- International business center strategically located between Asia, Europe and Africa.
- Ranked number 1 for Paying Taxes by the World Bank in it’s Doing Business 2016 report.
- Vibrant free economy and one of the most secure and safe societies in the world.
- Very efficient government bodies.
The United Arab Emirates (UAE) is 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 as 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.
Arabic is the first language, with English widely spoken and used in business. The UAE has dirham (AED) as currency, which is pegged to the US Dollar.
TAXATION & LAW:
There is no personal income tax in the UAE and the only corporate taxpayers are foreign banks and foreign oil companies. UAE has a relatively low import duty of five percent on most products brought in from non-GCC countries, except alcohol and tobacco.
The UAE offers investors operating conditions that are among the most liberal and attractive in the world, with
special economic zones and free zones that offer 100 per cent ownership, repatriation of profit and capital as well as exemptions from taxes.
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 that 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 effect 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 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.
3) 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) and can be set up 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.
Our company offers a full range of corporate services, from free-zone, local and off-shore company formation, to accounting services, auditing support, bank account opening, resident visa services, business advisory and compliance services.