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Top Questions When Selecting a Global PEO Providers
  • Article, Global

The Top Questions When Selecting a Global PEO Providers

So, in order to assist you in your global expansion efforts, you have chosen to work with a global PEO (Professional Employer Organization). That’s a great initial step but roll up your sleeves because the journey ahead is not as easy as this step. Now you should concentrate on getting the PEO Partner, which is best suitable for you, which should be a trustworthy partner who will strengthen your company’s reputation.

Selecting the correct PEOs plays an important role when it comes to streamlining your expansion in new areas. If you are successful in this step, then you’ll be able to lower employee turnover, significantly decrease costs, quickly expand your organization, and most importantly will be able to carry on your business without any interruptions.

Then comes the question of choosing which PEO will supplement your growth, as there are so many?

This is where we can come for your assistance in finding the best PEO in Dubai. We have enumerated 5 questions that one must ask himself before making the move on selecting the best PEO Services in Dubai. So without any further ado, let’s begin!

What kind of support do they provide, first?

  • Will your PEO be there for you if you need assistance with an HR issue?
  • Do you need to reach out to a call centre or can the PEO company send someone to meet you in person? Will your organization’s needs be met by the same committed team, or for each time when there is a new problem, you deal with a different person?
  • What HR or business processes can they handle?

Payroll management, providing employee benefits, assisting clients with compliance, and managing routine HR tasks like onboarding paperwork are all core PEO services. Some PEOs, however, take on additional tasks.

You can locate a PEO that provides services in a variety of areas, from hiring and employee training to workplace safety and performance evaluations, if you require them. Consider the advantages and disadvantages of hiring internally versus outsourcing before committing to these extra services.

What HR procedures do I contract out?

It can be challenging to remember which tasks your internal HR team should take care of and which ones you should delegate to a PEO when you divide your HR duties among them. Is it the PEO’s responsibility to ensure that employees register on time for benefits, for instance, or do you have to take care of that yourself?

To determine how many internal HR employees you’ll need to manage the remainder, ask the PEO precisely what services they provide.

What software do they use for payroll?

Payroll Services in Dubai and other HR technology should be offered by your PEO. One advantage is that you will have access to the most recent technology.

It’s important to consider whether you and your HR team will feel comfortable learning and using this technology because you and they will need to use it frequently. Do they provide a comparable service? To make sure the technology is suitable for your team before enrolling, ask if you can test it out first.

Don’t wait until you’re already bound by a contract before you realise you might be working for the wrong company. You can find the best partner for your workforce by inquiring the aforementioned five questions of prospective PEOs beforehand.

Conclusion

In addition to being expensive, running a business frequently requires spending too much time on time-consuming tasks. Because of this, an increasing number of companies are using PEOs (Professional Employer Organizations) to outsource tasks like payroll, risk management, and HR (human resources) for Global Mobility Services. But if you don’t ask the right question, it can be difficult to find the right PEO. Contact us right away if you have any questions; we have all the answers!

FAQ’s

What assistance do you offer in helping us draft employment contracts that are acceptable and legal?

The Global PEO should be aware of the particulars of the hire, as well as the nation, and should provide your team with best practises recommendations.

What kind of technology does PEO provide?

In the end, you select an HR solution in order to simplify your life. The platform must be simple to use for the solution to be effective.

What HR or business processes can they handle?

Payroll management, providing employee benefits, assisting clients with compliance, and managing routine HR tasks like onboarding paperwork are all core PEO services. Some PEOs, however, take on additional tasks.

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How To Calculate Your UAE Corporate Tax Liability
  • Article, U.A.E

How To Calculate Your UAE Corporate Tax Liability?

Overview

To get better prepared for the UAE corporate tax regime, calculation of the final amount of the Corporate Tax (CT) payable for a financial year must be learnt and clearly understood by all businesses. Compliance to CT is vital for companies and a well reputed professional Corporate tax advisory in Dubai, UAE can provide effective tax solutions to help companies comply with CT requirements. With all the needed expertise and knowledge, such tax consultants can help calculate CT payable very accurately with all applicable tax incentives e.g. deductions, exemptions in perspective and save money for the companies.

Though the final print of UAE CT as a set of regulations or laws is yet to be officially published, businesses can refer to the Public Consultation Document that provides information on the major aspects of CT. Final tax related decisions however must be made after official announcement of CT laws. The final amount of CT payable for an assessment year will be determined from the taxable income for the relevant financial year.

The Proposed Tax Bracket

As announced by the UAE Ministry of Finance (MOF), Corporate Tax in UAE will apply at a standard rate of 9% with the below mentioned tax brackets and rates:

  • 0% for taxable income up to AED 375,000
  • 9% for taxable income above AED 375,000
  • A different and possibly higher tax rate which is not yet specified for large multinationals fulfilling certain specific criteria

Method of CT Payable Calculation

The Public Consultation Document issued in April 2022 by the MOF has outlined a method for calculating the CT payable for a financial year. Businesses can seek additional information and advice from a reputed Dubai based professional tax consultant, IMC Group to accurately evaluate the CT liability as specified in the consultation document.

The 9 % CT will be imposed on businesses only if the taxable value exceeds AED 375,000. CT in UAE is calculated at a flat 9% rate of the net profit shown in the company’s financial statements after deducting all applicable deductions and excluding the exempted income. Any taxes paid in overseas jurisdictions will also be allowed for reduction from the profit shown in the financial statement. The net profit derived after all deductions will be considered as taxable income.

Hence, all applicable deductions when subtracted from the net profit will give the net income. When the exempt income of AED 375,000 is deducted from this net income, we can arrive at the taxable income. CT @ 9% on this taxable income will give the final tax liability. Foreign Tax Credit, if any when subtracted from this final tax liability, will give the Final CT Payable.

UAE CT will apply to UAE resident companies on their global income including overseas income which may be subject to a similar tax like UAE CT in another jurisdiction outside of UAE. The proposed UAE CT regime, for avoiding double taxation, will allow a credit for the tax paid in an overseas jurisdiction on the foreign sourced income against the UAE CT liability as a foreign tax credit.

The maximum Foreign Tax Credit that can be availed will be determined by the amount of tax that is paid in the foreign jurisdiction; or the UAE CT payable on the foreign sourced income and whichever is lower.

Unutilised Foreign Tax Credit, if any can not be carried forward or adjusted back to other tax periods. The Federal-Tax-Authority (FTA) will not refund any unutilised Foreign Tax Credit.

UAE Corporate Tax Relief for Small Businesses

The corporate tax regime involves a certain level of complexity which is unavoidable, especially in a diversified economy like the UAE. However, the UAE government has made provisions to keep the UAE corporate tax regime as simple as possible, which may help businesses to minimise their compliance costs. In line with this policy, the UAE corporate tax regime will provide relief for small businesses in the form of simplified financial and tax reporting obligations. The provision for small business relief is significant as the relative burden of tax compliance is disproportionately higher for small and medium-sized businesses across the world. Small business owners can consult with corporate tax advisors in Dubai to know further about the relief for small businesses under the corporate tax regime.

Hire the Best Corporate Tax Consultants in Dubai, UAE

Corporate tax agents in Dubai such as Jitendra Chartered Accountants (JCA) can advise business owners on critical tax matters such as the calculation of payable tax. JCA has a team of corporate tax advisors in Dubai who can help the businesses to comply with such complex provisions in the corporate tax regime.

Our services at JCA as Corporate Tax Consultants include CT Assessment & Advisory Services (one-time or retainer basis), CT Compliance Services & CT Agent Services to Represent to Federal Tax Authority (FTA) of UAE in case of any notices served by FTA. Ensure corporate tax compliance and avoid relevant penalties by availing of JCA’s corporate tax services in Dubai, UAE. JCA offers customised tax solutions to allow businesses to comply with the UAE corporate tax hassle-free.

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What are the Exempt Income Categories Under UAE Corporate Tax Regime?
  • Article, U.A.E

What are the Exempt Income Categories Under UAE Corporate Tax Regime?

Overview

The UAE Corporate Tax (CT) regime, as per the Public Consultation Document released by the Ministry of Finance (MOF) on 28 April 2022 proposes to exempt certain forms of income from taxation to prevent incidences of double taxation.

For the UAE-based companies, the Income generated from investments in other companies and income earned from operations undertaken outside the UAE, either through foreign subsidiaries or foreign branches is primarily exempted from UAE CT.

The exempt income scheme to be administered by the Federal Tax Authority shall include participation exemption or similar principles followed in international markets.

Exempt Incomes Under UAE CT

The following income shall be in general exempt from income tax. There will be no UAE withholding tax on domestic and cross-border payments.

Dividend Income

UAE companies earning dividend income from their qualifying shareholding shall not be liable to pay income tax. This would help prevent double taxation as profit money paid as dividends are already taxed once. All the domestic dividends earned from UAE companies will be CT exempt including dividends paid by a Free Zone entity enjoying CT holidays.
Dividend incomes from foreign companies will also be CT-exempt.

