Choosing the right business structure

In today’s complex regulatory environment, businesses must adopt tax-efficient structuring strategies to optimize tax liabilities, ensure compliance, and enhance profitability. The United Arab Emirates (UAE), with its competitive tax framework, extensive double tax treaties, and favourable regulatory environment, serves as a leading jurisdiction for tax-efficient corporate structuring.

Key Aspects of Tax-Efficient Structuring

✅ Corporate Tax Planning

• Leveraging the UAE’s 9% Corporate Tax (CT) regime and identifying exemptions for Qualifying Free Zone Persons (QFZPs).

• Structuring operations to benefit from 0% tax on qualifying income in Free Zones.

✅ Holding Company Structures

• Establishing a holding company in UAE Free Zones or offshore jurisdictions to centralize global investments and intellectual property (IP) holdings.

• Utilizing UAE-based holding entities to minimize withholding taxes through double taxation agreements (DTAs).

✅ Transfer Pricing Compliance

• Ensuring compliance with OECD guidelines and UAE Transfer Pricing (TP) rules to prevent tax disputes.

• Developing robust intercompany pricing strategies that align with global best practices.

✅ Double Tax Treaty Benefits

• Structuring cross-border transactions to benefit from UAE’s 140+ DTAs, reducing withholding tax on dividends, interest, and royalties.

• Implementing substance-driven structures to qualify for treaty benefits.

✅ VAT & Indirect Tax Optimization

• Implementing efficient VAT planning to optimize input VAT recovery and reduce compliance costs.

• Structuring supply chains to minimize VAT cash flow impact and customs duties.

✅ Economic Substance & Regulatory Compliance

• Ensuring compliance with UAE Economic Substance Regulations (ESR), Ultimate Beneficial Ownership (UBO), and Anti-Money Laundering (AML) regulations.

• Establishing genuine operational substance to mitigate tax risks.

Benefits of Tax-Efficient Structuring in the UAE

✔ Low Corporate Tax (9%) – One of the most competitive tax rates globally.
✔ 0% Tax on Foreign-Sourced Income – Free Zones and offshore entities benefit from zero tax on qualifying income.
✔ Extensive Double Tax Treaty Network – Reduces tax liabilities on cross-border transactions.
✔ 100% Foreign Ownership – No restrictions on foreign investment in Free Zones.
✔ No Capital Gains or Withholding Taxes – Making the UAE an ideal global investment hub.