Corporate Migration to the UAE
Economic Substance legislation has recently been introduced in Bermuda, the British Virgin Islands and the Cayman Islands as of 2019 in order to meet the deadline set by the EU for compliance with the OECD’s Base Erosion and Profit Shifting requirements. Due to an international tendency toward transparency and reporting standards these jurisdictions have adopted measures to ensure fair taxation including their new “economic substance” requirements.
In terms of the new Economic Substance legislation, legal entities carrying out relevant activities will need to furnish proof of economic substance by filing details including their total turnover, address, employees in the country and elsewhere, equipment of the entity, as well as management records, amongst other requirements.
The increased monitoring and enforcement carries strict penalty where non-compliance is determined and one should therefore be mindful of the implications involved in establishing an entity or continuing operations in these jurisdictions particularly where the location of the entity is immaterial to the continuation of the business.
In light of the above changes, many owners of established entities in the Caribbean islands may look to re-domicile and move their operations to a less arduous jurisdiction. The United Arab Emirates presents an apt alternative, offering streamlined transfer of business to either free zone or offshore jurisdictions with fewer requirements for registration and renewal of companies.
The UAE is committed to meeting the OECD requirements and thus satisfies those standards introduced by the CRS while presenting far less onerous processes for incorporation and re-domiciliation.
Through re-domiciliation, an established company is able to transfer its domicile to another jurisdiction while maintaining its legal identity, assets, obligations and liabilities. Currently the Dubai International Financial Centre (DIFC), the Abu Dhabi Global Market (ADGM), Dubai Creative Clusters Authority (DCCA), and the Dubai Multi Commodities Centre (DMCC), amongst others, permit corporate migration following initial application and due diligence completion.
With increased skepticism and crackdown related to golden passports and citizenship for investor schemes globally, residency in the United Arab Emirates offers clear solution to business owners seeking to relocate and re-domicile their portfolio while availing those advantages provided to residents including the following:
- Tax relief through the UAE’s vast network of double tax treaties
- No quota for residency permit issuance
- Economic opportunity
- Unparalleled connectivity
Once the entity has been relocated, the acquisition of residency in the UAE may be availed, offices in premier locations across the Emirates may be leased, and employees sought from the multitude of expatriates that call the UAE home. The possibilities for one’s business are endless.
The global shift toward transparency and reporting is well under way with enhanced international scrutiny toward entities established in historically lenient jurisdictions. We recommend that investors, and individuals interested in relocation take advantage of the UAE’s prime location, re-domiciliation capabilities and residency options without delay and we, at Senat MEA, remain available to assist you throughout the process.
Senat MEA is a full service platform, founded in 2014, with roots in Dubai that go back as far as 1984. Dedicated to trust and efficiency, at Senat MEA we ensure that our clients are equipped with leading counsel in navigating the region while taking into account the global nature of business and the importance of developing long lasting relationships.
Senat MEA’s team of lawyers, accountants and business consultants are highly qualified and come from a variety of backgrounds enabling us to supply you with incomparable expertise and outstanding services.