Benefits Of A UAE International Business Company
Contributed by Europe Emirates
10 April, 2015
UAE Offshore Companies are used for a variety of business purpose ranging from setting up business entities to owning overseas financial and real estate assets, inheritance planning, setting up holding companies and special purpose vehicles, ship registration and tax optimization.
Thanks to the EU Savings Directive of 2003 and recent US-EU initiatives to wipe out tax havens, the U.A.E became the better place to incorporate offshore companies for various reasons and purposes. UAE looks set to reap the rewards of a recent EU and US ruling under which banks are now forced to reveal information to tax authorities.
Financial institutions in the EU and US are now obliged to either disclose tax and bank information to the relevant tax authority, or charge client a hefty withholding tax.
New global standard will be effective by the end of 2015
A group-of-20 nations agreed to implement a global standard for automatically exchanging information between tax authorities by the end of 2015, the OECD said.
The endorsement is a step toward putting an end to "banking secrecy as we know it," Pascal Saint-Amans, director of the OECD's center for tax policy and administration, told reporters 23 February 2014 in Sydney, where G-20 finance ministers and central bankers are meeting.
A decision on the technology needed and detailed rules on how governments will swap tax data is likely to be made at a G-20 meeting in September 2014, he said. The new standard would see countries automatically exchange information gathered from their financial institutions.
Though the new directive specifically affects EU residents, a number of banks in tax havens have also agreed to exchange customer information, including Jersey, Guernsey, the Isle of Man, the Cayman Islands, Switzerland, Liechtenstein, Monaco and San Marino.
The reputation of discretion for some of these countries is being eroded. Since July 1, 2005 in order to keep details of their private, bank customers now have the option of paying a withholding tax, which will be levied directly in the country in which their savings are held. This will be charged at a rate of 15 percent for the first three years, 20 percent for the following three years, and 35 percent from 2011 onwards.
The United Arab Emirates enjoys a reputation as a secure, tax-free jurisdiction for international banking and company incorporation.
With this latest development from Europe and the US, UAE company registration and corporate and personal banking options are becoming even more popular with international businesses and high net worth individuals.
Since the UAE are neither a signatory to the relevant directive, nor agreeing to cooperate with the Organization of Economic Cooperation and Development (OECD), it looks set again even further.
The uniqueness of the UAE as opposed to other financial and offshore centers lies in the following
- 100% foreign ownership
- Banking Secrecy Guaranteed by Law
- No Public Registry
- 100% exempt from all corporate and income taxes.
- There are no foreign currency restrictions.
- Full repatriation of the offshore companies profits and capital is allowed.
- The setting-up costs are less that of an onshore company.
- There is no onshore office and accordingly, there are no employees and related costs.
- No share capital is required to set-up an offshore company.
- The offshore company can act as a Holding.
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