abcapital.ae

  • +971 52 365 5193
  • info@abcapital.ae
Book a Call
Facebook-f Instagram Linkedin

Author name: abcseo

dubai free zone license cost

Guidelines you should know about new businesses in UAE

Leave a Comment / Tax /

The United Arab Emirates has been a longstanding business hub for budding entrepreneurs and established businessmen all across the globe, and the recent guidelines further enhanced its appeal. Moreover, these new regulations have also introduced additional requirements for businessmen and companies who set their businesses in UAE. The UAE has actively encouraged innovation and entrepreneurship. Initiatives such as the Dubai Future Accelerators and Dubai Startup Hub support startups, attract talent and facilitate collaboration between entrepreneurs, investors and government entities.  Businesses can be set up through mainland companies, free zones and offshore entities each with particular advantages. Comprehending the legal structure, understanding the market, adhering to regulations Freezones have played a vital role in driving business growth in UAE offering significant advantages to the industry which includes offering 100% foreign ownership, tax exemptions, and streamlines processes, making them an attractive choice for entrepreneurs and investors. These zones offer state-of-the-art infrastructure, access to global markets and proximity to major transportation hubs, facilitating seamless operations and international trade. The introduction of e-platforms and digital services has simplified administrative tasks, making it easier for businesses to operate. Now, you need to be aware of the business laws passed which places an important role in smooth and fair conduct of a business. You are obliged to several laws that you need to be responsible for which are: This is just an overview of the regulations one need to adhere to, to start a business enterprise in UAE. Contact us at AB Capital to set up your business or get advices on everything business related now!

Guidelines you should know about new businesses in UAE Read More »

Business setup companies in Dubai

Non-residents liable to pay taxes on income from real estate: New Tax Regime

Leave a Comment / Tax /

Owning a home, an apartment, or a piece of commercial property is not subject to a yearly tax in UAE. Additionally, VAT (Value-Added Tax) is not levied on commercial property transfers. Owning property in the UAE, however, will result in additional costs in the form of fees and charges. It\’s important to note that some of them must be paid by both homeowners and renters.  A failure to comply with governmental requirements (even if it\’s an honest mistake) can result in significant fines, so it\’s important to stay up to date on UAE tax legislation. Cost of purchasing land and property in the UAE The following costs need to be taken into account when purchasing real estate in the UAE: In Dubai and Abu Dhabi, the Land Department (LD) one-time fee is equal to 4% of the property\’s worth. For land, administrative costs are AED 430 ($117), while for homes and apartments, they are AED 580 ($158). For properties valued at less than 500,000 AED, registration fees are AED 2000 ($544) + 5% VAT, while for properties valued at more than 500,000 AED, registration fees are AED 4000 ($1088) + 5% VAT. If you obtain a mortgage, these amounts will vary. In Dubai, mortgage registration costs are 0.25 percent of the total bank loan amount; in Abu Dhabi, they are 0.1 percent. When everything is done, you can ask your local LD for a Certificate of Owned Property. In Dubai, this will cost you AED 260 ($70), while in Abu Dhabi, it will cost you AED 1000 ($272). It takes this process about 3 business days. You should be ready to pay extra costs when purchasing real estate in the UAE and executing a Sale and Purchase Agreement, such as: Fees charged by the real estate agent equal to 2% of the final sales price of the property plus 5% VAT. The cost to issue a NOC (No Objection Certificate) is AED 1000 ($272). The certificate attests that the owner of the building has no objections to you purchasing the property. When purchasing real estate that is already in use, this sum is applicable. If the property you\’re purchasing is still being built, the project\’s real estate developer will charge you AED 5000 ($1361) for the NOC. UAE property maintenance fees There are mandatory property maintenance and upkeep fees that cover things like garbage collection, janitor work, lawn maintenance, ongoing and future renovations, as well as taking care of public areas like playgrounds, gyms, and swimming pools, despite the fact that there are no federal or municipal taxes on real estate in the UAE. Owners of homes incorporated into residential communities, as well as those who own apartments and other residential spaces, must pay an annual service fee that ranges from AED 3 to 30 ($0.82 to $8.2) per square foot of real estate. All property measures and associated costs in the UAE are computed in square feet (1 square foot equals 0.093 square meters), thus all UAE residents should get used to this. According to a clarification from the UAE Ministry of Finance, income from real estate and other immoveable property would be subject to a nine percent (9%) corporate tax for foreign businesses and other non-resident juridical persons. These annual service fees are calculated precisely by UAE real estate developers (i.e., building owners) using factors such property size, number of floors, equipment on-site, project infrastructure, and so on. Rental taxes in the UAE In the UAE, municipal governments impose taxes on rental properties that are the responsibility of the tenants. The rates of these taxes, which are based on annual rental costs, vary from one emirate to the next. All tenants in Dubai pay 5% of the annual rent, expats in Abu Dhabi pay 3%, and renters in Sharjah pay as little as 2%. In all emirates, tenants of commercial property pay taxes equal to 10% of their yearly rent. The monthly instalments for these UAE rental property taxes are added to utilities bills. Properties in the UAE, both residential and commercial Every residential property is connected to land ownership under UAE law. A tent, caravan, or trailer are not regarded as residential properties. Before any development on a property can begin, \”intended use\” is another consideration. Exclusion determines what qualifies as commercial property, therefore everything that doesn\’t fit into one of the following categories: The same UAE real estate taxes and fees that are levied on residential structures also apply to mixed-use environments (buildings that include residential spaces together with commercial, retail, or entertainment sectors). VAT on UAE Real Estate When it comes to paying VAT on real estate in the United Arab Emirates, everything initially seems straightforward. Residential property transactions are exempt from VAT, but commercial property transfers are subject to a 5% levy. For residential real estate, there are two different VAT statutes in the UAE: \”exempt from VAT\” and \”zero-rated.\” Registration as a UAE VAT payer is required in the following circumstances: You presently fall under ZERO RATED TAX regime If you belong to one of these categories. This implies that until the government changes your rate (which they may do if they so choose to), you are not required to pay UAE VAT on residential real estate. VAT on residential property is EXEMPTED for everyone else in the UAE. VAT refunds on real estate in the UAE The UAE government promotes real estate development; people and businesses can buy a plot of land, build residential property on it, and then ask for a VAT refund on the costs of construction materials and other related costs. A Building Completion Certificate must be obtained from the local development authority and submitted to the FTA no later than six months after it has been issued in order to accomplish that. In addition, the VAT rate is 0% for the first three years following the completion of an apartment or house\’s construction on initial sales and rentals. Developers in the UAE are able to do this

