Das erste Forum » The UAE as a modern offshore trading hub

The United Arab Emirates or UAE offers a unique combination of a high-quality lifestyle, a fast-growing economy and high standards of comfort and safety. The authorities of the United Arab Emirates have given the country a strong reputation as a global economic center by creating various zones for business creation and trade. For example, the UAE's free trade zones, or simply free zones, are designed to boost international business and are typically industry-specific or attached to ports or airports.

These free trade zones offer the opportunity to set up an offshore company in a location with highly developed infrastructure for the banking and financial sectors, business, tourism and entertainment. In addition to facilities for children and young people such as kindergartens, schools and international universities, the free trade zones offer a high standard of living, security and stability. An important restriction is the ban on trading in the UAE market. An offshore company in a free trade zone can only operate in the local business market through a local distributor.

Another very good reason to choose the UAE as the right place to set up your business is that offshore companies benefit from attractive legislation to protect investor interests and special tax regimes with 0% VAT, corporate tax and income tax. Like many Middle Eastern countries, the UAE generated most of its wealth from the oil industry. Although the oil industry is no longer the UAE's main source of income, the country can still afford a tax-free life to attract international companies and workers that further enrich and diversify the economy. The vice president and prime minister of the United Arab Emirates once declared that his country would never impose an income tax to control the deficit. In addition, there is no tax on capital gains, inheritance or rental income.

Offshore companies located in one of the free trade zones must comply with the laws of that zone. The incentives can also vary; Most free zones offer 0% corporate tax as one of their many incentives, provided the company does not trade with residents of the territory.

Following the IMF's suggestions that the application of VAT could help diversify the UAE's economic resources, it was announced that a 5% VAT will be introduced in the UAE from January 1, 2018. Certain food, educational and health items, bicycles and social services will be exempt from VAT.

The economy of the United Arab Emirates is growing steadily and, according to the IMF forecast, will grow by 1.5% of real GDP in 2017. It is currently the third largest re-exporter in the world and the Abu Dhabi Fund for Development is considered one of the largest stabilization funds in the world. In addition, Dubai has taken various measures to develop all sectors of its economy, as a result of which oil revenues today account for less than 20% of total revenues, while the rest comes from the business and financial sectors, air transport, tourism, transport logistics and education.

In 2016, the United Arab Emirates accounted for 62% of all private equity investments in the Middle East and North Africa by value and 34% of transaction volume. These positive changes were mainly driven by a sharp increase in investments in technology-related sectors – FinTech, IT and e-commerce in particular.