From a strategic location and a robust infrastructure to a supportive business ecosystem and a burgeoning demand for medical innovations, Dubai, UAE, stands as a beacon of opportunity for entrepreneurs in the healthcare industry. One of the most lucrative business ideas in Dubai, UAE is starting a medical device importing and exporting business.

In this article, we’ll go through the intricacies of establishing an import and export business of medical devices in Dubai, UAE.

Importing and Exporting Medical Devices in the UAE: the legalities

The import and export, as well as the distribution of Medical Devices in the UAE, is controlled by the Ministry of Health and Prevention.

Companies wishing to import and sell medical devices within the UAE must be established in the UAE and apply for registration of the devices and equipment with the Ministry of Health.

To import and sell Medical Devices and Equipment in the UAE, there are several requirements:

1. the company importing the equipment must be registered with the Ministry of Health with the related activities on the Trade License.
2. The importer must be a legal entity established in the UAE or a UAE national.
3. The medical equipment must be individually registered with the UAE Ministry of Health.

Alternatively, the company can be engaged with a local distribution or commercial agent, already registered with the Ministry of Health, for the importation and distribution of medical products, who can register the medical products for them.

The DED guidelines list two key activities linked to the importing, exporting, and trading of medical equipment and devices. These include the following:

• Surgical, Medical Articles, and Requisite Trading:

 This covers the resale of certain medical treatment instruments, including batteries for cardiac patients, earphones, pulse regulators, splints for fractures, walking sticks, artificial limbs, medical shoes, and surgical equipment like parts for damaged organ replacement, artificial organs, heart valves, bone joints, and suture bandages or plasters.

• Surgical and Medical Equipment along with Instruments Trading:

This activity includes the reselling of equipment and instruments used in clinics and hospitals for treatment, surgical activity, medicine, diagnosis, blood preservation, waste disposal, X-raying, physical therapy, sterilization, and rehabilitation. This activity also includes covers manual kits, medical check-up instruments, bandaging, surgical operations, and electronic devices with communication technologies.

How to start your importing and exporting medical devices business in Dubai, UAE

1.  Obtain a commercial license

You will need to obtain a commercial license from the Department of Economic Development (DED) in the Emirate where you plan to operate, or get a free zone commercial license.

• Register with the UAE Ministry of Health and Prevention (MOHAP)

To import and sell medical devices in the UAE, you have to register with the MOHAP, which needs detailed information about your company and the medical devices you intend to import and sell.

• Get a device marketing authorization

You need to obtain medical device marketing authorization from the MOHAP to market your goods.

• Get the necessary certifications

The medical devices you want to import, export, and sell must meet specific regulatory requirements in the UAE, including having certain certifications such as CE or FDA clearance, which prove that these medical devices meet international safety and quality standards.

• Collaborate with a distributor

Work with a distributor with good experience in importing and selling medical devices in the UAE.

• Comply with regulations

To avoid legal complications, make sure to follow the specific regulations and standards for importing and selling medical devices in the UAE.

How SPC Free Zone can help you?
SPC Free Zone promotes entrepreneurship and offers simple and value-added business support services. Whether you need an e-commerce license in UAE, a general trading license, or a professional license, we have it all covered. Additionally, you can apply for a dual-licensing option that provides mainland and free zone on the same license and up to 20 visas. Furthermore, the on-site immigration services allow you to get your license in just 45 minutes, and your UAE residency in 5 working days. Do you want to know how to start your business of importing and exporting medical devices in Dubai, UAE? Contact our team!

Consistently ranked as one of the world’s best places to do business, and home to one of the fastest growing and most diverse economies in the world, the UAE is fast becoming a most popular destination for aspiring entrepreneurs to set up their companies.

Business owners in Dubai, UAE, and all other emirates are required to have the proper license to run their businesses. One of the most sought business licenses in Dubai, UAE is the trade license, which encompasses a wide range of business activities.

What is a Trade License in Dubai, UAE?

A business license in Dubai, UAE is a document that specifies the nature of business activities that a company is allowed to undertake, whether it’s commercial, industrial, or professional services.

A trade license is an official document issued by the Department of Economic Development (DED) or other relevant authorities, like a Dubai free zone or Sharjah Free Zone, that permits a company or an individual to conduct business activities within the UAE. It’s a legal requirement for all businesses to obtain a trade license before starting their operations.

Types of Trade Licenses in Dubai, UAE

For those who want to set up a company in Dubai, UAE, there are many types of trade licenses to choose from to operate the business. Here we introduce the four most common Dubai, UAE trade license types available for Free Zone companies:

1. Commercial License for general trading businesses:
   Based on the nature of trading activities, this license may have other classifications. This license is basically for companies engaged in trading activities. It allows for buying, selling, and distributing goods.
2. Professional License for service-related businesses:
   This license is specific to service-oriented individuals or firms providing professional services like consultancy, accounting, legal services, and healthcare.
3. Industrial License for manufacturing goods:
   This license is for businesses involved in manufacturing or industrial activities, and it permits the production, manufacturing, packaging, and exporting of goods.
4. Tourism License for travel and tourism:
   This license is designed for businesses operating in the tourism and travel sector, including travel agencies, tour operators, and related activities.

