Dubai – UAE Company – LPOffshore.com

Dubai – UAE Company

Why Dubai is the Ideal Jurisdiction for Company Formation

Looking to launch a business in a global economic powerhouse? Dubai, part of the United Arab Emirates (UAE), is a premier destination for forming a Dubai company, offering unmatched benefits for entrepreneurs and corporations. Whether you’re considering a Free Zone company, mainland company, or offshore company, Dubai’s dynamic ecosystem, tax advantages, and strategic location make it the perfect hub for success. Here’s why setting up a Dubai company is a strategic choice.

1

Business-Friendly Tax System

Dubai’s tax regime is one of the most attractive globally, with Dubai taxes designed to maximize profitability. The UAE introduced a 9% corporate tax in 2023 for businesses with taxable profits exceeding AED 375,000, but Free Zone companies qualifying as Qualifying Free Zone Persons (QFZPs) can enjoy a 0% corporate tax on qualifying income. There are no personal income taxes, capital gains taxes, or withholding taxes, making Dubai ideal for Dubai companies and business owners.

2

Strategic Global Location

Positioned as a bridge between East and West, Dubai offers unparalleled access to markets in the Middle East, Africa, Asia, and Europe. Its world-class infrastructure, including major seaports and the Dubai International Airport, supports seamless trade and logistics for Dubai companies. This makes Dubai a hotspot for Free Zone companies and international businesses.

3

Flexible Company Structures

Free Zone, Mainland, and Offshore Dubai offers three main company types to suit diverse business needs: Free Zone Company: Operating in one of Dubai’s Free Zones (e.g., DMCC, JAFZA, IFZA), these companies enjoy 100% foreign ownership, 0% corporate tax on qualifying income, and no customs duties. Ideal for international trade, they are restricted from direct mainland business without additional licenses. Free Zone companies also offer Dubai immigration benefits like residency visas. Mainland Company: A Dubai company on the mainland can operate across the UAE and internationally, with 100% foreign ownership in most sectors since 2021. Subject to 9% corporate tax on profits above AED 375,000, mainland companies require a physical office but offer greater market access. Offshore Company: Registered in Dubai Free Zones like JAFZA or RAK ICC, offshore companies are designed for business outside the UAE, offering 100% foreign ownership, tax exemptions, and asset protection. They cannot conduct local business or obtain residency visas.

4

Fast and Streamlined Company Setup

Setting up a Dubai company is efficient, often taking 3–7 days for Free Zone companies and slightly longer for mainland setups. The process is largely online, with minimal bureaucracy, and Free Zone companies require only a flexi-desk or virtual office, reducing costs. Our services handle the entire process, from licensing to opening a Dubai bank account.

5

Robust Banking and Financial Ecosystem

Dubai’s world-class financial sector offers access to Dubai bank accounts with top-tier banks like Emirates NBD and HSBC. Free Zone companies and mainland companies benefit from seamless international transactions, while offshore companies can use Dubai bank accounts for global operations. We assist with Dubai bank account openings to ensure compliance and efficiency.

6

Comprehensive Immigration and Residency Services

Move to Dubai with ease through our Dubai immigration services. Free Zone companies and mainland companies allow business owners and employees to obtain UAE residency visas, valid for 2–3 years, with options to sponsor dependents. The process includes entry permits, medical tests, and Emirates ID issuance, all managed by our expert team to simplify Dubai immigration for you and your workforce.

7

Global Reputation and Innovation Hub

Dubai is renowned for its pro-business policies, zero corruption, and alignment with the UAE’s D33 Economic Agenda, aiming to double its economy by 2033. Dubai Free Zones like DMCC and Dubai Internet City foster innovation in sectors like tech, healthcare, and logistics, attracting talent and investment for Dubai companies.

Start Your Dubai Company Today

From its low Dubai taxes and flexible company structures to its strategic location and Dubai immigration benefits, Dubai is the ultimate destination for forming a Free Zone company, mainland company, or offshore company. Whether you’re a startup or a multinational, Dubai provides the tools to thrive globally.

Ready to launch your Dubai company? Contact us to streamline your setup, secure a Dubai bank account, and navigate Dubai immigration for you and your team!

