If a business is incorporated in the UAE, it will automatically be categorized as a ‘Resident’ Entity for UAE Corporate Tax purposes. Similarly, an individual conducting business activities in the UAE will also be considered a Resident Entity for UAE Corporate Tax.

A foreign company can be classified as a Resident Entity for UAE Corporate Tax if it is “effectively managed and controlled” within the UAE. Determining where a company is effectively managed and controlled takes into account all relevant factors, but a key indicator may be the location where the company’s board of directors makes strategic decisions impacting the company.

UAE registered entities like Limited Liability Companies, Private Joint Stock Companies, Public Joint Stock Companies, and other legal entities in the UAE will be liable for Corporate Tax as Resident Entities.

According to the Corporate Tax Law, a legal entity is categorized as a Non-Resident Entity if it is registered in a foreign nation and its management and control predominantly occur outside the UAE. Likewise, an individual is designated as a Non-Resident Entity for UAE Corporate Tax reasons if they are not involved in a taxable Business or Business Activity within the UAE.