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Now is the right time for re-domiciliation in the UAE

2 July 2020

Why is now the perfect time to consider domiciliation in the UAE?

Traditional offshore jurisdictions such as Bahamas, Barbados and Bermuda, British Virgin Islands, Cayman Islands remain on the grey list (partially cooperative list) for issues concerning collective investment funds. Other jurisdictions are under pressure with competition, regulatory issues and substance. In addition, many jurisdictions are being disregarded due to non-cooperative tax purposes which is something you can avoid by choosing the UAE.

The UAE benefits from being an alternative jurisdiction which is not facing scrutiny and controversial status, whilst also allowing companies to urgently meet Economic Substance Requirements.

What does substance mean?

The term ‘tax substance’ or ‘economic substance requirement’ refers to the requirement of an entity to have a physical economic presence in the jurisdiction it is established to qualify for the benefits of a tax treaty when earning income from some specific activities.

Guidance and requirements provided by the EU and OECD identify three requirements to be met for a resident entity that undertakes relevant activity to demonstrate it has sufficient economic substance. These guides were put in place to avoid the artificial shifting of profits from local taxpayers to foreign exonerated shell companies. The UAE is currently on the White List, enabling easy, flexible banking globally.

Why is the UAE best for ESR?

When many jurisdictions would struggle to meet ESR, the UAE has an abundant ecosystem of professionals, experts, office and resources to meet the Economic Substance Requirements. In mid-October 2019, the European Union’s finance ministers finally removed United Arab Emirates from their list of non-cooperative jurisdictions. They subsequently added the country to the EU’s list of tax compliant jurisdictions after it committed to adhere to the bloc’s tax requirements for conducting transactions with member states.

There are several conditions to meet economic substance requirements. We at SFM will be glad to assist you and offer you services such as:
  • - Assistance with the provision of resident directorship services
  • - Provision of Corporate Secretarial Services
  • - Assistance with preparation of annual General Meetings

For more information on company re-domiciliation in the UAE, kindly contact our team today.

For new companies in the UAE here is currently a limited discount on all RAK ICC companies, expiring 30th June 2020.

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