the flip side, many foreign countries (like the UAE) practice responsible banking. And because of that, deposits in their banks are actually safe.
6 - Tax Optimization 📉
Yesterday I saw a breakdown on Instagram showing how an entrepreneur making $1.5mm per year in California would pay 50% in taxes!
While taxes fluctuate dramatically, the sad reality is that first world countries - and especially the ones in Europe - charge some of the highest taxes in the world.
On the flip side, countries like the UAE offer a variety of No Tax and Low Tax benefits to attract wealth into their young and growing economies.
Today’s post was sponsored by Enterprise Growth Partners, a UAE-based wealth protection and tax optimization firm.
From now through the end of the year, EGP is offering free consultations to explain how you can establish a tax free business entity (and multi-currency foreign bank account) in Dubai / the UAE in the just 14 days.
And the best part: You can potentially mitigate your 2023 tax bill by getting set up before the end of the year.
💡 Takeaway: While first world countries offer the most economic opportunity, they also penalize their citizens with the highest taxes. By taking advantage of legal wealth protection and tax optimization strategies, however, savvy entrepreneurs can hit their financial goals faster.
I'll leave you with this quote…
"One thing is clear: The Founding Fathers never intended a nation where citizens would pay nearly half of everything they earn to the government.”
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