Welcome to SJPR Your Trusted Accountancy Practice in Dubai .
“Beyond Accounting: The SJPR Promise of Excellence.”
Mainland Services:
In Dubai, which is part of the United Arab Emirates (UAE), taxation for mainland companies is quite favorable compared to many other countries.
*Corporate Tax*:
- Dubai, and the UAE as a whole, historically did not levy an income tax on corporate profits for most businesses. However, a federal corporate tax was announced to be introduced from June 2023 at a standard rate of 9% on taxable profits exceeding AED 375,000 to align with global tax regulation efforts.
- Companies engaged in the extraction of natural resources are generally subject to taxation prescribed by the individual emirates, and Dubai is no exception; these companies are taxed separately at rates decided by the emirate.
*Value Added Tax (VAT)*:
- The UAE implemented VAT at a standard rate of 5% in 2018. It applies to most goods and services, with some exempt or zero-rated goods and services, such as basic food items, healthcare, and education.
- Businesses with taxable supplies and imports exceeding the mandatory registration threshold of AED 375,000 per annum must register for VAT.
*Personal Income Tax*:
- There is no personal income tax in Dubai, so individuals do not pay taxes on their earnings from employment, whether they are UAE nationals or expatriates.
*Social Security Contributions*:
- UAE nationals are required to contribute to social security schemes; however, this does not apply to expatriates, who typically rely on end-of-service gratuity payments and their own personal savings and investments for retirement.
*Customs Duty*:
- Imported goods may be subject to customs duties, typically at a rate of 5%, but free zones offer exceptions to these rules. Goods produced in GCC countries that meet certain conditions and goods imported for personal use within certain limits may be exempt from duty.
*Free Zone Companies*:
- Companies set up in Dubai's many free zones benefit from a different set of tax rules, including a guarantee of zero corporate tax for a certain number of years, no personal income taxes, and other benefits.
*Withholding Tax*:
- There is no withholding tax on dividends, interest, or royalties in Dubai, which makes it an attractive destination for international business.
*Other Taxes*:
- There is also no capital gains tax or inheritance tax in Dubai.
*Corporate Tax*:
- Dubai, and the UAE as a whole, historically did not levy an income tax on corporate profits for most businesses. However, a federal corporate tax was announced to be introduced from June 2023 at a standard rate of 9% on taxable profits exceeding AED 375,000 to align with global tax regulation efforts.
- Companies engaged in the extraction of natural resources are generally subject to taxation prescribed by the individual emirates, and Dubai is no exception; these companies are taxed separately at rates decided by the emirate.
*Value Added Tax (VAT)*:
- The UAE implemented VAT at a standard rate of 5% in 2018. It applies to most goods and services, with some exempt or zero-rated goods and services, such as basic food items, healthcare, and education.
- Businesses with taxable supplies and imports exceeding the mandatory registration threshold of AED 375,000 per annum must register for VAT.
*Personal Income Tax*:
- There is no personal income tax in Dubai, so individuals do not pay taxes on their earnings from employment, whether they are UAE nationals or expatriates.
*Social Security Contributions*:
- UAE nationals are required to contribute to social security schemes; however, this does not apply to expatriates, who typically rely on end-of-service gratuity payments and their own personal savings and investments for retirement.
*Customs Duty*:
- Imported goods may be subject to customs duties, typically at a rate of 5%, but free zones offer exceptions to these rules. Goods produced in GCC countries that meet certain conditions and goods imported for personal use within certain limits may be exempt from duty.
*Free Zone Companies*:
- Companies set up in Dubai's many free zones benefit from a different set of tax rules, including a guarantee of zero corporate tax for a certain number of years, no personal income taxes, and other benefits.
*Withholding Tax*:
- There is no withholding tax on dividends, interest, or royalties in Dubai, which makes it an attractive destination for international business.
*Other Taxes*:
- There is also no capital gains tax or inheritance tax in Dubai.
Freezone Services:
Freezone, or Free Trade Zone, companies in Dubai are businesses that operate within a specific, designated area where they enjoy certain tax exemptions and custom duty benefits. These zones are created with the purpose of encouraging foreign investment and promoting export-oriented businesses. There are multiple Freezones across Dubai, each with its own rules, regulations, and industries of focus.
Here's what's typically included when setting up a Freezone company in Dubai:
Here's what's typically included when setting up a Freezone company in Dubai:
1. *100% Foreign Ownership*: Unlike mainland businesses, which usually require a local sponsor or partner, Freezone companies allow foreign investors to retain full ownership.
2. *Tax Benefits*: Freezone companies benefit from various tax exemptions, which may include:
- Zero corporate tax for a certain number of years, which is renewable.
- Zero import or export duties within the Freezone.
- No personal income taxes (which aligns with the UAE's general tax policy).
3. *Repatriation of Capital and Profits*: Freezone companies have the benefit of unrestricted repatriation of both capital and profits, without currency restrictions.
