Activities that receive preferential state treatment
in the UAE

Find out which business activities are VAT-exempt, what you need to know about the UAE VAT
system, and what benefits you will enjoy by starting your business in the region's largest financial
hub.

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SORP.AE

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

Economic activity
abroad
International trade and service business activities with foreign counterparties through a company that is incorporated and operating in the UAE
Investment
activity
Investing own funds in securities on global markets, contributing to the authorized funds of foreign companies, purchasing and selling assets
Tax
groups
Holdings created in the UAE to hide the ultimate beneficiary, and interconnected structures under a single management in the form of ‘tax groups’
Precious
metals
Investment supplies of precious metals within the UAE and their import. This applies to gold, silver, platinum in the form of ingots with a purity of 99%
Export
and re-export
Direct and indirect deliveries from the UAE to countries other than the Persian Gulf countries, including through the UAE’s Free Trade Zones
Real estate
transactions
Purchase, sale and lease of apartments and houses 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

If you are confident in the prospects of your business in Emirates market, act quickly. Incorporate, obtain a license, open a bank account and office. Only having established a presence in the UAE market will you find your "anchor customer".

Voluntary
VAT registration
Turnover exceeding

185 000dirham

Mandatory
VAT registration
Turnover exceeding

375 000dirham

Reporting
frequency
  • Quarterly submission of reports to the FTA (Federal Tax Authority)
  • Monthly submission - for a large number of bank account transactions
Responsibilities
of taxpayers
  • 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?

Onshore status
It is automatically assigned during tax registration and guarantees protection against deoffshorization trends
Tax Residency
All TRN number holders can apply for tax resident status and receive Information Exchange Protection (CRS)
Participation in tenders
Candidates from a jurisdiction that generates a high degree of trust in commercial and state competitions, entry to international bids
Prestige
High credibility in the eyes of foreign counterparties and financial institutions, support of UAE banks and credit institutions
Creating a cash and settlement center
Optimization of the operational activities of the entire international business with central calculation of taxes
International agreements
Covering mutual protection of investments and 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.

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Things to take into account when registering

TAX Group

To form a Tax Group, members must be residents of the Emirates and operate related businesses. Such a group can submit consolidated financial statements to the Federal Tax Authority and receive a single taxpayer number.

TRN number

They are awarded to onshore(mainland) companies that operate in Dubai and are registered with the FTA. In addition to the advantages of jurisdiction, a TRN having protects against the payment of an “offshore fee” by counterparties and from “withholding tax".

Grounds for registration

Even if your business activity is amongst those that enjoy preferential rates or are exempt from VAT, you still need to register as a taxpayer, get a TRN number and a certificate confirming the exemption from tax obligations.

Bookkeeping

Despite the fact that there is no requirement for mandatory accounting in the UAE, all companies are legally required to submit financial reports and keep primary documentation for 5 years.

Understanding the business environment is the key to the success of your business in the UAE

When choosing a service company, you should look for a highly trustworthy organization that understands your business and knows how to use all the advantages of the jurisdiction to achieve your goals

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SORP specialists will help you resolve all issues with organizing your business in the UAE

Preparing a business model
We will choose the most appropriate license and type of legal entity
Setting up a business
Fast incorporation through our long-standing close cooperation with licensing authorities
Tax registration with the FTA
Registering for VAT with the FTA and obtaining a TRN number to provide credibility for your business
Dubai business address
Cost-effective office rental in SORP business center for employees and licensing procedures
Opening bank accounts
Close cooperation with UAE banks, assistance in passing KYC procedures
Local partner or agent
Nominee service from SORP Investment LLC with waiver of rights in the Dubai Court

The UAE is an ideal base for your business

International recognition
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.
Financial freedom
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
Tax advantages
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.
Superb location
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-term business partner in the UAE

We are the UAE’s leading consulting group providing a full range of services for the incorporation, support and management of business in the UAE and abroad. We have an impeccable reputation, broad capabilities and deep asset base.

Expert status

Tap into our specialist expertise and proven formula for organizing manufacturing businesses. Benefit from our knowledge, processes and tools for solving challenges

SORP Business Center

A prestigious address based on our business Center in Dubai will confirm the reputation of a reliable counterparty for your clients and partners

Integrated approach

Creating a secure structure, legal and secretarial support, confirmation of the control center, and much more on the Sorp Group platform

15 years of experience

Expert knowledge in opening and supporting companies working in any field of business activities