Dubai Corporate Taxes

IFZA Company Setup in Dubai: Your Gateway to Business Success

IFZA Company Setup in Dubai: Your Gateway to Business Success

Dubai, with its business-friendly ecosystem, strategic location, and world-class infrastructure, acts like a magnet for entrepreneurs and businesses around the globe. IFZA (International Free Zone Authority) is the most attractive opportunity for setting up a business in Dubai. This blog particularly highlights the benefits, requirements, and steps to ensure a smooth process of IFZA company setup in Dubai. Introduction to IFZA The International Free Zone Authority (IFZA), introduced in 2018, is one of the most dynamic and highly regarded free zones in the UAE. Since the UAE has shifted the country’s focus away from gas and oil, they’re now investing heavily in other areas and encouraging entrepreneurs to invest in the country, IFZA is the most encouraged investment for the sake. Located in Dubai Silicon Oasis, IFZA offers a wide range of business activities and license types, making it an ideal choice for entrepreneurs looking to set up a company in Dubai. IFZA in 2024: Updates! IFZA has seen a 25% increase in new business registrations in the first quarter of 2024compared to the same period in 2023.Technology and consultancy sectors are leading with a 30% increase in registrations.Over 10,000 new jobs have been created through companies established in IFZA in the pastyear. IFZA has attracted foreign direct investment (FDI) worth $1.2 billion in 2023, with projections to reach $1.5 billion by the end of 2024. Dubai Chamber of Commerce revealed that 78% of businesses in IFZA reported increasedprofitability and growth potential due to the flexible and supportive regulatory environment.(Survey) Why Choose IFZA for Your Company Setup? ● Flexibility: With a variety of license types and business activities, IFZA caters to a diverse range of business needs.● Strategic Location: IFZA is situated in Dubai Silicon Oasis, providing easy access to major business hubs, airports, and ports.● Cost-Effective: When establishing a company in a UAE free zone, the primarychallenges are the time and cost required. IFZA Dubai provides a swift and cost-effective solution for company formation, with all processes completed within Dubai. In contrast, other free zones tend to be more costly, often have longer processing times, and demand more extensive documentation before the formation can take place.● Modern Infrastructure: IFZA boasts all the modern amenities that Dubai provides, including cutting-edge infrastructure and the option to have your own flexi-desk or office within the free zone. IFZA’s advanced facilities cater to the needs of new entrepreneurs who require office space, making it a vibrant center of high-level business activity where you can establish global connections.● Business-Friendly Policies: IFZA provides 100% foreign ownership, zero corporate and income taxes, and no currency restrictions.● Comprehensive Support Services: From visa processing to office space solutions, IFZA offers extensive support to ensure your business runs smoothly. Licenses Offered by IFZA ● Industrial License: For manufacturing and industrial activities.● Commercial License: Suitable for trading and general commercial activities.● Holding License: For companies looking to hold assets and shares in othercompanies.● Service License: Ideal for businesses offering services such as consulting, IT, and other professional services. Business Activities Permitted in IFZA IFZA allows a wide range of business activities, including but not limited to: ● Trading and retail● IT and technology● Media and marketing● Education and training● Healthcare and medical services● Consultancy and advisory services● Real estate and property management Licenses Offered by IFZA ● Industrial License: For manufacturing and industrial activities.● Commercial License: Suitable for trading and general commercial activities.● Holding License: For companies looking to hold assets and shares in other companies.● Service License: Ideal for businesses offering services such as consulting, IT, and other professional services.   Business Activities Permitted in IFZA IFZA allows a wide range of business activities, including but not limited to: ● Trading and retail● IT and technology● Media and marketing● Education and training● Healthcare and medical services● Consultancy and advisory services● Real estate and property management Trends in Business Activities: 2024!In 2024, there has been a notable surge in IT and technology-related businesses, which now constitute 40% of the new registrations in IFZA, driven by Dubai’s push towards becoming a global tech hub.   Steps to Set Up Your Company in IFZA Step 1: Determine Your Business Activity and License Type The first step is to decide on the business activity you wish to undertake and the appropriate license type. This decision will influence the rest of the setup process. Step 2: Choose a Company Name  Select a unique name for your company that complies with IFZA’s naming conventions. The name should not include any offensive or blasphemous terms and must be available for registration. Step 3: Submit the Required Documents Prepare and submit the necessary documents, which typically include: ● Proof of address● Passport copy of the shareholder(s)● Passport-sized photos of the shareholder(s)● Business plan (if applicable) Step 4: Choose Your Office SolutionIFZA offers various office solutions, from virtual offices to physical office spaces. Choose the option that best suits your business needs and budget. Step 5: Obtain Initial Approval Once your documents are submitted, IFZA will review and provide initial approval for your business setup. Step 6: Sign Legal Documents and Pay Fees Sign the legal documents provided by IFZA and pay the relevant setup fees. These fees vary based on the license type and office solution chosen. Step 7: Receive Your Business LicenseAfter completing the necessary formalities, you will receive your business license, allowing you to commence operations in Dubai. Benefits of IFZA Company Setup Freely repatriate 100% of profits and capital. Conduct business in any currency without restrictions. Enjoy full ownership of your company without the need for a local sponsor. Strategic location near Dubai International Airport, access to a large consumer market. Enjoy 0% corporate income tax, personal income tax, and import/export duties within the zone (UAE general tax applies outside: 0% up to AED 375,000, 9% above). Visa Options for IFZA Companies IFZA companies can apply for multiple visas depending on their office package. The visa process is straightforward, and IFZA provides support throughout the application process. Types of visas include:● Investor Visa● Employee Visa● Dependent Visa

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How to Save Money on Taxes in the UAE: Insights into Legal Tax-Saving Strategies and Deductions Available in the UAE

In the modern landscape of the business world, every penny counts. When it comes to corporate tax UAE is well-known for its favorable tax environment by offering effective ways to reduce the tax burden. This business-friendly ecosystem incentivizes businesses in the UAE to employ several strategies that optimize tax savings while staying compliant with local regulations. This blog delves into effective strategies and insights on how to save money on taxes in the UAE, backed by modern research and facts 1. Maximize VAT DeductionsAVAT-registered businesses can reclaim the VAT they pay on business-related expenses, provided they keep accurate records and submit timely returns. Here’s how to maximize your VAT deductions: # Ensure all transactions are well-documented (including invoices and receipts) for purchases and expenses. # Claim input tax credit for VAT paid on goods and services purchased for business use. This can significantly reduce your net VAT liability. #Get familiar with zero-rated supplies (such as certain healthcare and educational services) and plan your transactions to benefit from zero-rated status where applicable. 2. Utilize Free ZonesFree zones in the UAE offer numerous tax advantages, including: # Businesses in free zones can be fully foreign-owned without needing a local partner. # Many free zones offer exemptions from corporate tax, import/export duties, and VAT,subject to certain conditions. # Full repatriation of profits and capital is allowed, which can enhance your financialflexibility. When choosing a free zone, consider factors such as location, industry focus, and specificbenefits offered. 3. Leverage Double Taxation Agreements (DTAs) The UAE has an extensive network of double taxation agreements with over 100 countries. These agreements prevent individuals and businesses from being taxed twice on the same income, providing significant tax relief. Here’s how to benefit from DTAs: # Familiarize yourself with the provisions of relevant DTAs, including reduced withholding tax rates on dividends, interest, and royalties. # Obtain a tax residency certificate from the UAE’s Ministry of Finance to avail of treatybenefits. This certificate proves your residency status and eligibility for DTA provisions4. Corporate StructuringEffective corporate structuring can minimize tax liabilities and enhance operational efficiency. Consider the following strategies for saving tax via corporate structuring: Establishing a holding company in a favorable jurisdiction can help in tax-efficient profit repatriation and asset protection.  Strategically setting up subsidiaries or branches in different emirates or free zones canoptimize your tax position and benefit from regional tax incentives.  5. Expense ManagementProperly managing your business expenses can lead to significant tax savings.Here are some key practices: # Ensure that all business expenses are correctly categorized and documented. This includes travel, entertainment, and operational costs. # Familiarize yourself with allowable deductions under UAE tax laws, such as depreciation of assets, research and development expenses, and employee-related costs. #Regularly review your expense reports and financial statements to identify potential areas for cost optimization and additional deductions.   B. Personal Tax-Saving TipsWhile the UAE does not impose personal income tax, there are still ways for individuals to manage their finances more effectively: 1. Invest in Tax-Efficient ProductsConsider investing in tax-efficient financial products and instruments: # Investing in real estate can offer rental income and capital appreciation, with favorable tax treatment on property sales. # Certain retirement savings plans and insurance products can offer tax-deferred growth and other financial benefits. 2. Estate PlanningProper estate planning ensures that your assets are distributed according to your wishes while minimizing tax liabilities:# Establishing wills and trusts can help in the tax-efficient transfer of assets to heirs and beneficiaries.  # Life insurance policies can provide tax-free payouts to beneficiaries, offering financialsecurity and tax advantages.  3. Expatriate BenefitsExpatriates in the UAE can take advantage of various benefits to enhance their financialwell-being: #Negotiate housing allowances with your employer, which can cover rental expenses and reduce your taxable income in your home country. #For those with families, education allowances can help cover the cost of schooling and reduce overall tax liability.  C. Compliance and Best Practices To maximize tax savings while ensuring compliance, it’s essential to follow best practices and stay informed about regulatory changes: 1. Stay UpdatedTax laws and regulations in the UAE are subject to change. Regularly review updates from the Federal Tax Authority (FTA) and seek professional advice to stay compliant and optimize your tax strategy. 2. Hire Professional AdvisorsEngaging professional tax advisors and accountants can provide invaluable insights and ensure your tax planning is both effective and compliant:  # Tax professionals can offer tailored advice based on your specific circumstances and the latest regulations. # In the event of an audit, professional advisors can help you navigate the process and provide the necessary documentation and support.3. Use TechnologyLeverage technology and accounting software to streamline your tax management processes:Professional tax advisory services can help individuals and businesses: # Use digital tools to automate record-keeping, expense tracking, and VAT calculations. # Cloud-based accounting solutions can provide real-time financial insights and simplify tax reporting. Conclusion Saving money on taxes in the UAE requires a thorough understanding of the tax landscape, strategic planning, and adherence to legal requirements. Businesses can significantly reduce their tax liabilities by maximizing VAT deductions, utilizing free zones, leveraging double taxation agreements, and optimizing corporate structures. Additionally, individuals can benefit from tax-efficient investments, estate planning, and expatriate benefits to enhance their financial well-being. Staying informed about regulatory changes, hiring professional advisors, and leveraging technology are essential steps to ensure compliance and maximize tax savings. By implementing these insights and strategies, you can navigate the complexities of the UAE tax system and achieve optimal financial outcomes. As the UAE continues to evolve its tax framework, proactive and informed tax planning will remain crucial to financial success. And the best approach is to hire someone who can leverage the best in-time, trendy strategies to avail maximum tax benefits.

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How to Maximize Tax Benefits in the UAE: 2024 Edition

The United Arab Emirates (UAE) continued its strong position as one of the most favorable regions that supports financial opportunities. In 2024, the UAE will remain an appealing destination for those opportunity seekers who want to optimize their tax efficiency. To improve their bottom line and minimize tax liability, businesses implement strategic tax planning. In this article, we have disclosed some of the key strategies that are tax efficient for the UAE in 2024. Understanding the UAE Tax Environment in 2024 An audit is a business’s independent assessment of the financial data of any company, whether profit-oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon. In the UAE, audits are mandatory for most businesses to ensure adherence to financial regulations and to provide stakeholders with an accurate current and future projection of the company’s financial health. Essential Documents for Company Audit No Personal Income TaxAs of 2024, the UAE doesn’t levy any personal income tax on individuals (and is included in one of the few remaining countries without personal income tax). It means, the salaries, wages, and other personal income of individual residents will not be subjected to any tax and saved individual residents’ higher portion of earnings. That’s why the UAE continued to attract investors, expatriates, and high-networth individuals, as the best region to earn from. Corporate Taxation The United Arab Emirates (UAE) continues to steal the show in the dynamic landscape of global business, by not imposing federal taxes on most businesses. There are a few exceptions for foreign banks and oil companies. Especially, the induction of a 9 % tax on profits exceeding AED 375,000, following the implementation of the federal corporate law on taxation in June 2023. However, startups and small business ventures with profits below this benchmark still enjoy significant tax advantages, positioning the UAE as a hub for entrepreneurial activity.According to the UAE Ministry of Finance, this newly levied tax regime is expected to be advantageous in aligning the UAE’s corporate tax policies with international standards (IS), while the tax rates are still competitive as compared to global standards.Value Added Tax (VAT)VAT was introduced in the United Arab Emirates on 1 January 2018. The general VAT applies to most goods and services and it’s 5%, still one of the lowest VAT rates applicable globally. According to the Federal Tax Authority (FTA), VAT revenues have consistently grown in the last few years, reflecting the expansion of the economy and enhanced compliance among businesses. Strategies for Maximizing Tax Benefits in 2024 1.Leveraging Free ZoneThe UAE is a hub for business, offering over 40 free zones brimming with potential. These zones act as magnets for investment, thanks to their enticing benefits like tax exemptions and full foreign ownership. The advantages of operating in a free zone include… 0% Corporate Tax: A 0% corporate tax applies to the qualifying income of businesses recognized as a Qualifying Free Zone Person (QFZP). Customs Duty Exemption: Companies can import and export goods without incurring customs duties, reducing operational costs. Full Repatriation of Profits: Businesses can repatriate all profits and capital without any restrictions. In 2024, the Financial Times granted the Dubai Multi Commodities Centre(DMCC) the ‘Global Free Zone of the Year’ award, highlighting the continued favorable business environment and strategic benefits of UAE free zones. Credit: Financial Times’ fDi Magazine for the ninth consecutive year. 2.Taking Advantage of Double Taxation Avoidance Agreements (DTAAs)To avoid double taxation on the same income, the UAE has signed over 130 Double Taxation Avoidance Agreements (DTAAs). The benefits DTAAs offer include: Tax Credits: Individuals and businesses can claim tax credits in their  home country for taxes paid in the UAE. Reduction or Elimination of Withholding Taxes: DTAAs often reduce or eliminate withholding taxes on dividends, interest, and royalties. Permanent Establishment Protection: DTAAs are saving taxpayers by reducing the risk of double taxation and providing detailed guidelines to avoid creating a taxable presence in other countries. The strategic use of DTAAs can result in significant tax savings for multinational companies operating in the UAE. Report credit PwC -2024 3.VAT Planning and OptimizationTo minimize VAT liabilities and ensure compliance with government regulations, effective VAT planning is essential. These are the strategies for the sake: VAT Filing timely: Prevent penalties and interest charges, by submitting VAT returns on time. Record-Keeping accuracy: To get maximum relaxation, identify potential areas for VAT saving through detailed and accurate records of all transactions. Zero-Rating & Exemptions: Identifying transactions that qualify for zero-rating or exemptions can significantly reduce VAT liabilities. For example, exports and certain financial services are zero-rated or exempt from VAT. The FTA has emphasized heavily on the significance of VAT compliance, and announced more audits in 2024, to ensure businesses adhere to the regulations. 4. Utilizing Tax-Free BenefitsThe UAE offers various tax-free benefits that individuals and businesses can leverage to optimize their tax position: Tax-Free Salaries: The UAE cares for your maximum take-home income and helps individuals negotiate salary packages that include tax-free allowances, such as housing, education, and transportation. Tax-Free Investments: Income from certain investments, such as real estate and securities, is not subject to tax, paving the pathway of opportunities for tax-free capital gains. Retirement Planning: The UAE has set up tax-efficient retirement plans, such as end-of-service gratuity schemes, which can provide significant long-term tax benefits. Expatriates in the UAE save an average of 25-30% more of their income compared to their counterparts in high-tax jurisdictions, all thanks to tax relaxation of personal income and other tax-free benefits. Credit: Study by Deloitte -2024. 5. Effective Business StructuringFor tax optimization, choosing the right business structure is crucial. Some common business structures in the UAE include: Branch Office: Establishing a branch office can be a cost-effective way to enter the UAE market without the need for full incorporation. The office will benefit from the parent company’s tax advantages. Holding Company: Forming a holding company can help in consolidating management and finances, providing tax advantages such as

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Documents Required for a Company Audit in 2024

Conducting a company audit is not mandatory. However, it is an essential process to ensure your business’ financial statements and reports are accurate and reliable. In the UAE, where the business  sector is constantly evolving, understanding the requirements for any company audit in 2024 is a must. If you too want to have your operations compliance-ready and transparent, continue reading this blog. It acts as a comprehensive guide to the documents required for a company audit in the UAE in 2024, with helpful insights into the process and effective preparation tips. Introduction to Company Audits An audit is a business’s independent assessment of the financial data of any company, whether profit-oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon. In the UAE, audits are mandatory for most businesses to ensure adherence to financial regulations and to provide stakeholders with an accurate current and future projection of the company’s financial health. Importance of Audits in the UAE Let’s delve in the importance of having a company audits and multiple critical functions it serves: Compliance: Ensure end-to-end compliance with the existing UAE laws and regulations of the land. Transparency: Leverage a clear and accurate picture of the company’s financial status. Investor Confidence: Your business investors want to know the financial position and health of your company. The findings and reports created from the audit helps them understand your business financial position and demonstrates your accountability. Fraud Prevention: With no financial assessments, financial inaccuracies and frauds can go undetected for long. Detects and prevents fraud through examination of the financial records and internal controls. Financial Health: Not only does it help your investors but also the internal stakeholders and decision makers to understand the financial health of a company and make decisive plans. How to Prepare for a Statutory Audit A solid preparation is key to a smooth and effective audit process. Companies should start by gathering all necessary documents and ensuring that their financial records are up-to-date. Below is a detailed list of documents required for a company audit in 2024 in the UAE. Essential Documents for Company Audit 1. Financial StatementsFinancial statements are the most important element of any audit. These documents offer a snapshot of the business’s financial performance and current position. Balance Sheet: A balance sheet shows the company’s financial position at the end of the year, including assets, liabilities, and equity. It is essential for the auditors to assess the company’s financial stability. Income Statement (P & L Statement): Details all revenues, expenses, and the profits over the financial year. Auditors can evaluate the business’s profitability through its Income Statement. Cash Flow Statement: Provides insights about the cash inflows and outflows, enabling auditors to understand how cash is generated and utilised in your business. Statement of Changes in Equity: Shows the movements in equity over the firms’ reporting period, including any new investments (if any) by the shareholders or if it’s paid out any dividends to the dividend-holders. 2. General LedgerA general ledger is the company’s master document that records all financial transactions done by the company. It is important for auditors to check the accuracy and comprehensiveness of the business’s financial records. 3. Bank Statements and ReconciliationsThe Bank statements and reconciliation statements are needed to verify and compare the cash balances reported in your financial statements. Auditors can use these documents so all transactions are recorded accurately and that there are no discrepancies. 4. Invoices and ReceiptsInvoices and receipts of any sales or purchases can be used to verify the revenue and expenses. These documents enable the auditors to confirm the transactional validity and ensure that those are recorded in the appropriate accounting period. 5. Payroll RecordsPayroll records provide details about all employee salaries and wages, and other benefits given to employees. Auditors can review your payroll records to ensure compliance with the local labour laws in Dubai and verify the payroll expense accuracy. 6. Tax Returns and VAT FilingsTax returns and VAT filings statements are essential for verifying the company’s tax liabilities and compliance with tax regulations. Since the corporate tax of UAE was introduced, it is important to ensure all tax documentations are accurate and up-to-date. 7. Contracts and AgreementsContracts and agreements with customers, suppliers, and other stakeholders provide evidence of the company’s commitments and obligations. These documents are reviewed and cross-verified to ensure that all transactions are legitimate and properly recorded. 8. Fixed Asset RegisterThe company’s fixed assets register, including depreciation, acquisition dates, costs, and current values. It helps auditors verify the existence and value of the company’s assets. 9. Inventory RecordsInventory records detail the quantities and values of goods held by the company. These records are crucial for verifying the accuracy of inventory balances reported in the financial statements. 10. Minutes of MeetingsThe MOM or minutes of meetings for every board and shareholder meeting provides precise insights into your company’s decision-making processes, workflows and significant changes and events. It helps auditors understand the governance and strategic steps of the company. 11. Regulatory FilingsRegulatory filings with government bodies and industry regulators are necessary to verify compliance with local laws and regulations. These documents may include business licences, permits, and other compliance reports. 12. Insurance PoliciesThe company’s insurance policies cover multiple risks it faced. The document is reviewed to ensure adequate coverage and proper bookkeeping for all insurance expenses as well as claims. Sector-Specific Documentation Apart from the above stated documents, you need to keep a track of the documents and data relevant to your sector’s unique needs. For example: 1.Dubai Mainland Company SetupFor companies involved in Dubai mainland company setup, additional documentation can include—trade licenses, compliance with local business regulations, and proof of registered office. 2. DMCC Companies in DubaiThe DMCC companies in Dubai must provide specific compliance documents related to the Dubai Multi Commodities Centre regulations. This includes a proof of membership and compliance with commodity trading rules. 3. Hotel Business in DubaiIf you are running a

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Top Benefits of Corporate Tax in Dubai, UAE

Corporate Tax, which is commonly known as CT, is levied on the company profits and is a hot debate topic among policymakers, economists and the founders and entrepreneurs. The Ministry of Finance introduced the federal Corporate Tax on business net profits on 1 June 2023 for the UAE region. It was first announced by MoF on 31 January 2022.  Several businesses see it as a burden on their net income. However, others find it a much-needed policy change for the benefit of the country. If you, too, want to learn more about the Corporate Tax in UAE, you are at the right place. Before we delve into the leading advantages of the Corporate Tax UAE, let’s understand the rates and nuances of this new tax.    Existing Rates of the Corporate Tax in Dubai, UAE As per the policy regulations stated by the UAE’s Ministry of Finance, here are the latest rates for the Corporate Tax. There are different types of loans, including working capital loan, POS Loan, Express loan, Inventory loan and Equipment business loan in UAE. Working Capital Loan Taxable Income Corporate Income Tax Rate Up to AED 375,000 0% (No Corporate Income Tax) Exceeding AED 375,000 9% Large companies meeting OECD criteria* Separate tax rate applicable Important Note: *In this, large companies or MNEs, refer to those that fall under the criteria under Pillar Two of the OECD (Organisation for Economic Co-operation and Development) Base Erosion & Profit-Sharing Project. For instance, companies that have a global revenue of more than 750 million or AED 3.15 billion. Express LoanTax Free Entities in the UAE’s Corporate Tax System Yes, you read it right.  A few entities are straightaway exempted from paying the Corporate Tax in UAE. This consists of 3 types of entities stated below: Specific categories of Investment funds NPOs or Non-Profit Organisations, provided they meet certain criteria and conditions Entities wholly owned by the government sector The following important question that arises is–which entities need to pay the CT in UAE. Tax Paying Entities in the UAE’s Corporate Tax System The UAE’s corporate federal tax implemented in Dubai applies to all commercial activities and businesses operating in the existing seven emirates.  Below are the two types of entities to which the CT does not apply: Businesses performing services that involve the extraction of natural resources Individuals who earn personal income, including investment returns or monthly salary income, are exempt from paying the CT until their revenue is generated from activities that don’t need the commercial activity licence.  Companies that are registered in the FTZs or Free Trade Zones and comply with all regulatory compliances are excluded from paying the Corporate Tax. This exclusion is applicable as long as it is not a Dubai mainland company setup. How is the Taxable Income Calculated for CT in Dubai This is a commonly asked question of most businesses and founders operating in the UAE and eligible for corporate tax payment. Your taxable income is calculated after reducing the allowable exemptions and expenses of the business’s gross profits. Interests paid on loans, asset depreciation, and operating expenditures are some of the expenses you can deduct from the business’s gross income.  In addition to the above, here is a list-view of all types of incomes that are exempted from the Corporate Tax: Profits generated from the Intra-group proceedings Net revenue generated from the reorganisation of groups Capital gains Dividend income received from a United Arab Emirates company via its shares held by the business For more information, you can consult AB Capital Services which will effectively guide you through the intricacies of the Corporate Tax applicable in Dubai and help pay your taxes. Top 5 Benefits of the Corporate Tax in UAE Coming to the most essential part – how is paying the corporate tax beneficial in 2024 and beyond. Trade and Working Capital Finance Solutions Tax Fairness: Corporate tax helps companies pay a fair portion of their taxes. Since it is calculated on the taxable income of businesses and corporations, it highlights a fair distribution of the geography’s tax burden.  Less Invasive: Compared to the personal income tax, corporate tax is more stable and effective. Moreover, keeping a tab on the corporate tax is simpler for business setup in UAE. This is because your tax consultant does not need to check the income of multiple households or individuals.  Economic Growth and Diversity: The corporate tax is a great mechanism to shield domestic industries from competing with foreign businesses. On the other hand, it encourages local businesses in the UAE through additional incentives given to them.  Relief to Small Businesses: For small businesses set up in UAE, the introduction of Corporate Tax is no less than a golden light. Firms with a revenue of less than AED 3 million in a year can decide to declare no taxable income. This is applicable for the period 1 June 2023 to 31 December 2026.  Enhanced Global Credibility: The implementation of the CT in the UAE, in addition to the international tax regulations, has helped boost the country’s reputation as transparent and regulation-compliant. As a result, this further attracts more foreign companies to expand in the UAE and improves international business networks and relations. Eligibility to Apply for a Business Finance In a nutshell, the introduction of the Corporate Tax in the Dubai, UAE is a great regulation for businesses and helps strengthen the country’s economic foundation and establishes a more sustainable foundation for its tax regime and growth.  Managing the CT calculation and payment can be challenging for businesses. However, you can rely on AB Capital’s business consultancy services. It is well known for its technical financial expertise and industry acumen, enabling businesses to drive their growth to new heights. Whether you need assistance with tax planning or a business setup in Dubai, we are there for you. Book a free consultation with the best business consultants in Dubai.

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Choosing the Right Consultant to Expand your Business in the UAE: Factors to Consider

Introduction As UAE grows as a flourishing land for startups and large enterprises setting up their roots, it becomes paramount for existing and new business to sustain and expand in a competitive land. To do so, financial assistance is required. Getting a business loan can be a big challenge if you are not aware of the nuances like the types of business loan, choose the right lender or interest rate.  However, with the right knowledge and reliable support you can conveniently get a loan in UAE and support your business’s operations, growth, or expansion plans. These loans come in various types and structures, each tailored to meet the diverse requirements of different businesses. Whether you’re a startup looking to scale up or an established company seeking to invest in new opportunities—this is a must read article for you. Types of Loans for Businesses Before securing or even applying for a loan in the UAE, it is essential for you to understand the various types of loan available in the financial realm. A business Loan is specifically intended for business purposes. As with all loans, it involves the creation of a debt, which will be repaid with added interest.  There are different types of loans, including working capital loan, POS Loan, Express loan, Inventory loan and Equipment business loan in UAE. Working Capital Loan As suggested from its name, this type of loan helps support the daily operational expenses incurred in a business. Expenses such as inventory and payroll can be covered through the working capital loan. Since it is short-term, typically, you can flexibly repay this loan in accordance with the cash flow cycle of your business. On the flip side, it has a higher interest rate compared to the other loans. POS (Point of Sales) Loan It is one of the best options for such companies who are merchant establishments using the credit card Point of Sale (POS) machines for daily business transactions and looking for a boost in working capital, inventory purchases, business expansion, purchase and upgrade of equipment etc. These businesses can leverage Point of Sale (POS) receivables to avail loan. Express Loan If your company has been in business for more than two years, you are eligible to apply for an Express Loan with minimum documentation and the shortest possible processing time, and can also take over your existing business loan with another bank at attractive terms. Inventory Loan A machinery loan is a credit facility that helps you borrow funds to buy, lease, repair or upgrade machinery. It is a type of business loan that enables you to improve your productivity and efficiency without compromising your working capital Equipment Loan Evident from its name, you can use this kind of loan to purchase vehicles or equipment essential for your business operations. It supports sustainable success as the loan repayment is generally aligned to the equipment’s life cycle. Key Factors in Selecting the Right Business Loan Interest Rate: The interest rate for your loan is what directly impacts the total amount you need to pay for it. When getting a loan, make sure you check the rates of all leading banks for your loan type or category and then settle for the one that offers a loan at the lowest interest rate. Also, understand the hidden charges, processing fees and any additional expense associated with the loan. Loan Repayment Conditions: The terms and conditions associated with your loan is the second most important factor to note. Go through the repayment schedule (monthly, quarterly or yearly) and compare it with your ability to afford and repay on time.  Lender’s Reputation: Borrow a loan for your business in Dubai, only from a reputable vendor. Their application process, customer/client service, past record of offering loan and instalment plans are a few things you must check. Go through their online reviews and check for recent news about the lender or financial institution.  Objective of the Loan: Make a clear plan of how you will use the funds received from this loan. Having a specific plan in place will ensure that the amount gets utilised in the best interest of your firm in UAE.  Personal Situation: In addition to the above factors, you need to assess the collaterals for loans, repaying capacity and your credit history to ensure that the repayment process is convenient and stress-free.  Trade and Working Capital Finance Solutions The Trade & Working Capital Finance solutions help businesses manage their cash flow efficiently. Whether you need to finance your inventory, pay suppliers or manage your receivables, you need to have the following documents handy with you.  Letter of Credit (LC): You can receive payment commitments against transactions, ensuring smooth cash flow throughout the order and delivery process. Loan Against Trust Receipts (LATR): This is utilised for financing the shipment of imported goods. It requires minimal setup and no interfaces.  Short Term Loans (STL): It is used for advance payment to business suppliers. Eligibility to Apply for a Business Finance A lot of businesses are unsure whether they are eligible for getting finances. But unfortunately, there are only a limited number of them who meet the eligibility criteria. The specific requirements differ from bank to bank in the UAE. Having said that all banks have these minimum requirements: Business must be running for at least 2 years Minimum annual turnover (amount varies per bank) Business or personal bank statements for the last 6 to 12 months Document Requirements Valid trade licence Valid passport, EID, visa (for all signatories and shareholders) Bank statements and VAT filings receipts Business documents, such as constitutional documents & Account mandates viz memorandums, Shareholders Resolution, etc. Company location document such as Ejari, lease agreement, etc. (as applicable) Banking or lending assessment information or documentation (if and as applicable) Capacity to meet the bank’s lending criteria Conclusion Business loans in Dubai play a pivotal role in the growth and sustainability of enterprises across various industries. As a business owner, understanding the intricacies of different loan

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5 Best Practices for a Successful Hotel Audit in Dubai

We often hear the term ‘human error’. Quite clearly, it is possible to leave an error in day-to-day business operations. However, several errors can burn a massive hole in your business’s financial pocket if left unnoticed and not rectified timely.   This is one of the many reasons to conduct an internal audit for your hotel business in Dubai! In basic terms, an audit is a detailed examination and analysis of your business’s financial statements and records as well the internal operational practices you follow, typically done by an external independent auditor.  Internal Audit vs Statutory Audit in Dubai Now, there are majorly two types of audits done for most types of businesses in Dubai–  Internal and Statutory.  Let’s understand the difference and the significance of each of them. 1. Internal Audit: An internal audit is like having your own employee find the errors. Generally, most restaurants have an internal team do their audit or outsource the task to a third-party, in case they do not have the required team or are falling short on time.  Every internal control is thoroughly assessed, and the auditing team focuses on maximising operational efficiency and risk management. The audit is conducted with a key goal: to improve operational processes, identify areas for improvement, and identify and eliminate process inefficiencies and frauds.  It offers actionable data and insights to the restaurant’s management, facilitating decisive plans and overall enhancements. 2. Statutory Audit: Unlike an internal audit that can be scheduled as per the organisation’s or restaurant’s administration’s plan, the statutory audit is mandated by an external team of any registered and reliable auditing firm in the UAE.  Regulatory and legal authorities such as the Dubai Economy or the DFSA (Dubai Financial Services Authority) assess compliance. The external auditing team also thoroughly checks financial statements and records of your restaurant for AS (Accounting Standard) compliance, accuracy and other additional factors.  This process helps assure regulators, investors and other restaurant stakeholders of the accuracy of your financial statements and records.  Things to Remember for a Successful Hotel Audit in the UAE Now that the distinction between internal and statutory audit is clear let’s explore the 5 best practices for a successful hotel audit in UAE. Following these tips will enable you to streamline your daily operations and boost business productivity.  1. Ensure you have well-defined the goals Before you start the audit process of your hotel business in Dubai, set well-defined objectives and the scope of it. Assess and make a note of the key areas you want included in this audit. For instance, it could be regulatory standard compliance, operational steps, guest experience and financial statements and records.  Determining these in advance will help you dedicate the auditing team’s effort to areas that need the most attention. While you are at it, assign timelines to each and communicate them to all internal stakeholders so everyone is informed. 2. Auditing consultants to rescue For hotels that do not have an internal team for auditing the financial records and operations, auditing consulting firms come to the rescue. Even if you have a finance team in-house, it is advisable to opt for the services of an audit consultant firm in UAE or business consultants in Dubai. There are a plethora of reasons why! Many audit consulting firms specialise in auditing the hotel business in Dubai. Thus, such consultants are able to uncover inefficiencies and establish controls that others may skip. You can elevate your hotel’s performance and brand image by leveraging its capabilities. 3. Timely internal audits are the best way to be prepared for statutory audits Prioritising your internal audits as per their schedule for your hotel operations is directly connected with streamlining and stress-free statutory audits. You must review all financial records and processes on a timely basis. This helps find any discrepancies and errors before they come to the surface at the time of statutory audits.  Also, make sure your internal audit is customised according to the nuances and regulations relevant to the hospitality industry in UAE. Altogether, an internal audit helps improve your hotel’s image and brand reputation and ensures trust amongst the stakeholders.  This is a good time to see how you can improve your operational process, remove manual and repetitive tasks and optimise cost. Lastly, evaluate resource utilisation and optimise wherever required. 3. Utilise the expertise of all departments If you are conducting the internal audit in-house for your hotel, ensure you include all department heads in it. This means, collaborating with customer experience specialists, human resources, operations, marketing and finance. All these departments have their monthly expenses that need to be thoroughly accounted for and assessed as a part of your internal audit process. 5. Chalk out a plan and reporting Hotel audits are ongoing throughout the period. In fact, the audit does not end after the audit process. The most important part starts thereafter.  Once you have completed the audit, it is time to evaluate the findings, make proper reports of them, and then get to even more important aspects—corrective actions. Check the progress of the rectifications done from time to time and add more checks to enhance the results. Following this will help ensure sustained improvements and success. 6. Create an ongoing audit plan: Audits for any hotel business in Dubai or restaurant business setup in Dubai can never be a one-time thing. In fact, you will understand this after you do the first audit of your hotel and find all the gaps. Besides an internal audit, hotels in the UAE are also required to conduct an energy audit every month. With effect from 15 March 2023, all hotels in the UAE must assess their carbon footprint and report the amount monthly.  The Strategic Advisor of the Middle East Solar Industry Association, Abhayjit Sinha shared this mandate in a panel discussion about renewable energy projects for the Middle East Energy Dubai summit. As per the new regulations, hotels in Dubai are also required to share the details of the water

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Checklist for an Internal Audit in a Business Firm In UAE

Are you running a business in the UAE or have a business setup in Dubai? Avoiding internal audits is one of the quirks of most business owners and stakeholders. But the truth is that delaying internal audits is one of the many factors that makes your business a sinking ship.   In this blog, we’ll walk you through all the essential steps involved in an internal auditing that you can smartly customize to suit the unique context and requirements of the UAE business landscape.   It does not matter whether you have a Dubai Mainland company setup, or one of the the DMCC companies in Dubai, or if you run a hotel business, or are looking for analytics and  insights as a business consultant—this checklist checks all the boxes and you can trust on it as your reliable companion for regulatory compliance, ensuring operational efficiency, and a sustained growth curve. But what is the significance of an internal audit for a business, and how does it work? You can consider an internal just like your regular dentist appointment. Just like a dental appointment that helps find issues and curb them before they turn into painful aches, an internal audit is a complete check-up for your company.  Firms operating in Dubai can make use of a focussed Internal, helping them to streamline their process, assess their existing financial practices, and identify any risks that can sooner or later turn into costly problems. Not to miss, availing services of a reliable internal audit company in UAE can help you stay compliant with the regulatory standards of the land. To start with an internal audit, you need a well-structured internal audit checklist in 2024. This document shall serve as your guide book for the team working on audits, and help chart a clear route of all prerequisites and actions that the team shall adhere to for finishing the audit process. This starts from analysing the existing internal controls, checking your business financial statements and records, and how to conclude the assessment you have made.  Step 1: Explore and Assess all Existing Regulations This step is often undermined. As a business functioning in the UAE, you must know and understand the laws of the land. In the practical scenario, the regulatory environment is changing and has multiple intricacies that directly or indirectly impact almost all businesses operating on its land. It does not matter which industry or stage you are at, the legal regulations are well defined, yet dynamic in nature.  Both Dubai Mainland company setups as well as the DMCC (Dubai Multi Commodities Centre)–function as per the governed framework of the federal and the local laws, licensing requirements and legal regulations. Thus, as a business owner, you must ensure that your business comply with the latest obligation pertaining to corporate taxation (CT) in Dubai. To avoid any challenges and safeguard your business from compliance issues, be diligence-ready at all times. Step 2: Define a Scope and Standardise Objectives Just like in other areas, before venturing into the internal audit process, define a create scope and list all objectives that you plan to achieve from this internal audit. Remember to tie back these objectives with the overall organisational goals. Consider your operational processes, compliance regulations, internal checks and controls and financial operations within the firm when defining the scope of internal audit.  While you are at it, it’s wise to work around SMART objectives. SMART signifies–Specific, Measurable, Attainable, Relevant and Timely. With this structure in place, your auditors are in a better position to derive meaningful financial insights and suggest clear improvements in areas that need change. Step 3: Identify Risks and Establish Control Checkpoints This is one the most important steps in the process of internal audit. Perform a detailed inspection and assess and list all current and potential risks that could impact the financial health of the business. Next, chalk out mitigation plans to address those financial risks and assess the efficacy of the existing checks in place. Assessing the current controls helps you better deal with challenges, what is popularly termed as Crisis Management, during a situation of financial crisis.  If you are into a hotel business in Dubai, your risk may defer from another firm that is into constructions or cosmetics or a healthcare product brand. Step 4: Create and Maintain Operational Documents Internal audit is an extensive process that can take anywhere from a few days to several months, depending on your firm, operational procedures, availability of resources and many other factors. Due to this, it is quite possible to skip the details if you don’t document everything.  Throughout the internal audit, create clear documentation and add recommendations, results from tests, workpapers, sample checks and audit planning paperwork to ensure better clarity and efficiency. Not only this, maintaining clean documents during your audit helps ensure that your future internal audits are quick and involve less effort. Step 5: Audit Your Finances Your finances are the backbone of your firm’s long-term success. Check the accuracy of your financial reports, compliance with AS (Accounting Standards), etc. To ease the process, especially for businesses with massive data and records, assign clear responsibilities. This will enable you to thoroughly check your financial statements and identify any errors and financial frauds.  At this time, cross check all records and data integrity with the entries.   Conduct an assessment of the control action plan and review bank reconciliation, expense controls and authorisation regulations. Lastly, check UAE’s latest tax regulations and policies and compare if your company’s financial compliance is the same.  Step 6: Manage Operational Requisites Clearly evident from the title, auditing your operational processes and their efficiency is all that needs to be done at this stage. Assess the efficacy of your set procedures, check key metrics, and current industry standards and how well your firm performs compared to them.  This is a good time to see how you can improve your operational process, remove manual and repetitive tasks and optimise cost. Lastly, evaluate resource

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How to get an Import/Export Code for Business in Dubai?

In this era defined by end-to-end global connectivity, the flow of goods between geographies has proved itself as the lifeblood of worldwide economies. Among the most important players in this well-knitted dynamic landscape, Dubai emerges as the hub of golden opportunity for those interested in import-export ventures. Leveraging its strategic location at the crossroads of Africa, Asia and Europe, Dubai proves itself as a prime destination for all sorts of foreign investors and startup enthusiasts planning to capitalise on the growing import-export market. Dubai’s resilient economic development and transportation infrastructure, with the finest of developed road network, ports as well as world-class airports, define its dependable foundation for seamless import and export operations. This being coupled with the country’s favourable tax laws, most startups want to set up in Dubai.  Thus, companies, whether old or budding, find it increasingly beneficial to import and export their products in this dynamic environment. On the other side, compliance remains essential, mandating the much requisite engagement with the esteemed business consultants in Dubai. Such a reputed consultant can help you secure a custom client code, simplifying the global trade facilitation.  Are you planning to get an Import/Export code, commonly known as the Customs Client Code for your business? Let’s delve into the complete details on how you can get it. Importance of Customs Client Code in Dubai In the UAE’s bustling trade scenario, having a customs client code is like having your own trading passport. This is a special code, which you can obtain by registering with the Dubai Customs, and gives you a green signal to trade your goods internationally, anywhere in the world. For any company eyeing the global markets from the UAE, the import/export code is a must-have. Firstly, you need a valid trading licence, specifying the day-to-day operations incurred in your business. Navigating the end-to-end processes are simplified with assistance from top accounting firms in Dubai. Such business consultants in Dubai are experts in their field and so can enable you to effectively navigate through the tedious application processes, ensuring you are all set to trade. Once you have got the code you can start your import and export deals instantly. With the support from an auditing firm in Dubai, you’ll breeze through all the manual paperwork involved in the procedure, thus making all trade-work easy-peasy. Your customs code is unique to your company and thus, it stays valid till the date of your business licence’s expiry. If you are thinking that renewing your customs code is going to be tough.  You are wrong.  Renewing the customs code is super convenient–in fact you can compare it with renewing your driver’s licence. This ensures that you are always set for trade drives. In a nutshell, the Dubai customs client code opens doors to global trade, making it simpler for any business setup in Dubai to thrive in UAE’s dynamic markets and beyond. Import Export Registration in Dubai Starting your global trade voyage starts with the Import-Export Registration in Dubai – an essential step that you need to take to establish your presence in the vibrant UAE market. Here are the top 6 factors you must keep in mind as someone applying for a Import Export Registration in UAE: Registration Process: The Dubai Customs effectively manages the end-to-end process and thereafter, issues you a unique Import-Export Code, that is required for the smooth trading in the UAE. Submit Your Document: At this stage, you need to share some key documents like your Trade License, undertaking licence, as well as the copies to your passport to initialise the process. We’ll explore this in detail in the next few paragraphs.  Review of the Application: Once you have submitted all necessary documents and paid the fees, the Dubai Customs authority thoroughly reviews your application to ensure compliance. Code Issuance: Once the application is approved, the Dubai Customs then issues the Import-Export Code for your business, which is valid for one year and needs to be renewed post that. If you don’t have a valid Trade License of your firm, then unfortunately, it is not possible to get the code issued. Cost Variation: A lot of business owners ask this question–What is the registration for the Import/Exports code? There is no fixed registration cost associated with it.  As a matter of fact, the cost of getting the customs code in Dubai may vary across Emirates and Free Zones. Understanding these knitty-gritty variations helps you in making informed choices. Dedicated Customs Code: With access to your Import-Export or Customs Code, your firm gains access to the dedicated Customs Code, ensuring seamless cross-border payments and trade transactions. Navigating the import and export registration is the first key to unlock your global trade success ahead. As you register your company in Dubai, it sets you up for the golden future in the UAE’s market and beyond.  To import or export goods in Dubai, UAE, you need a Customs Code—it’s like your entry ticket for smooth transactions. Without it, you can’t clear customs or comply with import and export rules. Key Documentation Required for Applying a Customs Client Code Copy of your passport Copy of the Visa and EID  Copy of your business’s trade licence An undertaking letter Your mobile number Details of the facility Details about the business User’s profile Final Step: Completing the Registration Process​ The Dubai Customs Code aligns all its operations with the existing laws of GCC, or the Gulf Cooperation Council along its relevant Federal and National regulations. Furthermore, this upholds several international protocols and agreements that ensure compliance and enable smooth trade interactions at a global level.  If you already have the customs code registered for your business setup in Dubai, make sure you know what its expiration date is. It is essential to renew the business code within 60 days from the date of expiry or it shall be suspended.  After Dubai Customs reviews and approves your application, they’ll generate your customs client code. The code is sent to you electronically, thus,

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