A bold move has been taken up by Sultan bin Saeed Al Mansoori, UAE Ministry of Economy, as a response towards the coronavirus crisis to make its market more business and commercial institutions friendly. This will be a significant step in the protection and quick recovery of the economy of the country.
How Business in UAE is like
UAE is one of the most business-friendly countries in the world. It has a liberal trade regime which contributed extensively towards the growth of the country. World Bank’s standards consider doing business in the UAE as a fairly easy process. The country is so welcoming and helpful towards investors and startups coming into the country so much so that there are 30 “free trade zones” in Dubai alone. And such free zones exist all over UAE in Abu Dhabi and Ajman too. These free trade zones enjoy the benefits of tax exemptions, property ownership, and other benefits. This prominent factor has proved itself to be an appealing factor over the years for doing business in UAE.
The country also boasts of having a wide diverse population, with over 80% comprising of non-indigenous. So, If you have been pondering over starting up your own business for a while and yet not quite sure of where and how to start, here are some reasons on why UAE could be the right fit for your startup. What makes it even more exciting for startups and companies is that the government recently has actively responded to the corona crisis by slashing its service charges from companies by up to 98%, which is an attempt to reduce the cost of doing business in the country.
The implication of services fees reduction on business and why the Ministry of Economy, UAE, does it?
Dealing with adverse impacts of the pandemic on the national economy, the Ministry of Economy, UAE announced a list of 94 services for which the service fees will be reduced. This bold move will ease the financial burden on businesses and commercial institutions, making the market even more friendly towards setting up businesses and running it with the hope of protecting businesses and quick revival of the economy in the country.
Al Mansoori, the Ministry of Economy, UAE said, “Reducing fees for service provided by the Ministry of Economy to individuals and companies will reduce the cost of establishing and conducting business in the country and will reduce the burden on commercial and investment institutions, which is to support the main and affected sectors stimulating the economic environment and ensuring the sustainability of the pioneering structure of the national economy”.
The reduction announcement covers a wide spectrum of services from individuals to companies and business sectors. This move comes after the Cabinet Resolution number 20 of 2020 in UAE relating to the services fees provided. The reduction will be particularly beneficial for business activities relating to production, trade, investments, and export-import activities. It has come off easier in terms of commercial registration services, agencies, auditors, and intellectual properties. It is estimated that the reduction move will cost the UAE government Dh 113 million in 2020.
The fees for a lost license as well as annual renewal has been slashed by 25%. The license translation of a workbook has also been reduced by the same 25%. The license renewal fee for the use of the ‘made in UAE’ trademark has been slashed by the largest percentage of 98. The country has also made it easier for the opening up branch for a foreign company by having reduced the fee up to 30% from Dh 5000 to Dh 3500. Partnership contracts would be easier as its fee has been halved down to Dh 50. The country even waived off rental fees for companies operating within the free zones such as DP World and Dubai Multi-Commodities Centre. These are some of the highlighted service fees included in the new list.
Clearly, the government of UAE is trying hard to give as much relaxation as possible to businesses helping them in ensuring their business stay afloat, which is a bold long term vision towards a quick restoration of the nation’s economy and growth.
A Golden opportunity to realize your startup dreams in UAE
This news of a reduction in the service fees will prove to be a golden opportunity for startups. As they now set up their business in the country more easily than ever before. And we at Commitbiz can help you realize your startup dreams in the UAE. We do all your work from incorporation to getting business licenses to even set up your workspaces all hassle-free within just a short period of time. For more information, feel free to contact us anytime.
What is the motto of the UAE government by service tax reduction?
By reducing the service tax, the country aims to reduce the burden on the business section, boost businesses across the nation and strengthen the local economy.
UAE plans to reduce service fees imposed by which authority?
The nation is planning to revise the service fee imposed by all the ministries and federal bodies.
When does the UAE corporate tax on business come into action?
The rule comes effective for the financial year beginning on or after June 1, 2023.
Up to how much profit is the new corporate tax not applicable?
To encourage SMEs and start-ups, the government decides not to apply corporate tax for profits up to AED 37500.
What is the UAE corporate tax rate?
At present, the UAE doesn’t have corporate tax implemented. However, the government is implementing a 9% corporate tax on business profits of more than 37500 AED.