The UAE has extended the tax break for small businesses until 2029: what does this mean for entrepreneurs?

Good news for small business owners in the UAE: Small Business Relief has been extended for another few years. Now, companies that qualify for the program and have an annual revenue of up to AED 3 million will be able to benefit from the preferential treatment for tax periods ending before December 31, 2029.

If your business generates up to AED 3 million per year, you may be able to reduce your tax burden and simplify your corporate tax compliance in the UAE. Small Business Relief was created specifically to ensure that small companies and startups do not bear the same tax burden and administrative costs as large businesses.

What is important to know? The AED 3 million limit remains. This means that if your business’s annual revenue does not exceed this amount, you can qualify for Small Business Relief - but only if you meet all the requirements of UAE law.

And here is an important nuance: revenue of up to AED 3 million ≠ automatic receipt of the relief.

You need to check whether your company meets the criteria of the regime, which tax period you have, and whether there are any circumstances that exclude the possibility of applying the benefit.

If you already run a business in the UAE or are just planning to open one, the extension of the benefit until 2029 may affect how you will build a business structure and plan your tax burden for the coming years.

This is especially true for entrepreneurs who:

• are opening their first company in the UAE;
• are moving their business to the UAE;
• work with international clients;
• have several companies in different countries;
• are planning to scale their business.

At the same time, it is important not to just register a company in the UAE, but to build the entire structure correctly. The type of activity, source of income, ownership structure, owner residency, and interaction with other countries can directly affect the tax consequences.

Therefore, before registering a company or changing an existing structure, you should first conduct a tax analysis of your specific situation. If you have a business in the UAE or are planning to open one, contact Antwort Law for a consultation. We will analyze your structure, sources of income and tax obligations and help you understand what opportunities and tax regimes may be available in your specific situation.

Diana Gulevskaya

Head of Office in UAE
Antwort Law