How to Get a Trade License in Dubai, UAE

To obtain your trade license in Dubai, UAE you need to complete the following steps:

1. Select your business activity

The first step to getting a business license in Dubai, UAE is to choose your business activities, you can select from a wide range of business activities and join several activities under your business license. SPC Free Zone offers more than 2000+ business activities, and you can combine up to 5 activities under one trade license.

2. Choose a trade name for your business

Choosing a trade name is crucial for setting up your company in Dubai, UAE, for brand presence and identity. As part of the business setup in Dubai, UAE, it is recommended to verify the name’s validity with the DED, Department of Economic Development, or the relevant free zone authority.   

You also need to check the name’s compliance with trade name protocols and avoid duplication with registered names.

3. Choose your business location

Choosing a business location is an important step in setting up a company in Dubai, UAE. Many companies choose to set up business in UAE Free Zones as they are cost-effective, offer 100% foreign ownership, 100% profit repatriation, and tax incentives.

4. Submit your application and pay fees

You will need to submit your application form and provide several documents and paperwork. This step also involves paying the fees associated with your business license in Dubai, UAE.

5. Receive your license and open a business bank account

After completing the above steps successfully, expect to receive your business license shortly; as fast as 45 minutes if you choose to set up your business in UAE with SPC Free Zone.

Why choose SPC Free Zone?

SPC Free Zone offers a hassle-free and convenient business setup in the UAE. With a central location in the emirate of Sharjah, minutes away from major airports in the region, and immigration services on-site, you can receive your trade license in UAE in just 45 minutes. Choose from over 1,500 business activities, get up to 20 visas under one trade license, and enjoy special discounts with multi-year licenses. Expand your business with the dual-license option that offers both mainland and free zone on the same license.

Ready to launch your business in UAE? Get in touch with SPC Free Zone today.

What Is an FZE LLC?

Free Zone Establishments Limited Liability Companies (FZEs) are limited liability entities created in UAE free zones and regulated by the laws and regulations of that same.

There are two types of companies established in UAE free zones:

1. Free Zone Establishment Limited Liability Companies (FZE LLCs)
2. Free Zone Corporation Limited Liability Companies (FZCO LLCs).

Free Zone Establishments (FZE) have one shareholder. Whereas a Free Zone Company (FZC) has 2 or more shareholders.

Benefits of Forming a FZE Limited Liability Company in Dubai, UAE

Setting up a Free Zone Establishment (FZE) Limited Liability Company (LLC) in Dubai, UAE, within a designated UAE free zone, offers several benefits:

• 100% Foreign Ownership: One of the most appealing aspects is that foreign investors can retain complete ownership of their company without the need for a local partner or sponsor.
• Tax Incentives: free zones in the UAE offer attractive tax benefits, including zero personal income tax.
• Repatriation of Profits and Capital: Companies operating in free zones are typically allowed to repatriate all profits and capital without restrictions.
• Exemption from Import and Export Duties: Free zones often provide exemptions from import and export duties on goods and services.
• No Currency Restrictions: Free zones typically allow businesses to transact in any currency without restrictions.
• Ease of Doing Business: Streamlined processes for company registration, licensing, and permits, reducing bureaucracy and facilitating a faster setup.
• Infrastructure and Facilities: Access to world-class infrastructure, office spaces, warehouses, and other facilities that are often tailored to specific industries, promoting efficiency and growth.
• Networking Opportunities: Free zones often foster a collaborative environment by bringing together businesses from various industries, offering networking opportunities and potential partnerships.
• Full Range of Business Activities: Depending on the free zone, a wide array of business activities and industries are permitted, allowing flexibility in choosing the type of business to operate.

Steps of setting up an FZC LLC

Obtaining a business License and forming a company in Dubai free zones, and other UAE free zones involves several steps.

Here’s a step-by-step guide to FZC LLC setup in Sharjah Publishing City Free Zone (SPC Free Zone):

Step 1: Initial Research and Planning

Before you begin the process, conduct thorough research and planning for your business. Understand the market, competition, and legal requirements specific to your industry.

Step 2: Choose Your Business Structure

Determine the legal structure of your business. Options in the Sharjah Free Zones typically include Free Zone Company (FZC), Free Zone Establishment (FZE), or Branch of an existing company.

Step 3: Select Business Activities

Identify the specific activities your business will engage in.

