A Member Firm of Andersen Global

Contact Us
IMC Logo

Blog

UAE Corporate Tax
  • Article, U.A.E

Avoid the AED 10,000 Fine: UAE’s New Corporate Tax Registration Deadlines

The Cabinet Decision No.10 of 2024, which came into effect on March 1, 2024, has been announced. The Federal Tax Authority (FTA) has outlined important dates for corporate tax registration, and it’s crucial to act swiftly. If you miss the deadline, you could be facing an AED 10,000 ($2700.00) fine.

The first deadline for juridical persons is May 31, 2024. This is part of the new tax rules from the FTA, reflecting the Corporate Taxation Law that kicked in last June, affecting all financial periods starting from then.

For any businesses commenced before March 1, 2024, you need to register for corporate tax by the dates mentioned below. And if you’re a new business by March 1, 2024, you have three months to register.

Staying on top of these rules is key.
Month of Licence issuance irrespective of year of issuance Deadline to apply for Corporate Tax Registration
1 January – 31 January 31 May 2024
1 February – 28/29 February 31 May 2024
1 March – 31 March 30 June 2024
1 April – 30 April 30 June 2024
1 May – 31 May 31 July 2024
1 June – 30 June 31 August 2024
1 July – 31 July 30 September 2024
1 August – 31 August 31 October 2024
1 September – 30 September 31 October 2024
1 October – 31 October 30 November 2024
1 November – 30 November 30 November 2024
1 December – 31 December 31 December 2024
Companies often struggle to keep up with changing tax regulations. At IMC, our experienced team is committed to helping in-house tax departments smoothly navigate the new corporate tax (CT) landscape with our Corporate Tax Advisory in UAE. Our tax experts conduct tax impact assessments, examine transfer pricing, review cross-border transactions, and develop operational strategies for businesses throughout the UAE.
Ready for Tax Success?
Click Here to Start!

IMC is your go-to expert for Corporate Tax in the U.A.E. We’re dedicated to assisting you in keeping up with tax regulations so you can focus on growing your business. IMC Group believes in empowering businesses with the knowledge and tools they need for complete tax compliance.

Trust us to guide you through these changes with ease and confidence.

Remember, it’s not just about avoiding fines – it’s about ensuring your business thrives under the new tax laws. Let IMC help you get there.

Read More

A Complete Guide to Obtaining an ICV Certificate in the UAE
  • Article, U.A.E

A Complete Guide to Obtaining an ICV Certificate in the UAE

In a bid to streamline the industrial bidding process and boost the country’s economy, the government of UAE has introduced the ICV (In-Country Value) certification programme. Obtaining your ICV certificate can provide your business with a competitive advantage during tender assessments. This explains why forward-thinking businesses are applying for the ICV certificate to gain an edge over other bidders. As a business entity operating in the Emirates, you would be keen to obtain your ICV.

Most business entities can easily obtain the ICV certificate by adhering to the guidelines. Only an ICV-approved audit firm or advisory company reserves the authority to give this certificate.

Guidelines to obtain your ICV Certificate in the UAE

1. Furnish the documents

The process of applying for your ICV certificate begins with obtaining relevant financial statements. Established audit firms can assist in preparing these documents. This would ensure your compliance with the International Financial Reporting Standards (IFRS). If your company is newly established, management accounts can be used for the application.

2. Use the latest statements

Established audit firms would recommend using ICV certification templates during the application. The auditors would use the latest financial statements (preferably the last 2 years’ statements) that have been audited and are IFRS compliant. For companies established within the last 10 months without audited statements, the figures from management accounts (not older than 9 months) can be used.

3. Get the application evaluated and approved

The Ministry of Industry and Advanced Technology (MOIAT) has established guidelines and procedures for evaluating ICV applications. Businesses need to get the ICV template verified along with the supporting documents. After evaluating your application, the ICV committee will approve it. You need to review the unsigned ICV certificate and approve it before sending it to the certifying body.

