It is important to get a few things in place before you start to setup a company in UAE. Defining your business activity correctly and then defining the right type of company is the first step in the process. Setting up a business in Dubai can be a complex process and it is advisable to get local guidance and legal advice about the various incorporation and registration formalities. We provide consultancy and advice in setting up a business in Dubai and will help you to streamline the entire documentation and paperwork in a hassle free and smooth manner, so that you can focus on developing your business in Dubai.
The following types of Business entities are available in UAE:
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Limited Liability Company (LLC): is a common legal type of Business operating in UAE Mainland. The selection for this kind of entity is due to its easiness to approach various restricted sectors. The completion time to incorporate such companies is faster compared to the rest of the Legal Forms. There are few pre-conditions to this legal form:-
– A UAE National is required to Partner with you.
– The shareholding pattern will be 51% for the UAE National and 49% for the Investing Partner.
– Immigration clearance is a requirement for the Investing partner.
– The managerial powers will be vested with the Investing Partner.
The UAE national will accept an agreement to forgo his rights as a partner and will be considered as a retiring partner for a specific fee. The determining factor for the fee will vary on the partner and his family heritage.
Benefits of LLC incorporation
– While foreign equity in the company does not exceed 49%, profit and losses can be shared at a ratio different the share capital.
– The most popular method of establishing a commercial company in UAE
– UAE LLC offers unrivaled access to the wider UAE economy
– No specific minimum capital requirements
– The investor becomes the partner in the company.
– The investor gets the investor visa under which he/her enjoys an investor’s status in the Emirates along with his/her family.
– The investor has the option to commence branches.
– The investor can manage the business without the day-to-day interference with the local partner.
– The assets and capital created will be in the name of the company and not in the name of the local national partner.
– Few restrictions on the activities of UAE LLC
– Easy to open global corporate bank accounts
The free trade zones offer a regulated and secure business environment licensing a whole range of business activities. They boost economy, promote foreign investment and drive growth.Free Zones are planned according to specific business industry groups and offer licenses to companies and entities within those groupings. Each free zone is managed by separate independent Free Zone Authority, and this authority is accountable for issuing business permits and licenses, employee visa and regulating the business requirements.
Advantages of Free Zone
– Complete foreign ownership.
– 100% return of capital and profits.
– Best infrastructure facilities available.
– Very limited restrictions on recruiting labor.
– Shared services and synergies with other companies.
– No personal or corporate income taxes, customs duties, import/export taxes involved.
– No bureaucratic red-tapism.
Major Free Zones in Abu Dhabi
The major free zone options in Abu Dhabi are
– Abu Dhabi Airport Free zone
– Khalifa Industrial Zone Abu Dhabi (KIZAD)
– The Abu Dhabi Media Free Zone (Twofour54)
– Abu Dhabi Global Market – ADGM
Major Free Zones in Dubai
Dubai is the business hub for many prestigious free zones among all emirates. The major free zone in Dubai are:
– Jebel Ali Free Zone (JAFZA)
– Dubai Multi Commodities Centre (DMCC)
– Dubai Media City
– Dubai Internet City
– Dubai Silicon Oasis Authority
– Dubai Airport Free Zone
Major Free Zones in Sharjah
Sharjah is the third largest and third most populous city in the UAE, with a highly diversified economy. The manufacturing, logistics and tourism industries in Sharjah contribute greatly to the economy of the emirate.
SAIF Zone Hamriyah Free Zone Sharjah Media City
Major Free Zones inAjman
Ajman is one of the best destinations to setup your business as the maintenance costs are comparatively low here. You can choose from a free zone, mainland or offshore company in Ajman.
Major Free Zones in RAK
The major Free Zone options in Ras Al Khaimah are
– Ras Al Khaimah Free Trade Zone (RAK FTZ)
– Ras Al Khaimah Investment Authority (RAKIA) Free Zone
– Ras Al Khaimah Media Free Zone(RMFZ
Umm Al Quwain Free Zone
Umm Al Quwain, a thriving economy, acts as a hub for trading and industrial companies. The emirate’s growing popularity as a feasible investment destination has been attracting businesses from all over, be it on mainland or free zone.
Umm Al Quwain is one of the most cost-efficient free zones in UAE that offers widest range of activities. It is ideal for SMEs and micro-businesses.
Offshore Company Formation in UAE An offshore company is a legal entity established in a tax haven or offshore financial center, being protected by specific legislation which guarantees a status of partial or full tax exemption. In some jurisdictions, offshore companies may trade or do business only outside of the country in order to be tax exempt, while in others companies may do local and international business.
Benefits of Setting up an Offshore Company in UAE
– Nil Taxation: Most offshore companies pay no local taxes on the income derived from offshore operations, i.e. from activities outside of the jurisdiction of company formation. These offshore companies include RAK, JAFZA and BVI and others.
– Anonymity: Registrars in most offshore jurisdictions do not disclose information about directors, shareholders and beneficiaries of offshore companies. Thus, the underlying principal may carry out all relevant transactions in the name of an offshore company while remaining anonymous. It is important to note that this applies to legitimate operations only.
– Asset protection: In the international business context, it is usually the laws of the jurisdiction of incorporation that are applied, rather than those, where the company is being sued. Many offshore jurisdictions are renowned for their favorable asset protection laws. Complementing an offshore company with an offshore banking facilities, protects company’s assets even further.
– Ease of Reporting: The compliance reporting requirements for offshore companies are limited, especially in comparison to companies, registered in onshore jurisdictions. Most offshore IBC companies are not required to file annual reports and accounts in the jurisdiction of the company formation. Instead, local authorities charge a flat annual license fee, which is insignificant in comparison to reporting expenses and taxes in onshore jurisdictions.
– Operating Costs and Fees: With limited reporting requirements, offshore companies generally have lower maintenance and operating fees. The cost of compliance, preparation of accounts and auditing in on-shore countries is often considerable while offshore companies save on these particular expenses.
Branch Set up: Branch of a Foreign Company option is apt for a company who wants to tap into the local market and is bound to hold back share-holding.
– A branch office is permitted to promote and market the products of its parent entity.
– Also, It can enter into transactions and offer services to customers.
– Representative offices are only allowed to promote or market the business activity of parent company and cannot enter into a transaction in the name of its company.
Advantages of Branch/ Representative Offices
– No personal income and capital taxes.
– No corporate taxation.
– 100% repatriation of capital and profits.
– No currency restrictions.
– Competitive import duties (5% with many exemptions).
– Abundant and inexpensive energy supply.
– Simple staff recruitment procedures.
– Competitive freight charges.
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