Wednesday, April 24, 2024

After Dubai, Abu Dhabi reduces business start-up costs


Abu Dhabi, the capital of the United Arab Emirates, wants to be competitive at all prices. After dubbing the new agreement reached by the G20 countries in June With a global corporate tax rate of “at least 15%”, the Gulf metropolis on Tuesday announced a “more than 90%” reduction in business set-up costs, among several multinationals that will increase the city’s regional and international competitiveness by providing regional headquarters.

In fact, in Abu Dhabi or neighboring Dubai (also a member of the United Arab Emirates), corporate taxation is virtually non-existent. Or, sAccording to the Organization for Economic Co-operation and Development (OECD), which unites the most developed countries, a tax haven is classified as “non-existent or insignificant taxes”. This applies not only to the Emirates, but also to Jersey, the Bahamas, the Cayman Islands and Bahrain.

The country, which is keen to drop this image of the tax haven, at the same time, and – even after signing – “welcomes” the G20 announcement on Monday, signed by 132 out of 132 of the OECD’s 139 members of the working group.

“Emirates supports global consensus against tax evasion and profit shifting,” said Saïd Rached al-Yatim, head of the UAE Ministry of Finance.

The federal government has reiterated its support for the G20’s efforts to combat “tax evasion and profit shifting,” a variety of optimization strategies that allow large corporations to largely escape.

Similarly, the Gulf country is “fully committed” to working with the OECD and the G20 to achieve a “fair and sustainable outcome,” he said in a statement.

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Scott Livermore, chief economist at the Dubai-based Oxford Economy Middle East, commented that the government, which relies on its international brand, should definitely be “seen as part of a global organization without tax havens”.

Different choice made by other financial service capital London Who is campaigning that should not be forced to use this new tax.

Abu Dhabi and Dubai lowered prices

In fact, Abu Dhabi is following in the footsteps of its neighbor Dubai. In June, the neighboring city announced a series of orders “aimed at reducing the cost of doing business and stimulating economic growth.”

The measures, which will be implemented “over the next three months, are aimed at establishing Dubai as a global destination for investment and trade,” Emirati leaders said without elaborating.

Similarly, “the cost of setting up a business in the Emirate of Abu Dhabi has been reduced to 1,000 dirhams (approximately 230 euros) or less than 90%,” the local government communications office said.

The reduction, which includes the elimination of certain fees – mostly registration fees to officials, registration with the trade association and municipal taxes – will apply from Tuesday, he said in a statement.

Mohammed Ali Al-Sorafa, Head of the Abu Dhabi Department of Economic Development, said, “Our goal is to create a growing business environment that promotes growth and innovation (…)

Also, from June 1, foreigners can form a company and hold the entire capital (previously up to a maximum of 49%), which was previously only possible in some free zones.

It should be noted that Abu Dhabi has a new major competitor in the Gulf and was told to get out of the oil-dependent position of Saudi Arabia, the Arab world’s largest economy.

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