4. Issuance of the ICV Certificate

Upon receiving the approved document from you, the certifying body would finally get your ICV certificate issued. With the ICV certificate in hand, your business can participate in bidding processes with relevant entities.

FAQ

How many certificates do I have to apply for?

Being a supplier in the industrial sector, you need separate certificates for all the business licenses in your possession. The authorities consider each business license as a separate legal entity. If your business operates at multiple branches under a single license, you need a single, comprehensive certificate.

How long does the ICV certificate remain valid?

The ICV certificate remains valid for 14 months after the audited financial statements get issued. Businesses may use the same financial statements to reapply for the certification before this period elapses. If you receive an updated ICV certificate, the previous one would remain valid.

Can I switch to a different certifying body?

When your business entrusts an Empaneled Certifying Body for validating the certification, you are not entitled to switch to a new body throughout the ICV certification process unless you have a valid reason.

IMC Group continues to be one of the trusted auditing and advisory firms in Dubai. Industrial suppliers can fast-track their process of obtaining ICV certificates with professional support.

Read More

Why Hiring a VAT Consultant in Dubai is Essential for Small Businesses
  • Article, U.A.E

Why Hiring a VAT Consultant in Dubai is Essential for Small Businesses?

Dubai continues to be a global commercial hotspot, offering a plethora of privileges to small businesses. With its ease of doing business, robust transit network, and business-friendly policies, it appeals to entrepreneurs across the globe.

The tax-free regime in Dubai before 1st January 2018 further transformed the city into a global investment hotspot.

Being a small business, it pays to adhere to the tax norms in the country. Working with seasoned tax advisory professionals, businesses can comply with legalities. Right from registering for VAT to tax auditing, hiring experts for VAT advisory would streamline your growth trajectory.

What services do VAT consultants in Dubai provide?

Getting entangled in legal hurdles would be the last thing small businesses expect. In the UAE, failure to comply with the existing VAT norms invites hefty penalties. Companies specializing in VAT advisory can guide your business and help you deal with your VAT liabilities accurately. With professional minds backing your business, you can focus on your priorities.

Reputable VAT consultants offer a plethora of services, including:

  • VAT Registration and deregistration
  • VAT advisory
  • Explaining VAT regulations
  • VAT return filing
  • Assistance in processing payment to FTA
  • Purchase invoice reviewing
  • Internal VAT audit
  • Mitigating VAT liabilities

5 Reasons Small Businesses Should Hire VAT Consultants

Here’s why forward-thinking businesses in Dubai closely collaborate with experts for accurate VAT advice.

1. They are experts

Being informed professionals, tax advisory companies in Dubai educate their clients about their liabilities. So, you don’t bear the risk of miscalculating payments or levying the wrong rate from customers. Established VAT consultants bring their comprehensive knowledge to the table, helping your business navigate through the complex regime.

2. Accuracy matters

While filing VAT, accuracy happens to be the magic word. Reputed VAT consults never hesitate to walk the extra mile to cross-check details. Working with experienced tax advisors, you remain secure from committing generic mistakes during return filing or the initial tax registration.

3. Risk analysis and mitigation

One of the best perks of seeking VAT advisory from consultants is their ability to manage risk. Experienced tax professionals are capable of identifying compliance risks. Accordingly, they advise their clients to stay on the right track, keeping them out of the woods. This way, you wouldn’t be at the risk of being pulled up for unintentional non-compliance with VAT norms.

4. Flawless VAT audit preparation

Remember, FTA would allow your business just 5 days to respond to a VAT audit query. Top VAT consultants prepare their clients for stringent tax audits. Just after filing your VAT, they help businesses understand the supporting documents. Besides, the consultants capture relevant field data and keep their clients well-poised for VAT audits.

5. Capitalize on opportunities

In case your business turnover lies in the Dh187, 500 to Dh375, 000 bracket, registering for VAT isn’t mandatory. However, getting your firm registered brings several benefits that are easy to overlook. Reputed VAT consultants help their clients make the most of these opportunities.

