Culture and Geography
The UAE is strategically located in the Arabian Peninsula and covers an area of approximately 82,880 square kilometres, with borders with Saudi Arabia, lying at the southwest of the country, and Oman, situated at the north and southeast of the UAE. The country also lies between the Arabian Gulf and the Gulf of Oman.
Although Arabic culture is part of everyday life in the UAE, the country is largely open to foreigners and strives to create an environment that is favourable to foreign investment and economic growth, and which promotes tolerance, diversity and multiculturalism.
The population of the UAE is estimated to be 10 million: approx. 80% of the population is composed of expatriates, with a large percentage residing in Dubai. Arabic is the country’s official language, but English is generally used in business and everyday life.
Legal Landscape
The UAE is a constitutional federation formed on the 2nd of December 1971 between the seven Emirates of Abu Dhabi, Dubai, Sharjah, Ajman, Fujairah, Umm al-Quwain and Ras al Khaimah.
Generally, parties entering into contracts in the UAE are entitled to opt for a foreign law, usually English law, to govern the relationship (except for certain types of matters, such as UAE property rights, employment contracts or registered commercial agency, and contracts concluded with UAE government entities). This choice will be upheld by local courts (generally DIFC, ADGM) or by foreign court or arbitration.
UAE AT A GLANCE
0%
Corporate Income Tax in Free Zones on Qualifying Income
Taxation
On the 1st of January 2018, the UAE introduced Value Added Tax (VAT) on the supplies of goods and services at a standard rate of 5%.
There are no personal income taxes in the UAE but a 9% Corporate Tax system has been introduced and applies:
- For accounting periods starting on or after the 1st of June 2023
- With many exemptions, namely for free zone entities, under specific requirements
- The UAE has concluded Double Tax Treaties with more than 130 countries.
Banking in UAE
- Several banking platforms are available in the market with international and local banks offering a wide range of products and services, regulated by the UAE Central Bank.
- Identification of Ultimate Beneficial Owners (“UBO”) is required, and the account signatories must meet the bankers in personae.
- Straightforward (rather than complex) structure is recommended at inception for ease of account opening.
- Application of US Foreign Account Tax Compliance Act (FATCA), Common Reporting Standards (CRS) and Economic Substance Requirements of the Organization for Economic Co-operation and Development (OECD).
Learn More About UAE Financial Advantages
Please get in touch with Dr. Alexander Kern directly [email protected].
