Company in Dubai: can we legally invoice French companies?
Summary
Introduction
Yes, a company registered in Dubai can legally invoice French companies, and no French law prohibits a foreign entity from issuing an invoice to a client established in France. The real question, therefore, is not whether the invoice is valid, but under what conditions it can withstand scrutiny from both sides of the business relationship.
The difficulty lies in the fact that this document is read by two administrations simultaneously. On the Emirati side, it must reflect actual business activity, in accordance with the company's regulations and its corporate tax obligations. On the French side, it becomes a liability for the client, and it is on this basis that tax adjustments are concentrated , far more so than on the format of the invoice itself.
Three sets of rules warrant attention: VAT treatment, the deductibility of the expense for the French client, and the potential reclassification as a permanent establishment when the service is actually provided from France. In addition to these three sets, there is the issue of transfer pricing when the Emirati company and its French client belong to the same group .
The schemes, thresholds, and rates described here are general guidelines, subject to change and should be verified on a case-by-case basis. The answer always depends on the individual circumstances of the executive, the exact nature of the benefit, and the group's structure; only an individual analysis can provide a definitive answer.
Yes, an Emirati company can invoice French companies.
French law does not restrict invoicing to French companies. A client established in France can perfectly well receive an invoice from a service provider registered in Dubai, whether it be a Free Zone Company or a mainland company, and pay it by international bank transfer. Freedom of contract and the freedom to provide services do not stop at the borders of the European Union .
What changes is the tax regime applicable to the transaction and the level of evidence expected from both parties. An invoice issued from the Emirates is not inherently suspicious, but it requires a more substantial file than an invoice issued within France. The tax authorities almost never dispute the existence of the document; they dispute the actual provision of the service it is supposed to compensate for.
This distinction explains why two entrepreneurs operating in the same Free Zone can face very different outcomes during an audit. The first invoices for a documented project, carried out from an office in the Emirates, with deliverables that can be dated. The second invoices for a monthly flat fee with no record of work performed and ends up having to reconstruct after the fact what he should have kept on file as the project progressed .
The tax regime of the Emirati company is not insignificant.
Since the implementation of the UAE corporate tax in June 2023, a company in the UAE is generally subject to a 9% tax rate on profits exceeding a certain threshold, unless it meets the conditions for Qualifying Free Zone Person status, which grants a 0% tax rate on qualifying income only. Services rendered to foreign clients may fall within this scope, but the conditions are strict and require sufficient substance in the UAE .
This point needs to be resolved before developing a billing model, as it determines the group's actual tax burden and overall credibility. A company that invoices significant amounts while declaring qualifying income without corresponding human resources weakens its position in both jurisdictions .
Mandatory information to include on an invoice issued from Dubai
An invoice addressed to a French client must allow them to justify their expense and, if applicable, their VAT return. The required information is standard: full name and address of both parties, license number of the Emirati service provider, the client's intra-community VAT number, sequential number, date of issue, precise description of the service, time spent or quantity, unit price, and total amount. A vague description such as "consulting services" weakens the client's case far more than the service provider's.
When an Emirati company is registered for local VAT, it generally applies a zero rate to services exported to a customer established outside the UAE, which must be clearly stated on the document. It is advisable to include the Emirati TRN number, as it confirms the service provider's administrative existence to both the customer and their bank.
Currency, language, and numbering: the details that matter
There is no requirement to invoice in euros, but an invoice in dirhams or dollars must include the exchange rate used; otherwise, the French client will have to calculate it themselves for their accounting. The language is not mandated either, although a bilingual invoice or one written in French significantly reduces friction during an audit.
Finally, the numbering deserves special attention. It must be continuous, chronological, and without gaps, as an inconsistent series is one of the first red flags an auditor will notice. This seemingly minor detail is sometimes enough to shift the debate to the accuracy of the accounting .
Why does the invoice not include French VAT?
For services rendered to a taxable person, the place of taxation is that of the recipient. Therefore, an Emirati service provider invoicing a French company does not have to collect tax: they issue an invoice excluding VAT, and the French client self-assesses the VAT in their own tax return. This is the principle established by Article 259-1 of the French General Tax Code, extended by the reverse charge mechanism.
