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How to increase your Tax Savings by Company Formation in the UAE - for Foreign Investors

Contributed by Aurion
29 April, 2020

Most of the overseas investors are choosing UAE for increasing tax savings.

UAE only has a 5% Value Added Tax (VAT) and no other taxes. For Oil and Foreign banks, there is a Corporate Tax levied by the UAE Government.

Why is Company Formation in UAE a Lucrative Option for Foreign Investors?

Company formation in UAE is a lucrative investment solution for international investors from the United Kingdom (UK), United States (US) and other higher tax paying countries of the world.

UAE has zero taxation for corporate and personal income. Hence, setting up of company in the Free Trade Zones of UAE will entitle you for:

  • 100% Foreign Ownership,
  • No Corporate or Income Tax
  • 100% Profit Repatriation
  • Zero Customs Duty, and,
  • World-Class Business Infrastructure.

What are the options for Overseas investors from UK or US set up business in UAE?

Overseas investors from the UK or US have multiple options to set up their business here in the UAE

  1. Business Setup in UAE Free Zones
  2. Company Registration in UAE Mainland
  3. Company formation in UAE Offshore

In the three options available for company formation, the easiest and quickest way of setting up a business in the UAE is in any of the 40+ Free Trade Zones of UAE.

Free Zones of UAE - The Ideal Choice for Company Formation

A business that is already operational overseas can set up a branch company or a 100% subsidiary of the parent company in UAE with the same company name.

This option is but a lot more complicated and time-consuming with a lot of Ministry and Embassy level document attestations from the home country as well as in the UAE.

Hence, the Free Zone Company Setup is the best available option to proceed for hassle-free company setup.

Double Taxation Avoidance Agreement (DTAA) Treaty

Companies and High-Net-Worth Individuals (HNIs) operating and residing in UAE can opt for the benefits from the Double Taxation Avoidance Agreement Treaty signed by UAE with 70+ Countries.

The Companies that are one-year-old and Individuals (HNIs) who have resided in UAE for more than 180 days can apply for the Tax Residency Certificate from the Ministry of Finance.

It will enable companies to prove their residence in UAE and avoid double taxation from their home country on the revenue generated in the UAE.

To know more about how to apply for a Tax Residency Certificate, read: Tax Residency Certificate

Company formation in the UAE Free Zones

The free zones of UAE offer a wide range of business activities, business setup package, and a host of business benefits for the investors.

Based on the nature of the business activity, company structure, shareholders, business process the right free zone has to be chosen to ensure continued business operations.

For example, if the company in into international trade and the main transport link is via Seaports, it is ideal for the company to be registered in the Free Zone that has proximity to the Seaport.  

Company Formation in UAE Freezones - Various Options Available

Hamriyah Free Zone or Ajman Free Zone would be a cost-effective solution for such business establishment.

These Free Zones have:

  • Warehouse Facilities,
  • Other logistics support Systems
  • Dedicated Customs Checking, etc.

The Freezones of UAE makes the business operations streamlined and easy.

Similarly, there are specific Free Zones available in the UAE for your business activity.

Experienced Business Consultants would guide you with the right option for successful company setup.

Choosing the right Free Zone is Critical

Choosing the right Free Zone for your business is critical and will help you achieve business profitability soon by reducing expenses and enhancing productivity.

The Free Zones of UAE comes with a host of business benefits for the investors.

The Free Zones offer the investors top-class infrastructure, technology support, and an all-in-one platform to easily start the business running from the first day.

There is additional support like 24/7 security, free Wi-Fi, meeting rooms, seminars, recreational spaces, and more.

Business Opportunities in UAE for foreign Investors

There is a huge potential for overseas investors to gain benefits from venturing into these industry sectors.

  • Real Estate
  • Retail
  • Financial Services
  • Tourism
  • Research and development
  • Innovation

As Dubai is aiming to further diversify its economy and reduce the dependence on oil and gas, new emerging sectors like smart transportation, sustainable energy, and information technology industries are the future.

UAE is aimed at promoting and introducing innovative offerings, latest technology, and best practices across the world.

UAE is gearing to establishing a sustainable business ecosystem in the future that will limit the environmental harms and reduce carbon footprints.

Rising Industry Sectors in the UAE

The exceptional government support, business ecosystem, availability of skilled labor, global connectivity, etc., is making UAE the perfect business center of the world.

UAE will be one of the major hubs for international business in the coming years and a lot of infrastructure projects and business investments are in line.

UAE has emerged as a Popular Trading Center of the World

The trading sector is one of the most popular industries in Dubai aside from the emerging ones.

From retail commodities to industrial equipment, UAE is one of the largest trading centers in the world.

The exceptional transportation links, international airports, and seaports are connecting UAE with the rest of the world.

Thus UAE is the perfect platform to facilities your trading business and expands to the world easily.

The shopping, logistics and distribution network of the UAE ports are sophisticated to drive large volumes of international trade.

Interested in Company Formation in the UAE to increase tax savings, talk to our expert consultants right away!

Contact: Aurion Business Consultants


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