UAE Corporate Tax System: A Guide for Your Dubai Company

Dubai’s tax system is a cornerstone of its appeal for Dubai companies, offering low Dubai taxes and significant exemptions for Free Zone companies, mainland companies, and offshore companies. Coupled with no personal income tax, it’s a magnet for global entrepreneurs looking to move to Dubai. Below, we explore the UAE corporate tax system, taxes for business owners, and how our Dubai immigration services support your Dubai company.

Why Choose a Dubai Company for Tax Benefits?

Introduced in June 2023, the UAE corporate tax applies at 9% on taxable profits above AED 375,000, but Free Zone companies can qualify for a 0% rate on specific income. There are no personal income taxes, capital gains taxes, or withholding taxes, ensuring Dubai companies and their owners retain more profits. Offshore companies are typically exempt from corporate tax, while Dubai bank accounts enhance financial efficiency.

Types of Taxes for Dubai Companies

Corporate Tax for Your Dubai Company

Rate: 9% on taxable profits exceeding AED 375,000 for mainland companies and non-qualifying Free Zone companies. Free Zone companies classified as Qualifying Free Zone Persons (QFZPs) enjoy 0% on qualifying income (e.g., transactions with other Free Zone entities or wholesale distribution).
Exemptions: Free Zone companies must maintain substance (e.g., adequate staff or assets in the Free Zone) and comply with transfer pricing rules. Offshore companies are generally exempt as they operate outside the UAE. Small businesses with revenue below AED 375,000 face 0% corporate tax.
Who It Applies To: All Dubai companies (mainland and Free Zone) with taxable activities in the UAE, except qualifying Free Zone companies and offshore companies.

Personal Income Tax for Business Owners

Rate: 0% – The UAE levies no personal income tax on salaries, dividends, or other income for individuals, including business owners of Dubai companies.
Benefits: This tax-free status maximizes disposable income for entrepreneurs and employees, making Dubai attractive for those planning to move to Dubai.
Who It Applies To: All individuals, including business owners and employees of Free Zone companies or mainland companies.

Other Taxes

VAT: A 5% Value Added Tax applies to certain goods and services in the UAE, but Free Zone companies dealing in exports or intra-Free Zone transactions are often exempt.
Customs Duties: Free Zone companies enjoy 0% customs duties on imports and exports within the Free Zone, while mainland companies may face 5% duties unless exempted.

Tax Advantages for Dubai Companies

0% Corporate Tax for QFZPs: Free Zone companies meeting QFZP criteria avoid corporate tax on qualifying income, ideal for international trade.
No Personal Income Tax: Business owners and employees keep all earnings, enhancing Dubai’s appeal for Dubai immigration.
Offshore Tax Exemptions: Offshore companies face no corporate tax, perfect for holding assets or global operations via Dubai bank accounts.
Dubai Bank Account Integration: A Dubai bank account streamlines tax compliance and international transactions for all Dubai companies.

Qualifying Free Zone Person (QFZP) Process for Free Zone Companies

For a Free Zone company to secure a 0% corporate tax rate on qualifying income, it must qualify as a Qualifying Free Zone Person (QFZP) under UAE tax law. This process is vital for Dubai companies in Dubai Free Zones to maximize tax savings, complementing strategies with Dubai bank accounts and Dubai immigration.

What is a QFZP for a Free Zone Company?

A QFZP is a Free Zone company that meets specific criteria to enjoy a 0% corporate tax rate on qualifying income, such as income from transactions with other Free Zone entities or wholesale distribution in designated zones. Non-qualifying income (e.g., from mainland UAE activities) is taxed at 9% if profits exceed AED 375,000.

