The Importance of Company Formation Consultants in Dubai

Dubai can be a great place for opening any business, but you will need to carry out many proceedings to do so. It is always advised to take assistance from the expert company formation consultants in Dubai to properly start the business. As mentioned above, a lot of works need to be done to open a company in this location. Even if you have knowledge regarding the proceedings, an expert can offer a much better service which will help you to avoid any risk.

If you are still sceptical about why you should hire business setup consultants, then the following information can help you to better understand it.

The advantages of recruiting an expert to form a business in Dubai

·         Accurate Paperwork- It is obvious that starting a business will include a lot of paperwork. If you do it yourself, you might forget some important documentation that can delay the proceedings and thus, your company will get affected by it. Hiring a professional will ensure that all the paperwork gets done accurately and quickly. This will also give you some relief from the hassle.

      A detailed market study- With the help of professional company formation consultants in Dubai, you will get all the information related to the market in which your company will operate. They can tell you which location will be the best for opening your type of company. You will also get to know what works in a specific market for a business to be successful in it, who will be the target audience, the competitors etc. This will be ultimately beneficial for your company.

·         Better management of legal matters- In order to start a business, there will be many legal formalities that need to be taken care of. For this, you will need a registered professional who has a good understanding of the related rules and regulations. They can also offer expert advice that can be beneficial for both the company and you. With the help of an expert, getting permits and approvals from the governing bodies will also become easier. Remember that if any error or mistake happens in the legal proceedings, it may cost your business largely.

·         Superior strategy planning- If you want to run a successful business, you must take an experienced professional’s help. An expert can assist you to develop strategies that can lead to your company’s success. Thus, hiring a professional can bring success to your business.

As you can see that there are so many benefits of hiring a consultant for business formation, you might want to recruit one to get to those advantages.

Different types of branch offices which you can open

A business setup in UAE is a buzz among entrepreneurs as it has become the most preferred location in terms of benefits, infrastructure, communication, government aids etc. Along with this, with the implementation of the vat, UAE has become a fast developing business hub as well with a high rate than what it was five years back.

Investors prefer a business setup in UAE also because of the high and sophisticated living and working conditions. The introduction of vat has ensured that the revenues that the investors will earn will be double than what they have earned in the last decade itself. UAE has brought forward diversified and strategic economic projects that ensure the revenues.

Why do a business setup in UAE is because of an increase in FDI flow, the GDP has accelerated to a high level, the company setup laws have become more friendly which has also got international accreditation. Thus, more foreign investors are moving into UAE today. Moreover, the country has distinct business specifications and categorized business jurisdictions that makes doing business easy.

Due to this, company formation in UAE has been tagged as one of the best places across the globe. The government is giving a lot of business opportunities and state-of-the-art facilities. The country houses the best infrastructure as per the business needs too where for example, there are places where companies can do business even 24 hours.

So when you own a company, it is necessary to have a dedicated outlet. These are often referred to branches too. A branch office is not a separate legal entity. It is only a means that functions to help the business to grow so that you can reach various places. You can establish your presence in new regions which will add authenticity and earn more revenues.

How can you get a branch office?

You need to file an application for this to the Ministry of Economic and Commerce through an agent. A permit letter is issued from the ministry. This approval must be secured from the needed authority. After this, the local economic department will be registering the branch office. Only after this, you will be getting the business license to open the branch.

Different types of branch offices

·         GCC company branch: Only a GCC based company can open this type of branch and extend business in any of the countries that form the GCC. The company can undertake more than one activity as stated in the company license. Even if they have multiple branches, they can register for the same.

·         Foreign company branch: You can open a foreign company branch in UAE and own it, i.e. have 100% ownership. You can operate this branch as headquarter in the country. However, if you want to import any good, you have to do it only through a local firm.

·         Free zone company branch: This branch has to be located in the UAE’s free zones. You can use this branch to expand your business. You can only open this kind of branch in the mainland; however, you need to get a license from DED.

Along with this, you must have an Emirati shareholder. In case, you do not have a shareholder who is local, you can get the branch license approved by the concerned ministry. A local service agent will help you with this.

·         UAE company branch: This kind of branch is only an extension of any UAE-based company. The company can only extend its branches within UAE and undertake all the activities that are stated in the company license.

These are the different branch offices that you can open for your business in UAE. However, these branch offices depend on the type of company that you are forming. 

Effect On Tourism Industry Due To VAT In Dubai

With the introduction of VAT in Dubai, its tourism industry is facing a number of changes and transformations. Travel and tourism sector is a part of UAE’s national economy with an average national contribution of Dh130 billion, annually.  A recent forecast in UAE has prompted an increment on international tourism revenue by 7 per cent annually. The UAE government is expecting a steady growth by 2020 with contemporary openings of new attractions like Motiongate Dubai, IMG Worlds of Adventure, Bollywood Parks and many more.

Now, the question is with the impending roll out of VAT in Dubai, what is going to the impact on tourism sector? Businesspersons are already concerned about their VAT return 

(Register for VAT return filing now)

and there is a lot more things doings rounds in the corner. Subsequent to this, you can find some of the recent impacts on tourism industry since the induction of VAT in UAE –

 Which of the companies have to be a VAT registered business?

According to the ministry of finance in UAE, businesses with annual turnover of more than Dh375,000 are compelled to register under VAT law. The update also informs that the trades with taxable turnovers between Dh187,500 and Dh375,000 come under the regulation of “optional VAT registration”.

      Is there any impact of zero-rated supplies on Dubai Tourism?

The tourism sector in Dubai can be categorized into several sub-divisions viz. luxury, medical, meetings, education, exhibitions, events and other special interest groups. According to recent updates, education and healthcare segments are subject to zero-rated supplies but the details are yet to be announced.

      What is the effect of current GCC VAT framework on events like World Expo?

If Dubai tourism industry hosts international events like World Expo, it may be subject to zero-rated or standard VAT rate. According to GCC VAT framework agreement, the option of selecting a scheme completely depends on the hosting members. This is going to have a positive impact on the larger exhibitions where 5% standard rate may show significant impact.

      Can they tourists claim back the VAT charges and administrative charges?

It is true that tourists are allowed to claim back the VAT charges they have paid. Considering lower administrative charges and VAT charges, the refund amounts is expected to be nominal. Once the UAE government introduces this scheme, the tourists are subject to take the administrative burden and the original refundable amount.

Till now, the road towards the execution of VAT is full off hurdles, errors and trials. However, UAE government believes that, once streamlined, this taxation is going to be the cornerstone of Dubai’s economic system.