Customer-side reverse charge: one entry, two lines
In practice, the French customer declares the tax due at the French rate on the invoice amount, then deducts it in the same step if they are entitled to a full deduction. The operation has no cash flow impact, but it is not optional: failure to reverse charge remains a punishable irregularity, even when no tax is ultimately due .
The invoice therefore benefits from explicitly stating that VAT is not applicable and that the recipient is liable for it. The reasoning changes for a French client who is not subject to VAT, or for certain services related to a building located in France, where specific rules apply. Here again, the precise classification of the service always precedes the choice of the applicable tax regime .
This mechanism also explains why the Emirati company doesn't need to obtain an intra-community VAT number. It's located outside the EU, and it's its client's number that appears on the document. Trying to force a European registration number onto the transaction only complicates matters instead of securing it.
From the French customer's perspective: is the charge tax-deductible?
This is the real point of contention. A French company that pays an Emirati service provider deducts an expense from its taxable income, and the tax authorities can challenge this deduction if the service is not justified. The grounds for this challenge are twofold: an abnormal management act when the price is clearly excessive, and the absence of actual consideration when there is no proof that the service was rendered.
The client must therefore be able to produce a contract, deliverables, written correspondence, a report, or a mission summary. A single invoice, without any record of work performed, remains the most frequent scenario for disputes arising from dealings with service providers established outside of Europe.
Article 238 A and the reversal of the burden of proof
Article 238 A of the French General Tax Code concerns payments made to beneficiaries subject to a preferential tax regime. When applicable, the French debtor must demonstrate that the expenditures correspond to genuine transactions and that their amount is neither excessive nor abnormal. The United Arab Emirates is not on the French list of non-cooperative states and territories, but a very low effective tax rate may be sufficient to trigger this enhanced evidentiary requirement.
In practice, this means that the French client must document the engagement with the same care as a transfer pricing dossier. The requirement is not insurmountable when the service is genuine, but it necessitates discipline from the very first invoice rather than a later reconstruction.
Withholding taxes that may apply
Most consulting services billed from the Emirates are not subject to withholding tax in France. The principle changes when the remuneration takes the form of a royalty: Article 182 B of the French General Tax Code provides for a levy on certain sums paid to individuals without a permanent professional establishment in France, and the 1989 Franco-Emirati convention subsequently capped or eliminated this levy .
Service billed from Dubai | VAT on the French customer side | French withholding tax |
Consulting, strategy, project management | Self-assessment by the lessee | None in principle |
Custom software development | Self-assessment by the lessee | None in principle |
Software license or royalty | Self-assessment by the lessee | Possible, article 182 B |
Transfer of rights, trademarks, patents | Self-assessment by the lessee | Possible, article 182 B |
Equipment rental located in France | Specific rules to check | To be examined on a case-by-case basis. |
Royalties, licenses and software: a fine line
A consulting engagement billed by the hour and a software license developed by an Emirati company are not subject to the same regulations at all. The classification depends on what is actually transferred: know-how, a right of use, or simply a service. A carefully drafted contract avoids reclassification as a royalty and the associated levy.
The benefit of the treaty provisions also requires that the Emirati company be able to produce a tax residency certificate issued by the Federal Tax Authority. This document is frequently requested by the French client or their bank, and obtaining it itself presupposes an applicable tax treaty and an actual presence in the Emirates during the relevant tax year.
When billing betrays a permanent establishment
Legal invoicing requires that the service actually be rendered from the UAE. If the manager continues to work from France, meeting with clients and negotiating contracts there, the tax authorities may consider that the company has a permanent establishment in the UAE as defined in Article 5 of the convention. The profit attributable to this establishment then becomes taxable in France , regardless of whether the invoice is issued in the UAE or not.
The same reasoning applies to the location of the company's effective management. A company run from a Parisian office remains Emirati on paper, but can be considered a French tax resident, with all the ensuing consequences for its financial results. The number of days spent in France plays a crucial role here, and we detailed this calculation and its pitfalls in a recent article.
This is why the issue of invoicing is never addressed in isolation. It stems from the overall strategy adopted when the company relocated to Dubai , which determines where human resources, decision-making, and economic risk are located. The invoice is simply the accounting translation of this strategy , and it inherits both its strengths and weaknesses.