4. *Operational Benefits*:
- Simplified procedures for recruitment and workforce processes.
- Assistance with labor recruitment and additional support services, such as sponsorship and housing.
5. *Infrastructure*: Well-established infrastructure tailored to the needs of specific industries.
6. *No Currency Restrictions*: Freezone companies can trade in any currency.
7. *Ease of Setup*: Setting up in a Freezone is usually quicker and involves less red tape than setting up a mainland company. This is because Freezones have their own independent regulatory authorities.
8. *Networking Opportunities*: Being part of a Freezone community provides networking opportunities with other businesses and potential for growth and collaboration.
9. *Office and Warehouse Facilities*: Freezones often offer flexible office and warehousing facilities, which can range from virtual offices to ready-to-use offices and large warehouses.
Here's what's typically included when setting up a Freezone company in Dubai:
1. *100% Foreign Ownership*: Unlike mainland businesses, which usually require a local sponsor or partner, Freezone companies allow foreign investors to retain full ownership.
2. *Tax Benefits*: Freezone companies benefit from various tax exemptions, which may include:
- Zero corporate tax for a certain number of years, which is renewable.
- Zero import or export duties within the Freezone.
- No personal income taxes (which aligns with the UAE's general tax policy).
3. *Repatriation of Capital and Profits*: Freezone companies have the benefit of unrestricted repatriation of both capital and profits, without currency restrictions.
4. *Operational Benefits*:
- Simplified procedures for recruitment and workforce processes.
- Assistance with labor recruitment and additional support services, such as sponsorship and housing.
5. *Infrastructure*: Well-established infrastructure tailored to the needs of specific industries.
6. *No Currency Restrictions*: Freezone companies can trade in any currency.
7. *Ease of Setup*: Setting up in a Freezone is usually quicker and involves less red tape than setting up a mainland company. This is because Freezones have their own independent regulatory authorities.
8. *Networking Opportunities*: Being part of a Freezone community provides networking opportunities with other businesses and potential for growth and collaboration.
9. *Office and Warehouse Facilities*: Freezones often offer flexible office and warehousing facilities, which can range from virtual offices to ready-to-use offices and large warehouses.
Offshore Services:
An offshore company in Dubai falls under the jurisdiction of either the Jebel Ali Free Zone (JAFZA) or the Ras Al Khaimah International Corporate Centre (RAKICC). These jurisdictions are known for providing a business-friendly environment with an array of benefits, but it's important to understand the specifics related to taxation and other advantages.
*Taxation of Offshore Companies in Dubai:*
- *Zero Taxation:* Offshore companies in Dubai typically benefit from zero corporate and personal tax. This means no income, capital gains, inheritance, or withholding tax.
- *No VAT:* Offshore companies are not required to register for VAT in the UAE as they are not allowed to conduct substantial business within the UAE. However, if they choose to engage in trade or business within the UAE, different rules related to VAT might apply.
*Benefits of Offshore Companies in Dubai:*
- *100% Foreign Ownership:* Dubai’s offshore company regulations permit 100% foreign ownership, eliminating the need for a local sponsor or partner.
- *Asset Protection:* Offshore companies often offer enhanced levels of privacy and asset protection, which can be crucial for wealth management.
- *Repatriation of Profits and Capital:* There are no restrictions on the repatriation of profits and capital, which provides flexibility for global business operators.
- *Banking Facilities:* Offshore companies can open multi-currency bank accounts in Dubai and carry out transactions internationally.
- *Legal Structure:* Dubai offers a stable legal environment based on Common Law principles, which is reassuring for international investors.
- *No Requirement to Publicly Disclose Shareholders or Directors:* While a register of shareholders/directors must be maintained, it is not made public.
- *Ease of Incorporation:* The incorporation process for an offshore company in Dubai is efficient and straightforward, often taking just a few days to complete.
- *Confidentiality:* Strong confidentiality provisions are in place for offshore entities, which can be a significant advantage in terms of privacy.
- *No Physical Office Requirement:* Offshore companies are not required to maintain a physical presence within the UAE, which can reduce operational costs.
However, there are a few additional points to consider:
- *Due Diligence Requirements:* Offshore companies are subject to due diligence requirements. Proper records must be kept and compliance with international regulations, such as anti-money laundering standards, is crucial.
- *Conduct of Business:* Offshore companies are generally restricted from engaging in business within the UAE. Their activities are typically confined to outside the UAE or in Free Zones.
- *Substance Requirements:* Global tax regulations, including BEPS (Base Erosion and Profit Shifting) initiatives, impact the requirement for substantial economic presence. Companies must be mindful of the rules in their country of residence regarding controlled foreign corporations (CFC).
- *Double Taxation Agreements:* Although offshore companies benefit from a no-tax regime, the UAE has double taxation agreements with many countries, which can provide tax relief for cross-border transactions.
