The term “Substance” refers to the presence of the actual presence of a company in the country of registration in order to claim benefits from tax agreements. The physical presence of the company is becoming increasingly important in international tax planning with the introduction of such OECD initiatives as countering the erosion of the tax base and the withdrawal of profits (BEPs), and the exchange of tax information on the standard (CRS).
The level of presence required from a company in the UAE will vary depending on the type of business of the company and the jurisdictions involved. By registering a company in the Emirates you get all the conditions in order to defend the growing pressure from the tax authorities and to ensure the real economic presence of the company in the country of registration. As a result, even small companies in the UAE are able to realize the promised tax savings after checking by the tax authorities for the presence of “Substance”. Thus, careful planning and detailed tax advice are of paramount importance in determining the extent of the company’s actual presence in the UAE. Contact Aligorex Global Business for a solution and offers on “Substance” for your company.
- Having a permanent office in the UAE;
- Hiring qualified staff;
- Availability of a fixed phone number, fax, Internet line, as well as a website and email address;
- Use of local bank accounts, accountants, auditors, lawyers, etc.;
- Conduct effective management of activities in the UAE;
- Storage of documentation in the local premises of the company.
- To obtain a tax residency certificate (“TRC”), an UAE company must follow the above requirements;
- The main difference between free zone companies and offshore companies is that offshore companies are not allowed to have an office in the UAE;
- Companies in the free zone can get a lease agreement (office space), which is included in the package price;
- Behind the “Substance” estate you can use the extensive network of UAE tax treaties.