UAE: Willing to Introduce Taxes

The United Arab Emirates (UAE) is willing to introduce taxes. However, before any decision is made, the government confirms it will examine and evaluate the advantages and disadvantages before introducing new taxes.

The UAE government discusses matters and issues extensively before making any decision. The government evaluates each matter and analyzes the affect their decision will have on the general competitiveness of the country. Having said that, the UAE is a member state of the GCC, thus in regards to the introduction of a VAT all the GCC countries need to make a unanimous decision. 

The UAE government has not specified what kind of taxes it plans to introduce and when it plans to introduce them. Currently, tax discussions revolve around the implementation of a VAT, Corporate Tax and a tax on remittances. The introduction of taxes is significant to the UAE as its oil revenues have declined due to the decrease of oil prices.

The GCC have undertaken several studies regarding the introduction of draft VAT legislation. Nonetheless, the GCC has not made a final decision due to the fact the member states have not yet concluded on the rate of the tax and tax exemptions.

Tax & Economic Implications

As aforementioned, several studies have been conducted to evaluate the affect the taxation will have on the economy and society. The latest study began in 2014 and was completed at the beginning of 2015. 

The studies review to what extent taxes will affect the growth rate of the UAE economy and its global competitiveness.

Once a final decision has been made regarding the introduction of VAT, the UAE government will make an official announcement to inform companies and the public. The entities and sectors that will be subject to the VAT will be allowed a period of 18 months after the tax is introduced in order to adjust, fulfil and comply with their tax obligations.

Several studies have been conducted regarding  the Corporate Tax the UAE is planning on introducing in order to evaluate the extent the introduction will influence companies in general. A draft law is still being reviewed and the tax rate has not been set. 

Dubai Open E-Commerce and Design Centres

Dubai’s success is mainly attributed to the fact the emirate continuously launches new free zones which attract businesses and enhance growth across a wide range of sectors. Besides offering business-friendly environments, these free zones focus on particular sectors of business enabling corporations to expand and grow. Currently, the emirate has established the Matajircom and Dubai Design District, two new hubs, which revolve around e-commerce and design respectively.

Promoting Design

The emirate’s luxury, fashion and design sectors are estimated to mark an impressive growth during 2015 as it is anticipated that consumer consumption will reach AED 150 billion. During April 2015, Dubai launched its new design hub known as Dubai Design District (d3), where both local talents as well as internationally known brands are found. The d3 was especially set up to aid local talents to acquire global recognition as well as a means for international corporations to expand within the Middle East and discover local talents. Set up to cultivate and develop design as well as generate profits and economic growth, the d3 is strategically found in the middle of Dubai Mall and the DIFC, Dubai’s renowned financial hub.

The d3 was established to provide free zone and non-free zone licences. Free zone licences offer a tax exemption for 50 years and 100% foreign ownership. The free zone licences are granted by the emirate’s Dubai Technology and Media Free Zone authority. In order to be granted a non-free zone licence, the Department of Economic Department, which is the authority that approves the issuance, requires 51% local ownership. The new d3 hub has been under construction and is anticipated it will be completed by October 2015. Those interested in setting up within the design free and have not yet secured adequate premises may reserve premises that will be completed in later construction stages, allowing them to apply for a free zone or non-free zone licence within d3.

Enhancing E-Commerce

Another sector which has marked remarkable regional growth is the emirate’s e-commerce. It is anticipated that the GCC E-Commerce sector will generate USD15 billion during this year. Dubai strives to maximise its business potential with the launching of Matajircom, the first global manmade e-commerce centre. The purpose of Matajircom is to enhance, attract as well as simplify the setting up of companies conducting e-commerce activities in Dubai. Matajircom is located within TechnoPark, located near Jebel Ali Free Zone. Jebel Ali Free Zone is currently home to more than 7500 corporations. As d3, Matajircom will also provide free zone as well as non-free zone licences.

Matajircom was set up by EconomicZones World. 

The purpose of the new hub is to attract e-commerce orientated businesses to set up within the UAE. The hub will offer rapid company registration, warehouse spaces as well as with agents specialising in logistics. Even though Matajircom will be launched shortly, the free zone will not grant licences till the start of 2016. It is anticipated that Matajircom will grant personalized regulations in order to assist e-commerce activities. Nonetheless, the specific date the legislation will be ready has not yet been confirmed.

Assistance

Dubai is home to more than twenty free zones. The two free zones aforementioned, d3 and Matajircom are amongst the ones which are currently being set up. Dubai continuously establishes new business opportunities for companies looking to expand so as to benefit the emirate economically. Additionally, these ongoing developments also reflect the confidence businesspeople have in both Dubai but also other regional markets.

   

Through the years we have witnessed Dubai grow and develop into a top-notch city. Dubai free zones offer the perfect business environment to corporations seeking to expand their horizons into the region. Our experienced team guides both foreign and local businesspeople through all the procedures and requirements needed to set up companies within the region in order to grow and meet their full business potential.

New Register of People with Significant Control introduced in UK Companies

According to the UK’s Small Business, Enterprise and Employment Act 2015 all UK companies, besides publicly traded companies, must keep a register of people who hold significant control over the specific company. This new policy, known as the register of people with significant control or PSC register will include information on people who are owners or control 25% or more of the company’s voting rights or shares, or who have control over the specific company and management.

Provided that the people who have control over a company tend not to be the same people to those included on the shareholder register, the PSC register will not be the same as the shareholder register.

The PSC register will not only be available to the public but will also be found on the internet under Companies House.

Apart from publicly traded companies, all UKcompanies, both private and public, are subject to comply with the PSC register requirement. Publicly traded companies already report under the DTR 5 regulation.

The UK government has introduced the PSC register in order to create more corporate transparency. The UK is the first to introduce the register, while the EU is also heading towards the same direction in order to comply with the Fourth Money Laundering Directive.