Capital Gains

UAE corporate shareholders will be exempted from CT on capital gains earned from the sale of shares of a subsidiary company as it would avoid double taxation of corporate profits.

Capital gains from the sale of shares in a Free Zone Person will be exempt from corporate tax in the event of the Free Zone Person being a holding company and most of its income being earned from shareholdings in subsidiary companies.

Capital gains from the sale of shares in both UAE companies and foreign companies are CT exempt subject to fulfilling certain conditions such as the UAE shareholder company owning a minimum of 5% of the shares of the subsidiary company and the CT rate of foreign companies being at least 9%.

Profit of Foreign Branch

UAE companies can avail of CT exemption either through the credit method or through the exemption method. They can claim a foreign tax credit for taxes paid in the foreign branch country or claim an exemption for their foreign branch profits.

Claiming for foreign branch profit exemption will be irrevocable and will apply to all foreign branches of the UAE company. The exemption for foreign branch profits can’t be availed if the foreign branch doesn’t come under a tax jurisdiction with a sufficient level of tax. Better insights on availing foreign branch profit exemption become possible when a company prefers to outsource the professional services of a corporate tax advisory in UAE.

Other Incomes

Profits made from a reorganization of groups and intra-group transactions shall be CT-exempt. Exemption can also be availed for income earned by a non-resident operating or leasing aircraft or ships as well as any associated equipment for international transportation. However, the such exemption can only be sought if similar tax treatment, as reciprocation, is granted to a UAE business in the relevant foreign jurisdiction.

The Bottom Line

The UAE companies must evaluate if they can fulfill the prescribed conditions, as and when appropriate, to avail the exempt income scheme and an understanding of the types of income exempt from the UAE corporate tax regime will help businesses prepare better.

Seeking professional help from corporate tax consultants in Dubai will enable you to assess the potential impact of corporate tax on your business. You can consult with the best corporate tax advisors in Dubai such as Jitendra Chartered Accountants (JCA) to prepare effectively for the corporate tax.

IMC Group is one of the leading corporate tax services providers in UAE and can help companies with smooth and seamless transition to the new tax regime. The services mainly include corporate tax assessment, corporate tax compliance and corporate tax agency.

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Step-by-Step Guide to Starting a Business in Bahrain
  • Article, Bahrain

Step-by-Step Guide to Starting a Business in Bahrain

Overview

According to the 2020 Index of Economic Freedom, Bahrain is the fourth freest economy in the Middle East and North Africa (MENA) region and is the 63rd freest economy in the world. Ranked 43rd among 190 economies in the ease of doing business, Bahrain has also been recognized as a High-Income country by the World Bank and the country’s high income can be attributed to oil and natural gas, aluminum export and tourism.

It was in 1970 when the Kingdom of Bahrain started growing into a Financial centre in the Arabian Peninsula and started attracting banks, insurance companies and investment firms from across the globe. Presently Bahrain has more than 114 banks including 23 retail and 69 overseas banks; 2 specialized banks and more than 400 financial institutions and rightfully claimed its position as one of the financial hubs among GCC countries. The central bank of Bahrain (CBB) regulates the banking and insurance sectors and foreign exchange offices.

The regulatory and accounting systems of the financial sector in Bahrain are transparent and comply with the world standard. For decades, the Government has supported the financial sector to reduce its reliance on oil and gas, and use it as the main driver of economic growth. Currently, the financial sector contributes to more than 17% of Bahrain’s GDP.

Besides the financial sector, Bahrain has diversified its economy in other non-oil sectors including manufacturing, real estate. aviation and communications. Alba, one of the largest Aluminum smelters in the world is a living testimony of the government’s commitment to economic diversification, industrialization and privatization.

Benefits of Company Formation in Bahrain

  • 100% foreign ownership is allowed
  • Free-holding of properties for foreigners
  • No restrictions on repatriation of capital and profits and no exchange controls
  • A reliable and efficient communication system
  • No excessively strict Visa, Residence & Work permit requirement inhibiting foreign investors and expats moving freely in Bahrain
  • Nil corporate Tax
  • Abundant cheap energy
  • Excellent support services from local authorities
  • The long reputation of political stability, safety and security
  • Nil personal income tax
  • World-class infrastructure facilities
  • Strategic location for cross border trade and investments
  • Availability of Multiple Entry Visa with five years validity

Investment Climate in Bahrain

The investment climate is generally positive for company formation in Bahrain, a country with a liberal foreign investment outlook and continuously looking for foreign investors and businesses.

The Government of Bahrain, in its endeavour to attract foreign direct investments, offers a lot of incentives to foreign investors for doing business in Bahrain. Many attractive incentives are offered from various Bahrain based institutions namely the Bahrain Logistics Zone (BLZ), Bahrain Development Bank (BDB), Bahrain Economic Development Board (EDB), Bahrain International Investment Park (BIIP), and Tamkeen, the semi-autonomous government agency of Bahrain.

A few of the incentives offered are

  • Assistance in company registration in Bahrain and starting business operations
  • Financial Grant
  • Duty-free access to other GCC countries for products manufactured in Bahrain
  • Exemptions of import duties on plant and machinery

Promoting Investment and Trade: Free Trade Zones (FTZ) and Free Port

Entire Bahrain itself can be termed as a large Free-Zone as it is tax-exempt, doesn’t impose any restrictions on foreign ownership for most of the businesses and levies minimum customs duties.

Americans and GCC nationals are officially treated as Bahrainis and there is no restriction on 100% foreign ownership for any businesses and industries at all.

Bahrain has three main FTZs including Bahrain Logistics Zones (BLZ), Bahrain International Investment Park (BIIP) and Bahrain International Airport (BIP) and offers no annual rental, 50% lower utility cost and nil customs duty. Foreign-owned companies enjoy similar benefits for doing business in Bahrain and have access to the same investment opportunities as Bahraini companies.

Bahrain’s primary commercial seaport, Khalifa Bin Salman Port provides a free transit zone to facilitate duty-free import of equipment and machinery into the country.

Expatriates are permitted to own land in designated areas in Bahrain. Americans and non-GCC nationals can also own commercial and residential properties including properties used for tourism, banking and finance, health projects, and training centres.

To strengthen its position as a startup hub and to promote the investment ecosystem through new company formation in Bahrain, the Government introduced in 2018 the Bahrain FinTech Bay, the largest FinTech hub in the MENA region. Four new laws were also enacted on data protection, bankruptcy, competition and health insurance.

Bahrain also launched the USD100 million Al Waha venture capital fund for Bahraini investments and set up a USD100 million ‘Superfund’ as a growth initiative of start-ups.

Types of Companies in Bahrain

The Bahrain Commercial Companies Law (BCCL) enacted in 1971 and subsequently amended in 2001, defines and regulates the companies in Bahrain.

Following BCCL requirements, Bahrain companies are classified as under

1. Joint Stock Company (JSC)

This is one of the popular corporate vehicles in Bahrain and consists of two or more partners as shareholders. The partners are not liable for the company’s debt and obligations except the amount equaling the value of their shares.
These are two types including

Public Joint Stock Company

The minimum paid-up capital is BHD 1 million with one mandatory auditor.

Closed Joint Stock Company

The minimum paid-up capital is BHD 250,000 with each share not exceeding 100. One auditor is mandatory with 100% foreign ownership.

2. Limited Liability Company (LLC)

Also known as the With Limited Liability Company ( WLL) is a popular business structure for foreign investors and offers 100% foreign ownership for most businesses. There can be a maximum of 50 partners responsible for the debt and obligations of the company. One mandatory auditor with an office in Bahrain. Must have two directors and two partners as a minimum. The minimum share capital requirement is BHD 100,000

3. Single Person Company (SPC)

It is also a preferred company vehicle in Bahrain and is owned by one single member owning the entire business and unlimited liability for company debts and obligations. The minimum paid-up capital is BHD 50,000. Must have one Director and one partner with an office in Bahrain.

4. Limited Partnership Company (LPC)

This is also a major company type with a partnership between two members or two corporate bodies personally liable for the debts and obligations of the company. There should be two partners and a minimum of two Directors. Must have a local office in Bahrain. There are subcategories of partnership companies such as Simple Limited Partnership Company, Limited Partnership by share.

Decree 28 of 2020, has been issued on 28th September 2020 documenting various amendments to certain provisions of BCCL, Law 21of 2001 as a part of Bahrain’s ongoing commitment to developing its ‘compliance and regulatory frameworks ‘ at par with international best practice. The regulations have not been issued yet and likely to be enforced in the coming months.
Few highlights of Proposed amendments are

  • A merger of SPC with WLL
  • For WLL companies, no restriction on maximum shareholders
  • Not-for-Profit companies, a new chapter added to BCCL & may be set up as the WLL
  • For WLL, the minimum share capital requirement has been removed
  • JSC can increase capital by converting debt to equity
  • LPC not permitted to adopt a trading name

New Company Registration in Bahrain

The Bahrain Ministry of Industry Commerce and Tourism (MoICT) has launched an online commercial registration portal known as “Sijilat” to facilitate the commercial registration process.

