The United Arab Emirates (UAE) is a federation of seven emirates located on the Arabian Peninsula. The seven emirates are Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al Quwain, Fujairah and Ras Al Khaimah. The federation was founded in 1971 and is an active member of the Gulf Cooperative Council (GCC). The capital is Abu Dhabi, with Dubai being the largest city in the UAE. It has developed a leading role in business services, including finance, and has effectively created a logistics hub between east and west.
Today, the United Arab Emirates (UAE) has one of the most open and dynamic economies in the world. A number of global business indexes have recognized the advantages that the UAE brings to international business. AT Kearney ranks the UAE as one of the top 20 best places in the world for global service business and also ranks in the top 30 on the World Economic Forum’s “most-networked countries”. It boasts over 31 onshore free-zones in its territory, suited for any business.
- No restrictions on profit transfer or repatriation of capital
- Very low corporate or income taxes
- A currency, the UAE Dirham (AED), that is stable, secure and pegged to the US dollar
- Very low, or non-existent, import duties
The UAE has signed Double Taxation Agreements (DTAAs) with over 40 countries to ensure that individuals will not pay tax to two different governments on income earned in one country.
Like every other country in the world, UAE has various legislations that govern the various sectors in the country. These are federal laws and include immigration laws, employment laws, and company law amongst others.
A Value-added tax (VAT) of 3-5% may be introduced in the following years that will affect the consumer market.
In general, there are three main options when doing business in the UAE:
- Incorporation in mainland UAE as a limited liability company.
UAE Limited Liability Companies (LLCs) are required to have a local shareholder who holds at least 51% of the shares and therefore, the maximum shareholding a foreign business can hold in an LLC is 49%.
- Free Trade Zones – As an alternative to setting up a local company, it is also possible to incorporate in one of the many free zones across the UAE. Free zones are specific areas within the UAE, introduced to attract foreign investment. Each free zone is administered and governed by their own regulatory authorities with their own rules and regulations. The licensing authority within each free zone is responsible for issuing free zone licenses and registering companies. Typically free zones are industry focused and are tailored to specific industries and therefore, only license specific types of activities.Some of the most popular free zones are: • DIFC – Dubai International Financial Centre. • DMCC – Dubai Multi Commodities Centre • • JAFZA – Jebel Ali Free Zone, RAKFTZ – Ras Al Khaimah Free Zone, DUBAI SOUTH (former DWC), AJFZ – Ajman Free Zone, UAQFTZ – Umm Al Quwain Free Zone etc.UAE Free Zone Taxes Free Zones offer major financial incentives to establish business entities. These are primarily focused on exemption from all taxes and duties levied on profits or production. The major incentives offered by the UAE Free Trade Zones are:
- 100% foreign ownership
- 100% repatriation of capital and profits.
- 0% corporate taxes for 50 years
- 0% dividend tax
- 0% withholding tax
- 0% personal income taxes.
- Exemptions from customs duties.
- Absence of currency restrictions.
- Offshore companies / International business companies
Some jurisdictions made available the possibility of incorporating off-shore companies. These companies are not intended to engage in any business within the UAE (whether onshore or within one of the free zones) can set up an entity under the offshore regulatory system.It is necessary to appoint an auditor who must be accredited in the UAE for the local companies and free-zone incorporated companies.These factors, combined with a strategic geographic location, an outstanding and continuously expanding infrastructure and an extremely safe environment, make the UAE an ideal place to do business.Besides the standard incorporation services offered for any free-zone, off-shore jurisdiction or the UAE Mainland, Uni Asia Group can also assist its clients with:
The UAE resident visa is issued for 2-3 years depending on the applicants’ status (employee or investor). Obtaining the UAE Resident Visa will provide you with a lot of advantages:
- Tax free status as an individual
- High standards of living
- Possibility to apply for a Tax Residence Certificate if all conditions are met
- Safe environment
- Attractive business community
The Tax Residency Certificate in UAE is also known as Tax Domicile Certificate. It is issued by the UAE Ministry of Finance to take advantage of the double taxation avoidance agreements signed between the foreign jurisdictions and the UAE. There are certain criteria to obtain Tax Residence Certificate in UAE:
- Company operating in UAE Mainland
- Free Zone Company
- An Individual Business Owner
- Offshore companies
The validity of the tax residency certificate is one year from the date of its issue. Terms and Conditions apply.
As one of the top three largest sectors in the Gulf Region, the UAE’s financial sector has an impeccable reputation. A supportive regulator like Central Bank of the United Arab Emirates sets high standards and issues policies that make the banks of Dubai and other Emirates of the UAE among the most reliable in the world. Most of the banks in the UAE offer low tariffs on banking services, a simplified reporting system, and high customer service quality with very competitive fees.
The procedures involved in opening a bank account in Dubai are quite strict and involve a considerable amount of paperwork. If you require a guided approach to set up a bank account in the UAE, you can rely on the UNI-ASIA Group’s expertise. UNI-ASIA Group offers a wide range of services to assist the clients in opening corporate and personal bank accounts with the leading banks of UAE.
Driving in Dubai is more of a necessity rather than choice, as public transport is still being developed to ensure connection to all parts of the emirate. Thus, it is more convenient to own your own vehicle and travel where you want without having to rely on public transport.
After receiving the UAE residence visa, you are not allowed to drive a car until you have received the UAE driving license. Even to drive a rented car, car rental companies will request a UAE Driving License, once they see a residence visa in your passport.
You may obtain the UAE Driving License by exchanging your existing driving license. To be eligible to do so, you must have a citizenship in one of the following countries, with current residency status in the UAE:
Australia, Austria, Bahrain, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, South Korea, Kuwait, Netherlands, New Zealand, Norway, Oman, Poland, Portugal, Qatar, Romania, Saudi Arabia, South Africa, Spain, Sweden, Switzerland, Turkey, United Kingdom, United States.
Those who do not have a driving license from one of the countries in the above list will require to pass a UAE Driving Test. You will need to undergo training from one of the five authorized driving schools in Dubai before you can get your driving permit.
UNI-ASIA Group can provide you with further details and all the necessary assistance for obtaining UAE Driving License. At UNI-ASIA Group, we will ensure that your needs are met quickly and efficiently.
The DIFC Special Purpose Company (“SPC”) is an increasingly popular corporate vehicle for use in structured finance transactions in the region.
Incorporated under DIFC law, SPCs enjoy the following benefits:
- No foreign ownership restrictions.
- 100% Capital repatriation.
- No requirement to lease a separate office space (the company is required to maintain a registered office and address in the DIFC through its Corporate Service Provider such as Uni Asia Group).
- No audit and accounts filling required and no Annual Shareholder Meeting.
- No withholding tax.
- Zero tax environment situated in the heart of Dubai and close to key markets, financial institutions & advisers.
SPCs also enjoy the certainty afforded by the DIFC’s English speaking & internationally oriented legal & regulatory system, including its sophisticated regime for the registration & enforcement of security & access to the jurisdiction of the DIFC Courts.