Step 4: Name Reservation

Choose a unique name for your business and submit the name reservation application to the free zone authority. Once approved, you’ll receive a name reservation certificate.

Step 5: License Application

Complete the license application form and gather all necessary documentation, that include:

• Application form.
• Passport copies of shareholders and managers.
• Other relevant documents.

Step 6: Lease Office Space

Find suitable office space within the free zone. Sign a lease agreement and obtain a tenancy contract or choose to work out a coworking space.

Step 7: Open a Bank Account

Open a corporate bank account in the UAE with a local bank. Provide the necessary documents, including your business license.

Documents Required for FZE LLC Formation

Here is a general list of essential documents typically required for company formation in SPC Free Zone and other UAE Free Zones:

• Passport copy of Shareholders in the Parent company.
• Emirates ID copy of Shareholders in the Parent company (if applicable).
• Certificate of Formation.
• Board/Shareholder’s Resolution Attested license (if applicable).
• Memorandum and Articles of Association.
• Ultimate Beneficial Owner Declaration.
• KYC (Know Your Customer) video.

Why set up your company in the UAE with SPC Free Zone?

SPC Free Zone offers a hassle-free and convenient business setup in the UAE. With a central location in the emirate of Sharjah, minutes away from major airports in the region, and immigration services on-site, you can receive your business license in UAE in just 45 minutes. Choose from over 1,500 business activities, get up to 20 visas under one trade license, and enjoy special discounts with multi-year licenses. Expand your business with the dual-license option that offers both mainland and free zone on the same license.

Ready to launch your FZE LLC in the UAE? Get in touch with SPC Free Zone today.

The e-commerce market has seen a huge leap in the UAE in the past few years. Combining an unrivaled location, world-class infrastructure, and a whole host of tax incentives for businesses, it’s little wonder why the region is becoming a destination of choice for retail businesses, not the least remarkable of them is dropshipping.

What Is Dropshipping?

Dropshipping is a model of retail fulfillment where a retailer doesn’t keep the products it sells in a store. Instead, when a store sells a product, it purchases the item from a third party—usually a manufacturer, wholesaler, or another retailer—and has it shipped directly to the customer.

Essentially, the retailer (or the drop shipper) acts as a middleman. He markets and sells products without needing to handle the inventory directly.

How Does It Work?

The process of dropshipping typically works like this:

1. Placing the Order: A customer purchases a product from a retailer’s online store.
2. Forwarding the order to Supplier: The retailer forwards the order details and shipment information to a third-party supplier, often a wholesaler or manufacturer.
3. Shipping the Product: The supplier packages and ships the product directly to the customer.

The Advantages Of Dropshipping For Retailers In The UAE

Here are the advantages of dropshipping for retailers looking to set up a business in Dubai, UAE:

• Low Startup Costs: Dropshipping requires minimal upfront investment as retailers don’t need to purchase inventory in bulk, reducing the initial financial burden of setting up a business in Dubai, UAE. This makes it an appealing option for entrepreneurs setting up a company in Dubai, UAE on a limited budget.
• Reduced Overhead Expenses: dropshipping minimizes overhead costs associated with storage, maintenance, and warehouse management. This allows retailers to focus resources on marketing, customer service, and expanding their setup business in Dubai, UAE.
• Wider Product Range: Dropshipping enables retailers to offer a broad variety of products without physically stocking them. This flexibility allows dealing with different product lines, which is advantageous for businesses setting up in Dubai, UAE to test markets and adapt to changing trends and preferences.
• Flexibility and Scalability: Dropshipping offers scalability without the hassle of managing inventory. As retailers plan to scale their companies in Dubai, UAE, they can easily do so without worrying about inventory management.
• Location Independence: The nature of dropshipping allows businesses to operate from anywhere with an internet connection, a significant advantage for entrepreneurs setting up a business in Dubai, UAE.
• Reduced Risks: In dropshipping, retailers only purchase items once they’re sold and paid for by the customer, mitigating potential losses and excess stock concerns.
• Focus on Marketing and Customer Service: With inventory management outsourced to suppliers, retailers can allocate more time and resources to marketing strategies, enhancing customer experience, building relationships, and ensuring satisfaction for customers.
• Access to Global Markets: Dropshipping facilitates access to global markets without the complexities of international logistics. Retailers in Dubai, UAE can reach customers worldwide, enabling international sales without the need for extensive warehousing or logistical setups.

For retailers considering setting up a business in Dubai, UAE, dropshipping offers these advantages, but success hinges on selecting reliable suppliers, maintaining quality service, and implementing effective marketing strategies within the competitive landscape of Dubai’s business environment.