Through Sijilat, businesses can obtain a license and other requisite approvals from the relevant authorities. The business registration process usually takes two to three weeks however can take longer if a business requires specialized approvals.

Normally most businesses outsource consultancy services for company registration in Bahrain to assist them through the commercial registration process.

Besides obtaining primary approval to register a company, most business owners must also obtain licenses from the following entities to operate their businesses:

The government also provides industrial lands at reduced rental rates for short periods as an incentive towards foreign investment through new company formation in Bahrain.

  • MoICT
  • The Municipality in which their business will be located
  • The National Bureau for Revenue, Compulsory if the business revenue expected to exceed BD 37,500
  • Ministry of Electricity and Water
  • Labour Market Regulatory Authority
  • General Organization for Social Insurance

Pre-incorporation Steps for company registration in Bahrain

  • Selecting your business type and activities
  • Deciding on the Share Capital
  • Selection of Outsourced services for Company Registration in Bahrain
  • Choosing a Company Name
  • Determining the Shareholding Pattern
  • Assigning Shareholders Designations

Process Steps for company registration in Bahrain

  • Submitting Application to MoICT with details of applicant and company name, type of business, the total number of shareholders, total share capital, shareholding patterns, passport copies, visa status etc.
  • Commercial Registration (CR) is issued without a license once the application is reviewed and approved by MoICT
  • Obtaining the requisite business Licenses based on your business activity
  • Articles of Association (AOA) and Memorandum of Association (MOA) are to be documented and submitted for approval. Once accepted, MOA & AOA are to be notarized and the copies to be submitted online
  • Obtaining Bank Deposit Certificate from the bank and submitting online to MoICT

Documents for Company Registration in Bahrain

The main documents required for company registration in Bahrain are

  • Duly filled company registration application form
  • Capital Deposit Certificate
  • Copies of Passport and Visa for company shareholders
  • Power of Attorney for Outsourced Consultant
  • Company Business Plan
  • Commercial office address details
  • Copies of Certificates of education and training of the applicant
  • MOA and AOA

Tax Considerations in Bahrain

Bahraini companies are completely free of taxation except for companies in oil, gas, oil exploration, mining and refining sectors taxed at 46%.

Value-added tax (VAT) is imposed on goods and services at a uniform rate of 5%. Financial and insurance services and real estate business are VAT exempt. No VAT is levied on food items and education. Oil and gas exploration is also free of VAT.

Foreign Commercial and residential properties attract 10% Municipal Tax and 2% stamp duty is levied on sales and registration of real estate properties.

The import duty of 5% levied on imported goods. Alcohol and cigarettes attract 125% and 100% duty. All imported goods in Bahrain need customs clearance from the Director-General of Customs.

Bahrain is free of withholding tax, capital gains tax and payroll tax.

All companies are required to submit audited financial statements within 6 months of financial year-end and file quarterly tax returns. Non- compliance attracts 1% monthly fines.

Bahrain has a Double Taxation Avoidance Agreement (DTAA) with more than 40 countries motivating foreign entrepreneurs for company formation in Bahrain.

Takeaway

Like all other countries in the world, the recent Covid-19 pandemic and fall in global oil prices made it difficult for Bahrain to generate revenue and reduce government spending. In April 2020, Bahrain announced a BDH 4.3 billion (USD11.4 billion and equivalent to 29% of the country’s GDP), eight-point stimulus package to support the economic slowdown caused by the Covid-19 restrictions. Several subsidies have also been introduced to foreign-owned and local companies including utility bills coverage and waiver of tourism and industrial land fees to ease doing business in Bahrain.

Though Bahrain’s investor-friendly, liberal and tax-free business scenario is becoming increasingly attractive to foreign investors, setting up a new business establishment is very competitive, arduous and time-consuming. Outsourcing of a business service agency is hugely beneficial to facilitate and support the company registration in Bahrain and here comes IMC as your perfect business partner.

IMC has a long presence in GCC countries as a Business Process Services (BPS) provider and has acquired a total understanding and knowledge of the functioning of Bahraini government bodies.

A customer-centric affordable services company supported by a team of enthusiastic result-oriented professionals, IMC can cater to all your needs for doing business in Bahrain.

Pre-Incorporation Advice

IMC has the experience and expertise to advice customers on the suitable company type taking in to account the laws of the land and the unique customer’s needs. We have the experience having handled different industries and geographies across the world. We understand finance and the legal framework required to handle a company’s operations. We will advise on the percentage of shareholding allowed for foreigners, and the rights which go with that percentage and other such business matters. IMC has been operating in GCC for over 10 years.

Types Of Companies

  • With Limited Liability Company (W.L.L.)
  • Partnership Company
  • Bahrain Shareholding Company (B.S.C.) – public
  • Bahrain Shareholding Company (B.S.C.) – closed
  • Simple Commandite Company
  • Commandite by Shares
  • Single Person Company
  • Branch of a Foreign Company
  • Holding Company

Documents Required For Company Formation

  • Company Registration application form
  • Draft Memorandum of Association
  • Board of Directors resolution resolving to establish the company in Bahrain (for corporate partners)
  • National ID card (Central Population Registry (CPR)) copies of the company’s representatives. If the partners are not present themselves to register the company, copies of the ID cards of their lawyers/other representatives must be provided
  • CVs of individual partners
  • Lease agreement as proof of the company’s commercial address

Free Zones in Bahrain

The island nation of Bahrain is diversifying its economy away from unsustainable hydrocarbons resources to sectors such as banking and finance, trade and industry, retail and tourism. Its physical link to Saudi Arabia – via the King Fahd Causeway, constructed in 1986 – has facilitated trade, tourism and retail.In 2013, Bahrain was ranked as the 12th most- free economy in the world by the US’ Heritage Foundation think tank. Bahrain is home to THREESpecial Economic Zones, all of which were ranked in the top 20 locations for inward investment, economic development and business expansion in FDI Magazine’s Global Free Zones of the Future 2012/13 report.

Advantages

  • FZ companies do not require a Bahrain national shareholder for trading and commercial activities. While it is mandatory to rent a free zone office at a low rent, it is not necessary to hire staff
  • Land rental rebates of 100% in government industrial areas for the first three years
  • Electricity rebates of 50% for the first five years of operation
  • No duties are imposed on goods imported and exported from the Free Zone

Bahrain International Airport (BIA)

Bahrain International airport sits in 19th place in the free zones of the future list, and is ranked fifth-best airport zone in the world. Offering cargo facilities, offices and retail space, the foreign trade zone has no customs duties. It is governed by Mumtalakat, the government vehicle for Bahrain’s non-oil and gas investments, established in June 2006 by royal decree.100% foreign ownership is allowed and it has a “bonded cargo terminal” allowing for delayed payment of duties until products leave the facility.

Bahrain Logistics Zone (BLZ)

The Bahrain Logistics Zone was established in 2008 next to Khalifa bin Salman port, the island’s main harbour. Placed 16th in the FDI Magazine ranking, the port zone offers land plots of 3,000 square metres and more for lease. The 100- hectare zone focuses on third-party logistics, storage and distribution (for export and re- export), as well as other logistics services and activities. In the first quarter of 2013, container throughput stood at 95,828 20-foot equivalent units, with an average processing time of 32 minutes.The BLZ is ideal for regarding-exporting and logistics companies benefiting from zero-tax and duty exemptions. It is also a boutique center for manufacturers in component assembly, packaging, testing, and repair companies.

Bahrain International Investment Park (BIIP)

BIIP offers100 per cent foreign ownership of companies, duty-free access to GCC markets, exemption from import duties on both raw materials and equipment and 100 per cent repatriation of capital. Located 5 kilometers from Bahrain International airport, BIIP consists of 2.5 million sq m of leasable land, costing $1.33 a sq m a year to rent. GCC free zones are considered as being outside the country, so goods are taxed at 5 per cent when exported to Bahrain. BIIP is not treated as a free zone, so is not subject to the 5 per cent tax when shipping goods to Bahrain.The Bahrain International Investment Park is ideal for large manufacturing operations, including food process, medical technology, electronics, and materials. Export led services including insurance claims, administration, and software and information systems.

