Category: Business

The United Arab Emirates (UAE) boasts numerous free zones across its emirates, each tailored to specific industries and business needs. Here’s an overview of some prominent free zones across the UAE:

Dubai

1. Jebel Ali Free Zone (JAFZA)
   • Location: Jebel Ali
   • Focus: Trade and logistics
   • Benefits: 100% foreign ownership, no import/export duties, and access to Jebel Ali Port.
2. Dubai Multi Commodities Centre (DMCC)
   • Location: Jumeirah Lakes Towers (JLT)
   • Focus: Commodities trading
   • Benefits: 100% foreign ownership, no import/export duties, and a robust trading environment.
3. Dubai Silicon Oasis (DSO)
   • Location: Silicon Oasis
   • Focus: Technology and innovation
   • Benefits: 100% foreign ownership, no import/export duties, and a technology-focused infrastructure.
4. Dubai International Financial Centre (DIFC)
   • Location: Downtown Dubai
   • Focus: Finance and professional services
   • Benefits: Independent regulatory framework, tax incentives, and a finance-centric environment.
5. Dubai Healthcare City (DHCC)
   • Location: Al Jaddaf
   • Focus: Healthcare and medical services
   • Benefits: 100% foreign ownership, tax exemptions, and a dedicated healthcare infrastructure.
6. Dubai Media City (DMC)
   • Location: Al Safa
   • Focus: Media and advertising
   • Benefits: 100% foreign ownership, no import/export duties, and a media-friendly environment.
7. Dubai Internet City (DIC)
   • Location: Al Quoz
   • Focus: Information technology and software
   • Benefits: 100% foreign ownership, no import/export duties, and a tech-driven ecosystem.
8. Dubai Design District (d3)
   • Location: Al Wasl
   • Focus: Design and fashion
   • Benefits: 100% foreign ownership, no import/export duties, and a creative hub.
9. IFZA

International Free Zone Authority (IFZA) is a prominent free zone located in   Dubai. Here are some key details about IFZA:

• Focus: A diverse range of businesses, including trade, services, and professional services.
• Highlights:
  • Flexible Business Structures: IFZA offers a range of company structures, including free zone companies, branch offices, and more.
  • Cost-Effective Solutions: Known for competitive pricing and flexible packages, IFZA provides an affordable option for both startups and established businesses.
  • Easy Setup: Streamlined processes for company formation, including fast registration and minimal paperwork.
  • Location: Positioned in Dubai Silicon Oasis, providing easy access to major transport links and business hubs.
  • Facilities: Offers modern office spaces, virtual office options, and flexible office arrangements.

IFZA aims to cater to a wide variety of business needs with a focus on simplicity and cost-effectiveness, making it a popular choice for entrepreneurs and businesses looking to establish a presence in Dubai.

1. Meydan Free Zone

Meydan Free Zone is another notable free zone in Dubai. Here’s a summary of what it offers:

• Focus: A broad range of industries, including trade, services, and consultancy.
• Highlights:
  • Strategic Location: Situated in the Meydan area, which is known for its mix of residential, commercial, and leisure developments. The location offers convenient access to major roads and is close to key areas like Downtown Dubai and the Dubai International Airport.
  • Business-Friendly Environment: Provides a range of business setup options, including LLCs, branch offices, and representative offices.
  • Cost-Effective: Offers competitive pricing for business setup and operational costs.
  • Facilities: Includes modern office spaces, warehousing options, and virtual office services.
  • Support Services: Offers comprehensive business support services, including administrative assistance and regulatory guidance.

Meydan Free Zone is designed to accommodate various business needs with an emphasis on flexibility and cost-effectiveness. Its location and facilities make it a viable option for businesses looking to establish or expand their operations in Dubai.

Abu Dhabi

1. Abu Dhabi Global Market (ADGM)
   • Location: Al Maryah Island
   • Focus: Finance and investment
   • Benefits: Independent legal framework, tax incentives, and a global financial hub.
2. Khalifa Industrial Zone Abu Dhabi (KIZAD)
   • Location: Near Abu Dhabi port
   • Focus: Manufacturing and logistics
   • Benefits: 100% foreign ownership, no import/export duties, and proximity to major transport routes.
3. Abu Dhabi Airport Free Zone (ADAFZ)
   • Location: Abu Dhabi International Airport
   • Focus: Aviation and logistics
   • Benefits: 100% foreign ownership, proximity to the airport, and tax exemptions.
4. Twofour54
   • Location: Yas Island
   • Focus: Media and entertainment
   • Benefits: 100% foreign ownership, no import/export duties, and a vibrant media community.

Sharjah

1. Sharjah Airport International Free Zone (SAIF Zone)
   • Location: Near Sharjah International Airport
   • Focus: Trade and manufacturing
   • Benefits: 100% foreign ownership, no import/export duties, and convenient airport access.
2. Sharjah Media City (Shams)
   • Location: Al Jerf
   • Focus: Media and creative industries
   • Benefits: 100% foreign ownership, no import/export duties, and a supportive environment for creative enterprises.

Ajman

1. Ajman Free Zone (AFZ)
   • Location: Ajman
   • Focus: Trade, manufacturing, and services
   • Benefits: 100% foreign ownership, no import/export duties, and a range of business facilities.

Fujairah

1. Fujairah Free Zone (FFZ)
   • Location: Fujairah
   • Focus: Trade and industry
   • Benefits: 100% foreign ownership, no import/export duties, and access to Fujairah Port.