Non-residents liable to pay taxes on income from real estate: New Tax Regime Read More »

Business setup companies in Dubai

A complete guide to the new UAE corporate tax for individuals and businesses

Leave a Comment / Tax /

The captivating sector of corporate tax in UAE where businesses bloom amidst a dynamic and diverse economic structure is a debatable topic to discuss on. In this Blog, you will get to learn more facts about the new corporate tax in UAE that was announced by the Ministry of Finance (MoF). Here are a few commonly asked Questions one needs to know before starting a new business in UAE: Was there any tax prior to the announcement of the new corporate tax? The UAE first introduced VAT in 2018 at 5% but then in January 2022, they announced a corporate tax that would come in effect this year. What is the rate of corporate tax in UAE? The corporate tax rate is at 9% of the net profit made by the business. However, if the annual profits of the business are up to AED 375,000 then up to that limit no corporate tax would be payable. Are all businesses in UAE subjected to corporate tax? No, not all business in UAE are subjected to corporate tax. The applicability of corporate tax depends on various factors including legal structure, business activities and annual turnover of the company. Why did they introduce the corporate tax in UAE? The corporate tax in UAE was introduced in order to amplify UAE’s position in the global market helping it become a hub for investments and start-ups with affordable registration fees and no corporate tax for new businesses. Is there any tax for small business and start-ups in UAE? No, there aren’t any tax rates for small businesses as of now. In fact, they have introduced Small Business Tax Relief in UAE for businesses with annual revenue of below AED 3 Million. Why did they announce Small Business tax relief for start-ups? The government announced this small business tax relief in order to provide support to small businesses and start-ups so that more people can operate in it. How to register for the Small Business tax relief? Businesses subject to corporate tax are required to register and obtain a tax registration number. The registration application must be submitted to the Federal Tax Authority. Will there be a personal tax in UAE now? No, there is no personal tax on people’s income in UAE. All the salaries, dividends and other income that a person earns in his personal status will not be subject to corporate tax. Navigating corporate tax applicability can be hard and requires a comprehensive understanding of the local tax laws in UAE. It is always advisable to seek professional guidance from a business or tax consultants who specialises in this sector. To seek guidance and help, AB Capital Services is here to deliver all your unique requirements accurately.