Conclusion

Fulfilling complex tax obligations in Dubai and remaining compliant involves the experienced handling of your accounts. Why not hire the best VAT consultants in your city to spearhead your business? IMC Group, one of the most esteemed companies specializing in VAT advisory in Dubai, can handle your tax matters with expertise.

Read More

2023 Middle East M&A Outlook: Brace for Surprising Developments
  • Article, U.A.E

2023 Middle East M&A Outlook: Brace for Surprising Developments

Gulf SWFs and PE firms have substantial financial resources to support significant M&A activity.

The Middle East’s M&A sector experienced a deceleration in 2022, with both corporate and financial investors adopting a cautious stance due to surging interest rates and growing economic unease. Although M&A transactions sustained their robustness during the initial months of 2022, they lost momentum as the macroeconomic situation progressively worsened throughout the year.

The year 2022 has presented several economic and financial challenges that have made dealmaking a complex task on a global scale. Among the main obstacles has been the constricting credit environment, with banks limiting their funding for leveraged buyouts due to increasing interest rates and an overall aversion to risk. As a result, the issuance of leveraged loans to support private equity (PE) acquisitions have mostly come to a halt in Europe and the Middle East.

Despite the global challenges, the Middle East has experienced a modest decrease in the number of deals, from 366 in the first nine months of 2021 to 343 in the same period in 2022. The UAE, Saudi Arabia, and Israel were the most sought-after countries by buyers, with companies headquartered in these locations representing 20.7%, 9%, and 54.2% of the total deals in the region, respectively.

Amid the increasingly challenging economic climate, most M&A transactions in the Middle East were focused on recession-proof sectors, such as non-discretionary consumer goods and healthcare, while technology, media, and entertainment remained popular. Additionally, infrastructure deals proved to be a highlight in the region’s M&A activity.

Looking ahead to 2023, we anticipate a new dealmaking environment characterized by the same challenges that affected the market in the latter part of 2022. As a result, we expect the M&A sector to remain sluggish, particularly in the first half of the year. Despite this, the performance outlook, potential public-to-private opportunities, distressed situations, and lower valuations could present new avenues for dealmaking and unlock previously pent-up deals.

Nevertheless, in this increasingly complex environment, the timelines for completing deals are likely to be longer, and the risk of executing transactions successfully is higher.

Here are some potential trends that could shape the M&A market in the coming months:

Undeployed Reserves:

In the short-term, powerful corporate buyers may hold an edge, but the M&A market will still depend on sovereign wealth funds (SWFs) and financial sponsors, who have ample dry powder available for investment. As economic conditions shift, these funds will likely become more selective and focus on opportunities that enhance their existing portfolios or offer cash-generating potential. Despite a slowing fundraising pace, we anticipate that SWFs and financial sponsors will remain key players in the M&A market.

Small-scale acquisitions:

While financing options remain limited and large-scale opportunities are scarce, private equity firms and sovereign wealth funds may shift their focus towards smaller-scale bolt-on acquisitions. These types of acquisitions can add value to portfolios of SWFs and PEs, particularly when traditional growth channels are no longer viable, and exit routes become limited. During times of uncertainty, investing in familiar businesses and platforms may also prove to be a more sensible strategy for SWFs and PEs.

Mergers and acquisitions in distressed companies:

It is worth noting that, contrary to expectations, we did not observe a substantial increase in mergers and acquisitions involving financially troubled companies thus far in 2022. However, we anticipate this may change in 2023 as worsening economic conditions begin to pressure company balance sheets. This could lead to asset sales and operational restructuring, ultimately creating potential opportunities for mergers and acquisitions in distressed companies.

Divestitures:

We anticipate increased divestiture opportunities as economic conditions become more uncertain, causing larger companies and conglomerates to re-evaluate their strategies and shed non-essential assets. Moreover, activism investment remains a potent catalyst, with many investors able to establish positions at reduced prices during a downturn in the stock market. For SWFs and PEs, divesting non-core business units from their portfolio companies, while more intricate, may yield superior returns.

