Thought Leadership

Recent amendments to the GCC Unified VAT framework highlight the direction of travel towards greater regional coordination. For international companies, the opportunity is regional, but execution remains local. Success depends on a GCC strategy that accounts for what differs between the UAE, Saudi Arabia, Bahrain, Kuwait, Oman and Qatar. Four priorities matter: design the operating model for a growing footprint, build local tax and finance expertise into the plan, decide what to standardise and what to keep local, and treat incorporation as the start of market entry, not the finish. The guiding principle is simple: think regionally, execute locally.

Regional coordination does not remove local complexity

A regional strategy for the Gulf does not mean uniform execution across it. The GCC’s evolving VAT framework illustrates the point. The GCC Unified VAT Agreement provides a common regional framework, while its practical implementation continues to depend on domestic legislation and implementing measures within individual member states. The regional agreement therefore sets the direction, while its practical effect depends on national implementation.

Foreign investment rules are moving in a similar way. Saudi Arabia’s new Investment Law took effect in February 2025, and the UAE has substantially liberalised foreign ownership in recent years, though sector-specific restrictions and licensing requirements can still apply depending on the activity. Together, these developments point to a region that is coordinating more closely at a policy level while leaving implementation, and much of the operating detail, to each jurisdiction. For international companies, that combination is what makes the operating model behind a GCC expansion as important as the decision to expand in the first place.

Four priorities for building a GCC operating model

Uncertainty about the right structure cannot be removed entirely, but it can be reduced by working through the same set of questions before entering each new market rather than after.

1. Matching the operating model to a growing footprint

As a GCC footprint expands, the operating model has to keep pace. Companies need clear answers on where customers are contracted, where employees are based, which activities require a local entity, which functions can be run centrally and how the various entities interact. These are not administrative details. They shape how effectively the regional business can scale.

2. Building local expertise into tax and finance

Tax is where the differences between markets become tangible. Corporate tax, VAT and withholding tax rules vary across the GCC, shaping entity structures, customer contracts and transactions between group companies.

Intercompany arrangements such as management fees, shared costs and financing need to reflect both the commercial structure of the group and the requirements of each jurisdiction involved. Finance and compliance functions should therefore be brought into planning alongside the commercial decision to enter a market, rather than after it. For CFOs, the challenge is not simply maintaining compliance in each market, but creating a regional finance infrastructure that gives leadership visibility across the organisation while accommodating local requirements.

3. Standardise what you can, localise what you must

Not every function needs to be reinvented in every market. Financial reporting, management information, governance, controls and core technology can often be coordinated regionally, giving leadership a consolidated view of the business. Tax, payroll, employment terms, corporate administration, licensing and regulatory compliance must reflect local requirements. Getting that balance right can prevent duplication and complexity that become difficult to unwind later.

4. Treating incorporation as a first step

A licence creates a legal entity. It does not create an operating business. Before entering a new market, companies need clarity on what the local entity will do, which customers it will serve, where employees will be based, how it will interact with the wider group, which functions can be supported regionally and who is accountable for governance and compliance locally.

Building one organisation across six markets

Firms that work through these questions before entering a new GCC market tend to scale more smoothly than those that address them market by market as pressure builds. Successful regional expansion depends on balancing consistency with local expertise. A clear view of what to standardise, what to localise and how each entity contributes to the wider organisation can help keep the operating model scalable as the regional footprint grows. Across the GCC, economic coordination is deepening at a regional level while implementation remains the responsibility of each member state. That combination makes connecting operations across markets as important as entering them in the first place.

The companies best positioned to capture the GCC opportunity will not necessarily be those with the largest number of entities. They will be those that build one connected regional organisation capable of operating effectively across multiple markets. The opportunity is increasingly regional. Capturing it successfully requires local intelligence.

For international businesses assessing or expanding their GCC footprint, Acclime’s Middle East specialists can help connect regional ambition with local execution across market entry, corporate, accounting, tax, payroll and compliance requirements. The aim is practical: a regional operating model that is compliant locally, visible centrally and built to scale.

This article first appeared on the Acclime website, and is intended as general information and does not constitute legal, tax or regulatory advice. Rules and incentives can change, and their application depends on the activities and circumstances of each organisation. Businesses can obtain jurisdiction-specific advice on their proposed activities and structure.