In the summer of 2023, a new corporate tax comes into force in the UAE, which obliges local companies to pay corporate tax at a tax rate 9%.
Moreover, currently local companies already pay VAT at a tax rate of 5% on transactions within the UAE.
Under these conditions, we have a reasonable question: why, with such a high level of corporate taxation, entrepreneurs call this place a tax heaven.
The answer is very simple: in each Emirate there are special free zones in which resident companies have a full tax exemption if two main conditions are met:
- The company must have an economic presence in the free zone (have an office and staff).
- All business activities must not be conducted in UAE mainland.
Thus, if your business is related to international transactions, you provide services or conduct trade activities, this solution may be ideal. You can use all the money from tax savings to improve your business, make your wages more competitive (because you do not have pay payroll tax in the UAE), promote your products or services, etc.
Our company SGC Middle East offers a range of services for the creation and support your company in the UAE. We will help you chose the right free zone and make integrate you new company into an existing legal structure without tax risks in your country.
We have been operating in Middle East market for more than 10 years and accompany our clients in the procedure of registration, opening bank accounts, accounting, tax and labor consulting.