Environmental, Social, and Governance:

ESG factors are becoming an increasingly important consideration for both corporate and financial buyers in their M&A activities. This trend is expected to continue and gain momentum in 2023. Investors closely scrutinise targets’ ESG practices, including their impact on the environment, diversity and inclusion policies, and supply chain management. These factors are now essential components of investment decision-making and can have a significant impact on deal outcomes. They can also influence the availability and cost of financing, giving sponsors an advantage in securing debt funding.

In 2023, M&A buyers are expected to shift towards more resilient sectors in the face of economic headwinds, including non-discretionary consumer, healthcare, infrastructure, and specific sub-sectors within technology, media, and entertainment. These sectors are better positioned to withstand economic uncertainties due to strong demand, recurring revenue models, and the ability to mitigate rising operating costs arising from inflation. Moreover, the ongoing trend of digitalization across businesses will provide impetus to technology-related sectors. Infrastructure assets will also be a key focus, given their asset-heavy nature and ability to generate stable cash flows, thus providing downside protection.

Read More

VAT Alert in UAE: What Every Entrepreneur Needs to Know
  • Article, U.A.E

VAT Alert in UAE: What Every Entrepreneur Needs to Know

Taxpayers in the UAE should prepare for new VAT changes effective January 1, 2023. It is advisable to consult tax consultants in Dubai promptly due to the significant impact of the recent amendment on your business.

Key dates

  1. The revised, amended provisions became effective from January 1, 2023
  2. As per new rules, qualifying registrants must submit reports from July 1, 2023
  3. The FTA kindly requests Qualifying Registrants to inform them by March 15, 2023

FTA updates the UAE VAT’s Tax Policy and Executive Regulation. The Federal Tax Department has modified the essential regulations surrounding UAE VAT:

Federal Decree-Law No. 28 of 2022 Modifications, Part I (Tax Procedures)
II. Act No. 8 of 2017’s executive rule amendments (Executive Regulations)
Based on the interpretation of the precise wording of the pertinent legislation, we have offered a comprehensive understanding following table:

1. The Federal Decree-Law No. 28 of 2022 updates Federal Decree-Law No. 7 in 2017 of a UAE on VAT, which will take effect on March 1, 2023.

Article Title Modification IMC Remarks
1 Meaning The terms “Tax Residency Certificates” and “Tax Residency” now have new terminology. A few small changes were also applied to the tax and business concept. For the Corporate Income taxes of June 1, 2023, the changes above were done to the legislation to ensure compatibility.
5 Linguistic In addition to Arabic, the Council can consider materials in other languages. In particular, if the Government demands it, an Arabic version could be necessary. Corporate and personal coordination with the Tax Authority will be improved.
7 Legal Advocates Members, too, can comply with any new obligations and present tax records to the Board. If the taxpayer is a juvenile or incompetent, there are no restrictions on filing the tax return.
10 Voluntary Disclosure (VD) When there is no increment of taxable income, individuals must file the VD. The segments and penalty provisions will be outlined in the Executive Order. Taxpayers may not be able to rectify errors in the subsequent report.
16 Power to do an internal audit
  • An extension from 5 to 10 business days for tax audit
  • Authorities can inspect the premises without a warrant
  • Five additional days
  • Cooperation between the taxpayer and the Official is essential
23 Tax Evaluation
  • Within 10 days, the FTA should provide taxation and inform the payer. When the taxpayer is failed in
  • Registered application and VAT payment
  • Due taxes
  • Error in return
 Help taxpayers determine the appropriate income tax.
24 Penalty for Regulatory Evaluation Administrative fines ranging from a set AED 500 penalty to a high equal to double the taxes Reduced the burden on taxpayers
25 Tax Offenses and Sanctions
  • Tax fraud, unauthorized withholding of taxes, and tax settling may result in a prison term or a financial penalty
  • Prison if the appropriate penalty is not paid unless it is cancelled
  • Financial fines or prison terms for falsifying information, data breaches, or obstruction of justice
 It lessened the strain of covering the initial sum—someone who fully adheres to the legal system and supports the Authorities.
32 Submission of a complaint and any other non-acceptance instances Within 40 business days, an appeal to the Council’s judgment must be filed. Taxpayers are given more time to submit their complaints.
36 Jury’s appeal system processes The panel’s judgment could be challenged within forty days. Chance to challenge in courts within the given timeframe
46 Limited Time Period Whenever five years have passed, the authority can impose tax assessments or perform tax audits in case:

  • FTA issues an auditing notification
  • The taxpayer submits a VD
 It gives the Authorities more chance to execute tax evaluations within the given timeframe, appearing in judgment.

In addition, the following additional sections are added for offenses involving taxes, reviews of valuations, complaints, and reviews.

Article no. Details
26 Measures and Techniques
27 Agreement on Tax Fraud Charges
28 Petition for a Taxation Modification
29 Increase in Timelines

2. Cabinet Decision No.99 of 2022 revised Executive Regulation – Law No. 8 of 2017 and will prevail on January 1, 2023.

The concept of service has now been changed in Article 3, exempting services offered by an entity to carry out duties as a board of any private or Government organization.

Article 72, which deals with monitoring the contributions made, has already been modified to the following extent:

  • Where a taxpayer has a business located in the UAE, no permanent premises must have detailed records
  • When services provided by a taxpayer into an ECO surpass AED 100,000,000, they must maintain documents to demonstrate the Emirate wherein the supply is acquired
  • The crossover threshold is also used to determine the provision’s relevance
Our Comments:

Since adjustments must be made to how enterprises are now operating, a modified federal decree-law, tax regulations, and administrative regulations are released. Therefore, organizations must ensure that the changes above are made to the relevant evidence and procedures as soon as possible before the law takes effect to prevent any legal implications.

How can IMC help?

IMC can assist your business by conducting a simulated audit that replicates the type of assessment the FTA may work. This audit will pinpoint any areas of non-compliance and provide recommendations to align your business with the UAE VAT regulations.

Read More

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.

Read More

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.

Read More

Kuwait and UAE Sign the Double Taxation Treaty
  • Kuwait, Newsletter, U.A.E

Kuwait and UAE Sign the Double Taxation Treaty

On 30th August 2022, the Kuwait Ministry of Finance announced that the State of Kuwait (Kuwait) and United Arab Emirates (UAE) have signed a long awaited double tax treaty, the first of its kind signed by Kuwait with any Gulf Cooperation Council (GCC) member state.

How will it benefit both the countries?

It aims to strengthen the cooperation frameworks in tax matters and boost cross-border trade and investment between both the countries. It is expected to bring together the financial, economic, and investment partnership between both the countries.

The tax treaty between Kuwait and UAE attempts to take advantage of the growing investment opportunities, uplifting commercial trading and strengthening the development goals in both the regions by way of diversifying the sources of national income and offering complete protection for goods and services.

The double taxation treaty provides a more favourable tax treatment in substitution to each country’s domestic tax legislation in respect of many income taxes (corporate and personal) and withholding tax matters.

How will it impact you?

The tax treaty may reduce the taxation burden of UAE residents in Kuwait and vice versa. This is because the double taxation treaty will override domestic tax legislation. Multinational companies in both the regions will have to revisit their existing tax structures to assess the impact of DTT rules.

What will happen next?

Currently, the tax treaty is signed between Kuwait and UAE. It should be followed by the final ratification and finally be published in the official Gazette. From there, it will be put into force as per the official date declared.

How can IMC Group help?

Our tax expert team at IMC Group is keeping a close eye on the taxation matters in the UAE and Kuwait. We will keep you updated with the latest provisions of the tax treaty. For more information, get in touch with us!