Dropshipping In The UAE: Market Opportunity

Those looking to set up a dropshipping business in the UAE are poised to capture the many market opportunities the country offers. There are many reasons why setting up a company in UAE is  a valuable opportunity:

• A fast-growing e-commerce market

The pandemic increased the reliance on e-commerce across the globe, including the UAE. The UAE e-commerce market is expected to grow to USD 8 billion by 2025, which offers great growth opportunities for dropshipping businesses.

• A business-friendly eco-system

The UAE offers a range of tax incentives and tax holidays that can help dropshipping entrepreneurs increase their profit margins.

• A digital-friendly environment

The UAE is one of the most digital-friendly countries in the world. Almost 100% of the population is online and uses the internet for e-shopping.

• Advanced logistics network

Boasting a strategic location between Asia and Europe, the UAE is the ideal base for conducting business between East and West. Home to the world’s busiest airport (Dubai International Airport), a highly efficient railway network, and an array of highway interchanges, you can ensure products are delivered to customers in ease and on time.

Why choose SPC Free Zone?

SPC Free Zone offers quick and flexible business setup in the UAE. Located in the heart of Sharjah with immigration services onsite, entrepreneurs can receive their e-commerce license UAE in just 45 minutes. Choose from over 1,500 business activities with up to 20 visas under one trade license. Expand your business with competitive incentives such as 100% foreign ownership with zero paid-up capital and a dual license option that offers both mainland and free zone on the same license. Build a business that thrives, with help from our business advisors.

Interested in starting and expanding your dropshipping business in the UAE? Get in touch with SPC Free Zone to find out more.

However, there are also challenges associated with dropshipping:

• Lower Profit Margins: As the retailer doesn’t buy products in bulk, the profit margins per sale might be lower compared to traditional retail.
• Dependency on Suppliers: The dropshipper relies heavily on the suppliers’ stock availability, shipping times, and quality of service, which can affect customer satisfaction.
• Control Over Inventory and Shipping: Since the dropshipper doesn’t handle the inventory directly, they have less control over product quality, shipping times, and packaging.
• Dropshipping has gained popularity, especially in e-commerce, due to its low barrier to entry and flexibility. Many online entrepreneurs use this model to start their businesses with minimal upfront investment, although success often hinges on effective marketing, finding reliable suppliers, and providing excellent customer service.

Want to get selling in the world of e-commerce but are lacking in inventory and capital? Dropshipping could be for you. In this article, we will explore everything you need to know about this simple and rewarding business model, including how to start dropshipping in UAE, what you will need, and how much it will cost. We will cover the following topics:

• Dropshipping in the UAE – market opportunity
• How dropshipping works
• How to start a dropshipping business in the UAE
• Do I need a license to start a dropshipping business in the UAE?
• How much does it cost to start dropshipping in UAE
• Is dropshipping legal in UAE?
• Why choose SPC Free Zone?

Dropshipping in the UAE – Market opportunity

It’s no secret that the e-commerce market has exploded in the UAE in the past few years. Combining an unrivalled location, unparalleled infrastructure and a whole host of tax incentives for burgeoning businesses, it’s little wonder why the region is becoming a destination of choice for dropshipping. Those looking to set up a dropshipping business are poised to capture the UAE’s many market opportunities, such as:

• A digital-first nation

The UAE is one of the most digital-friendly countries in the world. Almost 100% of the population is online and uses the internet for browsing, shopping and social media. What’s more, according to reports published by EZDubai and Euromonitor International, 75% of UAE consumers prefer e-commerce.

• A fast-growing e-commerce market

The pandemic accelerated e-commerce across the globe, and nowhere more so than in the UAE. The UAE e-commerce market is expected to grow to USD 8 billion by 2025. That’s a huge pool of captive customers for dropshipping businesses to tap into.

• A business-friendly eco-system

The UAE offers a string of tax incentives and tax holidays that can help dropshipping entrepreneurs increase their profit margins. Dropshipping businesses only need to worry about VAT.

• Impressive logistics network

Boasting a strategic location between Asia and Europe, the UAE is the ideal base for conducting business between East and West. Home to the world’s busiest airport (Dubai International Airport), a highly efficient railway network and an array of highway interchanges, you can ensure products are delivered to customers on time, every time.

How dropshipping works

Dropshipping is a retail strategy that enables entrepreneurs to capitalise on the booming e-commerce market with little to no upfront investment. Essentially, a dropshipping business purchases products from a third-party supplier or wholesaler as customers make an order. The third-party supplier takes care of shipping and logistics, while the dropseller only needs to worry about sourcing products for the best value, attracting customers and driving the highest profit margins.

The process can be broken down into the following simple steps:

Step 1: The shopper places an order on your dropshipping website

Step 2: You process the order and forward it to your supplier

Step 3: Your supplier receives the order

Step 4: Your supplier ships the order

Step 5: Your customer receives the products

Let’s dive into a few of the advantages of starting up a dropshipping business.

