What is a “Distribution and Service Centre” Business?

A “Distribution and Service Centre” Business refers to two distinct activities that are covered under one “Relevant Activity” heading.

A UAE entity is considered engaged in a Distribution Business if it:

1. Purchases goods from a Foreign Connected Person; and
2. Import those goods into the UAE; and
3. Distributes those goods outside the UAE.
A UAE entity is considered engaged in a Service Centre Business if it:

1. Provides services to a Foreign Connected Person; and
2. Those services are in connection with the Foreign Connected Person’s business outside the UAE. The economic substance requirements for a Distribution and Service Centre Business are applicable to UAE entities whose main activity is distribution and/or service centre operations. Licensees engaged in Banking, Insurance, Investment Fund Management, Lease-Finance, Shipping, or Headquarter Business may also purchase goods for, and/or provide services to foreign group companies as a normal part of their business operations. To prevent duplicate reporting, such Licensees are not also considered engaged in a Distribution and Service Centre Business. UAE entities that purchase and sell goods from and to third parties, or that provide services to third parties, are not subject to the Regulations (as a Distribution and Service Centre Business).

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