*Taxation of Offshore Companies in Dubai:*
- *Zero Taxation:* Offshore companies in Dubai typically benefit from zero corporate and personal tax. This means no income, capital gains, inheritance, or withholding tax.
- *No VAT:* Offshore companies are not required to register for VAT in the UAE as they are not allowed to conduct substantial business within the UAE. However, if they choose to engage in trade or business within the UAE, different rules related to VAT might apply.
*Benefits of Offshore Companies in Dubai:*
- *100% Foreign Ownership:* Dubai’s offshore company regulations permit 100% foreign ownership, eliminating the need for a local sponsor or partner.
- *Asset Protection:* Offshore companies often offer enhanced levels of privacy and asset protection, which can be crucial for wealth management.
- *Repatriation of Profits and Capital:* There are no restrictions on the repatriation of profits and capital, which provides flexibility for global business operators.
- *Banking Facilities:* Offshore companies can open multi-currency bank accounts in Dubai and carry out transactions internationally.
- *Legal Structure:* Dubai offers a stable legal environment based on Common Law principles, which is reassuring for international investors.
- *No Requirement to Publicly Disclose Shareholders or Directors:* While a register of shareholders/directors must be maintained, it is not made public.
- *Ease of Incorporation:* The incorporation process for an offshore company in Dubai is efficient and straightforward, often taking just a few days to complete.
- *Confidentiality:* Strong confidentiality provisions are in place for offshore entities, which can be a significant advantage in terms of privacy.
- *No Physical Office Requirement:* Offshore companies are not required to maintain a physical presence within the UAE, which can reduce operational costs.
However, there are a few additional points to consider:
- *Due Diligence Requirements:* Offshore companies are subject to due diligence requirements. Proper records must be kept and compliance with international regulations, such as anti-money laundering standards, is crucial.
- *Conduct of Business:* Offshore companies are generally restricted from engaging in business within the UAE. Their activities are typically confined to outside the UAE or in Free Zones.
- *Substance Requirements:* Global tax regulations, including BEPS (Base Erosion and Profit Shifting) initiatives, impact the requirement for substantial economic presence. Companies must be mindful of the rules in their country of residence regarding controlled foreign corporations (CFC).
- *Double Taxation Agreements:* Although offshore companies benefit from a no-tax regime, the UAE has double taxation agreements with many countries, which can provide tax relief for cross-border transactions.
Innovative Financial Strategies:
In the fast-paced world of business, staying one step ahead is crucial. At SJPR, we’re not just accountants; we’re your strategic financial partners. By constantly analyzing market trends and shifts, we craft forward-thinking strategies that position your business for future success, ensuring you’re always ahead of the curve.
Global Insight, Local Precision:
Dubai is a melting pot of global businesses, and with SJPR’s diverse experience spanning from London to Lisboa, we bring a blend of global perspective with a keen understanding of local nuances. This unique vantage point allows us to offer you solutions that are both world-class and locally relevant, ensuring your business thrives in the dynamic Dubai market.
Seamless Digital Integration:
The future is digital, and so are we. At SJPR, we leverage the latest in financial technology to streamline your accounting processes. Our digital solutions not only save you time and resources but also provide real-time insights into your financial health, allowing for swift decision-making and increased profitability.
Why Choose SJPR?
Turning Numbers into Success Stories at SJPR.
The Benefits of Outsourcing
- Trusted Expertise – With our pedigree from London and Lisboa, we bring a wealth of knowledge and experience to the table, ensuring accurate and reliable financial solutions..
- Competent Team– At SJPR, our team comprises highly skilled professionals who are dedicated to providing exceptional service and tailored solutions for your specific business needs..
- Client-Centric Approach – We prioritize our clients and their individual challenges. By understanding your goals and aspirations, we deliver personalized support and guidance every step of the way.
- Proactive Financial Management – We go beyond traditional accounting services by offering proactive financial insights, helping you make informed decisions that drive growth and sustainability.
- Reliable and Efficient– With our commitment to efficiency, we offer timely and accurate financial services, ensuring your compliance deadlines are met without any hassle.
“Leading with Integrity and Innovation:
Discover the SJPR Difference.”
Discover the SJPR Difference.”
DO BUSINESS
WITH US!
Choose SJPR, where we combine tradition with innovation to offer you the best in accountancy solutions.
Our Value
Our Mission
Integrity: We honor our commitments, always acting with truth and honesty.
Commitment to Excellence: We consistently exceed expectations through high-quality solutions, reflecting our expertise.
Innovation: In a dynamic world, we constantly seek improved methods to serve our clients effectively.
Client Focus: We listen, understand, and offer tailored solutions aligning with your business goals.
Respect & Collaboration: We value teamwork in an environment of mutual respect.
At SJPR, our mission is to be more than just an accounting firm. We aim to be your trusted financial advisors in Dubai, delivering precise and forward-thinking financial solutions while upholding principles of integrity and excellence.