Planning your Business - dda
Planning your business
How to plan your business?
To start a new business in Dubai or expand your company in a few, easy steps, check Invest in Dubai platform, designed to make business establishment a seamless journey. Dubai offers a range of resources and services to assist entrepreneurs and investors in planning and setting up businesses in the city. Through these services, individuals can gain access to information and resources on setting up a business, such as legal requirements, visa regulations, and market research.
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Starting a Business in Dubai Mainland
Foreign businesses are welcome to invest and start their operations in Dubai as a mainland company. Check requirements here
Starting a Business in a Freezone
Dubai Free Zone Council oversees more than 30 zones and provides a platform for seamless collaboration among them in order to enhance their performance and global competitiveness. Check more details here
Taxes
Some taxes are levied in Dubai, including Value Added Tax (VAT), Excise Tax, Corporate Tax, and Tax on Foreign Banks. VAT is a 5% consumption-based tax applied at each stage of the supply chain. Excise Tax is levied on specific goods that are harmful to health or the environment, such as tobacco and energy drinks. Corporate Tax applies to businesses with annual income exceeding AED 375,000. Additionally, foreign banks operating in Dubai, except those licensed in DIFC, are subject to income tax.
The tax regulatory framework in Dubai and the UAE is managed by the Federal Tax Authority (FTA), which oversees the implementation of taxation policies, ensures compliance with tax laws, facilitates tax collection, and provides guidance to businesses and individuals. Read about FTA
VAT
Value Added Tax (VAT) is a consumption-based indirect tax applied at each stage of the supply chain, with the final cost borne by the end consumer. In Dubai and the UAE, a 5% VAT is levied at the point of sale, and businesses are responsible for collecting and remitting it to the Federal Tax Authority.
A business must register for VAT if the taxable supplies and imports exceed the mandatory registration threshold of AED 375,000. Furthermore, a business may choose to register for VAT voluntarily where the total value of its taxable supplies and imports (or taxable expenses) is more than the voluntary registration threshold of AED 187,500.
Tourists can claim refund on VAT paid on purchases they made during their stay in Dubai.
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Excise Tax
Excise Tax is a form of indirect tax levied on specific goods. These goods are typically those that are harmful to human health or the environment.
Excise Tax is currently applied on the following goods:
Tobacco and tobacco products
Liquids used in electronic smoking devices and tools
Electronic smoking devices and tools
Carbonated drinks (note that this excludes sparkling water)
Energy drinks
Sweetened drinks
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Corporate Tax
Corporate tax is a form of direct tax levied on the net income or profit of corporations and other entities from their business. Corporate Tax applies to persons, who have annual income exceeding AED 375,000.
The following persons are exempt from Corporate Tax, either automatically or by way of application:
The UAE Federal and Emirate Governments entities
Wholly Government-owned companies listed in a Cabinet Decision
Businesses engaged in the extraction of UAE natural resources
Public Benefit Entities listed in a Cabinet Decision
Investment Funds
Public or private pension or social security funds
UAE juridical persons wholly owned exempted entities.
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Tax on Foreign Banks
Income tax is levied on foreign banks operating in Dubai. Law No. 1 of 2024 concerning Tax on Foreign Banks applies to all foreign banks operating in Dubai, including those in special development zones and free zones, with the exception of foreign banks licensed to operate in Dubai International Financial Centre (DIFC). Read the law Read the law
However, if these banks pay corporate tax in accordance with UAE Federal Laws, the amount of corporate tax will be deducted from their total tax liability.
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