Given that businesses operating in the local UAE market are highly profitable, the introduction of VAT has had a negligible impact on the business community. At the same time, many types of business in the Emirates are not affected at all and VAT is not applicable to a large number of foreign and local companies. Find out which areas of activity have received state support and an exemption from 5% VAT, and what unique opportunities are open to investors as well as the many advantages they can enjoy.
Business areas not affected by the introduction of VAT
International trade and service businessactivities with foreign counterparties through a company that is incorporated and operating in the UAE
Investing own funds in securities on globalmarkets, contributing to the authorized funds of foreign companies, purchasing and selling assets
Holdings created in the UAE to hide theultimate beneficiary, and interconnected structures under a single management in the form of ‘tax groups’
Investment supplies of precious metalswithin the UAE and their import. This applies to gold, silver, platinum in the form of ingots with a purity of 99%
Direct and indirect deliveries from the UAE tocountries other than the Persian Gulf countries, including through the UAE’s Free Trade Zones
Purchase, sale and lease of apartments andhouses in the UAE within 3 years from the date of their commissioning, and land plots without buildings
Many investors mistakenly assume that taxation depends on where the company was incorporated and choose Free Trade Zones, believing that activities outside the FTZ will be taxed. This is a misconception, since the tax system applies both to the FTZ and to the rest of the country. Having said that, Mainland (local) companies are a more flexible and creditable tool for doing business without restrictions
VAT reporting in the UAE
- Quarterly submission of reports to the FTA (Federal Tax Authority)
- Monthly submission - for a large number of bank account transactions
- Submission of tax reports and timely payment of VAT due
- Submission of tax invoices to clients upon the provision of the service
The basis for calculating value added tax in the United Arab Emirates is the difference between outgoing and incoming VAT. That is, the amount of value added tax can be calculated using the formula: "VAT on sales" (charged by the company to consumers) minus "VAT on purchases" (paid by the company when purchasing goods or services for subsequent use) is equal to "VAT payable to the FTA".
What benefits do taxpayers get in the UAE?
It is automatically assigned during taxregistration and guarantees protection against deoffshorization trends
All TRN number holders can apply for taxresident status and receive Information Exchange Protection (CRS)
Participation in tenders
Candidates from a jurisdiction that generatesa high degree of trust in commercial and state competitions, entry to international bids
High credibility in the eyes of foreigncounterparties and financial institutions, support of UAE banks and credit institutions
Creating a cash and settlement center
Optimization of the operational activities ofthe entire international business with central calculation of taxes
Covering mutual protection of investmentsand avoidance of double taxation, including the common customs space of GCC countries
The UAE government is doing everything to protect international business from global pressure. The introduction of VAT is one such measure. By introducing VAT, the UAE eliminated the risk of becoming the object of another international wrangle against tax-free jurisdictions, thereby guaranteeing geopolitical stability for its markets.
Things to take into account when registering
Grounds for registration
Understanding the business environment is thekey to the success of your business in the UAE
When choosing a service company, you should look for a highlytrustworthy organization that understands your business and knows how to use all the advantages of the jurisdiction to achieve your goals
SORP specialists will help you resolve all issueswith organizing your business in the UAE
Preparing a businessmodel
We will choose the mostappropriate license and type of legal entity
Setting upa business
Fast incorporation through ourlong-standing close cooperation with licensing authorities
Tax registrationwith the FTA
Registering for VAT with the FTAand obtaining a TRN number to provide credibility for your business
Cost-effective office rental in SORPbusiness center for employees and licensing procedures
Close cooperation with UAEbanks, assistance in passing KYC procedures
Local partneror agent
Nominee service from SORPInvestment LLC with waiver of rights in the Dubai Court
The UAE is an ideal base for your business
The country's high standing in the eyes of the international community allows companies incorporated here to enjoy the support of banks and financial institutions, international partners or counterparties. Foreign businesses receive state support in priority sectors on a par with local entrepreneurs.
The UAE government has declared support for free movement of capital and the complete absence of currency controls and restrictions on the size of bank transactions or payments in the national currency. The UAE is the most attractive settlement center for international transactions
Apart from the 5% VAT rate on a number of domestic goods and services, there are no major corporate or personal income taxes in the UAE. Any business owner can obtain the status of a tax resident and protect themselves from the automatic exchange of tax information
The UAE tops the ratings
The United Arab Emirates ranks second in the world in terms of financial freedom, first in terms of ease of taxation, 16th among the easiest countries to do business, and 5th in terms of international trade. In the ranking of global competitiveness, the Emirates ranked 9th and 10th in the logistics and infrastructure development index among all countries of the world.
The UAE is an international trade hub and a recognized logistics center due to its ideal geographical location at the intersection of Europe, Africa and Asia. The highly developed transport network allows you to quickly receive and conveniently store, ship and transport goods within the country and abroad.
The CORP Group of Companies provides the widest possible range of consulting services in the United Arab Emirates. As experts in the analysis and selection of business strategies in the UAE, we will tell you how to implement your idea most effectively and quickly. We provide our clients with recommendations on choosing the best jurisdiction in which to incorporate and ensure you avoid the typical mistakes people make when setting up a business here.
SORP Group will become your reliable long-termbusiness partner in the UAE
A leading consulting group that provides a full range of services for the incorporation, support and management of businesses in theUAE and abroad. We have an impeccable reputation, extensive capabilities and a very solid asset base.
SORP offers comprehensive support for acquired companies and their shareholders: from licensing, maintaining Bank accounts to obtaining the status of a tax resident of the country
Your requirements are unique. That is why we treat every business individually to tailor the right services to achieve your priorities.
15 years of successful work
We have helped thousands of clients acquire, build and develop businesses in the UAE
Assistance in choosing a bank that is suitable for your purposes, support with bank accounts opening and passing KYC procedures (know your customer).