A complete guide to the new UAE corporate tax for individuals and businesses Read More »

Corporate Tax Relief in UAE

UAE’s new Corporate Tax Relief for Small Business!

Leave a Comment / Tax /

Everything you need to know about UAE’s new Corporate Tax Relief for Small Business! Small industries are the backbone of a thriving economy and UAE is mindful of it and its importance. By implementing relief measures for various small businesses, the UAE government aims to attract entrepreneurs, foreign investment and have a growing economy. Understanding these reliefs and measures given to the small business owners, it helps to navigate them the confidence and stage for their industry and its success. What is the relief that these businesses will get? In April 2023, the ‘Small Business Relief’ was announced by the Ministry of Finance by introducing tax relief for those who fit under a certain norm. Small business owners in UAE with revenue under AED3 million can apply for tax relief which came in effect from June 1, 2023 and will extend upto end of 2026. Once the revenue exceeds the minimum revenue, the business will no longer cater to the Small business tax relief policy and need to give 9% tax then onwards. Why was this decision made? How will it benefit the small business? This decision was strategically made to diversify UAE’s income sources which were only limited to oils, allowing the country to maintain its status and economy. The new tax regime reaffirms UAE’s commitment to meeting international standards for tax transparency and prevent harmful tax practices. What are the conditions in which one can claim this relief? The small business relief only applied to a ‘resident person’. The Ministry of Finance also clarified that if FTA (Federal Tax Authority) establishes that taxable persons have artificially separated their business or business activities and have a revenue higher than the one stated, this would come under anti abuse rules of the Corporate Tax Law and may be set aside. Conclusion The UAE maintains a competitive environment for local and foreign investors with tax exemptions and reduced rates. It remains a viable business destination, even with the new tax, offering a favourable climate, especially for small businesses which can leverage the business-friendly ecosystem while adhering to the new rules. We at AB CAPITAL can help you with all your queries about everything you might want to know about business and taxes. Our consultants aim to assist you in all aspects you want to know more about. You can directly get in touch with us through our quick form you can fill or even visit our office regarding any help or advice.

UAE’s new Corporate Tax Relief for Small Business! Read More »