• Low barriers to entry

You don’t need business experience or capital to get going.

• No warehouse or office costs

The wholesaler takes care of inventory and you can run the business from anywhere.

• Scalable and flexible business model

Infrastructure costs don’t accelerate as you grow and you can adjust your strategy as you go.

• More marketing spend

Without soaring infrastructure costs, you can allocate more budget to attracting new customers, in turn growing your business.

How to start a dropshipping business in the UAE

Setting up a dropshipping business in the UAE is easier than you think, providing you’ve jumped through the right hoops. We’ve broken down the process of starting a dropshipping business in the UAE into four simple steps:

Step 1: Decide what you will sell

Pick your niche. To drive the biggest profit margins and ensure greater business success, sell unique products that target a specific demographic. This will require extensive research, but spending a little more time at this stage will pay off in the end. Explore the competition and work out what your customers are looking for. After all, if they can find it in a shopping mall, why would they come to you?

Step 2: Select your sources

Spend time researching wholesalers that offer the best value products. Making savings here can drive higher margins. You don’t need to limit yourself to one supplier either, as many dropshipping businesses work with multiple suppliers. As well as seeking out value, you should also make sure your suppliers are reliable. They are ultimately responsible for inventory and shipping, and if these are found lacking your reputation and customer base will suffer.

Step 3: Choose where to sell your products

When it comes to selling, you have two options: online and social media. There are a wide variety of e-commerce platforms available, such as Shopify and Alibaba. However, it’s important to choose one that aligns with your goals. How comprehensive are the platform’s capabilities? How much visibility will your platform get? Is the platform user-friendly? These are all questions that you should be asking throughout the process.

Step 4: Address legal requirements

To launch your business, you’ll need to settle up a few legal issues, such as business licenses and taxes. You should also ensure that your suppliers meet specific criteria to ensure you avoid common issues, such as counterfeit.

There’s no need to do it all alone, though. Our friendly business advisors can help you navigate setting up a dropshipping business in SPC Free Zone to ensure a seamless start to success.

Do I need a license to start a dropshipping business in the UAE?

Yes, all dropshipping businesses in the UAE require an e-trader license.

Cost of starting a dropshipping business in the UAE

The cost of starting a dropshipping business in the UAE starts from AED 6,875. However, there are numerous considerations you will need to take into account when starting your dropshipping business, such as visa requirements and office space.

At SPC Free Zone, you can start a dropshipping business in the UAE for as little as AED 6,875. This setup package includes coworking spaces with no visa. If you wish to add visas, the price rises to AED 9,250.

Is dropshipping legal in the UAE?

Yes, dropshipping is legal in the UAE but according to Article 6 of 2011, you will need to obtain a trade license to set up your business legally. Without this, you will be liable for financial (and administrative) penalties under Article 335 of the Commercial Companies Law (CCL).

Why choose SPC Free Zone?

SPC Free Zone offers quick and flexible business setup in the UAE. Located in the heart of Sharjah with immigration services onsite, entrepreneurs can receive their e-commerce license UAE in just two hours. Choose from over 1,500 business activities with up to 20 visas under one trade license. Expand your business with competitive incentives such as 100% foreign ownership with zero paid-up capital and a dual license option that offers both mainland and free zone on the same license. Build a business that thrives, with help from our business advisors.

Interested in starting and expanding your dropshipping business in the UAE? Get in touch with SPC Free Zone to find out more.

#dropshippinguae #businesssetupindubai #spcfz

For entrepreneurs considering setting up a business in UAE, or establishing a company in Dubai, UAE, understanding the implications of the UAE corporate tax is crucial.

In June 2023, the UAE government implemented a federal corporate tax that impacts local and foreign-owned companies operating within the UAE. Companies must annually file tax returns and settle any corresponding tax dues. Additionally, the corporate tax framework includes various exemptions and reliefs. The tax rate is fixed at 9%, and the taxable income is calculated after permissible expenses are deducted.

The corporate tax in the UAE applies to all companies, both locally owned and foreign entities. Yet, there are advantages for businesses operating within free zones, including a favorable corporate tax structure and exemptions from customs duties among others.

Corporate Tax Rates

The UAE Corporate Tax regime introduces a tier system with 3 rates:

• All annual taxable profits up to AED 375,000 shall be subject to tax at 0%.

• All annual taxable profits above AED 375,000 shall be subject to 9% rate.

• All multinational enterprises that fall under the scope of Pillar 2 of the BEPS 2.0 framework (i.e. consolidated global revenues over AED 3.15 billion) shall be subject to different rates as per OECD Base Erosion and Profit-Sharing rules. However, until the Pillar Two rules are adopted by the UAE, multinationals will be subject to CT under the regular UAE CT regime.

What incomes are exempted from the corporate tax?

