Emirates Company Formation. Operating a business in the UAE under UAE federal law foreign businesses have three main forms to choose from to conduct business in the UAE:
Alternatively, six out of seven Emirates (the exception being Abu Dhabi) offer the possibility to conduct business out of a free zone and three Emirates – Dubai Offshore, Ras al Khaimah Offshore and Ajman offshore – offer an International Business Company regime.
What is a Tax Free Jurisdiction?
If there is no need to sell goods directly to the local market then setting up in a free zone is often more attractive than setting up as a local company, which requires 51 per cent local ownership. The practice is to allow the provision of services through a freezone entity to the local market as long as a significant proportion of the turnover is realised abroad.
The main advantages of setting up in one of the freezones in the UAE are as follows:
The business environment here is “activity driven” and there are many options. We work with a number of Free Trade Zones in assorted Emirates depending on the business activity and requirements. These are onshore Free Zone companies however in most instances these companies do not allow trade in the open UAE market place.
We generally offer bespoke services once we understand the business requirement the number of Visas required and the type of trade.
Free Zone companies allow 100 percent foreign ownership but restrict where the company can do business.
A full onshore company can come in many different forms and is allowed to openly trade in their activity anywhere in the UAE.
To retain 100 percent ownership clients often establish branch offices or representative offices. Otherwise a normal LLC onshore in any of the Emirates requires a Local (Emirati) Sponsor who must own between 51 – 100 percent of the LLC depending on the activity of the company.
In all onshore environments the client will have to visit the UAE in person on a number of occasions. Contact us if you need by way of further information or guidance.
The free zones each have their own free zone authority. These are profit-making entities. Their main source of income is derived from renting office space, collecting license fees, and providing services to the companies operating in the freezone. In all freezones financial statements need to be submitted to the freezone authorities annually.
One of the pleasant side effects of the economic downturn is that freezones are competing for business more so than before. For example, whereas it was an absolute requirement to rent office space until a few years ago, now there are several free zones outside Dubai that have introduced a flexi-desk concept. This means that a room is shared or a desk is rented for a number of hours a month.
The UAE is particularly well positioned to cope with the increasing pressure from onshore tax authorities to provide real economic substance. The UAE free zones offer a very easy and inexpensive way to obtain office space, locate a server, and hire staff: i.e. those factors that are important to determine whether a company has real economic substance. Furthermore the professional infrastructure is developed. A broad range of advisory, support and outsourcing services is available that will further enhance the possibility to locate real business functions here.
About Emirates Country
|Capital city:||Abu Dhabi|
|Region:||A country at the southeast end of the Arabian Peninsula on the Persian Gulf, bordering Oman to the east and Saudi Arabia to the south, as well as sharing sea borders with Qatar and Iran|
|Governing corporate legislation:||Free Zines’ Regulations|
|Type of Law:||Civil|
|Language of Legislation and Corporate Documents:||English/Arabic|