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Middle East Tax Havens

In the middle-east tax haven, there are two main emirates (territories) in the United Arab Emirates UAE that stand out and promote themselves as prominent tax havens territories in the Middle East. These are Dubai, and Ras Al Khaimah. Both of these UAE tax haven territories have free trade zones.

Ras Al Khaimah UAE is in the northern sector of the Persian Gulf. Unlike other UAE territories, Ras al-Khaimah is not a major oil producer, and has had to develop to other sectors to support its economy. In recent years, Ras al Khaimah has been aggressive in positioning itself as an investment destination par excellence. It established the Free Trade Zone in May 2000.

Dubai is a major International Finance Centre in the world and is an emerging offshore tax haven. Dubai has a vibrant banking and financial service sector, and in the offshore world it has earned the title of DIFC (Dubai International Financial Centre).

These Middle East tax havens within the UAE are the only ones where well developed and regulated Free Trade Zones/ Free Industrial Zones are available for investors. The first Free Zone formed was Jebel Ali, Dubai, in 1985 which has experiences significant prosperity and growth since its inception. By way of increased number of investors, there has been a surge in numbers as many international investors have established their offices, factories or warehouses and invested millions, with great returns.

There are many benefits to enjoy by incorporating in these Middle East tax havens, more specifically in the tax free — free zone. The ‘free zone’ companies or offshore companies formed in these Middle East tax havens in the UAE are worth their weight in gold. Firstly, 100% foreign ownership of UAE companies is allowed. The tax free zones for company formations are also no-tax zones. This means that there are no taxes, corporate or personal. In Dubai, the tax exemptions are set for a period of 15 years with a guarantee of an extension for an additional 15 years (in the event that corporate income tax is introduced in Dubai). To continue on the benefits of company formation in Middle East tax havens in the UAE, any money that is repatriated is tax free. There is no withholding tax. On top of these significant benefits, the Middle East tax havens territories with free trade zones have provisions for full exemptions of import and export duties. There are no foreign exchange restrictions, trade barriers or quotas.

Incorporation of an offshore Middle East tax haven offshore company in these territories is much faster in the free zone than outside. Incorporation is also less expensive.

As a Middle East tax haven, the UAE approach to company formation has brought about innovative with flexible corporate entities that are hybrid of on-shore and off-shore regulations. UAE offshore companies may not be permitted to operate in the on-shore environment, outside of the Free-zone but they can open and operate bank accounts with UAE-based banks. Therefore when registered within the Free Zone and offshore company may enjoy the same benefits as a standard domestic corporation.

Unlike traditional offshore companies around the world, tax haven UAE companies registered in a Free Zone, can own investments inside and outside of the UAE (JAFZA) and can real estate in Dubai in certain designated areas (which are approved by the Free Zone registrar). And unlike other Free-Zone companies, there are no minimum capital requirements for an Off-Shore company to incorporate.

Tax Haven Middle East (UAE) has reinforced itself as a prominent tax haven by recruiting workforces that enhances the offshore concept. Currently, over 12.000 companies, many of which being major brands, operate under the UAE Free Zones Authority.