offshore setup

Exploring the Business Landscape: Freezone vs. Mainland vs. Offshore Companies

Leave a Comment / Offshore /

What is Differences between Freezone, Mainland & Offshore? The type of corporate entity, business activity conducted by the organization, and your anticipated trading partners can all influence your priorities. To conduct business in the UAE, you must have a thorough understanding of these jurisdictions in order to make informed judgments.The 3 Jurisdictions of the UAEBelow mentioned are the 3 types of Jurisdictions in the UAE, in which you can start your Business-FreezoneIn the United Arab Emirates, there are more than 40 free zones. It is incorporated in an emirate\’s specified jurisdiction where the company is permitted to conduct business inside the same free zone. Most entrepreneurs who want to save money on taxes choose to form a free zone since the government provides numerous perks and incentives to enterprises that set up shop in the zone.MainlandAn onshore company in the UAE is also known as a mainland company. It has been granted a license by the Department of Economic Development (DED) of the relevant emirate, allowing it to operate freely in the local market as well as outside the UAE.OffshoreAn offshore company is one that is incorporated in one jurisdiction but has its parent firm in another. There is no need for a physical office; hence this is not a branch firm. They have no physical presence in the nation in which they have chosen to incorporate as an offshore corporation. Free Zone vs Mainland vs Offshore Company in the UAE: DifferentiationSetup Cost of the CompanyFreezone Company: MediumMainland Company: HighOffshore Company: LowOwnershipFreezone Company: There are no such limitations for a corporation operating in a free zone. An expat can own 100% of the company\’s shares. To start a business, you don\’t require a local partner or a service agent.Mainland Company: If an expat starts a business in the mainland of the UAE, they can only own 49% of the company. The remaining 51% must be purchased by a local sponsor.Offshore Company: Until and unless the company is based outside the UAE, an expat can have full ownership. An offshore business is not permitted to have a physical presence in the United Arab Emirates.Responsible Government AuthoritiesFreezone Company: Free zones have their own approval standards for every corporation operating within their jurisdiction, and they do not require clearance from authorities outside the free zone.Mainland Company: They must obtain approval from authorities such as the Department of Economic Development (DED), the Ministry of Labor (MIL), the Dubai Municipality, and the Ministry of the Interior (MOI), among others.Offshore Company: Offshore formation is available at Ras Al Khaimah and the Jebel Ali Free Zone (JAFZA). Their approval is overseen by the free zone authorities in that jurisdiction.Work SpaceFreezone Company: A free zone corporation is not required to have a workspace. These businesses have the option of operating virtually or without an office.Mainland Company: Every mainland firm in the UAE must have a work space with at least 200 square feet of space.Offshore Company: In the UAE, they are not permitted to have any physical workspaces. They can obtain it outside of the nation.Scope of BusinessFreezone Company: A corporation established in a free zone is typically not permitted to conduct business (manufacture and sell) outside of the free zone, unlike on the mainland.Mainland Company: Anywhere in the UAE, a corporation operating on the mainland is free to conduct business. They are permitted to conduct business in any free zone in the emirates.Offshore Company: They are permitted to conduct business outside of the emirates. Their ability to conduct business within the UAE is constrained.VisasFreezone Company: The size of the office/ work premises determines whether or not a resident visa is granted.Mainland Company: The size of the office/work premises determines whether or not a resident visa is granted.Offshore Company: A residence visa is not provided to an offshore firm establishment because there is no need for office space.AuditFreezone Company: Auditing isn\’t required for every Freezone company. However, some types of businesses are required to conduct an annual audit of their financial statements. Free zone corporations (FZCO) and free zone establishments are included in this category (FZE).Mainland Company: At the end of every financial year, mainland enterprises must conduct an audit.Offshore Company: The audit is not prepared by an offshore business because it does not have the authority to do so. They can do one if they wish to stay on top of their finances.There are a few places where all three jurisdictions or any two jurisdictions share similarities, but their roles and goals in doing business are very distinct. A free zone\’s taxation and those of an offshore business are identical. In contrast to a free zone, both the mainland and offshore can have bank accounts in the UAE and overseas. But, at the end of the day, there is no one-size-fits-all solution for deciding whether or not to open a firm in any of these jurisdictions. There is no such thing as a \”better\” free zone, offshore, or mainland configuration; it all comes down to what works best for your company.ConclusionWe at AB CAPITAL can assist you if you need more information about these jurisdictions or are ready to start a business in the UAE. Our consultants can help you with all aspects of company formation in any of the Emirates. Please get in touch with us right away, even if you just want some friendly advice. Thus, we hope this blog provided you with insightful information. For more information on other related aspects, feel free to check out our website as well or get in touch with our Experts by visiting our Office.

Exploring the Business Landscape: Freezone vs. Mainland vs. Offshore Companies Read More »

tax image

Decoding Freelancing and Corporate Tax in the UAE: What You Need to Know!

