Who Can Benefit from Freezone Company Formation?

UAE Freezone Company Formation

The United Arab Emirates has been a global business hub for centuries, attracting businesses, investors, and entrepreneurs from all parts of the globe to come to its shores to do business, attracted by a favorable business environment and strategic location combined with tax incentives. Among the key business advantages of being in the UAE is establishing a company in a free zone. The free zone company formation in the UAE offers several advantages, such as 100% foreign ownership, tax exemption, and streamlined company setup. However, the businesses that would get the most benefit are as follows:

In this blog post, we will show who can benefit from forming a UAE-free zone company and why it may be in your best interest to form a free zone company to operate your business.

  1. Entrepreneurs and Startups

The opportunity freezone company formation opens up for the startups and entrepreneurs to find their slot in the UAE market is quite huge, considering that it requires only minimal capital, plus the entrepreneurs benefit from enjoying 100% foreign ownership and zero personal and corporate taxes. In this respect, Freezones attract most of the startups with minimal overhead costs that will leave them free to plough back into the business.

  1. International Investors

Freezone company formation can be seen as an opportunity for international investors looking to access the UAE market or expand their global operations. Unlike free zones, there is a notion of having to have a local sponsor for companies outside free zones; conversely, foreign investors can completely own companies in free zones and have more control over decisions made within these organizations.

  1. E-commerce Businesses

One of the rapidly growing industries in the world is e-commerce, and the UAE cannot be ignored either. There are several reasons why companies dealing with electronic commerce would like to form freezone companies, including no customs duties and tax savings, coupled with first-class logistics infrastructure. Freezones like Dubai CommerCity are born specifically for the purpose of e-commerce ventures, offering a wide array of services like warehousing and fulfillment and digital commerce.

For an e-commerce startup or established company entering the Middle East, freezones offer essential infrastructure, strategic location, and tax-free environment to ensure success. 

  1. Consultancies and Professional Service Providers

Another advantage of having a free zone is that it is suitable for consultancy, freelancers, and other service professionals. Quite a number of the UAE’s free zones are designed and set up with in mind the idea of hosting businesses that are, to a large extent, service-based, thus allowing it to have flexible office solutions, not to mention an easy procedure to establish, licensing requirements which are less costly. A typical example is Dubai’s Knowledge Village and 

Media City free zones that attract consultancies on media, IT, and education.

One of the major benefits for consultancies is that they will not be liable to pay corporate taxes or income taxes. 

Conclusion

The range of UAE Freezone Company Formation benefits caters to various businesses, including startups, consultancies, manufacturers, and international investors. The freedom zones include 100% foreign ownership, tax exemptions, duty-free trade, and access to world-class infrastructure. In this sense, it is the perfect location for any business seeking to thrive in the dynamic economy of the UAE.

Whether you are an entrepreneur launching a new venture, a trading company looking to expand into global markets, or a tech startup looking for innovation, freezone company formation is the answer to achieving success. This is because a specific freezone designed to meet your business needs provides the tools and environment to unlock new opportunities and propel long-term growth.

 

Liquidation strategies to deal with the debts

Company Liquidation

Just presume, your company is badly debt-ridden, and you need to liquidate all the resources into cash. RBS auditing has the best Liquidation Services in Dubai. There are several reasons why a company needs to get liquidated to reimburse the debt to the bank from which the company needed the loan, creditors, or lending companies. The process of liquidation includes the selling of all the company’s possessed items, such as products, land, raw materials, machinery, and another commodity that can be sold out or auctioned whereas some items are purchased by the buyers.

Company Liquidation in Dubai | Company Liquidation Audit Report UAE

Company liquidation is of two types-

Voluntary Liquidation/ compulsory liquidation

Liquidation by court

Voluntary liquidation is the shutting down of companies by shareholders or creditors of the company who passes the legal resolution. During the meetings of shareholders, an official liquidator is appointed, who is responsible for the winding up of the company, and such liquidation is also called compulsory liquidation. 

Employees are considered the primary creditors. The pending dues of the employees are cleared.

Sometimes the company files a petition for liquidation to the court by itself, when it gets failed financially, or is unable to pay off its pending dues. 

According to the UAE Freezone Company Liquidation service, a company in a good state will not get subjected to the liquidation process. Whereas, if a company cannot show proper growth and is not capable of paying off debts, then only the creditors can take action against the company.

Perks of Liquidation services:

  • Liquidation happens to the company, not the people of the company.
  • Creditors are not allowed to chase directors of the company after the company is liquidated.
  • Once the company is liquidated all the legal disputes against the company come to an end.
  • The liquidation management sanctioned the chosen liquidator.

