COMPANY FORMATION IN THE UAE

CORPORATE SERVICES / Incorporation and Business Establishment
Since Dubai launched Dubai Internet City freezone in the year 2000 company formation in the UAE has taken off.  Ever since, the UAE’s government has focused on making and keeping the UAE the most attractive place to do business, invest and live in the region. 
 

Important reasons for setting up your business in the UAE are:

  • Well connected to the region. As such it is a prime logistical airline and shipping hub.
  • Professional infrastructure.
  • Pleasant place to live, great service and hospitality industry.
  • Timezone: in between East and West.
  • High disposable income of the local population.
  • Absence of direct taxation (no income tax, corporation tax, withholding taxes, wage taxes).
  • Very few restrictions on hiring expatriates.
  • Light regulation.
  • No exchange controls.
  • Low import duties and VAT.
  • Efficient visa procedures.
  • Efficient customs procedures.

Company formation in the UAE has its own peculiarities. Many issues need to be considered when setting up a business in the UAE. These are the most important ones to consider:

  • Set up a business in a freezone or outside the freezone - referred to as mainland companies - or as an International Business Company. The choice will depend on where the customers of the companies will be and where the activities are to be carried out. Mainland companies are setup with the Economic Department of the emirate in question; for instance in Dubai these are companies are registered with the Dubai Economic Department. Dubai International Financial City (DIFC) and Abu Dhabi Global Markets (ADGM) are two freezones that have their own legal and regulatory regime. Here various types of regulated entities can be set as well as unregulated entities such as special purpose vehicles which can be used for asset holding and investment purposes.
  • Which activities to list on the trade license of the company. A company can only engage in a limited number of related activities. It must choose between either a Commercial License, a Professional License or an Industrial License.
  • Whether the activities or products are regulated, in which case additional licenses need to be obtained from the responsible government department(s).
  • If applicable: finding a suitable local sponsor or service agent for the company. Limited Liability Companies (LLC) established in the mainland require a local sponsor while other types of companies require a service agent. A sponsor acquires a 51% ownership in the company but profits can be distributed otherwise. OneWorld MidEast Ltd will advise on which agreements to put in place for your legal protection.
  • What type of UAE legal entity to establish: a LLC, Civil Company, Professional Company, Sole Establishment or whether to set up a Representative Office or Branch.

In general the benefits of setting up a business in a UAE freezone are:

  • 100 percent foreign ownership is allowed
  • A guarantee for 15-50 years against the future imposition of corporation tax is given
  • In gated freezones goods do not need to clear customs and can be processed duty-free and VAT free. If, and once, the goods are provided to the local market they need to clear customs and duty and VAT will be payable
  • Streamlined procedures. Most formalities are typically dealt with through the free zone authorities instead of the various government departments
  • No restrictions on hiring expatriates
  • Usually UAE freezone companies are able to benefit from the 80+ double tax treaties the UAE has concluded.
When you’re ready to take advantage of the business environment that the UAE offer contact us for a free consultation. Our experts will review your existing and planned activities in the UAE, explain your options and provide recommendations. Once you’ve decided on a course of action, we’ll be there to assist you every step of the way, from establishing your legal entity, arranging a reliable local sponsor, obtaining regulatory approvals, putting the right legal protections in place, applying for employment visas and registering for VAT. When you partner with us we can act as your one stop shop for secretarial, administrative, recruitment, legal and accounting services so you can focus on developing your business. Oneworld has helped thousands of clients successfully establish operations in countries all over the world and manages over US$5 billion worth of assets on behalf of entities established for clients.
 

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