• Double Taxation Avoidance Treaties (DTAs): The UAE has DTAs with several countries to prevent double taxation of income. This means that businesses that are taxed in the UAE may be able to claim a credit against their tax liability in their home country.
• The employment income of individuals.
• Tax exemptions for certain industries: The UAE government offers tax exemptions for businesses operating in certain industries, such as extractive businesses.
• Other personal income: Dividend income. Rental receipts from UAE real estate investments even if UAE real estate and other investments are held through a private or family trust, subject to certain conditions.

UAE Corporate Tax Regime: misconceptions rectified.

Newly announced, with a lot of nuances to learn and clarify, there are many questions asked about the UAE Corporate Tax. Here, we correct some misinformation about the CT scheme. It’s always advised to reach for a well-informed business setup consultant, like SPC Free Zone, for reliable information about this essential aspect of business setup in the UAE.

Does the CT only apply to companies owned by foreigners?

Corporate tax impacts local and foreign-owned companies incorporated or resident in the UAE, and operating within the country, or foreign entities that have a Permanent Establishment or taxable nexus in the UAE, irrespective of the residence and nationality of the individual founders or (ultimate) owners of the entity.

Are businesses subject to Emirate level taxation exempt from UAE Corporate tax?

Emirate level taxes paid will not be able to be credited against or otherwise reduce the amount of Corporate Tax Payable. Businesses engaged in the extraction of the UAE’s Natural Resources and in certain non-extractive activities that are subject to Emirate level taxation will be exempt from the UAE Corporate Tax, subject to certain conditions. Other businesses may be subject to both Corporate Tax and Emirate level taxation.

Will UAE Corporate Tax replace VAT in the UAE?

No, Corporate Tax is different than VAT. A registered business for VAT will have to pay VAT and Corporate Tax separately. If the business is not registered for VAT it may still have to pay Corporate Tax.

Do I still have to pay service fees to the Federal and Emirate Governments with the corporate tax?

Applicable service fees will still be payable to the Federal or relevant Emirate Government.

However, business setup, licensing, license renewals, and other Government charges that are incurred in the process of business are generally considered deductible expenses for UAE Corporate Tax.

Why choose SPC Free Zone?

SPC offers a fast and easy Sharjah freezone business setup in the UAE. As one of the most centrally located and easily accessible free zones in the region, it’s the ideal ecosystem to start and grow your business successfully with our competitive business setup packages. We help entrepreneurs obtain relevant business licenses and visas for the free zone. With SPC Free Zone, you can also take advantage of up to 20 visa quotas and maximize profits with zero paid-up share capital and 100% foreign ownership.

SPC Free Zone also provides an e-commerce and general trading license for all commercial activities. We aim to give business owners the tools and knowledge they need to navigate their way. Contact us today!

Want to set up a business in the UAE? Calculate your business setup cost today!

What Is VAT?

Value Added Tax, VAT, is a consumption tax that was introduced in the UAE on 1 January 2018 and is imposed on most goods and services that are bought.

Businesses whose taxable turnover exceeds the threshold of AED 375,000 for mandatory registration, or AED 187,500 or more but not more than AED 375,000 in the case of voluntary registration, are required to register for VAT in UAE.

VAT-exempt sectors in the UAE

The general rate of VAT in UAE is 5%, but some goods and services are subject to a 0% rate or an exemption from Value Added Tax in UAE. The 0% VAT rate applies to:

• Goods and services exported outside the VAT-implementing GCC member states.
• Supplies for certain sea, air, and land means of transportation.
• Supply of precious metals for investment.
• International and intra-GCC transport.
• The first supply of residential real estate, within three years of their construction.
• Supply of certain educational and healthcare services and relevant goods and services.
• The oil sector and the oil and gas derivatives sector.

As for the exempted sectors, the following categories are exempt from VAT:

• The supply of certain financial services
• Sale of bare land
• Lease or sale of residential property
• Local transport

How can businesses calculate their VAT?

VAT is an essential aspect of running a business in the UAE, so it is crucial to learn how to calculate VAT as a business owner.

Since VAT is an indirect tax, the companies charge the customers and receive the tax on behalf of the authorities by collecting VAT on sales (output tax), recovering the VAT amount paid on the purchase of goods (input tax), and subtracting the input from output.

Let us give you an example for more clarification.

If you work in a certain industry and your company purchased materials for a total of AED 200,000, the input tax will be:

AED 200,000 x 5% = AED 10,000

If you sell the product of the raw materials you purchased, and the revenue of sales is AED 500,000, the output tax will be:

AED 500,000 x 5% = AED 25,000

In this case, the final net VAT payable to the government will be:

VAT = Output Tax – Input Tax

VAT = AED 25,000 – AED 10,000

VAT = AED 15,000

How and when to file VAT returns reports?

