Non-resident companies.
The company, which is registered in offshore and that is not deemed resident in the place of registration, in fact, is managed and owned by non-residents of the country where it is registered. The company does not carry out any business and does not accrue benefit in the country where it is incorporated. Such non-resident companies are exempt from any corporate taxes and profit taxes.
Resident companies.
Whereas the company’s registered office is located in the country where it is registered, and whereas the control is exercised by local director, provided it is owned by residents or non-residents of the country, such company shall be deemed resident. In some countries such companies with resident status are treated as resident companies being exempt from the tax payments.
From this perspective, the United Arab Emirates is an extraordinary country, since establishment of tax resident in the company in the UAE does not entail tax payments in the Emirates.
Such company can have activities outside as well as inside the country, enjoy the benefits of using numerous tax treaties UAE has signed and have highly effective business due to absence of taxes.