Read More

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.

Read More

Revised Golden Visa Rules: UAE Makes 10-Year Residence Scheme More Investor and Family-Friendly
  • Article, U.A.E

Revised Golden Visa Rules: UAE Makes 10-Year Residence Scheme More Investor and Family-Friendly

Overview

The UAE Golden Visa programme paves the path to citizenship for international talents who like to invest, work, study and excel in key sectors and speciality areas in the Emirates.

The Golden Visa is available for international investors and top global talents and provides them with visas for up to 10 years duration. The top talents include people and researchers in the fields of science and technology including doctors, specialists, scientists and inventors. The visa is also available for talents from the creative arts and sporting fields, and business owners and real estate investors in UAE can also apply for this visa. The golden visa process is however different from applying for a normal residency permit or Emarati citizenship and outsourcing a professional pro services in Dubai UAE is often seen to hasten the golden visa dream to fruition.

UAE today can boast of several high-tech and high-growth fields that can provide ample opportunities for the global top talents to grow, prosper and contribute to the welfare of mankind and the society at large through innovative industrial applications, sophisticated healthcare systems, most advanced high tech agricultural techniques, robust financial solutions and smart start-up ecosystems based on industry 4.0.

The Dubai UAE is a dream home for many global talents owing to its rich cultural heritage, diverse population, huge promise for future growth, safety and political stability and high standard of living. The emirate has also lured many reputed international business houses to come, settle and invest in Dubai company incorporation.

Lots of people have so far been awarded a golden visa and a good number of high school students securing high grades with 95% and above were granted golden visas along with their parents and siblings. Around 44,000 visas were issued in Dubai in the first year only.

What is the golden visa system?

In 2020, the UAE implemented a new system for long-term residence visas to enable and attract foreigners to live, work and study in the country without the need of a national sponsor and with 100% ownership of their business on the UAE’s mainland.

These visas are issued for 5 or 10 years and are automatically renewable on expiry.

Golden visa is granted to investors engaged in business set up in Dubai UAE, entrepreneurs, specialized talents and researchers in various fields of science, technology and knowledge and bright students with promising and innovative scientific capabilities.

The golden visa UAE eligibility criteria were simplified in April 2022 and the categories of people eligible to apply for the long-term 10-year visa have been expanded under a new set of executive regulations.

What are the benefits of this newly revised golden visa system?

The UAE Cabinet, headed by Sheikh Mohammed bin Rashid Al Maktoum, the Vice President, Prime Minister and Ruler of Dubai, has introduced the new set of executive regulations of the Federal Decree-Law on Entry and Residence of Foreigners for solidifying the country’s position as the most attractive to live, work, and invest.

Investors, entrepreneurs, exceptional talents, scientists and professionals, outstanding students and graduates, humanitarian pioneers, and frontline heroes, who fulfil certain eligibility parameters will qualify for the 10-year golden visas.

Besides granting the stay of the above-mentioned beneficiaries for 10 years, the new regulations provide additional benefits of Golden Visa in UAE allowing the visa holder to sponsor his/ her family members, including spouse and children regardless of their age. The new rules will also enable the visa holders to sponsor domestic support services without putting any restrictions on the numbers.

Secondly, the previous restriction on the maximum duration of stay outside the UAE for the Golden Residence to remain valid has been scrapped.

The revised visa rules allow the family members to stay in the UAE if the original holder of the Golden visa passes away, and till the expiry of the visa.

What are the different types of visas that one can apply for?

The types of golden visas one can apply for to obtain long residency status in the UAE along with the golden visa UAE eligibility criteria are mentioned below.

Golden Residence for Scientists is awarded to the highly successful scientists and researchers based on recommendations from the Emirates Scientists Council. Possession of a PhD or Master’s degree in engineering, technology, life sciences and natural sciences from the top universities across the world is mandatory including notable achievements in the field of research.