Access to Bahrain double tax treatiesYes

Type Limited Liability Company (WLL)
Under Bahrain law, foreigners can own 100%
Share Capital US$ 133,000
Director Minimum Two
Memorandum & Articles of Association Yes
Shareholders Minimum two
Can the entity hire expatriate staff in Bahrain Yes
Bahrain Resident Secretary Required Yes
Statutory Audit Required Yes
How long to open Corporate Bank Account One Day
Annual Tax Must be filed
Timeframe for Incorporation 1 month

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The Ultimate Resource Guide to Help You Succeed in New Business Setup In Qatar
  • Article, Qatar

The Ultimate Resource Guide to Help You Succeed in New Business Setup In Qatar

Overview

Qatar formally called the State of Qatar. The capital is Doha. It is a sovereign Arab emirate, placed Western Asia. Qatar has the world’s third biggest characteristic gas saves and oil holds. Qatar has one of the quickest developing economies on the planet. To achieve better profits of investor it has adopted open market policy. It is essential to note that foreign direct investment is promoted and foreign entities are welcomed in Qatar to help grow the economy. In addition, there are various incentives available to attract foreign capital including tax breaks and exemptions from customs duty. The Qatar Investment Authority is established by the government for the purposes of company registration and company formation in Qatar. This article follows details involved during company setup in Qatar.

Company Registration & Company Formation in Qatar

  • With specific special cases, Qatar’s foreign investment law limits foreign ownership of local entities to 49% of the entity’s capital for a company setup
  • An LLC company formation in Qatar is the most commonly used business entity
  • Foreign investment is not allowed in commercial agencies and real estate
  • The representative company formation in Qatar is 100% foreign owned and controlled, it is not allowed to make direct sales in Qatar. Such an office will only engaged in activities such as promoting the business of the parent company and market research

Company Registration & Company Formation in Qatar

  • With specific special cases, Qatar’s foreign investment law limits foreign ownership of local entities to 49% of the entity’s capital for a company setup
  • An LLC company formation in Qatar is the most commonly used business entity
  • Foreign investment is not allowed in commercial agencies and real estate
  • The representative company formation in Qatar is 100% foreign owned and controlled, it is not allowed to make direct sales in Qatar. Such an office will only engaged in activities such as promoting the business of the parent company and market research

Accounting & Tax

  • The corporate income tax rate has been cut to a flat rate of 10%.There is no personal income tax in Qatar
  • Qatar has 33 Agreements for the Avoidance of Double Taxation

Timeframe for Incorporation2 weeks

Type Limited Liability Company (WLL)
Under Qatar law, foreigners can own 100%
Share Capital QR 200,000
Directors One
Shareholders Two
Memorandum & Article of Association Yes
Can the entity hire expatriate staff in Qatar Yes
Qatar Resident Secretary Required Yes
Statutory audit required Yes
How long to open Corporate Bank Account? 2 weeks
Annual Return Must be filed
Annual Tax Must be filed
Access to Qatar double tax treaties Yes

Government Links

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How to Set Up Your Very Own Company In Kuwait: A Step-By-Step Guide
  • Article, Kuwait

How to Set Up Your Very Own Company In Kuwait: A Step-By-Step Guide

Types of Business Entities in Kuwait

Companies in Kuwait are established under the Commercial Companies Law (the CCL).The following business structures are available to non-Kuwaitis to undertake business / commercial activities in Kuwaitis.

  • Limited Liability Companies
  • Shareholding Company
  • Branch Company
  • Partnership Company
  • Joint Venture Companies

Limited Liability Companies (WLL)

Limited liability companies, usually referred to as ‘With Limited Liability (WLL), are the most commonly used corporate form of entity in Kuwait and are considered equivalent to French SARLs, German GmbHs or private companies in the United Kingdom. The key features are,

  • WLL companies are not permitted to engage in banking, insurance or to act as a pure investment fund
  • Maximum percentage of shareholding by a non- Kuwaiti in a WLL should be 49%(except if such WLL has obtained an approval from the KDIPA)
  • Ownership interests are represented by shares of the WLL companies
  • Minimum Capital requirement is 1,000 KWS

Joint Ventures

A joint venture is an entity formed by two or more natural or legal persons who are jointly and severally liable. The key aspects of the joint ventures are as follows:

  • It does not have legal existence
  • It does not need to be recorded in the commercial register of the Ministry of Commerce and Industry. However, the partners of the joint venture must be separately registered in their own names
  • The contract defines the objects and terms of the joint Venture. This form of business structure is usually used to carry out construction projects (i.e. construction of power plants, roads, etc.)
  • In the event the joint venture involves a foreign partner, then the entity conducts operations through the trade license of the Kuwaiti member of the joint venture

Branch

Foreign corporate bodies are not permitted to set up a branch in Kuwait (except in cases where the foreign corporate body has obtained an approval from KDIPA). If the foreign corporate bodies do not wish to operate in Kuwait through a participation in a shareholding company or a limited liability company, it may engage in business in Kuwait only through a Kuwaiti commercial agent or a Kuwaiti service agent (as explained below).Under the CCL a branch is not a recognized legal form for foreign investors. It should be noted however that for the purpose of tax filing and certain other practical purposes, it is convenient to refer to Kuwait operations of foreign corporate bodies as “branch” operations.

Agent / Distributor

Agencies are governed by Law No. 36 of 1964, which regulates the following:

  • Commercial agents which are engaged in promoting products for their principal or negotiate and conclude deals on behalf of their principal
  • Distributors which are engaged in promotion, import and distribution of the products of their principal
  • Service agents or sponsors who are appointed by foreign companies intending to engage in government contract works

Timeframe for Incorporation3 Months

Type Limited Liability Company (WLL)
Under Kuwait law, foreigners can own 49%
Share Capital KD 7,500
Memorandum & Articles of Association Yes
Shareholders Minimum Two
Can the entity hire expatriate staff in Kuwait Yes
Tax Registration Certificate Required Yes
Kuwait Resident Secretary Required Yes
Statutory Audit required Yes
How long to open Corporate Bank Account? 1 Day
Annual Return Must be filed
Annual Tax Must be filed
Access to Kuwait double tax treaties Yes

Government Links

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Here is a Step-by-Step Guide that will Help You Explore the Possibilities of Setting up a New Business in Oman
  • Article, Oman

Here is a Step-by-Step Guide that will Help You Explore the Possibilities of Setting up a New Business in Oman

Overview

Oman is the third-largest country in the Arabian peninsula having entrepreneurship and overseas trading long been existing in Oman for many centuries and its maritime trade used to touch the shores of Africa, Europe and China.

Before the discovery of oil and gas, Oman was predominantly a rural and agrarian economy based on fisheries and agriculture. Once the oil was discovered in commercial quantities during 1964, Oman gradually moved from agrarian to an oil-based economy and production, and export of oil started dominating the government exchequer in Oman.

Sultan Qaboos Bin Said took the reign of Oman in 1970 and ruled the country till his death in 2020. Under his visionary leadership, Oman has undergone a rapid socio-economic development while upholding its cultural heritage and was a constant source of motivation to foreign investors for doing business in Oman.

Though oil and gas, reserves have rapidly boosted Oman’s economy, led by Sultan Qaboos the country actively implemented a forward-looking economic development plan focused on diversification and industrialization to reduce its dependence on oil and gas and invite foreign players for company formation in Oman.

Benefits of Company Formation in Oman

Oman has many untapped investments and business potential in many industries such as tourism, mining, fisheries, logistics and manufacturing and the government always encourages foreign direct investment and offers various incentives and free zones to promote a business-friendly economic environment and lure foreign entrepreneurs for doing business in Oman.

Oman offers many opportunities for foreign investors to become a long term business and investment partner and invest in company formation in Oman.

Friendly Taxation Policy

Nil income tax on personal income, lower income tax on companies, tax relief on effective double taxation treaties Oman enjoys with more than 35 countries.

Import Exemptions

No import duty levied on Raw materials. plant and machinery for five years from the start of manufacturing activities.

Capital & Profit Repatriation

No restriction on profit and capital repatriation and dividend transfers.

Foreign Ownership

Oman allows 100% Foreign ownership in Free Zones and 70% in other regions.

Strategic Location

Oman is the gateway to North American, European, African and Asian markets offering access to a large customer base.

Political & Economic Stability

Oman has a long reputation for political stability with controlled inflation and stable exchange rate, trade surplus and foreign currency reserves.

Diversification

Oman is well-diversified industrially which facilitates business activities through a robust supply chain.

Infrastructure

Oman has good infrastructure facilities like good roads, airports, ports with good communication networks.

Transparent Legal System

Oman has a transparent and friendly legal system offering a conducive business environment.

International Presence

Oman has ties with world economic bodies such as membership with WTO, GAFTA, GCC with free trade agreements with USA, Iceland, Singapore, Norway, Switzerland and many other countries.

Natural Resources

Oman has good reserves of Petroleum, Gas, Asbestos, Copper, Chromium and Gypsum.

Land Availability

Government leases the land with good amenities at discount.

Language

English is widely used in business and commerce.

Business Climate in Oman

Barring a few numbers of trades and services, no restrictions are imposed on company formation in Oman and doing business on its soil. 100% foreign ownership of Omani companies would now be allowed under the new Foreign Capital Investment Law (FCIL) RD 50/2019 proposed in January 2020.

A few of the 37 commercial activities not allowed for 100% Foreign ownership are mentioned as under.

  • Translation and Photocopying
  • Tailoring
  • Vehicle and Automotive Repairs
  • Sale of Drinking water
  • Hairdressing and Salon Services
  • Fishing
  • Rehabilitation Centres
  • Taxi Services

The restricted services, however, contribute to a small portion of Oman Economy and the new law would open up promising new sectors for 100% foreign investment and enthuse overseas companies for doing business in Oman.

The Ministry of Commerce and Industry ( MOCI) has embraced significant modernizing initiatives under the new FCIL regulation to facilitate and promote investor-friendly regimes in the Sultanate of Oman.

The new FCIL law doesn’t also stipulate the minimum share capital requirement which can transform the foreign investment landscape in Oman. The existing practice requiring a company with one or more foreign shareholders to have a minimum starting share capital of OMR 150,000 which is approximately $390,000 has now been relaxed by MOCI. However, being a new regulation it needs reconfirmation from MOCI on a case to case basis.

The new FCIL law is a revolutionary step towards globalization and modernization of Oman and will invariably bring a plethora of opportunities to the foreign business communities.

Types of Companies in Oman And Applicable Requirements

There are two most common ways of doing business in Oman and can further be classified based on company type and regulatory requirements

Business setup with a Local company

A locally incorporated company can take several forms

  • Proprietorship Company
  • Limited Liability Company
  • Free Zone Company
  • Joint Stock Company
  • Holding Company
  • Limited Partnership Company
  • General Partnership Company
  • Joint Ventures

Business setup with a foreign entity

There are three ways one can do business with a foreign entity

  • Branch office
  • Commercial Agencies
  • Representative office

Most of the Omani Companies are LLCs or limited liability companies that foreigners are willing to invest and do business with. The number of founding members should be minimum two and maximum forty.

A foreign company is permitted to own a maximum of 70% of shares of an Omani company. If there is a free trade agreement with the country of foreign national, a higher %age of shares can be allowed.

The current minimum share capital requirement for a foreign-owned LLC is OMR 150,000 unless wholly owned by Oman citizens or GCC or FTA nationals for whom the initial capital investment requirement is OMR 20,000.

For joint stock and holding companies, the initial minimum capital requirement is OMR 500,000 and OMR 2 million respectively. Initial capital requirements are usually much higher for banks, financial services and insurance companies.

Partnership Companies

The features of Omani Partnership companies are

  • Formed by two or more stakeholders
  • Needs registration within a month of execution of partnership agreement in the Commercial Register
  • Needs approval of all partners before transferring the individual interest
  • Name of the partnership must spell that it is a partnership
  • Any mishaps with one partner dissolve the partnership unless all other partners agree to continue

Proprietorship

Usually, only the Oman citizens are allowed for single Proprietorship companies, GCC nationals can start a Proprietorship company under certain conditions and for specific activities.

Foreign Company Branches

Foreign entities are allowed to open representative offices however, with limited scope. A foreign company is only recommended to operate a branch that has secured a Government project contract and is only valid during the tenure of the contract.

Proprietorship

A joint venture is formed through a joint venture agreement and by two or more entities performing a particular project. A JV has no legal status and is not registered. The Omani partner must own a minimum of 51% share.

Process of Registèring a Company in Oman

The process of company registration in Oman is relatively simple and straightforward and the main process steps once the initial capital is paid, are as follows

1. Reserving a Company Name

An application needs to be submitted to the Ministry of Commerce and Industry (MOCI) with a uniquely chosen name for your company highlighting and branding your products or services as you feel appropriate.

2. Submitting Incorporation documents

On approval of company name, shareholders documents and company constitution along with the bank certificate and authorized signatory form needs to be submitted to MOCI for company registration in Oman.

3. Registering with Oman Chamber of Commerce and Industries (OCCI)

Once MOCI registration is completed, you need to get your company registered with OCCI for complying with the commercial rules and regulations required for your company.

4. Designing a Company Seal

A company seal needs to be designed and issued from the registered authorized signatory of the LLC.

5. Obtaining approvals from Government Authorities

Based on company type, size and nature of business; you need to obtain a set of approvals from the appropriate authorities for company registration in Oman and include

  • Tax Registration
  • Oman police registration
  • Registration with the Ministry of Manpower
  • Industrial, environmental and other permits and licenses
  • Municipality License
  • Registration with Oman Police
  • Import Export License as appropriate
  • Registration with Public Authority of Social Insurance

6. Post Registration Process

Once the company registration is over, all documents mentioned against point 4 needs to be obtained

Documents Required for Registration of Company in Oman

Company registration in Oman requires the following essential documents

  • Memorandum and Articles of Association
  • Tax Registration Certificate
  • Shareholders’ Visas and Passports
  • Chamber of Commerce and Industry affiliation certificate
  • Certificate of Initial Deposit
  • Identity Cards of Shareholders
  • Filled Company Registration Form

Tax Laws in Oman

Various aspects of Taxation in Oman are

  • Registration with the Secretariat General of the Ministry of Finance is mandatory for all taxable entities
  • A provisional return of income tax must be filed within 3 months of the applicable accounting period
  • A uniform 12% tax rate is applicable for all companies irrespective of nationality and size, and profit up to OMR 30,000 is exempt from tax
  • The final tax return must be filed within 6 months of the applicable accounting period

Tax Exemptions

The following are exempt from income tax in Oman

  • Dividends received from an Omani company
  • Gains on the disposal of Securities listed in Muscat Stock market
  • Omani marine companies
  • Foreign Airlines
  • Investment funds
  • Foreign companies engaged in the exploration of gas and oil
  • Foreign companies working for government projects

Withholding Tax

Cross border payments subjected to withholding tax and at a flat rate of 10% on the gross payment in Oman are

  • Royalties
  • Management Fees
  • Provision of Services
  • Consideration for R&D
  • Consideration for Computer Software

Indirect Tax

  • Oman doesn’t impose any VAT or Sales Tax or Property tax; plans to implement VAT from April 2021 at a rate of 5%
  • Stamp duty of 3% is levied in real estate transactions
  • 5% Import duty as in other GCC countries on goods entering Oman

Personal Tax

  • No personal income tax in Oman

Free Zones in Oman

There are three free zones and two special economic zones for attracting foreign investment in the country. Each zone has it’s own sets of incentives including Tax Holidays, Import Duty exemptions, Waiver on initial capital requirements and 100% foreign ownership.

Free Zones

  • Salalah free zone
  • Shohar free zone
  • Al Mazunah free zone

Besides, there are eight Industrial Estates such as Rusayl, Sohar, Raysut, Sur, Nizwa Al Buraimi, Sumail, Al Muzanah offering highly attractive land rents, tax holidays, exemptions on machinery and equipment.

Special Economic Zones (SEZ)

  • Duqm SEZ
  • Knowledge Oasis Muscat

Accounting and Tax

Type Limited Liability Company (WLL)
Under Oman law, foreigners can own 70%
Share Capital OMR 20,000
Memorandum & Articles of Association Yes
Shareholders Minimum Two
Can the entity hire expatriate staff in Oman Yes
Tax Registration Certificate Required Yes
Saudi Resident Secretary Required Yes

Timeframe for Incorporation3 weeks

Type Limited Liability Company (WLL)
Statutory Audit Required Yes
How Long to open corporate Bank Account? 3 weeks
Annual Return Must be Filed
Annual Tax Must be Filed
Access to Oman double tax treaties Yes

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The Ultimate Guide to Company Formation in Saudi Arabia
  • Article, Saudi Arabia

The Ultimate Guide to Company Formation in Saudi Arabia

Why set up a Company in Saudi Arabia

Best known for its huge oil industry, Saudi Arabia is the largest free-market economy in the Middle East and North Africa (MENA) with an approximate 28% share of total Arab GDP. The geographic location provides easy access to many export markets including Europe, Asia and Africa. Domestic consumption driven by a young and wealthy community is increasing steadily and continuously expanding local demand and accelerating the rate of company formation in Saudi Arabia.

KSA with the highest level of safe and secure business climate and political stability offers low energy cost and 100% foreign ownership in retail and wholesale sectors as a large privatization programme.

World Bank Regional Director of the Gulf Cooperation Council (GCC) and MENA, Issam Abousleiman said, “Saudi Arabia’s impressive reforms in doing business this year show its commitment to fulfilling the main pillar of its National Vision 2030: a thriving economy.” He also highlighted, ” Easing the business climate for local entrepreneurs to thrive as well as foreign investors to work in the Kingdom shows a forward path to creating more jobs for Saudi youth and women, and creating sustainable, inclusive growth.”

