In today’s world, countries can be divided into two categories.
- Countries with developed economy and infrastructure. When doing business in these countries the business is bound with the obligation to pay high taxes.
- Countries with developing economies. In some of these countries tax rates are noticably lower comparing to others.
Certainly, there are also some existing developed economies that allow the use of preferential tax treatment for certain types of companies and certain types of activities such as, for example, holding companies in Europe, trading companies in Hong Kong, or offshore companies in Seychelles and British Virgin Islands.
When comparing more strict tax laws of most of the countries, the United Arab Emirates is one of the few countries in the world, where you can have an opportunity of doing business while at the same time paying taxes at the rate of 0%. In this tax regime at 0 % is not preferential tax treatment which requires to fulfill a large number of conditions for such taxation; it is the official tax rate of 0 % for most of business activities for the business in the country and abroad. Such regime of taxation applies to offshore companies in the UAE as well as to the onshore companies in Free Trade Zones and also companies registered outside the UAE Free Trade Zones. Even though the onshore companies might have, if necessary, the real working office in the country, the staff, and effective management of the company in the country it would still be paying taxes at the rate of 0 % .
These UAE companies’ features are getting particularly attractive in the light of changes, which touched practically all countries over the world in terms of determination of the companies effective tax residence under the following three parameters:
B) Company’s country of registration.
C) Company’s effective place of control.
B) Company’s real office location.
According to the annual analysis of different tax systems in the world published by the specialists of the international company Price Waterhouse Coopers - “Paying Taxes - The Global Picture” (“Taxation in different countries – the global picture”), the United Arab Emirates takes place as one of the leading countries in the world in terms of business taxation and tax reporting. Referring to the results of the analysis of 2012, the total number of hours required for accounting and audit in the UAE is 12 hours per year (comparing to Russia – 290 hours per year, Ukraine – 657 hours per year, Cyprus – 149 hours per year, Germany- 221 hours per year).
In addition to the preferential tax regime in UAE, the country offers clear legal system, prime location, developed infrastructure and access to all services and facilities that you can only imagine.