Golden Residence for Professionals is given to highly skilled workers with educational qualifications and professional experience in all disciplines and must have a valid employment contract in the UAE and should be classified in the first or second occupational level as per the Ministry of Human Resources and Emiratisation classification in line with the International Standard of Classification of Occupations ISCO by the International Labor Organization. Possession of a Bachelor’s degree or equivalent is a must with a minimum monthly salary of AED 30,000.

Golden Residence for Exceptional Talents is granted to the top talents from the fields of arts, sports, digital technology etc. and solely based on the talent of the individual irrespective of educational qualification or employment status or monthly salary or professional level. A recommendation and approval by a federal or local government entity are mandatory.

Golden Residence for Real Estate Investors is awarded to the Real estate investors if they purchase a property worth a minimum of AED 2 million. Investors are allowed to purchase the property with a loan from specific local banks.

Golden Residence for Entrepreneurs is issued when an entrepreneur is the owner or a partner in a startup registered under SME category with yearly revenue of not less than AED 1 million and the approval for the startup idea must be given by an official business incubator or the Ministry of Economy or the competent local authorities.

The owner or partner of a business project duly approved by the Ministry of Economy that has been sold at a minimum of AED 7 million is also treated as credible for Golden Residence.

Golden Visa for Outstanding Students and Graduates are meant for students with high academic performance in UAE secondary schools, and outstanding graduates from UAE universities and the top 100 universities globally fulfilling certain specific criteria such as CGPA.

The new regulations have rolled out new 5-years residence tracks to attract talented and skilled professionals, freelancers, investors and entrepreneurs. Skilled employees from the first, second or third occupational level and possessing a Bachelor’s degree or equivalent with an annual salary of AED 15,000 minimum are entitled to stay in UAE for five years. If you don’t qualify under the UAE Golden Visa for Investors, you can still reside in the UAE for five years as a freelancer or self-employed without any sponsor or employer. However, a freelancer or self-employed person must have a minimum Bachelor’s degree or specialised diploma, with an annual income of AED 360,000minimum from self-employment for the last two consecutive years.

The cost of a 10-year golden visa is roughly AED 1150 plus AED 1150 for application & issuance. The 5-year green residence schemes usually cost around AED 650 plus another AED 650 for application and issuance.

What is the procedure for applying for a golden visa?

The procedure detailing How to Apply for a UAE Golden Visa is explained below.

You need to log onto the Federal Authority for Identity and Citizenship (ICA) smart services website and access the golden services from the menu at the top.

If you belong to any of the eligible categories of golden visa and have not been nominated so far, you need to click on the “Start Service’ under “Visa – Golden Visa – Nomination Request for Golden Residence – New Request” for accessing the online form for submitting your details and the category under which you wish to be nominated.

Unified Identification Number (UID), the six-digit number assigned to you while entering the UAE also needs to be mentioned in the form. Filling up this form may be tricky at times and seeking help and advice from a pro services in Dubai is usually recommended.

A dedicated team has now been formed with representatives from the Dubai Immigration service, the General Directorate of Residency and Foreigners Affairs for quick and efficient handling of all applications for golden visas and other important residency visas. Named “You are Special”, the service can be accessed 24×7 online or by calling a phone number.

THE TAKEAWAY

The recent amendments to the golden visa rules updated the entire Entry and Residence scheme including long term residence visas with simplified requirements and many additional benefits. Under these revised visa rules, no host or sponsor is now required. The objective of this new scheme is to enhance the competitiveness of the nation, attract foreign investors for Dubai company incorporation and stabilize the job market.

Read More

Follow Us

Recent Posts

Get updated by Signup
to our Newsletter!

IMC Logo

Get Started

About

Locations

© 2024 IMC Group. All Rights Reserved.

IMC Logo

Get Started

About

Locations

© 2024 IMC Group. All Rights Reserved.

IMC Logo

Get Started

About

Locations

© 2024 IMC Group. All Rights Reserved.

Popup Form Image
Let's Talk