Company Re-Domiciliation: Why You Should Consider UAE

Adekunle Oludele
1
611 Views
Jul 15, 2023

Migration is a process that has been going on since times immemorial. People habitually leave less comfortable places and move to more comfortable locations. This is only natural, is it not?

Companies migrate too even though the relocation opportunity has been available to business entities for a comparatively short time only. A group of people may want to move to another place if the weather conditions become less favorable, for example, if the soil becomes less fertile, or if a military conflict arises in the place where they live. Why would a company want to move from one jurisdiction to another? What can make the company owners reregister the company in another country?

It may happen that the corporate legislation of the country where the company is domiciled changes for the worse or the tax burden may become too heavy. Recently, a new reason for company re-domiciliation has appeared, however. In an attempt to conform to the new international regulations, some jurisdictions that used to have little economic substance requirements now require that companies registered there have tangible assets in the country and a few local people on the staff. If you find yourself in a similar situation, you may want to consider moving your company from the country where it is currently registered to the United Arab Emirates.

Today, it is quite possible to do so. Before this opportunity became available, the company owners had to liquidate the company in their home country if they were to register it in another country. And starting from scratch entailed some undesirable consequences. For instance, some old business contacts had to be broken and some new bank accounts had to be opened.

You can avoid incurring this sort of losses in the modern world. When you re-domicile your company to a new jurisdiction, it does not have to cease to exist even for a moment. You can keep the company name. You can keep the company brand. You can keep the corporate bank account. You can keep the contracts that you have signed with other companies. You can keep your suppliers. You can preserve your company’s history. The key difference is going to be as follows: your company is going to be scratched from the list of business entities in your home country and it is going to be listed in the Business Register of another country. That is it.

It is true that the company re-domiciliation process is going to involve some administrative costs. The costs are not going to be extremely large, however, and they can easily be compensated for by the advantages that you can find when registering your company in a foreign country. For instance, you can find some tax benefits there that are not available in your home country. Besides, the substance requirements may be not so harsh in a new place. On top of that, you may be able to improve the image of your company: some jurisdictions are more reputable in the international market than some others are and you have to admit that.

If you have been thinking of finding a new home country for your business company, we suggest that you should consider the United Arab Emirates for this purpose. You may benefit from relocating your company there in many different ways, especially if you consider the opportunity of registering your company in one of the Free Economic Zones (FEZ), of which there are over forty in the UAE.

Reasons why you should re-domicile your company to the UAE

The United Arab Emirates is undoubtedly the leading business hub in the Middle East, North Africa and South Asia. It is one of the richest countries in the world and though its wealth is mainly attributable to its huge oil deposits, the Sheiks are smart. They realize very well that the day will come when they run out of oil but they want to continue to prosper anyway. For this reason, they look for every opportunity to diversify and develop the country’s economy. They believe that one of the most powerful instruments of economic diversification and development is building a business environment that foreign entrepreneurs find attractive. If they do, they will bring their capitals and their talents to the country. This, in its turn, will make the UAE economy sustainable and not so much dependent on oil exports.

If you re-domicile your company to the UAE, you will find the following main properties there that make doing business from the country easy and highly profitable:

Low taxes: personal income is not taxed at all in the UAE and many other taxes (gift, inheritance, capital gains, etc.) are not charged either. There is a 5% VAT (some products are exempt) and a 9% corporate tax since recently. The tax is not charged if the company is registered inside a FEZ.
The UAE has multiple double taxation avoidance treaties (with more than 80 countries). A few new such treaties are underway.
No currency control is applied in the UAE. You can withdraw the profits that you make in the country and move them anywhere else without any problems.
You can register the company in a world-renowned financial center such as Dubai International Financial Center, for example. It is the 8th largest financial center in the world and the largest such center in the Middle East, Africa, and South Asia.
Abu Dhabi Global Market as well as Dubai International Financial Center (both are FEZs) have highly progressive corporate legislation. In particular, cryptocurrencies and crypto business are both legal on their territories.
It is possible to register an offshore company in Dubai or in another Emirate. (Please note that this opportunity is unavailable in some parts of the UAE.)
You can find international providers of financial, legal, and fiscal services in the UAE.
There are top-class infrastructural objects in the country. For instance, planes fly to around 300 destinations from the UAE airports.
The UAE is the 29th largest economy in the world and 2nd largest economy in the Middle East and North Africa;
The living standards in the UAE are extremely high. The country offers the best quality of life in the Middle East.
The country is highly safe too. The crime rates in the UAE are among the lowest crime rates in the world.
The UAE offers political stability and a liberal business environment. It ranks high for economic freedoms and ease of doing business.
The UAE is one of the few countries that have successfully handled the Covid-19 crisis.

The UAE is certainly worth considering if you are looking for a new home country for your company.

Comments (1)

Sakshi

Jul 18, 2023

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