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Business Setup

UAE Market

UAE is the leading regional trading hub; it offers access to a market of outstanding potential for overseas companies. Among its key characteristics are:

  • A growing market
  • A prosperous market
  • A diversified market
  • An accessible market

The Business Environment

UAE offers business sector all the advantages of a highly developed economy. The infrastructure and services match the highest international standards, facilitating efficiency, quality and service. Among the benefits are:

  • Free enterprise system.
  • Highly developed transportation infrastructure
  • State-of-the-art telecommunications
  • Top international exhibitions and conference venue
  • High quality office and residential accommodation.
  • Reliable power, utilities etc
  • First class hotels, hospitals, schools, shops and Cosmopolitan lifestyle.

Costs in Dubai

A Dubai business setup has several advantages from a cost factor viewpoint. Most benefits are correlated to the type of business been setup, but in general, there are some guaranteed advantages, including:

  • No income taxes
  • No corporate taxes
  • No trade barrier
  • No foreign exchange controls
  • Competitive energy costs
  • Competitive real estate costs
  • Competitive labour costs
  • Competitive import duties (4% with several exemptions)

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Legal Structures for Setting up Business in Dubai

The Federal Law stipulates a total local equity of not less than 51% in any commercial company and defines seven categories of business organisations, which can be established in Dubai. It sets out the requirements in terms of shareholders, directors, minimum capital levels and incorporation procedures. The seven categories of business organisation defined by the Law are:

  • General partnership company
  • Partnership-en-commendam
  • Joint venture company
  • Public shareholding company
  • Private shareholding company
  • Limited liability company (LLC)
  • Share partnership company

of the above seven company types, LLCs are more commonly chosen by the foreign investors.

Apart from these seven categories, investments are encouraged through:

  • Branches and representative offices of foreign companies
  • 100% foreign owned professional firms
  • Free Trade Zones

Limited Liability Company

  • A Limited Liability Company can be formed by a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the Company's capital. Most Companies with expatriate partners have opted for this Limited Liability Company, due to the fact that this is the only option which will give maximum legal ownership i.e. 49% to the expatriates for a trading license.
  • Fifty-one percent participation by UAE nationals is the general requirement for the Limited Liability Companies. Therefore the normal shareholding pattern for an LLC is:
    • Local sponsor - 51%
    • Foreign Shareholder (s) - 49%
  • While foreign equity in the company may not exceed 49%, profit and loss distribution can be mutually agreed. Responsibility for the management of a Limited Liability Company can be vested in the foreign or national partners or a third party.

The time required to form a company will be approximate 1-2 weeks from the date of receipt of all the documents. The procedure and cost breakup will be given upon request.

Option # 1 New Company Setup

Documents Required

Documents Required for All Cases:

  • Application Forms – will be prepared by Our Firm.
  • Memorandum of Association – will be prepared by Our Firm.
  • Trade name of the proposed entity (At least three names should be submitted).

A) Requirements for Individual Applicants:

  • Passport Copy – will be attested by our firm.
  • Bank Reference Letter – letter can be issued by the applicant’s existing bank. A template can be forwarded by Our Firm. (original required)
  • Proof of residence – Any document that establishes the physical address of the applicant; e.g.;trade license, electricity bill, water bill, telephone or landline bill. (Original is required).
  • Any other documents requested by the Registrar during the incorporation process.

B) Requirements for Corporate Persons Applicants:

  • Passport Copies for the shareholders – will be attested by our firm.
  • Passport copies and C.V. (Resume) for the Manager.
  • Proof of trade name reservation (will be provided by Our Firm).
  • Proof of initial approval for the activities will be provided by Our Firm
  • Personal Information sheet for each shareholder and manager (Template will be forwarded by Our Firm).
  • Memorandum of Association for your existing company/ entity at place of origin. Must be attested and notarized by the UAE Embassy.
  • Article of Association for your existing company/entity at place of origin must be attested and notarized by theUAE Embassy.
  • Board resolution to be resolute by the board of directors for your existing company/entity at place of origin expressing intent for establishing a new setup abroad. Must be attested and notarized by the UAE Embassy. (Template will be forwarded by Our Firm).
  • Certificate of registration (if any) for your existing company/entity, license or certificate of incorporation your existing company/ entity attested and notarized by the U.A.E Embassy.
  • Certificate of good standing for your existing company/entity issued by the registrar of the companies at the place of origin. (The template can be forwarded by Our Firm upon request).

Branch / representative Offices of Foreign Commercial Companies

The Commercial Companies Law covers the formation and regulation of branches and representative offices of foreign companies in the UAE and stipulates that they may be 100% foreign owned, provided a local service agent is appointed.

A branch office, legally regarded as part of its parent company, is a full-fledged business, permitted to perform contracts or conduct other activities as specified in its license. A branch office may only be engaged in activities similar to those of its parent company.

Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local service agents. Local service agents - also sometimes referred to as sponsors - are not involved in the operations of the company but assist in obtaining visas, labour cards, etc and are paid a lump sum fee per annum. The time required to form a branch of a foreign company is approximately 3-4 weeks from the date of receipt of all the documents.

Business plan, current profile and last two year financial statements must be submitted to prove the credibility of the company. The Companies that are of trading nature must have manufacturing facilities at its country of origin. All branch ventures are subject to an approval of the Ministry of Economy.

A representative office, on the other hand, is limited to promoting its parent company's activities, i.e. to gather information and soliciting orders and projects to be performed by the company's head office. Representative offices are also limited in the number of employees that they may sponsor. Procedures are same for representative office setup except two year financial statements are not mandatory.

Option # 2 Branch Setup

Documents Required

Documents Required for All Cases:

  • Application Forms – will be prepared by Our Firm.
  • Memorandum of Association – will be prepared by Our Firm.
  • Trade name of the proposed entity (At least three names should be submitted).

A) Requirements for Individual Applicants:

  • Passport Copy – will be attested by our firm.
  • Bank Reference Letter – letter can be issued by the applicant’s existing bank. A template can be forwarded by Our Firm. (original required)
  • Proof of residence – Any document that establishes the physical address of the applicant; e.g. trade license, electricity bill, water bill, telephone or landline bill. (Original is required).
  • Any other documents requested by the Registrar during the incorporation process.

B) Requirements for Corporate Persons Applicants:

  • Passport Copies for the shareholders – will be attested by Our Firm.
  • Passport copies and C.V. (Resume) for the Manager.
  • Proof of trade name reservation (will be provided by Our Firm).
  • Proof of initial approval for the activities will be provided by Our Firm).
  • Personal Information sheet for each shareholder and manager (Template will be forwarded by Our Firm).
  • Memorandum of Association for your existing company/ entity at place of origin. Must be attested and notarized by the UAE Embassy.
  • Article of Association for your existing company/entity at place of origin must be attested and notarized by the UAE Embassy.
  • Board resolution to be resolute by the board of directors for your existing company/entity at place of origin expressing intent for establishing a new setup abroad. Must be attested and notarized by the UAE Embassy. (Template will be forwarded by Our Firm).
  • Certificate of registration (if any) for your existing company/entity, license or certificate of incorporation your existing company/ entity attested and notarized by the U.A.E Embassy.
  • Certificate of good standing for your existing company/entity issued by the registrar of the companies at the place of origin. (The template can be forwarded by Our Firm upon request).
  • Capital - Dubai Airport Free Zone (DAFZA) - Branch Setup
  • No Capital required

Doing Business in Dubai Free Zones

Special incentives are available for free zone business setups, including the following.

  • 100% foreign ownership and control
  • Renewable 15-year guarantee of no taxation
  • No customs duties
  • Flexible investment options
  • Efficient transport and distribution facilities
  • Full administrative and recruitment support

Free Trade Zones

Establishing a business entity in one of the UAE’s Free Trade Zones (FTZs) can be an extremely attractive option for foreign investors. The major attributes of a free zone are:

  • 100 per cent foreign ownership of the enterprise
  • reduced or different trade barriers,tariffs and quotas
  • 100 per cent repatriation of capital and profits
  • Corporate tax exemptions for up to 50 years
  • No personal income taxes
  • Assistance with labour recruitment, and additional support services, such as sponsorship and housing.
  • An independent Free Zone Authority (FZA) governs each free zone, and is the agency responsible for issuing FTZ operating licences and assisting companies with establishing their business in the FTZ.
  • Investors can either register a new company in the form of a Free Zone Establishment (FZE) or simply establish a branch or representative office of their existing or parent company based within the UAE or abroad. An FZE is a limited liability company governed by the rules and regulations of the Free Zone in which it is established. Except for acquiring nationality in the UAE, the provisions of the CCL do not apply to FZEs, provided that the Free Zones have special provisions regulating such companies.
  • However, free zone companies may only operate within the free zone boundaries and are generally limited to performing solely thouse activities listed in their licence.

In addition to free zones, major industrial clusters such as Abu Dhabi’s Higher Corporation for Specialized Economic Zones (HCSEZ) are hubs for manufacturing, logistics and trade across a number of sectors, offering unique opportunities for efficiencies of scale and market access. Specialised Economic Zones offer investment incentives such as reduction on infrastructure costs, administrative support, simplified approvals procedures and residential cities for workers. Companies situated in these zones are subject to the requirements of the CCL, including the 51 per cent UAE participation requirement.

Abu Dhabi


Dubai


Sharjah


Ajman


Umm Al Qwain


Ra’s al-Khaimah


Fujairah


Further information is available on the UAE Ministry of Economy website and through each Emirate's Department of Economic Development.


Chamber of Commerce

Chambers of Commerce in each emirate are invaluable sources of information and assistance for anyone intending to do business in the country: they keep investment databases, issue and authenticate licences and other documentation, arbitrate on disputes and provide business facilities, such as meeting and conference rooms.

 

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