Major reforms attracting more foreign investments and doing business in Saudi Arabia are

  • A one-stop system simplifying and easing business startups
  • Protection of minority investors
  • Simple and easier Enforcement of contracts
  • Easier availability of credits through new insolvency law and secured transactions law
  • Online platform for construction permits
  • Cross border trading and investments
  • Easy resolution of insolvency and financial restructuring
  • Streamlining availability of power

Which sectors are promising for new business set up in Saudi Arabia

High standards of living and a young society are boosting the domestic demand and various business sectors are offering immense success and growth possibilities in the KSA now. Following are some lucrative sectors for doing business in Saudi Arabia.

  • Tourism and Hospitality
  • Steel Manufacturing
  • Engineering and Technology
  • Real Estate
  • Lubricants, Glass and Plastics
  • Education
  • Healthcare and Pharmaceutical
  • Financial services
  • Media and Entertainment

How many types of companies in Saudi Arabia

Saudi Arabia, one of the largest emerging economies in the MENA and the MEASA regions offer many different corporate vehicles to its prospective business owners and investors. An understanding of the right corporate entity is important before an investment decision is made.

Company formation in Saudi Arabia and operations of the corporate entities come under the New Companies Regulations (NCR) act came into existence on 2nd May 2016.

The five forms of companies available for both local and foreign businesses in Saudi Arabia are

  • Limited Liability Company (LLC) It is the most commonly formed company in Saudi Arabia. It allows minimum liability for owner’s against company debt. An LLC company is not permitted more than 50 shareholders.
  • Joint Stock Company (JSC) It consists of capital that is divided into shares of equal value.
  • Single Member Limited Liability Company (SMLLC) It is a limited liability company and can have a sole owner who owns all the shares of the company. There are many benefits of owning an SMLLC and one can’t own more than one such company.
  • Limited Partnership Company (LLP) It is a partnership company in which some or all partners have limited liability with elements of partnerships and corporations.

Besides, special business forms are available to foreign companies for doing business in Saudi Arabia.

  • Joint Ventures
  • Branch Office
  • Representative Office

How to form a Company in Saudi Arabia

With Policy Reforms underway, Saudi Arabia is relentlessly pursuing its privatization initiatives and striving to make the company set up process easier and more convenient. One can expect to complete company registration in Saudi Arabia and carry out business activities within a period of six to nine months.

1. Pre-incorporation Process- Planning and Strategy

During this process, due diligence is done on the optimum business type, paid-up capital and license requirement. Following are list items to be considered during this phase

  • The name of Business/ Company
  • The Type of Business Entity; LLC, JSC, Branch Offices or other types
  • Organizing Documents such as Business License, Certificate of Incorporation, Board Resolution, Power of Attorneys etc.

2. Incorporation Process

Once everything has been planned and reviewed, the company registration in Saudi Arabia can be started with simultaneously working on different steps to optimize the time duration. The steps involved are

1. Application for Investment License
All non-GCC foreign investors need to apply to the Saudi Arabian General Investment Authority (SAGIA). Nature and size of the investment activity with key financial information on the company’s operation should be clearly stated and the SAGIA application form to be filled in. The SAGIA will then issue a pre-approved certificate confirming the company’s registration with 100% foreign ownership, as appropriate.

2. Articles of Association
This will need to be submitted to the Ministry of Commerce and Investment and once approved, the document needs to be notarized to register for Commercial Registration certification and Tax Number, and subsequent publication of Articles of Association with a company name in the newspaper.

3. Registration of Company Name
The name for company registration in Saudi Arabia must be reserved with the Unified Centre and get approved before submitting incorporation forms, articles of association and the deed of establishment.

4. SAGIA Foreign Business Investment License
On successful submission of all documents such as the CR, Tax Registration, Municipality License and Bank’s Share Capital deposit letter and approval, SAGIA issues foreign business investment license and allows the company to sign contracts, issue invoices and hire employees.

5. MERAS Registration
It is a government program mainly for foreign company registration in Saudi Arabia and managed by Saudi Business Centre for facilitating procedures and providing services for business operations to speed up the business setup process. Companies can register with a municipality under MERAS and a physical office will be required for registration. The complete registration has to be submitted to the Saudi Arabia Ministry of Commerce and Industry (MOCI)
The Certificate of Registration (CR) is normally issued in 6 weeks and the company does tax registration. Under MERAS, companies can notarize the Articles of Association online, register with the Ministry of Labor and Social Development (MLSD) the General Organization for Social Insurance (GOSI) and the General Authority of Zakat & Tax (GAZT) including registration with Wasel.

6. Creating Company Seal
Company seal needed for contractual agreements, shareholders and management resolutions, Government documents, Official letters and notices must bear the CR number and Company name.

7. Registration at Chamber of Commerce
Within 30 days of registration of CR, all business entities seeking company registration in Saudi Arabia need to submit the certificate of membership obtained from the Chamber of Commerce and Industries (CCI).

8. Bank Account Opening
A local bank account required to be opened within 90 days of issuance of Commercial Certificate.

3. Post-incorporation Process and Staying Compliant

Once the company is incorporated, the following activities need to be initiated for completion of the entire process of company formation in Saudi Arabia.

  • Saudi Employment Visas
  • Conversion of Bank Account to a corporate bank account

How free zones helped diversify Saudi Arabian Economy

Saudi Arabia has implemented two types of free zones to attract foreign investments in economic and industrial activities. While industrial free zones are dedicated mostly for manufacturing industries, the economic free zones were launched for basic economic activities such as Agriculture, Healthcare, Education, Logistics, Science and Research etc.

The industrial cities were built during the 1980s and subsequently transformed into great economic hubs. Economic cities were established at the start of this century and are still being developed. Both the industrial and economic free zones allow 100% foreign ownership besides offering tax exemptions and low tax rates.

Free zones development plan mainly emphasized the need to diversify the country’s economy and reduce its reliance on oil and gas through the utilization of non-oil resources.

Presently, Saudi Arabia, has 28 industrial cities administered and maintained by Saudi Industrial Property Authority and offering custom duty exemption on raw material and equipment, easy availability of loans up to 75% of the capital, extended repayment period of loans up to 20 years and low land lease. Two most famous industrial cities are Yanbu and Jubail and major petrochemicals, fertilizers, steel, iron and chemical manufacturing facilities are located here.

Tax incentives are yet to be implemented in the economic cities which would include custom duty exemptions on raw materials and machinery, lower tax on training and salary cost and overall tax exemptions on some specific business units. Famous economic cities are Jazan economic city, Knowledge economic city and Prince Abdulaziz Bin Mousaed Economic city.

What legal requirements to be considered before Company Formation in Saudi Arabia

Tax Structure in Saudi Arabia
No personal income tax is levied on employees earnings however, companies are taxed based on the company type and business set up.

All registered companies come under the jurisdiction of corporate tax including companies and branches owned by foreign investors. The applicable tax rate is 20% for non-listed companies.

Tax is imposed based on net profits. Incomes earned through interest are also taxed for non- Saudi and non-GCC nationals. The Saudi and GCC nationals, however, need to pay a 2.5% religious tax called Zakat tax.

Withholding taxes are levied on entities who make payments to foreigners e.g rent and management fees. Withholding tax rates are imposed at different tax rates and 20% for management fees, 15% for royalties, and 5% for rent, airline tickets & freight and international telecommunications services.

Activities Prohibited for Foreign Investors
100% Foreign investment is allowed in the service sector. Trading and retail business are mostly prohibited from foreign investors. Following is a list of prohibited activities that include but not limited to

  • Defence and military equipment manufacturing including uniforms and related devices
  • Security Services and Investigation Agencies
  • Brokerage companies in Real Estate
  • Drilling and Exploration of Oil and Gas
  • Fishery Business
  • Real Estate Investment in Medinah and Makkah
  • Printing and Publication Business

Minimum Paid Up Capital
Though there is no statutory minimum capital requirement, normally SAGIA requires foreign LLCs to have SAR 500,000 capital minimum. Based on activities, the minimum paid-up capital requirements are

  • 100% Foreign Commercial: SAR 30 million with a commitment for at least SAR 200 million investment in the first five years
  • Commercial with 25% Saudi Partner: SAR 7 million and a minimum SAR 20 million contribution from the foreign investor
  • Service & Property Investment, Real Estate SAR 30 million
  • Trading SAR 20 million
  • Service Transport: SAR 500, 000
  • Agriculture: SAR 25 million
  • Contracting: SAR 500,000
Accounting and Tax

There is no personal income tax on income earned by individual and employees. However, there are three type of taxes levied on the Companies based on the shareholding structures.

Where a company is owned by both Saudi and non-Saudi interests, the portion of taxable income attributable to the non-Saudi interest is subject to Corporate tax, and the Saudi share goes into the basis on which Zakat is assessed.

