As a geographical and economic hub of the Middle East, global
investors see the United Arab Emirates (UAE) as a vital element of their
operations. Dubai is the second largest emirate and is located as the most
important port and commercial center of the UAE. It has worked to become a
widely diversified economy. Critical sectors include manufacturing, logistics,
financial services, information technology, retail, travel, tourism, medical
care and education, as well as a strong focus on green technologies.
To attract international business, Dubai has invested heavily
in its transportation, telecommunications, energy and industrial
infrastructure. There are no taxes on income or capital in Dubai, except for
oil and national banks, and there are no withholding taxes. Businesses in Dubai
can gain additional significant advantages due to the absence of foreign
exchange controls, trade barriers or quotas, which makes it an ideal place for
business creation and business formation.
The main law that provides for the registration of companies
on land in Dubai is the Companies Law. It establishes all the rules that must
be met before and after the registration of a company.
In the case of offshore companies or free zones in Dubai, each
authority imposes its own registration requirements.
The procedure to open an offshore company in Dubai differs
greatly from that necessary to incorporate a company on land. If currently, you
are not sure which one you need, consider the following:
1) a) an offshore company (RAK Offshore, for example) has no
special requirements or limitations with respect to the owners / shareholders
of the company while
b) a company on land does not allow total foreign
ownership (the company requires a local "sponsor"). For more
information on the requirements, see: Establishment of a company on the UAE
land.
2) a) an UAE offshore company gives 0% corporate tax while
b) a company on land has fiscal
obligations and compliance requirements according to UAE legislation.
3) a) an offshore company cannot be activated within the UAE;
b) a company on land is designed
to do business in the Emirates.
To summarize: if you are not interested in the Dubai market
(your clients are not within Dubai) and only want business set up in UAE to
take advantage of the tax regime, privacy and / or offshore banking, then it is
advisable to start an offshore company in one place on land.
Setting up a business in Dubai requires a thorough
investigation and most of the time it is attractive for professional services.
Our business training agents in Dubai can help you with more details on the
main steps if you want to open a business in Dubai.
A foreign company that wishes to setup a business in the UAE may
choose to establish operations as a branch, representative office or registered
company, or it may designate a commercial agent for selling its products in the
UAE market or export them. New companies may also choose to carry out their
activities from a Free Zone, which is a designated and self-regulated area
established to catalyze economic activity within an emirate and is governed by
its own set of rules and regulations. There are about 40 free zones in the UAE,
with more in development.
It is important to have a complete understanding of your
options before deciding how to establish your company's presence in the UAE.
The overall growth of your company in the United Arab Emirates may be hindered
when making the wrong decision, therefore, consider the following points when
deciding the best structure for your needs.
Business Link UAE’s team of professional business training
specialists help local and foreign investors to follow the main steps for
business formation in the UAE and open the type of business required. The
business configuration in the UAE is not difficult, but many foreign
entrepreneurs do not know the local regulations, so it is recommended to
contact a local agent for the configuration of the company in the UAE. The
agent will explain to the foreign investor the differences between local and
foreign companies and those established in free zones and will help him choose
the one that is suitable for his business needs. Then, the entrepreneur must
prepare the documents for the formation of the company in the UAE and begin the
incorporation procedure.
