At NH Management, we understand the critical role that tax incentives play in the success of prescribed companies in the UAE. The UAE offers a highly favourable tax environment to attract foreign investment and promote economic growth. In this article, we’ll look in-depth at the tax benefits for prescribed companies in the UAE, helping you understand how these incentives can enhance your business operations.

Establishing a prescribed company in the UAE provides not only regulatory flexibility but also a strong foundation for tax planning and asset protection. These advantages make prescribed companies particularly appealing for family offices, holding structures, and private investment vehicles seeking long-term efficiency.

Corporate Tax Exemptions for Prescribed Companies in Dubai

One of the most attractive tax benefits for prescribed companies in the UAE is the exemption from corporate tax. The UAE does not levy a federal corporate tax on most business sectors, which allows companies to retain a larger portion of their earnings.

• No Federal Corporate Tax: Unlike many other countries, the UAE imposes no federal corporate tax on most entities, allowing prescribed companies to maximise profits.

• Sector-Specific Exemptions: Certain industries, such as oil and gas, may follow distinct tax rules, but prescribed companies in other sectors typically benefit from full corporate tax exemptions.

According to the UAE Ministry of Finance, the corporate tax regime is structured to support diversification and ensure that the UAE remains one of the world’s most business-friendly jurisdictions.

Value Added Tax (VAT) Benefits

Introduced in 2018, VAT in the UAE is set at a relatively low rate of 5%. However, prescribed companies can enjoy a range of VAT-related benefits:

• Zero-Rated VAT: Export-oriented prescribed companies may qualify for zero-rated VAT on their goods and services, effectively exempting them from VAT charges.

• VAT Refunds: Companies operating in specific eligible sectors can apply for VAT refunds, further reducing their tax liabilities and improving cash flow.

Proper VAT registration and filing processes are essential to fully enjoy these tax benefits for prescribed companies in the UAE, ensuring compliance while maintaining operational efficiency.

These VAT benefits make the UAE particularly advantageous for international holding structures and family offices managing cross-border investments.

Customs Duties Exemptions

Prescribed companies operating in the UAE also enjoy major advantages related to customs duties—particularly for those involved in international trade or import-export operations:

• Duty-Free Import and Export: Companies based in free zones can import and export goods without paying customs duties, improving operational efficiency and cost competitiveness.

• Reduced Duties for Certain Goods: Even outside free zones, prescribed companies may benefit from reduced customs duties on specific goods and materials essential to their operations.

Free Zone Tax Incentives

The UAE’s numerous free zones offer additional tax benefits for prescribed companies that make them highly attractive for business operations:

• 100% Foreign Ownership: Unlike mainland entities, free zone companies can be wholly foreign-owned, offering complete control over operations.

• Guaranteed Tax Holidays: Many free zones offer tax holidays ranging from 15 to 50 years, providing long-term tax stability and predictability.

• No Import or Export Taxes: Free zone companies are entirely exempt from import and export taxes, further reducing operational costs.

For a detailed overview of the DIFC’s prescribed company structure, read our guide on Understanding the Legal Framework of Prescribed Companies in the UAE.

Unravel Full Tax Benefits for Prescribed Companies in the UAE with NH Management

Whether structured within the DIFC, ADGM, or other UAE free zones, prescribed companies can strategically utilise available exemptions to enhance profitability, improve group-level tax efficiency, and support global investment expansion.

The tax benefits for prescribed companies in the UAE are extensive and designed to foster a thriving business environment. From corporate tax exemptions and VAT advantages to customs duty relief and long-term free zone incentives, these measures make the UAE one of the most efficient and strategic jurisdictions for business setup and investment.

At NH Management, we help clients navigate these complex frameworks to structure their entities for maximum tax efficiency and compliance.

Contact us today at info@nhmanagement.com or call +971 4 222 1327 to schedule a consultation.