Setting up a business

Under UAE law, foreign entities interested in establishing a formal presence in the UAE have five options: create a permanent establishment, of which there are seven different types; establish a branch office, create an entity in a UAE free zone, create a civil company (only in Sharjah and Dubai), or enter into a commercial agency agreement.

The UAE Commercial Companies Law (CCL) requires that each company established in the UAE has one or more UAE national partners who hold at least 51 per cent of the company’s capital. Companies that undertake certain activities (oil industry, production of electricity and gas, treatment and distribution of water) are exempt from the 51 per cent requirement. Companies established in free zones are also exempt from the 51 per cent requirement, if the relevant free zone has special provisions regulating the company. Foreign banks are exempt from having to appoint a sponsor.

Further information is available on the UAE Ministry of Economy website and through each:

Emirate’s Department of Economic Development.

Abu Dhabi Department of Economic Development

Dubai Department of Economic Development

Ra’s al-Khaimah Department of Economic Development

Sharjah Department of Economic Development

Fujairah Department of Economic Development

Chambers of Commerce:

Chambers of Commerce in each emirate are invaluable sources of information and assistance for anyone intending to do business in the country: they keep investment databases, issue and authenticate licences and other documentation, arbitrate on disputes and provide business facilities, such as meeting and conference rooms.

Abu Dhabi Chamber of Commerce

Dubai Chamber of Commerce and Industry

Sharjah Chamber of Commerce & Industry

Ajman Chamber of Commerce & Industry

Umm al-Quwain Chamber of Commerce & Industry

Ra’s al-Khaimah Chamber of Commerce & Industry

Fujairah Chamber of Commerce, Industry & Agriculture

Free Trade Zones:

Establishing a business entity in one of the UAE’s Free Trade Zones (FTZs) can be an extremely attractive option for foreign investors. The major attributes of a free zone are:

• 100 per cent foreign ownership of the enterprise
• reduced or different trade barriers, tariffs and quotas
• 100 per cent repatriation of capital and profits
• Corporate tax exemptions for up to 50 years
• No personal income taxes
• Assistance with labor recruitment, and additional support services, such as sponsorship and housing.
• An independent Free Zone Authority (FZA) governs each free zone, and is the agency responsible for issuing FTZ operating licenses and assisting companies with establishing their business in the FTZ.
• Investors can either register a new company in the form of a Free Zone Establishment (FZE) or simply establish a branch or representative office of their existing or parent company based within the UAE or abroad. An FZE is a limited liability company governed by the rules and regulations of the Free Zone in which it is established. Except for acquiring nationality in the UAE, the provisions of the CCL do not apply to FZEs, provided that the Free Zones have special provisions regulating such companies.
• However, free zone companies may only operate within the free zone boundaries and are generally limited to performing solely those activities listed in their license.

In addition to free zones, major industrial clusters are hubs for manufacturing, logistics and trade across a number of sectors, offering unique opportunities for efficiencies of scale and market access. Specialized economic zones offer investment incentives such as reduction on infrastructure costs, administrative support, simplified approvals procedures and residential cities for workers. Companies situated in these zones are subject to the requirements of the CCL, including the 51 per cent UAE participation requirement.

Abu Dhabi:

Abu Dhabi Airport Free Zone (ADAFZ)

Abu Dhabi Media Zone Twofour54

Global Marketplace Abu Dhabi (GMAD)

Kizad

Masdar City

Dubai:

Dubai International Humanitarian City

Dubai Airport Free Zone

Dubai Biotechnology & Research Park

Dubai Flower Centre

Dubai Design District

Dubai Gold and Diamond Park

Dubai Healthcare City

Dubai International Financial Centre

Dubai Internet City

Dubai Knowledge Village

Dubai Maritime City

Dubai Media City

Dubai Multi Commodity Centre

Dubai Outsource Zone

Dubai Silicon Oasis

Dubai Studio City

International Media Production Zone

Jebel Ali Free Zone

Dubai Techno Park

Dubai Auto Zone

Dubai International Academic City

Dubai Energy and Environment Park

Jumeirah Lake Towers Free Zone

Sharjah:

Sharjah Airport International Free Zone

Hamriyah Free Zone

Ajman:

Ajman Free Zone

Umm al-Quwain:

Ahmed bin Rashid Free Zone

Ras al-Khaimah:

RAK Free Zone

RAK Investment Authority Free Zone (RAKIA FZ)

Ras al-Khaimah Media Free Zone (RAKMFZ)

Fujairah:

Fujairah Free Zone

Fujairah Creative City

The professional consultants at Vertex Global support our clients to select the most appropriate decision in business setup and guide them through complete procedures of Dubai Mainland company formation and Dubai Economic Department company registration. Contact Business link UAE for Dubai mainland business setup for more details, call +971 (0) 4 329 6687 or e-mail us in info@vertexglobaluae.ae.