Taxpayers in the UAE should file their VAT returns with the Federal Tax Authority (FTA), online using e-services, every quarter, within 28 days from the end of the tax period.

VAT refunds

If you are a taxable person in a net tax refundable position or someone eligible for refunds for certain reasons, you may request a VAT refund. To do so, follow the following steps:

• Go to the FTA’s e-Services portal.
• Choose VAT -> VAT refunds     ->    VAT refund request.
• Fill out the request form.

What is VAT grouping?

Businesses that satisfy certain requirements can be able to register as a VAT group. One requirement is to be under the same ownership and located within the same GCC country.  

VAT grouping helps in simplifying the accounting for VAT in Dubai and all the emirates. Group VAT scheme allows people and entities that are closely linked financially and organizationally to operate as a single VAT person, get a single VAT number, and file a single return.

How can SPC Free Zone help you?

SPC Free Zone helps you navigate every stage of your business setup process in the fastest, most convenient, and flexible way possible.

Get your license issued in just 45 minutes, and your UAE Residency in 5 working days, thanks to our location in the heart of Sharjah with immigration services onsite.

Choose from over 1,500 business activities and get up to 20 visas under one trade license.

Expand your business with our dual-license option that allows you to work from both mainland and the free zone on the same license.

We also offer a wide range of business support services, like documentation, corporate banking assistance, and customs codes, among others.

Get in touch with our expert team today and launch your dream business with SPC Free Zone!

As a member of the Organisation for Economic Cooperation & Development “OECD” Inclusive Framework, the United Arab Emirates issued the Economic Substance Regulations in 2019 which require UAE entities to maintain an adequate “economic presence” in the UAE relative to the activities they undertake.

Economic Substance Regulations (ESR) apply to entities and unincorporated partnerships registered by a competent authority in the UAE, that carry out one or more relevant activities as defined under ESR across the UAE, including Free Zones and Financial Free Zone, also referred to as Licensees.

The ESR requires Licensees to demonstrate their genuine economic presence in the UAE. Licensees may be required to prepare and submit an economic substance notification and an economic substance report on an annual basis when they conduct any of the Relevant Activities.

What are the Relevant Activities?

• Banking business.
• Insurance business.
• Investment fund management business.
• Lease-finance business.
• Headquarter business.
• Shipping business.
• Holding company business.
• Intellectual property business.
• Distribution and service center business.

Economic Substance Regulations requirements

Entities are expected to use a ‘substance over form’ approach to determine whether or not they undertake a Relevant Activity, irrespective of its mention on the licensee’s trade license.

Entities that are engaged in one or more of the relevant activities in the UAE during the relevant financial year, are required to submit annual economic substance notifications and reports to the regulatory authority.

These entities must submit economic substance notification within 6 months from the end of the fiscal year, indicating whether they carry out a Relevant Activity in the financial year and whether any income is generated from that Relevant Activity. Additionally, they need to disclose if the income from the relevant activity has been subjected to taxation outside the UAE.

The information provided as part of the Notification is a prerequisite to filing an Economic Substance Report. The Economic Substance Report must be submitted within 12 months from the end of the fiscal year, indicating whether they met the economic substance requirements, with information about the Relevant Activity income earned, the number and qualifications of the staff involved, and information about the premises and other assets used in conducting the Relevant Activity.

UAE entities will need to do qualitative and quantitative assessments for whether and which of their activities fall within the scope of the economic substance regulations.

UAE entities that qualify for an exemption from the Regulations are also required to submit a notification.

Exempted entities under ESR in the UAE

The following categories of entities are exempt from filing an ESR Report, but still need to file a Notification:

1. Entities 100% owned by UAE nationals or UAE resident individuals, which are not part of a multinational enterprise group and operate solely within the UAE.
2. Investment funds.
3.  Entities that are tax resident in a jurisdiction outside the UAE
4. Branches of a foreign company where the income of the branch is subject to tax in the jurisdiction of the parent company.

What is the importance of the Economic Substance Regulations (ESR) for businesses?

By introducing the ESR the UAE aims to comply with international standards. Being a member of the Organisation for Economic Cooperation & Development “OECD” Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, adhering to these regulations demonstrates the UAE’s commitment to transparency and combating harmful tax practices.

ESR ensures that companies conducting business in the UAE have a substantial presence and contribute to the local economy. This prevents unfair advantages for entities that might otherwise try to minimize their tax liabilities without a genuine economic activity in the country.

Commitment to global standards helps in maintaining the UAE’s reputation as a reliable and transparent business hub. This, in turn, attracts more international investments and fosters confidence among businesses operating within the UAE.

Compliance with ESR regulations is a legal requirement. Non-compliance can result in penalties such as fines, suspension, or revocation of business licenses, which can significantly impact the operations and reputation of a company.

How SPC Free Zone can help you?

