May 2021 / United Arab Emirates

The Business Registration & Licensing (BRL) sector of Dubai Economy reports that 15,475 new licenses have been issued during the first quarter of 2021, a growth of 19% compared to Q1 2020, when 13,027 licences were issued. This highlights the resilience of the business environment of Dubai and the emirate’s economic competitiveness and ability to attract businesses to across various sectors. Of the new licenses issued in Q1 2021, 58% were professional (8,935), followed by 41% commercial activities (6,290), and the rest distributed among the tourism and industrial activities. In terms of distribution of the new licenses according to location, Bur Dubai accounts for the largest share (8,220), followed by Deira (7,236), and Hatta (19). The top sub-regions were: Al Fahidi, Burj Khalifa, Al Khabaisi, Port Saeed, Trade Centre 1, Al Marar, Al Barsha 1, Naif, and Riggat Al Buteen. During the first quarter of the year, 99,887 business registration and licensing transactions were completed, a growth of 8% compared to 92,325 in Q1 2020, demonstrating the vital role of Dubai Economy in delivering value-added services to the public in Dubai. License Renewal accounted for 38,090 transactions during Q1 2021, a 4% growth compared to Q1 2020 (36,484). This underlines the benefits from the economic stimulus package launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council, which allows renewal of commercial licenses without lease contract. Auto Renewal via text messages during Q1 2021 accounted for 20,923, 16% growth compared to Q1 2020 (18,061). The number of Trade Name Reservation was 17,397, Initial Approvals reached 13,914, and the total number of Commercial Permits was 3,077. Dubai Economy highlighted the importance of collaborative work by the government and private sectors. The private sector supports economic development by launching competitive and value-added projects under the wise leadership of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai. You can obtain any trade license or launch a business in a matter of minutes through ‘Invest in Dubai,’ the first integrated digital business set-up platform, which simplifies the business journey without the need to visit service centres. The platform provides initial approval, reservation of a trade name, issuance of instant licences, Dubai SME licences, Intelaq licences, DED Trader licences, in addition to electronic Memorandum of Association, and the renewal of commercial licences.   Source: Government of Dubai - Media Office

The UAE Federal Tax Authority (FTA) has extended the VAT registration of sole establishments to legal persons. The FTA confirmed that a legal or natural person owning a number of sole establishments needs to obtain only one VAT registration for all its sole establishments and that the FTA does not require separate VAT registrations for such establishments.

The VAT registration should be obtained ideally in the name of the natural person owning the sole establishments. However, if a natural person, owning multiple sole establishments, wishes to obtain the VAT registration in the name of one of its sole establishments, the person may apply to the FTA accordingly. The value of supplies made by the natural person and all its sole establishments must be aggregated to assess whether the VAT registration threshold has been exceeded.

The FTA further provides that it will review such VAT registrations in certain cases and inform the relevant taxable persons of the corrective steps they should take, if any.

It should be noted that, for VAT purposes, a one-person company LLC or other similar entities are not considered sole establishments, and are seen as a distinct and separate legal person from their owner unless the relevant applicable legislation states otherwise.

The FTA published the extension on VAT registration of 'Sole Establishments" in public clarification No. VATP026 on 5 May 2021. The public clarification No.VATP026 replaces the clarification No. VATP021 which limited the VAT registration to sole establishments owned by a natural person.