Tax Haven Dubai

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Tax haven Dubai is becoming a popular jurisdiction for the creation of corporate vehicles and the investment opportunities that are increasingly available. Tax haven Dubai is a zero tax emirate and to present has no information exchange agreements. This allows tax haven Dubai to be characterized as one of the jurisdictions that still guarantees its customers with privacy, security and discreet services.

Country Overview

Tax haven Dubai is located on the southern cost of the Persian Gulf, directly with the Arabian Desert. This is found on the Arabian Peninsula and forms one of the 7 emirates, sharing borders with Sharjah, Sultanate of Oman and Abu Dhabi.

Tax haven Dubai is one of the world fastest growing financial centres. Most of tax haven Dubai’s growth has been attributed to its oil resources, which for any years was said to be the backbone of the country’s economy. On a daily basis an estimated number of 240,000 barrels of oil are exported. Tax haven Dubai’s economy, however, is well diversified into tourism, the real estate and construction sector, which accounts for 22.6% of GDP, trade – accounting for 16% of GDP, entrepot, which contributes 15% of GDP ad financial services. In 2005, tax haven Dubai had an estimated gross domestic product (GDP) of USD37 billion.

Dubai Offshore Financial Services

Tax haven Dubai has adopted an investor friendly climate that encourages trade and doing business, so much to the extent that with the exception of companies involved in the oil industry and banking institutions, al other companies are exempt from corporate income taxes, import duty concessions on certain items and pay a uniform duty of only 4% on all other imported goods.

Dubai Offshore Legislative Framework

Dubai’s financial legislative system was created by combining both Federal and Dubai Law; the synthesized framework by which the DIFC is governed.

In addition to Federal Law, the fundamental legislation in Dubai includes laws which are carried out by both the DFSA and the DFIC. These laws are passed by the Ruler of Dubai and are only applicable to the DIFC. These laws represent the core framework under which financial services and activities in tax haven Dubai are provided and conducted. Some of these include the:

  • Markets Law (2004),
  • Trust Law (2005),
  • Investment Trust Law (2006),
  • Regulatory Law (2004),
  • Collective Investment Law (2006)
  • Law Regulating Islamic Financial Business (2004)

Dubai Financial Services Authority (DFSA)

All financial and ancillary services carried on within the Dubai International Financial Centre (DIFC) are regulated by the Dubai Financial Services Authority (DIFC). The Regulatory Law (Article 41 (1)) prohibits the conducting of financial services from outside of the DIFC, which was purposely built as a financial free zone.

The DFSA is mandated for the registration and authorization of individuals and organisations offering ancillary and or financial services in Dubai, supervising and ensuring that regulatory codes and rules are respected by service providers and enforcing legislation governing financial services providers and activities within the DIFC. The DFSA is mandated to administer the Markets Law 2004, under which all financial activities and services providers are governed.

An important aspect of the DFSA’s duties include preventing and eliminating money laundering and financial crimes by establishing and enforcing the necessary measures and guidelines for detecting these activities. The DFSA achieves this end through a collaborative effort with the United Arab Emirates Central Bank.

New Developments

In July 2009, a Market Practitioners Panel (Panel) was formed by the DFSA to revamp tax haven Dubai’s Collective Investment Funds (Funds) regime. The Panel consists of 10 experts who have worked in the industry and will be charged with the task of identifying areas which are lacking so as to devise new ways that will enhance the quality and increase the potential of the funds sector in Dubai as a tax haven.

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