Can a foreign company register for VAT in the UAE?

Yes, a foreign company can register under VAT in UAE, but only when it falls under the Federal Tax Authority - FTA criteria. It is mentioned in UAE VAT Law that businesses which are not resident in the UAE should also be obliged to register for VAT if the value of their taxable supplies or expenses in the state exceeds the limit as determined. The compulsory threshold for registration is AED 375,000 and on a voluntary basis, an applicant company may apply for registration when its supplies or expenses are above AED 187,500.

This can be directly done through the e-services portal of the FTA. To set up an online account and access it, the company has to describe its activities, financial records, and other relevant legal documents. Foreign companies are also allowed to appoint a tax agent or representative in order to ensure proper compliance with UAE VAT obligations, including filing returns and making timely payments.

VAT registration would be beneficial for the foreign company to claim input VAT on qualifying expenses, thus reducing the overall cost of doing business in the UAE. On the other hand, a registered business must maintain proper records, issue VAT-compliant invoices, and file VAT returns on time. Failure to comply could lead to the imposition of fines or penalties; hence, foreign companies should be fully aware of regulatory requirements.

The added advantage of value-added tax registration for businesses involved in frequent transactions in the UAE will be increased legitimacy and transparency. This will go a long way in placing such companies in a favorable position for possible collaborations with UAE-based companies that may require VAT compliance as part of the qualification to their vendor list. Thus, the VAT registration will be one important step for the overseas company for doing proper business in the UAE market.