Leave a Comment / Tax /

Will a Freelance Professional be Subject to UAE Corporate Tax? As per the regulations of corporate tax in the UAE, any taxable income exceeding AED 375,000 will be subject to Corporate Tax. This tax system will also be applicable to freelancers and independent contractors in the UAE who work for themselves if their income goes beyond the AED 375,000 limit. Before heading deeper into how UAE corporate tax applies to freelancers, let’s take a look at the diverse aspects of corporate tax and implications. UAE Corporate tax Being the pro-business hub, the nation provides businesses with unparalleled access to cutting-edge infrastructure, technological advancements, 100% foreign ownership, and a tax-free culture. These advantages draw hundreds of professionals to the UAE each year in search of intriguing career prospects. This is why the Ministry of Finance of the UAE published Federal Decree-Law No. 47 of 2022, which establishes the legal foundation for corporate tax on commercial profits in the UAE.The UAE has taken this step to follow international norms and comply with Pillar 2 of the OECD’s Global Minimum Tax Plan. According to the law, starting with their first fiscal year beginning on or after June 1, 2023, taxable individuals and businesses must pay a 9% corporation tax. It is critical to assess how the UAE corporate tax will apply to both individuals and businesses in the future given that it is the first time the country has chosen to impose it. Do Freelancers Have to Pay Corporate Tax? The Corporate Tax regime will also apply to freelancers in UAE and other independent contractors who work for themselves if their income exceeds the AED 375,000 threshold. The law dictates that these independent contractors must have a license or permit. Many eventualities that apply the corporate tax for freelancers are as follows:• Those who have the new freelance permit, which is provided under the new labour law for self-sponsored expatriates, are not required to pay corporate tax on their profits. • If freelancers with business licenses are sponsored in a free zone and engage in any activity for other businesses, the sponsor will be charged corporate tax. • Freelancers who work for a business will not be subject to income tax on the money they make from salaries; rather, the business that issues the visa will be subject to income tax on its net profit. Corporate Tax for Freelancers: Exemptions The following situations are where the corporate income tax law in the UAE exempts individual or freelancer profits made in their capacity:• Interests, profits, and other earnings made by a person residing in the UAE from bank deposits or savings plans. • Income derived from real estate investments by individuals in their capacity. • Dividends, capital gains, and other income received by individuals from their ownership of shares or other securities How can AB CAPITAL assist the Freelancers in UAE? Business owners have always regarded the UAE as a tax-free oasis. By introducing the new corporate tax regime, the UAE intends to follow worldwide best practices in developing a leading global hub for businesses while advancing the nation’s strategic objectives for further growth. Whether it’s for the deployment of countermeasures, training personnel, or formulating a compliance policy, our professionals can handle your company’s accounting and auditing demands and assist you in becoming UAE corporate tax ready. If you are a freelancer having any confusion regarding the corporate tax on your income, get in touch with AB CAPITAL’s professionals for your guidance.

Decoding Freelancing and Corporate Tax in the UAE: What You Need to Know! Read More »

OFFSHORE COMPANY SETUP IN DUBAI

Offshore Company Setup in Dubai

Leave a Comment / Offshore /

Introduction: Discover the possibilities of establishing an offshore company in Dubai, UAE. This blog post provides essential insights into offshore company setup in Dubai, including its definition, the advantages of choosing Dubai as your offshore destination, eligible business types, required documentation, and the option of hiring professional assistance. What Is an Offshore Company in Dubai? An offshore company operates in one jurisdiction while being registered in another, primarily to optimize tax benefits. By establishing an offshore company in Dubai, entrepreneurs can maximize profits, benefiting from factors like low corporate taxes, political stability, strategic location, wealth management options, and privacy safeguards. Advantages of Choosing Dubai for Offshore Business Dubai holds a prominent position among renowned global financial hubs like Frankfurt, London, Hong Kong, and New York. Its unique advantage lies in providing the benefits of a tax haven without the drawbacks associated with other tax havens. Here, businesses thrive without excessive taxation, ensuring privacy and encouraging growth. Eligible Business Types in Dubai Common business types suitable for offshore company formation in Dubai include intellectual property holding companies, shipping firms, general trading firms, online advertising companies, logistics firms, professional consulting services, and real estate holding firms. However, offshore companies in Dubai are prohibited from engaging in local trading or employing individuals. Unlocking the Benefits of Offshore Company Formation Offshore companies in Dubai enjoy several benefits, such as: Required Documents for Offshore Company Registration To register an offshore company in Dubai, you\’ll typically need the following documents: A Simple Guide to the Registration Process Registering an offshore company in Dubai involves straightforward steps: Considering Professional Assistance While the process is relatively straightforward, hiring a Dubai offshore company formation agency can ensure a smooth experience. Professionals can navigate potential complexities, ensuring compliance and minimizing the risk of application rejection. Conclusion:  Establishing an offshore company in Dubai opens doors to exciting possibilities. With its favorable tax environment, political stability, and abundant business opportunities, Dubai serves as a beacon for entrepreneurs worldwide. By understanding the registration process, eligible business types, and the myriad advantages, you can unlock the potential of offshore company setup in Dubai. Consider expert guidance from AB Capital Services (FZE) for a seamless and successful offshore company formation journey. Schedule a free meeting with AB Capital Services (FZE)(website link) to embark on your offshore company formation journey in Dubai and the UAE.