Invoicing one's own French company: the realm of transfer pricing
Many executives maintain a structure in France and have certain services invoiced by their Emirati company. This practice is not illegal, but it places the relationship under the regime of related companies: the price charged must correspond to that which independent companies would have charged . Article 57 of the French General Tax Code allows the tax authorities to reinstate the profit indirectly transferred abroad.
The risk is all the greater when the service is intangible and the difference in rates between the two jurisdictions is significant. Management fee billing calculated without a methodical approach remains the most common item of correction in this type of structure, because it is difficult to justify on the fly.
Document the market value before issuing the invoice
The required documentation is not necessarily extensive for a small organization, but it must exist: a description of the functions performed by each party, the valuation method used, comparative data, and consistency between the invoiced price and the resources actually deployed in the Emirates. A company with no employees or office space that invoices management services to its French subsidiary exposes the group to the risk of reintegration .
The evidence file to be compiled on both sides
A solid case file is built gradually, never the day before an audit. On the Emirati side, it includes the current license, the office lease, proof of the manager's presence, local bank statements, and the tax residency certificate. On the French side, it includes the contract, deliverables, reports, and a record of communications with the service provider.
This discipline is not a mere administrative formality: it is the only effective response to a request for information. Entrepreneurs comparing several destinations, whether it's an entrepreneurial relocation to Portugal or a move to the Bahamas , find the same requirement for substance and traceability everywhere.
The thresholds, rates, and regimes mentioned here remain general guidelines subject to change, and their application depends closely on each executive's specific situation. Consulting a tax relocation advisor in Dubai allows for a thorough verification of the structure's consistency before issuing any invoices.
Testimony from a leader based in the Emirates
The founder of a digital services company, based in Dubai for just over two years, invoices about ten French clients. "My first year, I sent out single-line invoices, without contracts, and nobody said a word to me," he explains. "It was my biggest client who raised the alarm: his accountant refused to process the expense without at least some supporting documentation ."
He then describes a complete overhaul: framework agreement, purchase orders, monthly reports, reverse charge mechanism on each invoice, and a tax residency certificate submitted annually. "The hardest part wasn't the paperwork, but accepting that my invoice also binds my client," he concludes. "Since then, none of my French clients have hesitated to work with an Emirati company."
Frequently Asked Questions
Should an invoice issued from Dubai include VAT?
No, this concerns a service provided to a French company subject to VAT. The invoice is issued excluding VAT, and the client self-assesses the French VAT in their tax return. An explicit statement regarding self-assessment avoids any ambiguity during accounting processing.
Can my French client refuse an Emirati invoice?
While not legally obligated to do so, their accountant will often require a contract and supporting documentation before processing the expense. Providing these documents upfront speeds up payment and secures the deduction for the client.
Do you need an intra-community VAT number to invoice in France?
The Emirati company does not have and does not need this information for a service performed outside the European Union. The invoice shows the French client's number, as they are the ones handling the reverse charge .
Does withholding tax apply to my consulting fees?
Generally, no, provided the service in question is not a fee. The distinction lies in the nature of the right transferred, and a clear contract remains the best protection against reclassification.
Can I invoice my own French company from Dubai?
Yes, provided that the price is respected at arm's length and the service is documented. Flat-rate billing without a demonstrable method or consideration exposes the customer to the reintegration of the profit deemed to have been transferred.
Is an Emirati tax residency certificate essential?
It is not required to issue an invoice, but it becomes necessary to invoke the Franco-Emirati convention, particularly regarding withholding tax. Obtaining it requires an actual presence in the Emirates during the relevant fiscal year.
Conclusion
A company in Dubai can legally invoice French companies, and this isn't a gray area. The key difference lies in the consistency between the invoice issued, the service actually rendered, and the location from which it was provided. The invoice doesn't create the substance ; it merely reflects it.
The best approach, therefore, is to secure three points before the first invoice: the classification of the service, the VAT processing, and the supporting documentation expected by the French client. The figures mentioned here are public and subject to change; only an individual assessment can provide a definitive answer, whether it concerns the Emirates or an entrepreneur's relocation to Panama .
You run a company in the UAE and invoice French clients. You can request a personalized study from Coreway Consulting to validate your invoicing scheme before it is challenged.
