Dubai, a city synonymous with luxury and innovation, has emerged as a global business hub. Its mainland, renowned for its strategic location and world-class infrastructure, is a prime destination for business expansion. Entrepreneurs can leverage the UAE’s Economic Substance Regulations for significant tax benefits, adding to the allure of setting up shop in this dynamic environment.
Dubai’s strategic location serves as a gateway to the Middle East, Africa, and Europe, offering access to a vast consumer market. Its world-class infrastructure, ease of doing business, and robust legal framework further enhance its appeal as an investment destination. For Indian entrepreneurs, investing in Dubai can also serve as a stepping stone to global expansion.
The city’s government has implemented numerous initiatives and policies that encourage entrepreneurship. These include the establishment of free zones, which offer 100% foreign ownership, zero customs duty, and minimal bureaucratic red tape. These free zones have attracted businesses worldwide, including technology firms, logistics companies, and financial services providers.
The Economic Substance Regulations (ESR) is in line with UAE’s commitment to international tax cooperation and transparency. The regulations require UAE’s onshore and free zone companies and other business forms that carry out any of the ‘Relevant Activities’ listed in the regulations’ framework to maintain an adequate ‘economic presence’ in the UAE relative to the activities they undertake. This ‘Economic Substance Test’ ensures that businesses are not driven solely to benefit from a low or non-tax jurisdiction, thus preventing the harmful tax practice of profit shifting from high-tax jurisdiction to low tax regimes.
The ESR effectively imposes a requirement for UAE entities (including offshore companies and branches of local and foreign companies) that carry out and earn income from any of the ‘Relevant Activities’ to maintain economic substance in the UAE specific to each Relevant Activity. Annual filing requirements must be met or organizations risk penalties for non-compliance.
In terms of trade, India’s exports to the UAE reached US$31.3 billion in FY 2022-23, marking an increase of 11.8% YoY. The main products that India exported to the UAE are Refined Petroleum ($7.98B), Jewellery ($3.19B), and Diamonds ($2.51B). In 2021, bilateral trade between the two countries stood at $43.3 billion.
In conclusion, Dubai’s dynamic economy, strategic location, favourable tax regime, and investor-friendly policies make it a lucrative investment haven for Indian entrepreneurs. As they look to expand their horizons and tap into new markets, Dubai offers a promising and profitable venture.
Dubai’s strategic location serves as a gateway to the Middle East, Africa, and Europe, offering access to a vast consumer market. Its world-class infrastructure, ease of doing business, and robust legal framework further enhance its appeal as an investment destination. For Indian entrepreneurs, investing in Dubai can also serve as a stepping stone to global expansion.
The city’s government has implemented numerous initiatives and policies that encourage entrepreneurship. These include the establishment of free zones, which offer 100% foreign ownership, zero customs duty, and minimal bureaucratic red tape. These free zones have attracted businesses worldwide, including technology firms, logistics companies, and financial services providers.
The Economic Substance Regulations (ESR) is in line with UAE’s commitment to international tax cooperation and transparency. The regulations require UAE’s onshore and free zone companies and other business forms that carry out any of the ‘Relevant Activities’ listed in the regulations’ framework to maintain an adequate ‘economic presence’ in the UAE relative to the activities they undertake. This ‘Economic Substance Test’ ensures that businesses are not driven solely to benefit from a low or non-tax jurisdiction, thus preventing the harmful tax practice of profit shifting from high-tax jurisdiction to low tax regimes.
The ESR effectively imposes a requirement for UAE entities (including offshore companies and branches of local and foreign companies) that carry out and earn income from any of the ‘Relevant Activities’ to maintain economic substance in the UAE specific to each Relevant Activity. Annual filing requirements must be met or organizations risk penalties for non-compliance.
In terms of trade, India’s exports to the UAE reached US$31.3 billion in FY 2022-23, marking an increase of 11.8% YoY. The main products that India exported to the UAE are Refined Petroleum ($7.98B), Jewellery ($3.19B), and Diamonds ($2.51B). In 2021, bilateral trade between the two countries stood at $43.3 billion.
In conclusion, Dubai’s dynamic economy, strategic location, favourable tax regime, and investor-friendly policies make it a lucrative investment haven for Indian entrepreneurs. As they look to expand their horizons and tap into new markets, Dubai offers a promising and profitable venture.