SPC offers a fast and easy Sharjah freezone business setup in the UAE. As one of the most centrally located and easily accessible free zones in the region, it’s the ideal ecosystem to start and grow your business successfully with our competitive business setup packages. We help entrepreneurs obtain relevant business licenses and visas for the free zone. With SPC Free Zone, you can also take advantage of up to 20 visa quotas and maximize profits with zero paid-up share capital and 100% foreign ownership.

SPC Free Zone also provides an e-commerce and general trading license for all commercial activities. We aim to give business owners the tools and knowledge they need to navigate their way. Contact us today!

The Emirates ID Card is an identification card that the Emirates Identity Authority (EIDA) issues to citizens and residents as proof of identity and residency status in the country, and it includes its holder’s biometric information such as his/her photo, fingerprint, and signature, as well as personal details such as name, date of birth, nationality, and residency status.

Purposes of the Emirates ID Card

Proof of identification: The card consists of a smart chip with the holder’s name, photograph, signature, Emirates ID biometrics, and other essential personal information.

Government services: The Emirates ID card allows you to access several government services such as healthcare, education, and employment services.

Travel: The Emirates ID card can be used to travel to other GCC countries without the need for a passport, for a specific category of travelers.

Driving: You need an Emirates ID to obtain a driving license in the UAE.

Access to buildings and facilities: You need an Emirates ID card to enter some places and facilities such as airports, government buildings, and others.

Banking and financial services: You need an Emirates ID card to open bank accounts and access other financial services in the UAE.

The Emirates ID card is mandatory for all UAE citizens and residents, and you’re required to hold your Emirates ID with you at all times. At the same time, there’s a digital version of the Emirates ID you can use in case the physical one is temporarily not available. Read our article to learn how to acquire an E-version of the Emirates ID card.

How to get an E-version of your Emirates ID card

As we mentioned before, your Emirates ID card is an essential document that is required to be held around everywhere. But it happens that the identification card is lost, damaged, and even stolen, which demands immediate action to report the incident to the ICP and apply for a new card.

 The card also has an expiry date and requires renewal within 30 days of its expiry, otherwise, you may face a fine of AED 20 per day, which can go up to a maximum of AED 1000.

While you wait for your new card to be issued, you can still use the electronic version which you can acquire in various ways:

1. UAE Pass app:
   The UAE Pass is a digital identity solution that allows residents and citizens to access various government services online without the need to physically visit government offices. The app offers many government services under one platform, enabling users to perform tasks like accessing official documents, paying bills, applying for permits, and many more.
   You can download the UAE Pass app from the Google Play Store and Apple App Store and register with your Emirates ID number. The app will ask you to confirm your identity through facial recognition.
   Now you’ll go through the following steps:
   1. Select the category of Federal Authority for Identity, Citizenship, Customs and Port Security
   2. Click on Emirates ID Card
   3. Do the face scan.
   4. Download the digital Emirates ID
2. ICP mobile app:
   To get an E-version of your Emirates ID card via the ICP mobile app all you have to do is the following:
   1. Sign in to the UAEICP app via your UAE Pass account.
   2. Select the Emirates ID option.
   3. Select your name and view your ID.
   4. Download your ID card on your device.
3. QR Code:
   Another way to benefit from the E-version of your Emirates ID is by generating a QR or Quick Response code from the UAEICP app which can be used for transactions and processes that require the use of the Emirates ID card.
   To get the QR Code:
   1. On the ICP mobile app select the Emirates ID QR Code option.
   2. Select personal information or mobile number.
   3. After you have successfully submitted your details, you will receive a QR code.

How SPC Free Zone can help you?

When it comes to setting up a business in the UAE, there’s no reason to do it alone. SPC Free Zone offers a wide range of support services to suit your business needs, from the start of your journey and beyond. Whether you’re looking to get a UAE residency visa or need to apply for your Emirates ID card we can help.

Our VIP Medical and Emirates ID Assistance service facilitates the process of applying for a new Emirates ID card or renewing your expired one, as well as visa services. We provide a full range of VIP services from physical examination to the collection of test results and accompanying you to the Emirates ID center, where we complete all documentation as well as assist with the biometrics process. We will also collect your Emirates ID on your behalf.

Our support services also include spouse and children’s visa assistance, documentation, corporate bank assistance, and many more.

With SPC Free Zone, you can also choose from more than 1,500 business activities and take advantage of up to 20 visa quotas and competitive business setup packages. Our customers who want to set up a business in Sharjah free zones benefit from a whole string of benefits like zero paid-up share capital. With immigration services on-site, you can also get your license issued in less than 45 minutes, and your UAE residency visa in 5 working days. Are you planning for a business setup in Dubai, UAE, or anywhere in the UAE? contact our team of experts and get your business license in 45 minutes!