Detailed Comparison: Romania vs. UAE Advantages, Additional Benefits, Example comparison
Top 3 Advantages for UAE
Low Taxation: Enjoy a tax-free environment or significantly lower taxes compared to Romania.
Ease of Doing Business: Experience streamlined processes with minimal bureaucracy.
Strategic Location: Benefit from the UAE’s prime location as a global trade hub.
Additional Benefits of the UAE
Infrastructure and Innovation: Enjoy state-of-the-art infrastructure and a dynamic business environment driven by innovation.
Quality of Life: High standards of living with excellent healthcare, education, and lifestyle options in a safe, multicultural society.
Global Trade Hub: Benefit from the UAE’s strategic location at the crossroads of Europe, Asia, and Africa, providing access to major international markets.
Top 3 Advantages of UAE for Business and Freelancers:
Low Taxation: The UAE offers a tax-free environment for many types of businesses and freelancers, which significantly reduces the overall cost burden compared to Romania.
Ease of Doing Business: Setting up a business in the UAE is streamlined with fewer bureaucratic hurdles and quicker processing times compared to Romania.
Strategic Location: The UAE serves as a gateway to major international markets, providing excellent connectivity and opportunities for global trade.
Detailed Comparison Company Taxation in Romania vs. UAE
Romania
SRL Micro 1%:
- Applicable for small businesses with a turnover not exceeding 60,000 euros.
- Tax rate: 1% on turnover.
SRL Micro 3%:
- Applicable for small businesses with a turnover not exceeding 500,000 euros.
- Tax rate: 3% on turnover.
SRL Profit:
- Standard corporate taxation for larger businesses.
- Tax rate: 16% on profits.
Freelancers (PFA System):
- Taxed under the real system or standard form of taxation.
- Personal income tax: 10% on income.
- Social contributions: Approximately 25% for social security and 10% for health insurance.
UAE
Businesses:
- Many free zones offer 100% foreign ownership, no corporate taxes, and no personal income taxes.
- Mainland companies are subject to a 9% corporate tax on business profits exceeding AED 375,000 (approximately €92,000).
- Simplified setup processes with less bureaucratic red tape.
Freelancers:
- Freelance permits available in various free zones.
- No personal income tax.
- Flexible visa options and sponsorship opportunities.
Additional Benefits of the UAE:
Infrastructure and Innovation:
- State-of-the-art infrastructure, including world-class airports, seaports, and telecommunication networks.
- High investment in innovation and technology, creating a dynamic business environment.
Quality of Life:
- High standard of living with excellent healthcare, education, and lifestyle options.
- Safe and secure environment with a diverse, multicultural society.
Global Trade Hub:
- Strategic location at the crossroads of Europe, Asia, and Africa.
- Access to a large consumer market and international trade routes.
Example Comparison for companies and freelancers
Example 1: IMM 100 K EURO
Benefits of the UAE
- Higher Net Revenue: In both free zones and mainland UAE, businesses retain more of their revenue due to lower or no taxes. For a business with 100,000 EUR revenue, the net revenue in the UAE is 100,000 EUR, compared to as low as 84,000 EUR in Romania under the SRL Profit system.
- Tax Efficiency: The UAE offers a tax-efficient environment with 0% tax in free zones and a low 9% tax on profits exceeding AED 375,000 in the mainland.
- Simplicity and Predictability: UAE’s tax system is simpler and more predictable, reducing administrative burdens and allowing businesses to focus on growth.
Example 2: Free lancer
Benefits of the UAE for Freelancers
- Higher Net Revenue: Freelancers in the UAE retain 100% of their revenue due to the absence of personal income tax, social security, and health insurance contributions. For a revenue of 100,000 EUR, the net revenue in the UAE is 100,000 EUR, compared to 55,000 EUR in Romania.
- Tax-Free Environment: The UAE provides a tax-free environment for freelancers, significantly increasing take-home pay.
- Simplified Financial Management: Without the need to manage and pay multiple types of taxes, freelancers can focus more on their work and growth.
