6 Benefits of setting up an offshore company

If you are an entrepreneur and you are thinking of setting up an offshore company formation in Dubai, then I believe that you have taken a right decision indeed. Establishing a company offshore might be an elaborate process, but there are several benefits that an offshore company incorporation has on offer for you. From minimisation of taxes to better confidentiality – an offshore company can be a safe bet for such reason and many more.

Here are the six key benefits of forming an offshore startup.

ü  Optimization of taxes

The first and foremost benefit than an offshore company can offer you is the lowered and minimised tax obligations of your business in Dubai or any other place in the Emirates. Since non-resident companies enjoy an exemption from taxes and have to pay low percentages of taxes, an offshore company can help you optimise the tax cost of your company. Make sure you hire an agent who is a local of Dubai as he or she will be able to guide you in the best way when it comes to matters of corporate taxation.

ü  Confidentiality

Since most offshore companies are not required to publish their financial information or the details of directors and shareholders publicly, this will help you maintain the privacy of your company. In Dubai, you will never be asked to reveal your financial information to any third party unless your business activities are considered criminally offensive.

ü  Low administration costs

Since the legal obligations of an offshore company are lesser than other kinds of establishments in Dubai, you will not need any extra staff for accounting, or other administration activities. This will help you save a considerable amount of money on other staff thus making it more cost-effective for you and your budget.

ü  Lower set up and maintenance costs

Since the procedure of setting up an offshore company is considerably easier and more straightforward, the expenses that you have to spend in the process of offshore company incorporation in Dubai is lower. Since as an entrepreneur budget is a big problem, this is the best option to save money by spending less on establishment and maintenance costs.

ü  Lower capital requirement

In Dubai, registering an offshore company will require minimal capital, usually less than what is needed for an onshore registration. In many other parts of the Emirates, there is no margin for money required for registration. This makes offshore company incorporation a profitable option indeed.

When you think of a new business setup in Dubai, an offshore company is the best option as it is flexible regarding the structure of the company and its capital requirements, etc. So what are you still waiting for? Go and start your offshore enterprise today!

How to Register a Company in the UAE?

The process of company setup in UAE is often seen as a difficult job by most of the aspiring entrepreneurs in the country. In fact, the foreign investors find the whole process quite intimidating, which is the reason they look for expert assistance while planning their company formation in the country. However, the process is not as complex as people think it is. If you are willing to establish your business in the prosperous land of UAE, you may need to comply with the following steps in for registration.

1.      Decide who your local partner will be:

As you may know, every foreign investor needs a local partner to perform the company incorporation procedure in the UAE successfully. While that may sound like an additional task, finding a genuine local partner can be way more taxing than it sounds. Also, you need to decide what sort of contribution you expect from the local partner.

2.      Choose a name for the company and get activity approval:

One of the challenges regarding company setup in UAE is that you don’t have the option to choose any name for your company and get away with it. While it is mandatory to get your business activities approved by the authority, you are also obligated to get the name of the company approved by the Department of Economic Development (DED). You can apply for the approval of name and business activities by submitting a standard application form at DED.

3.      Look for business premises and make tenancy contract:

There are several favorable areas where you can set up your business in the UAE. However, you need to have a valid tenancy contract for your rented business premises before you can start the operations of your company in the UAE.

4.      Make a MoA with the partner:

The MoA or the memorandum of association with your local partner is the testament to the arrangement between you two. It includes all the necessary details about your partnership, including the ownership percentage, responsibilities and much more. It needs to be submitted to the DED.

5.      Submit the MoA and the license application:

Lastly, you need to submit the MoA as well as the license application at the DED along with the required legal documents and tenancy contract. You will be needed to pay all the fees at this stage. The process usually takes about a week to get you the license.

That’s it. Now you have the permission to run a company in the UAE. However, you still need to abide by the regulations set by the government.

Everything You Need to Know about VAT Refund in the UAE

Every VAT registered business needs to file their VAT return within the said time. You will also find the VAT refund form on the online portal where one can claim any extra VAT paid. Businesses are required to gather the VAT from the consumers for the government. Along with this, they also have to pay the VAT to their suppliers upon any purchase. In the VAT return form, this input and output VAT are calculated.  A taxable person can only claim for a refund if the paid VAT is more than the collected one. To do this calculation more accurately, the assistance of an expert tax agent Dubai is highly recommended.

There are also some conditions fulfilling which one can claim a refund:

·         Type of the service or product- Apart from the standard rated taxable goods, VAT refund can be claimed even on the zero-rated service and products. But, if the goods are exempted from the VAT, no refund can be requested for that.

·         VAT registration- In order to claim for a refund, the business must be a VAT registered company. Otherwise, it cannot make a request for a refund.

·         Eligibility period- Following the supply date, if the payable or paid amount passes six months, any refund claim will not be considered as eligible.   

·         Rational charging of VAT- The company must collect the VAT in a reasonable way. There will be no refund if the VAT is charged wrongly on the services and products.

·         VAT invoice- Businesses need to show VAT invoices that have been properly created to claim a VAT refund.  

The process of claiming VAT refund

While filing your VAT return, you will get an option to request for a refund if your paid VAT amount is more than the received VAT. There, you will have to choose the ‘Yes’ box to claim your refund. After the submission of the VAT return form, you will have to finish the application form for VAT refund, ‘Form VAT311’.

You need to log in to the portal of FTA and then, go to the refund form. Here, you will have to fill in all the details. The fields which you will find in the VAT refund form are as follows:

·         Name and TRN of the organisation or taxable person- You will not have to fill up this field as it will be automatically filled up.

·         Excess Refundable Tax- This is another automated field which will contain the total amount of the refundable tax which is extra. This will be according to the reported amount in the last filed VAT return.

·         The refund amount you want to get- In this field, you will have to input the amount of the VAT that you wish to get back.

·         The outstanding excess refundable tax amount which is eligible- This field will again be automatically filled and show the remaining refundable amount.

·         The penalty for late registration- This area will contain the details of any late registration penalty that you might have.

Now you have a good amount of knowledge regarding the VAT refund. Thus, you can claim for the same very easily the next time you do this.