  • Corporate Tax: on all registered entities including companies or branch having foreign ownership.
  • Withholding tax: on entities making payment to non-residents, such as for rent, loyalties and management fees
  • Zakat (Islamic wealth tax): Zakat, a religious levy, is charged on the company’s Zakatbase at 2.5%. Saudi citizen investors (and citizens of the GCC countries, who are considered to be Saudi citizens for Saudi tax purposes) are liable for Zakat
  • Drilling and Exploration of Oil and Gas
  • Fishery Business
  • Real Estate Investment in Medinah and Makkah
  • Printing and Publication Business
Corporate tax rate for unlisted Company is 35%

Basis for Corporate Taxation:

  • Tax is on the net adjusted profits
  • The share of profits attributable to interests owned by non-Saudi / non-GCC nationals is subject to income tax
  • The share of profits attributable to interests owned by Saudi / GCC nationals is subject to Zakat (religious levy)

Withholding tax rates

  • Rent 5%
  • Royalty or proceeds 15%
  • Management fees 20%
  • Payments for airline tickets, air or maritime freight 5%
  • Payments for international telecommunications services 5%
Type Limited Liability Company (WLL)
Under Saudi Law, Foreigners Can own 100% (in certain activities) subject of FSI approval and manufacturing / trading requires local national participation
Share Capital SR 500,000
Director Minimum One
Shareholders Minimum Two
Memorandum & Article of Association Yes
Can the Entity hire Expatriate in Saudi Yes
Type Limited Liability Company (WLL)
Saudi Resident Secretary Required Yes
Statutory Audit Required Yes
How Long to open corporate Bank Account? 4 Days
Timeframe for Incorporation 6 Months
Annual Return Must be Filed
Annual Tax Must be Filed
Access to Saudi Double Tax Treaties Yes

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Dubai Mainland Company Formation
  • Article, U.A.E

Mainland Company Formation in Dubai, UAE – IMC Group

Your Guide to Dubai Mainland Company Registration

A mainland company is a company licensed by the Department of Economic Development (DED) in the relevant Emirate of the United Arab Emirates. This type of license allows non-UAE nationals to own 100 percent of the shares in a private business entity.

Limited Liability Company (LLC)

L.L.C. allows you to do local trade and services. It is recommended for a company setup in Dubai who wants to pursue or during company formation in Dubai for retail business. A company registration in addition to local trade it also permits global trade. A Dubai limited liability company (L.L.C.) is an ideal vehicle to use for entrepreneurs doing business within Dubai, the U.A.E. and internationally. With company registration and company formation in Dubai L.L.C., you still can own only 49% of the equity. However, you can do that and keep more than 49% of the profits. U.A.E. law allows L.L.C.s to come up with flexible, differential profit sharing arrangements. These can give you an enormous advantage, especially since the 51% local equity rule is quite inflexible in most cases. It’s not surprising, therefore, that the L.L.C. is the most popular form of business organization in U.A.E.

  • Local & International Trade allowed
  • Office required
  • Visa provided
  • 51% shareholding held by local U.A.E. national except for professional licenses, where 100% shareholding is allowed

Benefits of Company set-up in Dubai L.L.C.

A Dubai L.L.C. offers unrivalled access to Dubai and the wider U.A.E. economy. Through a Dubai L.L.C., international entrepreneurs obtain Trade Licenses from the Dubai government. There are few restrictions on the activities of a Dubai L.L.C., and it is possible to obtain a license for all activities with the exception of banking, insurance and investment activities. Through a Dubai L.L.C., investors obtain a strong physical presence in Dubai. Although cost effective office space is hard to find in, we offer solutions to meet every budget and specifications. Incorporating a Dubai L.L.C., company registration now faces no specific minimum capital requirements, after this formal requirement was abolished in the U.A.E. Companies may or may not be subject to minimum capital requirements, dependent on the size, nature and goals of the business.It is easy to open global corporate bank accounts following company registration and Dubai L.L.C. set up.

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Why Should You Consider Incorporating Your Tech Start-up in Singapore
  • Article, Singapore

Why Should You Consider Incorporating Your Tech Start-up in Singapore?

There is a reason why Singapore is popularly known as ‘Asia’s emerging Silicon Valley’.  The city-state is host to an exceptional network of over 4,000 tech-enabled start-ups in 2021 alone.  This is significant growth from about 1,000 tech-enabled start-ups in 2014.

Tech Startups in Singapore

Singapore has evidently become the tech start-up epicentre of South East Asia by raising $8.3 billion in the first nine months of 2021, nearly two-and-a-half times the $3.5 billion raised in the same period last year, according to Enterprise Singapore. This is close to 50% of the total funding for start-ups in South East Asia.

Investments in deep tech start-ups have surged from $324 million in the nine months ended Sept 30, 2020 to $861 million in the nine months ended Sept 30, 2021.

Deep Tech Funding
The government is also making every effort to develop Singapore into the world’s first truly ‘Smart Nation’. The Infocomm Development Authority of Singapore (IDA) which looks after the technological sector is on a mission to build an innovation driven economy where technology start-ups have a crucial role to play in bringing innovation and vibrancy into the tech ecosystem.

Tech Start-Up Landscape in Singapore

“Singapore is a nation where we can create possibilities for ourselves beyond what we imagined possible.” – Prime Minister Lee Hsien Loong

Singapore is ranked at 14th position in 2019 by Start-up Genome for its vibrant tech start-up ecosystem and was valued at US$25 billion.

Owing to its progressive information and technology infrastructure, friendly business ecosystem, stable political environment, conducive business policies, attractive tax laws, strategic location advantage, skilled workforce, friendly digital trade, and encouraging government schemes, technology start-ups in Singapore are amongst the fastest-growing industries in the entire Asia Pacific region.

The country boasts of its state-of-art technology that offers economic, environmental, and technological solutions to its entrepreneurs and global investors. It is why new-age entrepreneurs think of company formation in Singapore.

Singapore: The Smart Choice for Your New Business

According to a report, Singapore has birthed at least 22 unicorns, surpassing the combined total of the last eight years. Some of the industry-leading tech start-ups that have emerged as unicorns in the nation’s technology ecosystem are Carro, PatSnap, Nium, Cove, Trax, Grab, Acronis, Zilingo, Circles Life and Carousell, among others.

Furthermore, there is a huge concentration of investors coupled with the vast availability of funds in Singapore which further boosts the growth of the Singapore ecosystem. The local ecosystem benefits from over 600 accelerators, incubators and investors.

These are some of the major reasons why a lot of home-grown start-ups as well as overseas start-ups have relocated their base in Singapore. To name a few, Grab, Konigle, Interviewer.ai and Privyr are some of the tech start-ups that have relocated to Singapore.

In 2022, the economic output of the technology sector is anticipated to cross $5.3 trillion. The tech-savvy companies and entrepreneurs are leaving no stone unturned to leverage this opportunity.

The above mentioned facts and data very much prove that this is the right time for you to register your tech start-up in Singapore.

Singapore is Shaping the Future of Technology Start-Ups

Singapore has always been at the forefront of preparing for the digital future. The setting up of Punggol Digital District ( PDD) is a testament to Singapore’s reputation as the region’s digital innovation hub. It depicts Singapore’s efforts toward Smart Nation and digital economy plans.

Opening in 2024, the district will serve as a living hub for companies, students and the public to test digital and smart living solutions.

Some of the top global companies like Delta Electronics Int’l (smart living solutions), Boston Dynamics (robotics design solutions), Group-IB (cyber security services provider) and Wanxiang (blockchain solutions) along with a network of tech associations have already confirmed plans to set up their bases in Punggol Digital District.

In one of the PDDevents, Singapore Minister for Trade and Industry Minister Gan Kim Yong said, “The ecosystem will be further strengthened by the Cyber Security Agency of Singapore (CSA), Government Technology Agency (GovTech) and a network of tech associations. Together, we hope to create a vibrant ecosystem that promotes opportunities for collaboration in the digital technology space.”

His statement gives more power to Singapore’s first smart business district and promises an even better future for the technology sector in Singapore.

