United Arab Emirates (UAE) is a federation, which comprises seven emirates - absolute monarchies: Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Ras al-Khaimah, Fujairah. The UAE are among the world leading economic and financial centers and it is focusing on the attraction of a number of foreign investments. Therefore the UAE have developed very comfortable and favorable business environment within the country.
Business registration in the UAE:
It is possible to carry out commercial activity in the UAE through a company registration, which could have the following forms:
- Local company (51% shares ownership must belong to the UAE citizens or legal entities owned by UAE citizens) – local company is not territorially restricted;
- Free-zones company (a company is allowed to carry out its business only within particular free-zone and/or outside the UAE territory);
- Offshore company (JAFZA offshore, RAK ICC, Ajman Offshore) – is prohibited to carry out its business inside the UAE territory, but is allowed to open a bank account in a local bank).
Our qualified team provides services for a company establishment, assistance with all legal matters related to its activity and the fulfilment of its financial/accounting obligations according to the UAE legislation.
Tax types and rates:
- Corporation Tax – 0%;
- WHT – 0%;
- Payroll tax – 0%;
- VAT – 5% (0% rate is applicable in some cases).*
*In the UAE VAT was introduced from the 1 January 2018 with the standard rate of 5%. VAT is levied on the sum of exported goods and services, as well as of imported. Some exemptions from VAT are allowed and the 0% rate is applicable.
VAT registration is mandatory if the following conditions are met:
- The place of registration and management of legal entity is the UAE (or the other State-party to the Gulf Cooperation Council) or the legal entity carries out its business in the UAE (or in other State-party to the GCC) and
- Annual turnover is over 375.000 AED or is expected to exceed 375.000 AED during the following 30 days.
The fine for non-compliance with the local legislation, including non-registration when it is required or late registration, is 20.000 AED. Our specialists are ready to assist with preparation and filing the VAT reports for your company.
Advantages for business in the UAE:
- The corporation tax 0%;
- 100% foreign capital is allowed, a local sponsor is not required (if not a “local” type of company);
- Annual audit is not mandatory (except of “local” companies and companies incorporated in some free-zones);
- High level of personal data and company information confidentiality ;
- The possibility to conduct business and live in the UAE as well as open bank accounts in local banks without legalization of corporate documents (except of offshore companies);
- The right to apply for resident visa for shareholders and managers of a company**
- The possibility to obtain tax residence certificate for the DTAs purposes (applicable for “local” and free-zones registered companies)***
** The UAE resident visa can be issued to a natural non-resident person upon real-estate purchase or the FZ company ownership. It could be valid up to 3-years term and can be prolonged after the expiration date. A resident visa holder is eligible to stay and work in the UAE on the permanent basis.
*** The tax resident certificate can be granted for an individual and legal entity.
Requirements to obtain a tax residence certificate for individual:
- A person has a resident visa valid at least for 6 months
- Stay on the UAE territory at least for 180 days
- Has a valid bank account which is used for regular payments (for example salary payments)
- Has place of residence in the UAE
Requirements to obtain a tax residence certificate for legal persons (FZ companies):
- A company is active at least for 1 year;
- Has an office in the UAE (real office or flexi-desk facilities);
- A shareholder, director and/or manager have valid resident visas
- Confirmation of business operating (bank account statement,audit for the last year)
Please note that it is impossible to obtain a tax residence certificate for a few countries simultaneously as well as without referring to a country of income origin. During a year one company can obtain only one certificate valid for a particular country.