Ras Al Khaimah

1. Ras Al Khaimah Economic Zone (RAKEZ)
   • Location: Ras Al Khaimah
   • Focus: Various industries, including manufacturing, trading, and services
   • Benefits: 100% foreign ownership, no import/export duties, and flexible business setup options.

These free zones offer diverse benefits tailored to various industries, including tax exemptions, 100% foreign ownership, and streamlined business setup processes. Choosing the right free zone depends on your business needs and industry focus.

• Corporate Tax is a form of direct tax levied on the net income of corporations and other businesses.
• Broadly, Corporate Tax applies to the following “Taxable Persons”:
• UAE companies and other juridical persons that are incorporated or effectively managed and controlled in the UAE;
• Natural persons (individuals) who conduct a Business or Business Activity in the UAE as specified in a Cabinet Decision to be issued in due course; and
• Non-resident juridical persons (foreign legal entities) that have a Permanent Establishment in the UAE
  • Juridical persons established in a UAE Free Zone are also within the scope of Corporate Tax as “Taxable Persons” and will need to comply with the requirements set out in the Corporate Tax Law. However, a Free Zone Person that meets the conditions to be considered a Qualifying Free Zone Person can benefit from a Corporate Tax rate of 0% on their Qualifying Income
  • Non-resident persons that do not have a Permanent Establishment in the UAE or that earn UAE sourced income that is not related to their Permanent Establishment may be subject to Withholding Tax (at the rate of 0%). Withholding tax is a form of Corporate Tax collected at source by the payer on behalf of the recipient of the income. Withholding taxes exist in many tax systems and typically apply to the cross-border payment of dividends, interest, royalties and other types of income.
• The Corporate Tax Law also exempts certain types of income from Corporate Tax. This means that a Taxable Persons will not be subject to Corporate Tax on such income and cannot claim a deduction for any related expenditure. Taxable Persons who earn exempt income will remain subject to Corporate Tax on their Taxable Income.
• The main purpose of certain income being exempt from Corporate Tax is to prevent double taxation on certain types of income. Specifically, dividends and capital gains earned from domestic and foreign shareholdings will generally be exempt from Corporate Tax. Furthermore, a Resident Person can elect, subject to certain conditions, to not take into account income from a foreign Permanent Establishment for UAE Corporate Tax purposes.
• A Free Zone Person that is a Qualifying Free Zone Person can benefit from a preferential Corporate Tax rate of 0% on their “Qualifying Income” only.

In order to be considered a Qualifying Free Zone Person, the Free Zone Person must:

• maintain adequate substance in the UAE;
• derive ‘Qualifying Income’;
• not have made an election to be subject to Corporate Tax at the standard rates; and
• comply with the transfer pricing requirements under the Corporate Tax Law.

The Minister may prescribe additional conditions that a Qualifying Free Zone Person must meet.

If a Qualifying Free Zone Person fails to meet any of the conditions, or makes an election to be subject to the regular Corporate Tax regime, they will be subject to the standard rates of Corporate Tax from the beginning of the Tax Period where they failed to meet the conditions.

• All Taxable Persons (including Free Zone Persons) will be required to register for Corporate Tax and obtain a Corporate Tax Registration Number. The Federal Tax Authority may also request certain Exempt Persons to register for Corporate Tax.Taxable Persons are required to file a Corporate Tax return for each Tax Period within 9 months from the end of the relevant period. The same deadline would generally apply for the payment of any Corporate Tax due in respect of the Tax Period for which a return is filed.

In the UAE, VAT (Value Added Tax) is a consumption tax levied on most goods and services. Introduced on January 1, 2018, the VAT rate is currently set at 5%. This tax is designed to diversify the economy and reduce dependency on oil revenues. Here are a few key points about VAT in the UAE:

1. Applicability: VAT applies to most goods and services, but some sectors are either exempt or subject to a zero rate. For example, certain educational and healthcare services may be exempt or zero-rated.

2. Registration: Businesses with taxable supplies exceeding a certain threshold (currently AED 375,000) must register for VAT. Smaller businesses can also opt to register voluntarily if taxable turnover crosses AED 187,500

3. Compliance: Registered businesses must charge VAT on their taxable sales, issue VAT invoices, and file periodic VAT returns with the Federal Tax Authority (FTA).

4. Refunds: Businesses can generally claim refunds on VAT paid on business-related expenses.

5. Penalties: There are penalties for non-compliance, such as failing to register, not filing returns on time, or incorrect VAT reporting. If you’re dealing with VAT in the UAE, it’s often a good idea to consult with a tax professional to ensure compliance and optimize your tax position.

The UAE has implemented an excise tax as part of its broader efforts to diversify its economy and encourage healthier consumption patterns. Here’s a brief overview:

1. Introduction and Purpose: The excise tax in the UAE was introduced on October 1, 2017. Its primary goals are to reduce the consumption of certain goods that are harmful to health or the environment and to generate additional revenue for the government.

2. Taxable Goods: –

Tobacco Products: A tax rate of 100% applies.

Energy Drinks: A tax rate of 100% applies.

Carbonated Drinks: A tax rate of 50% applies.

3. Implementation: The Federal Tax Authority (FTA) is responsible for implementing and managing the excise tax. Businesses dealing with these goods need to comply with regulations, including registering for the tax, maintaining accurate records, and submitting regular tax returns.

4. Impact: The excise tax has been part of a broader health and environmental strategy, aiming to discourage consumption of products that have negative health or environmental impacts. If you need specific details about rates, compliance requirements, or any changes, checking the latest updates from the Federal Tax Authority or consulting with a tax professional in the UAE would be advisable.