Indian tax firms dive into Gulf of opportunity
Indian tax advisory firms are expanding into the Gulf to tap rising demand from multinational and India-linked businesses, as countries in the region—historically known for their tax-free or low-tax environments—roll out new levies and compliance mechanisms.
India-origin consultancies such as Tax Compaas, Nangia Global, AKM Global, Dhruva Advisors, and AMRG Associates, have set up operations in the UAE or are in the process of doing so, industry executives said. Some law firms with taxation divisions such as Cyril Amarchand Mangaldas (CAM) and Luthra & Luthra have also expanded to the region.
The shift follows introduction of corporate tax, personal income tax, global minimum tax rules, and tighter compliance frameworks. The UAE introduced a 9% corporate tax in June 2023 and a 15% domestic minimum top-up tax (DMTT) for large multinational enterprises last year, while Oman is set to introduce a 5% personal income tax on a minimum income of OMR 42,000 ($109,000) from 2028.
Further, the phased rollout of e-invoicing in the UAE from July this year will require companies to upgrade reporting systems and significantly strengthen tax documentation and reporting processes.
E-invoicing will mandate the exchange of machine-readable (XML) invoices between businesses and the Federal Tax Authority (FTA). to eliminate paper, reduce VAT fraud, and automate compliance, enabling real-time transaction reporting. Industry experts said the regulatory shift is creating a surge in demand for specialised advisory, particularly in niche areas such as transfer pricing, restructuring and cross-border tax compliance, where the region currently faces a shortage of experts.
“The transfer pricing regulations here are much wider than in many other jurisdictions because a lot more companies fall under transfer pricing rules,” said Ajay Rotti, founder and CEO of Tax Compaas. The firm set up its Dubai office in October last year, with a strong focus on e-invoicing readiness and transfer pricing advisory. Many businesses in the Gulf are dealing with formal tax documentation and intercompany transaction benchmarking for the first time, Rotti said.
Also, unlike in India, transfer pricing regulation in the UAE applies not just to multinationals but also to large local companies. The UAE’s regulatory framework requires even transactions with connected persons, such as shareholders or promoters, to be benchmarked at arm’s length, significantly widening the scope of transfer pricing compliance. “In a jurisdiction with no personal income tax, structures such as high promoter salaries or profit shifting between mainland and free zone entities come under scrutiny. Transfer pricing essentially acts as an anti-avoidance mechanism to prevent profit shifting,” Rotti explained.
CORPORATE COMPLIANCE
Free zone structuring and corporate tax are among other areas requiring tax advisory, experts said.
“The multinational firms are seeking advice on reviewing their free zone setups, including assessing eligible income, meeting substance requirements and, where needed, shifting certain functions from the mainland to free zones to ensure compliance under the new tax law of the UAE,” said Yeeshu Sehgal, who leads AKM Global’s Middle East practice.
Entities operating in UAE Free Zone are exempted from corporate tax. However, a 9% corporate tax rate applies to income from non-qualifying activities such as certain sales to the UAE mainland. The tax applies to taxable income exceeding AED 375,000 ($102,000) for non-qualifying, domestic, or excluded activities
Besides, the DMTT applies to multinational enterprises with annual consolidated revenues exceeding ¤750 million ($883 million), in compliance with the Organisation of Economic Cooperation and Development’s (OECD) global tax rules.
SECOND WAVE
The introduction of value-added tax (VAT) by the UAE and Saudi Arabia in 2018, followed by Bahrain in 2019 and Oman in 2021, drove a significant deployment of tax professionals by the Big Four firms across the region.
That first wave is now being followed by mid-sized and specialised Indian firms amid rising demand from Indian corporates, family offices and multinational firms using the UAE as a regional hub.
Rajat Mohan, senior partner at AMRG & Associates, who is setting up a Dubai office in April, said many of the firm’s India-based clients already have operations in Dubai, making the expansion a natural progression.
India-origin consultancies such as Tax Compaas, Nangia Global, AKM Global, Dhruva Advisors, and AMRG Associates, have set up operations in the UAE or are in the process of doing so, industry executives said. Some law firms with taxation divisions such as Cyril Amarchand Mangaldas (CAM) and Luthra & Luthra have also expanded to the region.
The shift follows introduction of corporate tax, personal income tax, global minimum tax rules, and tighter compliance frameworks. The UAE introduced a 9% corporate tax in June 2023 and a 15% domestic minimum top-up tax (DMTT) for large multinational enterprises last year, while Oman is set to introduce a 5% personal income tax on a minimum income of OMR 42,000 ($109,000) from 2028.
Further, the phased rollout of e-invoicing in the UAE from July this year will require companies to upgrade reporting systems and significantly strengthen tax documentation and reporting processes.
E-invoicing will mandate the exchange of machine-readable (XML) invoices between businesses and the Federal Tax Authority (FTA). to eliminate paper, reduce VAT fraud, and automate compliance, enabling real-time transaction reporting. Industry experts said the regulatory shift is creating a surge in demand for specialised advisory, particularly in niche areas such as transfer pricing, restructuring and cross-border tax compliance, where the region currently faces a shortage of experts.
“The transfer pricing regulations here are much wider than in many other jurisdictions because a lot more companies fall under transfer pricing rules,” said Ajay Rotti, founder and CEO of Tax Compaas. The firm set up its Dubai office in October last year, with a strong focus on e-invoicing readiness and transfer pricing advisory. Many businesses in the Gulf are dealing with formal tax documentation and intercompany transaction benchmarking for the first time, Rotti said.
Also, unlike in India, transfer pricing regulation in the UAE applies not just to multinationals but also to large local companies. The UAE’s regulatory framework requires even transactions with connected persons, such as shareholders or promoters, to be benchmarked at arm’s length, significantly widening the scope of transfer pricing compliance. “In a jurisdiction with no personal income tax, structures such as high promoter salaries or profit shifting between mainland and free zone entities come under scrutiny. Transfer pricing essentially acts as an anti-avoidance mechanism to prevent profit shifting,” Rotti explained.
CORPORATE COMPLIANCE
Free zone structuring and corporate tax are among other areas requiring tax advisory, experts said.
“The multinational firms are seeking advice on reviewing their free zone setups, including assessing eligible income, meeting substance requirements and, where needed, shifting certain functions from the mainland to free zones to ensure compliance under the new tax law of the UAE,” said Yeeshu Sehgal, who leads AKM Global’s Middle East practice.
Entities operating in UAE Free Zone are exempted from corporate tax. However, a 9% corporate tax rate applies to income from non-qualifying activities such as certain sales to the UAE mainland. The tax applies to taxable income exceeding AED 375,000 ($102,000) for non-qualifying, domestic, or excluded activities
Besides, the DMTT applies to multinational enterprises with annual consolidated revenues exceeding ¤750 million ($883 million), in compliance with the Organisation of Economic Cooperation and Development’s (OECD) global tax rules.
SECOND WAVE
The introduction of value-added tax (VAT) by the UAE and Saudi Arabia in 2018, followed by Bahrain in 2019 and Oman in 2021, drove a significant deployment of tax professionals by the Big Four firms across the region.
That first wave is now being followed by mid-sized and specialised Indian firms amid rising demand from Indian corporates, family offices and multinational firms using the UAE as a regional hub.
Rajat Mohan, senior partner at AMRG & Associates, who is setting up a Dubai office in April, said many of the firm’s India-based clients already have operations in Dubai, making the expansion a natural progression.
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