Steps in the QFZP Process

Assess Eligibility for QFZP Status
- The Federal Tax Authority (FTA) evaluates whether your Free Zone company meets QFZP criteria:
  - Substance: Maintain adequate staff, assets, or operations in the Dubai Free Zone.
  - Qualifying Income: Earn income from activities like intra-Free Zone transactions, wholesale distribution, or other approved activities.
  - Non-Election for Standard Tax: Opt not to be taxed at the standard 9% rate even if profits exceed AED 375,000.
  - Transfer Pricing Compliance: Adhere to arm’s-length pricing for related-party transactions.
  - De Minimis Rule: Non-qualifying revenue must be less than 5% of total revenue or AED 5 million (whichever is lower).
- Example: A Free Zone company in DMCC exporting goods globally with minimal mainland activity may qualify as a QFZP.
Register for Corporate Tax
- All Dubai companies, including Free Zone companies, must register with the FTA for corporate tax, even if expecting a 0% rate. Submit the registration form via the FTA’s online portal.
File a Corporate Tax Return
- Submit an annual Corporate Tax Return to the FTA, typically within 9 months of the financial year-end, declaring all income and claiming QFZP status.
- Include a statement asserting QFZP eligibility and specify qualifying vs. non-qualifying income.
Provide Supporting Documentation
- To substantiate QFZP status, your Free Zone company must provide:
  - Financial statements detailing income sources.
  - Contracts or invoices showing intra-Free Zone or export activities.
  - Records of transactions via a Dubai bank account to prove income origins.
  - Evidence of substance (e.g., office leases, employee contracts in the Free Zone).
  - Transfer pricing documentation for related-party transactions.
Respond to FTA Inquiries
- The FTA may request additional details to verify QFZP status, such as:
  - Proof of operational substance in the Dubai Free Zone.
  - Breakdown of income sources and compliance with de minimis rules.
- Timely responses are critical to securing the 0% tax rate.
Receive FTA Assessment
- The FTA reviews the return and issues a tax assessment. If approved as a QFZP, qualifying income is taxed at 0%. Non-qualifying income above AED 375,000 is taxed at 9%. Appeals can be filed within a specified period if denied.

Key Considerations for a Successful QFZP Claim

Substance is Critical: Ensure your Free Zone company has tangible operations (e.g., staff, office, or assets) in the Dubai Free Zone to meet FTA requirements.
Accurate Income Segregation: Clearly distinguish qualifying and non-qualifying income to comply with de minimis rules.
Professional Support: Engage tax advisors or our team to navigate complex QFZP requirements and ensure compliance.
Avoid Tax Avoidance Schemes: The FTA may challenge claims if they suspect artificial arrangements to inflate qualifying income.

Why It Matters for Free Zone Companies

The QFZP process is a game-changer for Free Zone companies, enabling 0% corporate tax on qualifying income. This, paired with Dubai bank accounts for seamless financial management and Dubai immigration for residency visas, makes Dubai Free Zones a top choice for tax-efficient global operations.

Dubai Immigration Services: Residency Visas for Your Dubai Company

Our comprehensive Dubai immigration services make it easy to move to Dubai with a Dubai company. Both Free Zone companies and mainland companies can sponsor UAE residency visas for business owners, employees, and their dependents, valid for 2–3 years. We manage the entire process, from entry permits to Emirates ID issuance, ensuring a hassle-free transition.

Residency Visa Process

Entry Permit: Obtain a temporary employment or investor visa (valid for 60 days) through the Dubai Free Zone authority or mainland authorities.
Medical Fitness Test: Complete a blood test and chest X-ray at an approved UAE medical center.
Emirates ID: Apply for the mandatory national ID card, requiring biometric data.
Visa Stamping: Activate the residency visa by stamping it in the passport, either in-country or upon UAE entry.
Dependent Sponsorship: Sponsor family members (e.g., spouse, children) with additional documents and fees, requiring a minimum salary of AED 4,000/month for employees.

Benefits of Residency Visas

Access to UAE Services: Open a Dubai bank account, obtain a driving license, and access healthcare and education.
Long-Term Stability: Renewable visas support long-term plans to move to Dubai.
Family Relocation: Sponsor dependents for a seamless family move.

Get Started with Your Dubai Company

Dubai’s low Dubai taxes, flexible company structures, and robust Dubai immigration services make it the ultimate destination for launching a Free Zone company, mainland company, or offshore company. With our end-to-end support, from company formation to Dubai bank account setup and residency visas, we ensure your Dubai company thrives in this global hub.