If you are interested in our services for liquidation, please feel free to contact our customer care for further details regarding these services. In addition to these programs, our company also offers UAE Freezone Company Formation. RBS is one of the top leading service providers in terms of tax and advisory, accounting, audit services. Our company possesses the personality of a small firm but has the caliber of big firms. Our team has a long-term experience in accounting, taxation, business advisory services, auditing, the management consultancy. Our team consists of skilled individuals who are smart enough to manage the risk of the clients and more.

Freezone Company Formation | Start Any Business UAE

Federal Decree- Law No. (18) of 2022 (‘’the Amendment of VAT Law w.e.f January 01, 2023’’)

VAT

Federal Decree- Law No. (18) of 2022 (‘’the Amendment of VAT Law w.e.f January 01, 2023’’)

Summary of VAT amendments:

Article Number Title VAT Amendments
Article 1  Definitions New definitions have been introduced for –

Relevant Charitable Activity, Pure Hydrocarbons, Tax Evasion, Tax Audit, Tax Assessment and Voluntary Disclosure.
Article 5 Supply of Goods Entry into a contract between more than two parties entailing the transfer of Goods at a later time will be considered as supply of goods as per new amendment.
Article 7 Other out-of-scope transactions A new clause inserted which allows the Executive Regulations to stipulate any other transactions that can be considered outside the scope of VAT.
Article 15 Registration Exceptions Exception to register from tax is now extended to include registered persons having 100% zero rated supplies, in addition to non-registered persons.
Article 21  Cases of Tax Deregistration New amendment grants the Federal Tax Authority, the right to deregister any registered person if they assume that the taxable person’s VAT registration may cause any harm to the tax system.
Article 26 Special Date of Supply The date of supply under Clause 1 now includes the date on which one year has passed from the date on which the goods or services are provided.
Article 27 Place of Supply of Goods (continuous supply) As per new clause, place of supply of goods that include export or import will be inside UAE if Article 26(1) applies AND the ownership of the goods has been transferred inside the UAE.
Article 30 Place of Supply in Special Cases (transport-related services) Clause is extended to include transport related services in the rule of special place of supply. Place of supply means place where transportation starts.
Article 33  Place of residency (Agent/Principal) The place of residence of principal will be the place of residence of the agent as per changed clause.
Article 36 Value of Supply and Deemed Supply for Related Parties Where a deemed supply occurs between related parties, the value of supply would be determined by the market value, as per amended law.
Article 45 Supply/Import of Goods and Services that are Subject to Zero Rate Import of following added to the zero-rated list

·         means of transportation and goods related to means of transportation

·         rescue planes and ships

·         crude oil and natural gas

·         Related basic healthcare goods.

·         investment precious metals (if they are supplied or imported for investment purposes.)
Article 48 Reverse Charge Reverse charge will apply to “Pure Hydrocarbons” instead of “any form of hydrocarbons”
Article 55 Recovery of Recoverable Input Tax in the Tax Period (Imports) The first condition of the Article for recovery of input tax as per the reverse charge mechanism is amended with the addition to keep invoices and import documentation (i.e. for goods only) for the importation of goods or services.
Article 57 Recovery of tax by Government Entities and Charities Government entities can recover tax if incurred for the provision of sovereign activities.

charitable organisation can recover tax if incurred for the provision of relevant charitable activities.
Article 61 Instances and Conditions for Output Tax Adjustments (additional case) Clause inserted which requires taxable person to adjust output tax after the date of supply not only if the tax was charged in error but also if the application of the tax treatment was incorrect (e.g., where it was treated as exempt/zero rated instead of taxable at 5%)
Article 62 Mechanism for Output Tax Adjustment Tax credit note must be issued within 14 days from the date of occurrence.
Article 65 Conditions and Requirements for Issuing Tax Invoices (obligation to pay VAT) It has made mandatory for the taxable person to pay the VAT to the Federal Tax Authority in cases where such person issues a tax invoice stating VAT on it or receives an amount as VAT.
Article 67  Date of Issuance of Tax Invoice (for continuous supplies) Now it has been specified that the date of issuance of tax invoice under continuous supply will be 14 days from the date of the supply.
Article 79 bis Statute of Limitations (new article) ·         The statute of limitation of 5 years not applicable where FTA has issued a notice to audit, provided audit is completed within 4 years from notice date.

·         statute of limitation will be extended by one year if taxable person files voluntary disclosure in 5th year.

·         Voluntary disclosure cannot be filed by the taxable person after the lapse of 5 years.