Category Company Incorporation

UAE has long been considered to promote a tax-free system which helped it being a prominent business hub. However, recently, the United Arab Emirates (UAE) has decided to impose tax on profits made by businesses at a range varying between 0% and 9%. Though having a long-term position as a tax-free economy, the proposed rates are much lower as compared to other countries. It resonates the region’s long-standing commitment to upholding its position as a top-notch business avenue.

Whether you are looking to setup a company in Dubai or already have one, this post would help you understand each & every aspect of UAE’s tax regime.

What does corporate tax mean?

Also called business profits tax or corporate income tax, corporate tax refers to a direct tax that is levied on the total income or businesses. The new tax system of UAE would place it among nations that already have a set corporate tax system.

The UAE discharged the Corporate Tax Law in the tear 2022, which gave the legal backdrop for the overview and application of a federal corporate tax applicable for financial years starting on or after 1 June 2023.

At the outset, without relieved, any income more than AED375,000 will carry along a 9% statutory tax rate. There will be no tax on income below this limit.

Who are obliged to register for UAE corporate tax?

Both resident and non-resident individuals with permanent business establishment or connection in the UAE are needed to register themselves to obtain a corporate tax registration number.

Resident Individuals

These individuals include businesses established in UAE in freezones, offshore, or the mainland. Foreign bodies that are looked after by individuals in the UAE and people doing businesses in the UAE are also taken as resident individuals. The taxable income would be their universal income.

Resident taxpaying individuals are supposed to register by specific due dates ascertained by the month of issuing of trade license. The year of license issuance has no role in it.

Below is a table that highlights the month of license issues along with their respective deadlines for tax registration application.

In the case of businesses having multiple licenses or business groups with diverse operations, the deadline would rely on the first license issuance date.

Non-resident Individuals

Non-resident individuals are inclusive of firms that have a permanent establishment in the UAE. This category also includes those getting income from the UAE that is not realted to the permanent establishment or a connection in the UAE.

The taxation for non-resident persons will be applicable only on the income associated related to their UAE permanent establishment or connection. The deadlines are defined below:

Down the line, all taxable individuals are needed to file their corporate tax registration application. If not done, it will incur a penalty of AED10,000.

UAE Corporate Tax Exemption

In UAE tax regime, some individuals are exempted from the tax liability. They include government units and government-run establishments. A list of exempted entities is listed below:

• Ancestor businesses in the UAE
• Non-extractive natural resource firms in the UAE
• Qualifying public benefit entities
• Qualifying investment funds
• Public and private pension or social security funds
• Wholly-owned and regulated UAE subsidiaries of specific exempt entities

Small Businesses

The businesses with revenues lower than AED3 million for the current and previous tax sessions, small business relief can be availed. Small business relief can be availed for tax session ending before or on 31 December 2026.

A business needs to meet the below criteria to avail small business relief:

• It must be a resident in in the UAE
• The revenue for the concerned tax session and all previous tax periods should know go beyond AED3 million
• The business should not be a financial institution or a holding business

A business needs now to pay any kind of corporate tax if all the above points are met. However, it will be based on compliance requirements like simplified transfer pricing rules.

Eligible Free Zone Individuals

For individuals meeting the Qualifying Free Zone Person (QFZP), there is no need to pay any corporate tax on their income. They can avail this benefit if they:

• Have proper substance in the UAE
• Carry non-qualifying income not above the de-minimis limit
• Get qualifying income
• Abide by the transfer pricing rules and paperwork requirement
• Get audited financial statements as per the International Financial Reporting Standards (IFRS)

There are two types of qualifying income:

• Income from activities with free zone individuals: This income comes from activities with other free zone individuals, excluding when income comes from omitted processes
• Income from activities with non-free zone individuals (qualifying processes): Income generated from qualifying activities with businesses other than free zone can be considered qualifying income, as far as these processes are not omitted.

The list of qualifying activities is given below:

• Material manufacturing & processing
• Possessing shares & securities
• Owning, handling, and running shipping business
• Reinsurance services controlled by UAE
• Fund management services under UAE regulatory oversight
• Wealth and investment management services, looked after by UAE regulators
• Headquarter services
• Treasury and financing services
• Aircraft financing and leasing services
• Supplying materials from a specific zone to resellers, meant for resale
• Logistics services
• Any supporting activity that assists the primary qualifying activity without working individually

Contrary, the below-mentioned excluded activities will carry a corporate tax of 9%:

• Dealings with natural individuals not pertaining to specific qualifying activities
• Banking, insurance, and finance and leasing processes not coming under designated exemptions
• Ownership or misuse of non-commercial stationary property other than free zones, or intellectual properties

Corporate Tax Filing

Once the registration is done, businesses should get ready their initial corporate tax filing. The pending tax will be payable within nine months after their concerned relevant tax period is over. Any UAE corporate tax payable need to paid within this period.

With a majority of businesses following a a fiscal year system ending on 31 December, the primary taxable period will be from 1 January 2024 to 31 December 2024. This way, the filing deadline would be 30 September 2025.

It is necessary for businesses to keep all concerned documents and records in order for a period of 7 years after the end of the tax period. This is mandatory in regard to compliance guidelines defined by UAE tax authority.

The Conclusion

Whether you are already running a business in the UAE or planning to setup a new one in the UAE, Licensebox can help you in following the latest UAE tax regulations by providing full-fledged support in regard to document preparation, eligibility check, and tax filing.