Offshore Company Setup in Dubai Read More »

person hold VAT blocks

The Importance of VAT Registration: Benefits and Complete Guide for Businesses.

Leave a Comment / Vat Registration /

Value Added Tax (VAT) registration is an essential aspect of financial compliance for businesses. Whether you\’re a small business owner or an individual starting a new venture, understanding VAT registration is crucial. In this blog post, we will provide an informative overview of VAT registration, discuss who needs to register, and highlight the benefits of doing so. Let\’s dive in! What is VAT Registration?Value Added Tax (VAT) is a consumption tax levied on the sale of goods and services. VAT registration refers to the process by which a business becomes officially recognized as a VAT taxpayer by the relevant tax authority. Once registered, businesses are required to collect VAT from customers, maintain proper records, and submit periodic VAT returns. Who Needs to Register for VAT?The threshold for VAT registration varies by country, but generally, businesses must register for VAT if their taxable turnover exceeds a certain threshold within a specified period. This threshold is set by the tax authorities and may differ based on factors such as the country, industry, and type of goods or services provided. It\’s crucial to familiarize yourself with the VAT registration requirements specific to your jurisdiction. Benefits of VAT Registration:Legitimacy and Credibility: VAT registration lends legitimacy to your business, signaling to customers and suppliers that you are a serious and compliant entity. It enhances your professional image and can lead to increased trust and credibility in the marketplace. Input Tax Recovery: One significant advantage of VAT registration is the ability to reclaim VAT paid on business-related purchases and expenses. This allows you to offset the VAT you\’ve paid against the VAT you\’ve collected, potentially reducing your overall VAT liability. Expanded Business Opportunities: Many businesses, particularly larger corporations and government entities, prefer to work with VAT-registered suppliers. Registering for VAT can open doors to new contracts and partnerships, expanding your business network and potential client base.Compliance and Avoidance of Penalties: Registering for VAT ensures that you comply with tax regulations and avoid potential penalties for non-compliance. Staying on the right side of the law will save you from unnecessary fines and legal troubles. The Impact of VAT on Small Businesses:VAT registration can pose challenges for small businesses, particularly those with limited resources and accounting expertise. In this section, we will explore common issues faced by small businesses regarding VAT registration and provide useful tips to navigate the complexities. Topics to cover can include VAT accounting, record-keeping, invoicing, and VAT returns. Changes in VAT Laws and Regulations:VAT laws and regulations are subject to regular updates and revisions. Keeping abreast of these changes is essential for businesses to maintain compliance. This section of the blog post can focus on recent changes in VAT legislation, providing a summary of the key updates and their implications for businesses. It\’s important to advise readers to consult with tax professionals or refer to official sources for detailed information. Common Mistakes to Avoid When Registering for VAT:Registering for VAT can be a daunting process, and mistakes are not uncommon. In this section, we will highlight some of the most common mistakes made during VAT registration and provide practical guidance on how to avoid them. Topics to cover can include incorrect VAT registration thresholds, inaccurate VAT accounting, failure to maintain proper records, and late submission of VAT returns. Conclusion: Understanding VAT registration is crucial for businesses of all sizes. It ensures compliance with tax regulations, provides financial benefits, and opens doors to new opportunities. By familiarizing yourself with the basics of VAT registration, staying informed about changes in VAT laws, and avoiding common mistakes, you can streamline your business operations and navigate the world of VAT more effectively. Remember, seeking professional advice from tax experts.Moreover, VAT registration opens doors to expanded business opportunities. Many large corporations and government entities prefer to work with VAT-registered suppliers. By registering for VAT, you can tap into these potential partnerships, broadening your business network and clientele. This increased visibility and access to a wider customer base can lead to greater growth and success.However, it\’s essential to acknowledge that VAT registration can pose challenges, particularly for small businesses with limited resources and accounting expertise. It is crucial to overcome these challenges by understanding the intricacies of VAT accounting, proper record-keeping, accurate invoicing, and timely submission of VAT returns. By dedicating the necessary time and effort to understand and comply with VAT requirements, small businesses can mitigate potential pitfalls and optimize their financial operations.

The Importance of VAT Registration: Benefits and Complete Guide for Businesses. Read More »

Scroll to Top