What does 'Permanent Establishment' mean for a foreign company in the UAE?

Permanent Establishment is the concept that determines when a foreign (non-resident) company's presence in the UAE becomes substantial enough to be taxed here on the profits tied to that presence, even without formally incorporating a local entity. It's typically created when the company has a fixed place of business here — an office, branch, or project site — through which its activity is actually carried out, or when someone in the UAE habitually concludes contracts on the foreign company's behalf. Purely temporary or preparatory presence usually isn't enough to create one.

The practical impact matters: a foreign consultancy sending a team to work from a client's UAE office for a long project, or opening a small liaison office, can unintentionally create a Permanent Establishment — triggering an obligation to register and file a return on the profit attributable to that UAE activity, even without setting up a UAE company. Many foreign businesses underestimate this. RASEEKH assesses clients' cross-border activity to determine whether the Permanent Establishment threshold has actually been crossed.