If you’re thinking about company incorporation in Singapore, one of the first things you’ll need to do is register with the Accounting and Corporate Regulatory Authority (ACRA). So, what is ACRA and what does it do exactly? It is a government authority that keeps a record of all the companies registered in Singapore to maintain transparency with the general public. Let’s find out more about ACRA.

About ACRA

Its main functions include:

Accounting and Corporate Regulatory Authority (ACRA) is the national regulator of company registration, financial reporting, public accountants and corporate service providers. It is tasked with developing the accountancy sector and fixing accounting standards which are followed by companies, societies, co-operative societies and societies registered in Singapore. Singapore is often ranked as one of the best countries to start a business. ACRA plays an important role in this achievement. If you want to make your business a legal entity, registration with ACRA is necessary.

ACRA Functions

Its main functions include:

• Overseeing and regulating companies and public accountants.
• Providing companies with a Unique Entity Number so that they can conduct business activities in Singapore.
• Collecting data of those associated with the company such as shareholders, directors, company secretaries, and so forth.

Statutory Requirements of ACRA

There are certain statutory requirements set forth by ACRA. The company directors must ensure their compliance with these requirements. In case of non-compliance, ACRA can take action against them. The following ACRA statutory requirements must be complied with by all the companies in Singapore:

• Every company registered with ACRA must have a local registered office address.
• A private limited company must have between 1 to 50 shareholders which can be individuals and corporate entities.
• Only individuals who are 18+ can be appointed as directors.
• A company is required to hold an annual general meeting. It provides a platform for stakeholders and company officers to communicate with each other. AGMs ensure that company’s stakeholders are updated about the company’s financial situation and direction.
• Private companies are required to file their annual return within 7 months after the end of the financial year.
• All the companies, including ones that are inactive and dormant, are required to file annual returns.
• If even IRAS has exempted a company from filing its income tax return, the company must file its annual return with ACRA as long as the company’s status is “live.”
• Under the Companies Act of Singapore, every company shall appoint a secretary within six months of incorporation.
• A company’s sole director and company secretary cannot be the same individual.

Conclusion

ACRA is the national regulator of companies in Singapore. All the companies operating in Singapore are registered with this government authority. Without this authority’s approval, no company can get registered in Singapore. ACRA has set forth certain statutory requirements for all the companies in the country. In case of non-compliance with any of these requirements, an enforcement action can be taken against them by the authority.

If you want to obtain ACRA’s approval for company incorporation in Singapore, please allow Licensebox consultants to assist you. We will provide you with expert guidance and complete assistance to ensure that your company’s formation process goes as smoothly as possible.

Any individual who wants to establish a company in the United Kingdom must apply for UK company incorporation with the Companies House. Without the approval of the Companies House, a company cannot be established anywhere in the United Kingdom, whether it’s in Northern Ireland, Wales, England or Scotland. Let’s find out more about what is the Companies House in the UK in this post.

Companies House: Definition

Formed in 1844, Companies House is the official registrar of companies in the UK. It is responsible for regulating and administrating the public limited, private limited, private unlimited, chartered and other companies in the UK. This agency, as well as British company law in general, are governed by the provisions of the Companies Act 2006 of the UK. 

Companies House mandates all the companies registered in the UK to file documents such as statutory accounts, annual accounts, confirmation statements and change of address notifications. If a company appoints new directors, secretaries or officers, the same must be notified to the Companies House by filling out a form. The Companies House stores the data of companies and makes them available as part of the public record so that anyone can monitor and access details of any company running in the UK.

Functions of Companies House

The main functions of the Companies House are:

• Forming and dissolving limited partnerships
• Preserving and archiving data in compliance with the Companies Act
• To make corporate information publicly available

Different Ways to Register with the Companies House

Those who seek company registration in England or Wales are required to register with the Companies House located in Cardiff, the capital of Wales. Those who seek company registration in Scotland must register with the office in Edinburgh, the capital of Scotland. For northern Irish companies, the concerned office for company registration is Companies House office located in Belfast. Additionally, there is also a central London office which can be reached out to through post.

To apply for company registration in a hassle-free manner and from the comfort of your home, you can register with the Companies House online. Once company registration process is done, the Companies House will issue you a Certificate of Incorporation, showing that your company is legally registered in the UK.

Details included in Certificate of Incorporation issued by Companies House

The certificate of incorporation granted by the companies house to the companies in UK consists of the following information:

• Registered name
• Registered number
• Date of incorporation
• Whether the company is limited or unlimited, and if limited, whether by shares or guarantee
• Whether the company is private or public
• Whether the company’s registered office is based out of England, Wales, Scotland, or Northern Ireland

Penalties for non-compliance with Companies House

You must keep the Companies House updated about the current information regarding your company. In case of any inaccuracies or late filing, the Companies House will charge penalties. If the annual accounts are submitted after the deadline, an automatic financial penalty charge will be applicable. In certain circumstances, company officers can be subject to prosecution if they withhold information from the agency. 

Conclusion

Companies House is the government body responsible for administering company information in the UK. It issues the certificate of incorporation to all the newly registered companies in the United Kingdom. If you want to obtain company registration in the UK as quickly and easily as possible, you can connect with Licensebox consultants. We will help you in receiving the certificate of incorporation from the Companies House effortlessly, so that you can run your business in the UK without any hassle.