Start a company in UAE to save on Taxes
UAE has a company formation setup process that caters to the requirements of investors who are looking to save taxes, as UAE has rules in place that enables it to charge fewer taxes from both the residents and foreign investors. As a result, foreign investors choose UAE as a location for their business set up to save on taxes.
UAE offers two main locations for the investor to set up the business, which is the mainland and freezone. Both jurisdictions are governed by a different set of rules and accordingly the taxes are charged from the investors. UAE charges very few taxes and some of the taxes charged include value-added tax of 5%, excise taxes for some of the selected commodities like energy drinks, and tobacco products.
UAE also charges minimal tourism and municipality tax on hotels. Further UAE has a tax regime that only charges corporate tax from foreign banks and oil companies. UAE as a country is free from various kinds of taxes that are charged in other countries, which mainly include income tax, no tax on capital gains, no tax on property sale, and no inheritance tax.
Thus UAE as a business location is ever attractive to the investors to save on taxes while deciding to start a business setup in UAE. Many factors make UAE aheaven for the investors and drive them to choose the country as a location to set up their business.
The various factors that come play an important role in all this are outlined below
- Process of business setup is easy as the government provides continuous support to investors not only to minimize the burden of taxes on them but also to provide them with other facilities as well. •
- The UAE has put in place a world-class infrastructure to lure the investors along with putting in place one of the friendliest tax regimes of the world. •
- UAE is a tax haven for investors as they have to the very minimal amount in the taxes while operating both at the local and global level. This is mainly because UAE has signed several agreements with other countries that result in huge tax savings for the investor in the UAE. •
- Waiver in custom duties and free trade agreements has made UAE as one of the most sought destinations among the investors. •
- Further UAE has put in place a double taxation treaty with 94 countries to avoid taxes on overseas investment. A double taxation agreement is put in place to promote cross border trade and ensure investment flows into the country. Thereby it helps in protecting taxpayers from double taxation; as a result, attracts more investment into the country. •
- UAE as a country has on offer various niche market trends, as it offers several liberal policies in different industrial sectors, which in turn helps to attract a huge number of investors into the country. UAE has put in many friendly measures like 100% foreign ownership and 100% profit repatriation without charging any taxes.
The factors outlined above play a major role in attracting investors as they are at the benefit of saving lots of taxes which are otherwise charged in other countries. UAE has put in place various policies that ensure investors feel comfortable in investing within the country and also helps them save on taxes in UAE while deciding to start any business setup.
Although UAE charges several taxes like excise tax, customs tax, municipality tax, corporate tax, the amount charged for these taxes is minimal such that investors don’t feel it as an extra burden to pay these taxes. Among the taxes various kinds of taxes are charged on a few of the business setups that fulfill certain conditions, thus making UAE a more attractive proposition among the investors to start a company to save on taxes.
Further UAE has kept the option of choosing from different jurisdictions for an investor. If an investor decides to set up a company in mainland Dubai, it will save him the burden of taxes even though minimal taxes are to be paid while as on the other hand the option of Freezones for an investor to set up a company will save almost 100% of different taxes that may otherwise be levied in other countries.
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