Why Choose Singapore for Tech Start-Up

Strong IP Protection Laws
Singapore has successfully positioned itself as a ‘global IP hub in Asia’, with a range of programmes to accelerate the patenting process to match up to the demands for IP rights worldwide. Singapore company incorporation enables you to protect your innovative tech ideas through strict IP laws.
Conducive Testbed for Innovation and New Technologies
With a population of around 6 million, Singapore is considered a perfect test bed for new technologies and for testing your innovative tech ideas. It is also seen as a gateway to access the broader Southeast Asia market opportunity. This is one of the prime reasons that attract creative and innovative entrepreneurs to locate their start-ups in Singapore.
Vibrant and Thriving Technology Ecosystem
Singapore’s ecosystem of open innovation enables technology businesses to thrive in a digital economy. Leading tech companies like Facebook (now META), Amazon, Apple, Netflix and Google have their bases in Singapore. This gives an opportunity to start-ups to draw on cutting-edge research and also connect with thought leaders in their respective industries.
‘Smart Nation’ Initiative

Under the ‘Smart Nation’ initiative, the Singapore government has launched Digital Economy Framework to transform itself into a digital-based society. It is becoming a tech hub for future technologies. Some of the strategies followed by the government that supports the initiative include:

  1. Establishment of a high tech ecosystem to boost the number of local tech start-ups.
  2. Digitalisation of existing domestic businesses to spur economic growth.
  3. Tax Exemption Scheme for local companies incorporated in Singapore for the first three years. They can claim corporate tax exemption of up to 75% on their first S$100,000 taxable income and up to 50% on their next S$200,000 taxable income.
Ease of Doing Business
The start-up culture in Singapore is supported by the forward-looking government that ensures ease of doing business. Singapore has consistently been recognized as the easiest place in the world to conduct business. In fact, as per the ‘World Bank Annual Ratings 2022’, Singapore is ranked at 2nd position among 190 economies across the world in the ease of doing business. Also, as per the Economist Intelligence Unit’s ‘Business Environment Rankings, 2022’, Singapore ranks 1st in the Asia Pacific and the world for having the best business environment.
Funding Support from Government

The government in Singapore offers various attractive grants, incentives and funding schemes that assist entrepreneurs and start-ups to launch and expand their operations from Singapore. Enterprise Singapore is a government agency supporting the growth of Singapore enterprises. Action Community for Entrepreneurship (ACE) is responsible for driving entrepreneurship and innovation in Singapore. The organisation helps Enterprise Singapore to offer grants to start-ups.

Minister for Trade and Industry, Gan Kim Yong said, “The Government is committed to supporting research and innovation. Under the Research, Innovation and Enterprise 2025 masterplan, or RIE2025, the Government will invest S$25 billion to anchor Singapore’s positioning as a Global-Asia node of technology, innovation and enterprise.”

A Complete Guide for Doing Business in Singapore

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Substantial Grants and Incentives for Tech Businesses in Singapore
Some of the grants offered by the government agencies to tech start-ups in Singapore to accelerate their development and fund their operations include:
Startup SG
Startup SG is a SPRING Singapore-led programme that unifies an array of start-up support grants and schemes under an umbrella initiative. The programme has six unique pillars that deal with the various aspects of a start-up ecosystem. Let us take you through each pillar of the Startup SG programme in detail so that you can tap on these schemes to avail financial, talent and capability support if you plan on starting a new company in Singapore.
Startup SG Tech

Start-up SG Tech scheme acts as a platform for entrepreneurs to access local support schemes. The scheme is specifically targeted at tech start-ups. It provides early-stage funding to local Singapore companies for commercialising proprietary technology ideas.

The scheme aims to offer funds for Proof-of-Concept (POC) and Proof-of-Value (POV) projects. POC projects can avail grants up to S$250,000 if the project is designed for testing the technical and scientific viability of new technology. Whereas, POV projects can avail grants up to S$500,000 if the project is designed for testing the commercial viability of a lab-proven technology.

Start-ups that meet the below-mentioned criteria are only eligible for Start-up SG Tech scheme.

  • Core R&D activities to be carried out in Singapore
  • The company should be incorporated within the last 10 years at the time of grant application
  • Company is not a subsidiary of a corporate entity at point of incorporation
  • Group annual sales of the company is not more than S$100 million or the group employment size is not more than 200 people
  • The local shareholding of the company should be minimum 30%
Start-up SG Tech offers grants to companies in the sectors such as advanced manufacturing and robotics, biomedical sciences and healthcare, food science and technology, agritech, information and communications technologies, precision engineering, transport engineering and clean technology.
Startup SG Equity

Startup SG Equity scheme aims to stimulate private sector investments in innovative Singapore-based technology startups. The scheme is specifically targeted at general tech start-ups and deep tech start-ups. While general tech start-ups are companies that use existing technologies to provide an online solution for an offline problem, deep tech start-ups are companies that deal with high level issues and bring advanced solutions to complex challenges affecting humanity.

The scheme aims to assist start-ups engaged in technology innovation to access funding from private investors. It is a co-investment scheme in which the Singapore government will co-invest with private investors in start-ups that require significant capital expenditure and time to be commercially viable.

Singapore government will co-invest in a 7:3 ratio i.e., the government will offer 70% funding in an initial investment round of S$250k to the start-ups that are improving existing technologies. At a later stage, the government will co-invest in a 1:1 ratio i.e., it will invest S$1 for every S$1 invested by private investors up to a maximum of S$2 million.

For deep tech start-ups, the government will co-invest in a 7:3 ratio i.e., the government will offer 70% funding in an initial investment round of S$500k. At a later stage, it will co-invest in a 1:1 ratio i.e., the government will invest S$1 for every S$1 invested by private investors up to a maximum of S$4 million. In the last stage, it will co-invest in a 3:7 ratio i.e., the government will invest S$3 for every S$7 invested by private investors up to a maximum of S$8 million.

Start-ups that meet the below-mentioned criteria are only eligible for Startup SG Equity scheme.

  • The company should be Singapore based and the core operations must be carried out in Singapore
  • The company should have been incorporated as a private limited company for less than 10 years
  • The company should prove that its products or services and applications offer substantial innovative and intellectual property
  • The company should have the potential for high growth and show its ability to scale in the international market
  • The company should not be a subsidiary or a joint venture
  • The company should have a paid-up capital of minimum S$50,000
  • The company should not be involved in illegal acts or acts that are against the public interest such as gambling, tobacco-related products etc.
  • The company should have identified an independent third-party investor
Incorporate your Tech Company in Singapore with IMC Group
With easy and efficient access to IP protection laws, testbeds, grants and resources, Singapore is the most ideal destination to incorporate your tech company and establish your presence in Asia. If you need help with your technology company formation in Singapore, get in touch with IMC Group and find out more about our company incorporation services.
Singapore Tech Landscape at a Glance
How to Incorporate Tech Startup in Singapore - FAQ
1) How do tech start-ups get funding in Singapore?

Tech start-ups in Singapore get funding via the following methods:

  • Cash grants
  • Government funding
  • Tax incentives
  • Angel investors
  • Venture capitalists
  • Incubators
  • Accelerators
2) How do tech start-ups benefit from start-up schemes and grants?
Tech start-ups benefit from start-up schemes and grants in the following ways:
  • Quick access to funds
  • Eases cashflow
  • Provides the capital needed to perform key business activities like conducting market research and Research & Development
3) What are the different business structures for tech start-up registration in Singapore?
You can register your tech start-up in Singapore with any of the below-mentioned business structures:
  • Private Limited Company
  • Limited Liability Partnership
  • Limited Partnership
  • Partnership
  • Sole Proprietorship
4) Which is the ideal business structure for tech start-up registration in Singapore?
The most ideal business structure for tech start-up registration in Singapore is a private limited company. It is dynamic and scalable. Moreover, a private limited company also limits your liability to your share capital.
5) What are some of the key considerations for starting a technology company in Singapore?

When you have decided to launch your tech company in Singapore, a few questions that you might need to ask yourself are:

  • What are the associated risks? Does the technology have clearly defined applications and a definable market?
  • Is it going to be a disruptive technological innovation? If not, which category will it fit into?
  • Who will own the intellectual property rights?
  • When can the product hit the market?
  • Will you be the sole founder or group of founders?
  • What will be the role of founders?
  • Whether it will be a small sustainable business or grow as a company or go for public listing or position itself for acquisition?
  • What will be the initial valuation of the company? Will there be a need for private investments for long term growth?
  • Do you want to limit your liability?
6) How long does it take to incorporate a technology start-up in Singapore?
If all the documents are in order, incorporation of a technology start-up in Singapore takes only 1 to 3 days.
7) Is it mandatory to have a local director for a Singapore Tech Company?
Yes, it is mandatory to have at least 1 local director who is either a natural resident of Singapore or a permanent resident or holder of an Employment Pass, Entre Pass or a Dependant’s pass.
8) How much share capital is required to incorporate a tech company in Singapore?
As per provisions of the Companies Act in Singapore, you can incorporate a tech company in Singapore with just S$1 share capital. You can increase the share capital in the future as per your choice.
9) What are the minimum requirements to incorporate a technology company in Singapore?
You can incorporate a tech company in Singapore with a minimum of one share, S$1 paid-up capital, one shareholder, one local resident director, and a local registered address.
10) How many directors are required for private limited company formation in Singapore?
Private limited company formation in Singapore requires at least 1 local director who is either an ordinarily resident in Singapore or a Singapore citizen or permanent resident in Singapore or holder of an Employment Pass or Entrepreneur Pass. The person should be 18 years of age or above.

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