Business incentives in Dubai

The UAE Ministry of Finance, in an effort to create the most favourable environment for entrepreneurs and investors, has launched a tax incentive programme. This initiative, enshrined in the Federal Decree Law (47) of 2022, provides companies that fulfil certain criteria with the opportunity not to pay corporate tax for an extended period of time as long as certain conditions are met.

Benefits of the exemption:

The corporate tax exemption significantly reduces the costs of small businesses, freeing up significant funds to generate more profits, make investments and expand the business.
The relief avoids additional tax procedures and calculations, and this saves time and resources.
Tax relief creates a more favourable environment for the development of new ideas and technologies, leading to new products and services.

The relief applies to small organisations, except for large organisations with revenues above AED 3.15 billion and those already benefiting from the zero rate, thanks to the registration of their business in free economic zones.

The exact criteria for participation in the support programme are not publicly disclosed. However, they are known to include the following factors:

Firm size. The benefit is mainly aimed at small and medium-sized enterprises (SMEs).
Scope of business. Certain sectors of the economy may be prioritised.
Degree of innovation. Activities to develop new technologies or products may be a higher priority for the benefit.
Number of employees. Organisations that actively create new jobs have an advantage.

Additional advantages of firms that have received the tax credit:

Simplified process of registering and doing business.
Access to government support programmes.
Preference in tenders and government contracts.

Tax relief in the UAE is a powerful tool to stimulate business development and provide a favourable environment for entrepreneurship. It allows you to significantly reduce costs, increase profitability and focus on growth and development. To qualify for the benefit, it is important to fit the criteria, which is not yet publicly disclosed. Remember that it is not a guaranteed right, but an opportunity that can be taken advantage of by eligible companies.

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