Accounting and tax

Healy Consultants’ Accounting Department will assist our Clients with their mandatory accounting and tax obligations in UAE:
tax and legal obligations in UAE

  1. The Companies registered in the UAE must maintain proper accounting records according to IFRS/IAS Accounting Standards;
  2. In the UAE, taxes are only levied on companies which deals in oil and gas exploration and production and petrochemical. Companies in the UAE pay no corporate or capital gains tax on worldwide-sourced income;
  3. There are no withholding taxes in the UAE;
  4. Value Added Tax (VAT) has been introduced and implemented in UAE w.e.f 1st January 2018. The standard rate is 5%. Food items, health, education, petroleum products, social services and bicycles are VAT exempt. The financial services and (residential) real estate sectors are also exempt from VAT (with certain exceptions);
  5. A mandatory 5% tax on imports to mainland UAE is applicable to all trading companies, irrespective of their business activities; However, companies in free zones are exempted from import duty on goods coming into the free zone;
  6. As part of an annual obligation, all business entities are mandated to file audited accounts with Ministry of Commerce located outside the free trade zones;
  7. In order to meet development goals and to diversify the source of Income, UAE has signed Double Taxation Agreements (DTAs) with more than 90 countries;
  8. With effect from 1st October 2017, UAE government introduced Excise Tax Law wherein, excise tax is payable on the importation, manufacture and stockpiling of excisable goods, which include carbonated beverages, energy drinks and tobacco;
  9. There is no personal tax levied on residents and non-residents;
  10. Many strategic advantages are offered to international business people by the UAE. A successful tax planning strategy for a UAE company requires taking advantage of the country’s tax regulations and Healy Consultants’ tax experts deliver a comprehensive strategy to our Clients.

Legal and compliance

Healy Consultants Compliance Department will assist our Client in effectively discharging all legal obligations following company setup in UAE:

Company regulations

  1. There are various categories of business organization defined by the Commercial Companies Law, such as;
    • Limited Liability Company (LLC);
    • Free Zone Company;
    • Offshore Company;
    • Branch / Representative Offices of foreign companies;
    • Partnership and joint venture company;
    • Public and private shareholding company;

    Amongst above, the most appropriate method of establishing a business in the UAE by foreign investors is to form a Limited Liability Company (LLC) or the branch/representative offices;

  2. A company is deemed to be UAE-resident under the following conditions:
    • It was formed in the UAE;
    • The company’s central management and administration is in the UAE, even if it was formed in another jurisdiction;
    • The company conducts business in the UAE and its voting control is in the hands of resident UAE shareholders, even though it was incorporated in another jurisdiction or its central management is in another jurisdiction;
  3. Under UAE corporate law, directors control the daily operations of the UAE business. Directors are appointed by the company’s shareholders who have the power to remove them as and when required;
  4. The UAE incorporation process mandates that all companies must apply for appropriate government licenses before commencing operations. Examples includes trade license, industrial license or professional license for skills-based businesses;
  5. A UAE LLC is mandated to reserve 10% of annual profits until the reserve reaches 50% of the initial share capital;
  6. All resident firms must file returns with the relevant authorities, providing information about the directors and shareholders. Only the director’s information will be publicly accessible;

Other considerations

  1. UAE participates in many organisations and conventions such as WIPO, WTO, PCT and WIPO Copyright Treaty which deals with intellectual property rights of foreign companies;;
  2. UAE business laws provide for de-registration of a resident company. This process takes approximately 6 months on average. Healy Consultants can assist our Clients with de-registering their UAE business for a fee of US$1,450;

Contact us

For additional information on our accounting and legal services in UAE, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi