TRC Certificate in the UAE for Legal Person: Step-by-Step Process by AB Capital Services

Introduction

The UAE has a very favorable climate for doing business and has signed double taxation agreements with many countries. In order to take advantage of these tax treaties, the companies and other legal entities require a Tax Residency Certificate (TRC). This certificate helps businesses to escape the double taxation, get the best tax rates, and meet the international tax standards. In this blog, we will explain how to get a TRC certificate in the UAE for Legal Person, the advantages of this document, and how AB Capital Services, top business consultants in Dubai, can assist your company in this matter.

What is a TRC Certificate for Legal Persons?

TRC is recognized as an official document, which is released by the UAE’s Federal Tax Authority (FTA). It confirms the legal entity or company residence of the United Arab Emirates for tax Identification purpose. Having TRC means that legal entities can take advantages of UAE tax treaties with other states, and thus it is useful for the companies with global presence.

Eligibility Criteria for TRC for Legal Entities

For legal persons (companies and other business entities) to be eligible for a TRC in the UAE, they must meet certain criteria:

Established in the UAE: The company must be legally operating in the UAE either as a mainland, free zone or offshore company and must be registered.
Active Operations: The company must show that it is conducting business within the UAE and that it is conducting business frequently.
Physical Presence: The entity must have an office or place of business in the UAE.
Compliance: The company should also be in compliance with the laws of the UAE, accounting and VAT if any.

Documents Required for TRC Application for Legal Persons

To qualify for a TRC in the UAE when applying as a legal person, there are several documents that one is needed to produce. To prevent any form of delay, AB Capital Services makes sure that all the paperwork is well done. The following documents are typically required:

Photocopy of the trade license of the company.
Certified true copy of the company’s Memorandum of Association (MoA).
Company’s shareholders and ownership structure showing the proportion of ownership of each shareholder.
Consolidated audited financial statements for the last fiscal year.
Lease agreement of the company for the office or operational place.
Bank statements for the last six months.
Business documents that show that the business is active in the UAE (invoices, contracts, etc.).
Letter of board resolution to affirm the company’s decision to apply for the TRC.

TRC Application Process with AB Capital Services

The application of the TRC is not easy, especially for companies that have international operations and businesses. AB Capital Services makes this process straightforward by offering expert guidance at each step:

Initial Consultation: AB Capital checks your company’s compliance with the TRC and examines your existing business model for improvements.
Document Preparation: The team helps you compile and submit all necessary documents that meet the FTA’s requirements.
Application Submission: AB Capital is responsible for the submission of the application to the FTA and guarantees that all the information provided is correct and all the necessary documents are included.
Follow-up and Approval: AB Capital monitors the status of the application and informs the client periodically until the TRC is received.

Why Legal Entities Should Obtain a TRC in the UAE?

How to obtain a tax residency certificate?

Obtaining a TRC as a legal person provides numerous benefits for businesses, especially those engaged in cross-border transactions:

Avoid Double Taxation: The TRC enables a legal entity to escape from being taxed in the UAE and in another country on the same income.
Access to Favorable Tax Rates:The advantage of having a TRC is that companies can take advantage of the lower tax rates that are negotiated between the UAE and other countries.
Strengthened Business Reputation: Having a TRC puts your company in a better position, proving that the company is in compliance with the international tax laws.
Financial Optimization: The TRC enables companies to minimize their tax liability and invest more in their growth and development.

Challenges in Obtaining a TRC for Legal Persons and How AB Capital Can Help

Although the process of obtaining a TRC holds many advantages, it may have its difficulties for those companies who lack knowledge of corresponding legislation. Common challenges include:

Complex Documentation: Meeting the FTA’s requirements on all the documents, you may encounter problems without the help of a professional.
Time-Consuming Process: Seeking a TRC may be cumbersome, particularly if some organizations are operating in several different countries.
Frequent Changes in Regulations: With UAE taxes and compliance laws, there can be amendments in laws which can make it hard for the businesses to adapt to the changes.

These challenges are well handled by AB Capital Services through provision of services that are unique to each client. It also makes sure that approved applications at the time of submission are properly prepared and timely submitted so that they are not rejected by the UAE laws.

AB Capital Services: Your Trusted Partner in TRC Applications

AB Capital Services has established itself as a trusted partner for businesses seeking tax residency certificates in the UAE. With a team of experienced consultants, they offer comprehensive support for businesses throughout the TRC application process. Here’s why AB Capital is the right choice:

Expert Knowledge: Their team has vast knowledge in UAE tax residency laws, which makes your company’s application to be in conformity with the laws.
Personalized Solutions: AB Capital offers its services in a way that is most suitable for your business needs, so you get the best services that you need.
Transparent and Timely Service: The company is also very professional and keeps the client informed throughout the process and the process is very fast.

TRC Certificate for Legal Persons vs. Natural Persons

While both legal persons (companies) and natural persons (individuals) can apply for a TRC, the process and requirements differ significantly:

Legal Entities: Need to provide a lot of information concerning their activities, financial reports, and legal status.
Natural Persons: Emphasis on the physical presence and financial transactions in the UAE. AB Capital Services helps both types of clients to meet their needs during the application process as a way of addressing their needs.

How Long Does it Take to Get a TRC for Legal Persons?

For a regular legal entity in the UAE, the time for the processing of the TRC application is estimated to take between 2 and 4 weeks depending on the documentary requirement that is needed as well as any other request that may be issued by the FTA. When you have AB Capital Services handling your application, you will find that the process is efficient and fast.

Fees and Costs Involved in TRC Applications for Legal Persons

The process of applying for a TRC entails government fees and service charges for consultancy. The fees charged are clearly explained by AB Capital Services, so that companies know all the expenses that are incurred in the process of acquiring a TRC. Their service fees include the preparation of the documents, submission of the documents, follow up on the documents and advisory services.

Conclusion

It is crucial for legal persons in the UAE to apply for a TRC certificate to enhance their tax planning and take advantage of the DTAs. When you apply for an SBA loan with the help of AB Capital Services, your company will be able to avoid many of the common pitfalls and receive numerous tax benefits.

Whether you are a first-time applicant or a company that needs to renew their TRC, AB Capital Services is ready to help your business throughout the process.

FAQs (Frequently Asked Questions) About TRC for Legal Persons

Q: Can any business apply for a TRC in the UAE?
A: Only businesses that are registered and operational in the UAE, and meet the residency and compliance requirements, are eligible to apply for a TRC.

Q: How often does a TRC need to be renewed?
A: A TRC is valid for one year and must be renewed annually by submitting updated financial and business activity documentation.

Q: Does a TRC apply to both mainland and free zone companies?
A: Yes, both mainland and free zone companies in the UAE are eligible to apply for a TRC, provided they meet the FTA’s requirements.

Q: Can a TRC help reduce tax on international income?
A: Yes, a TRC allows businesses to benefit from tax treaties that reduce or eliminate tax on international income, making it a valuable tool for companies engaged in cross-border transactions.

Q: What happens if a company’s TRC application is rejected?
A: If an application is rejected, AB Capital Services assists in identifying the reasons for rejection, correcting any issues, and resubmitting the application to ensure approval.