Registration of a company in the UAE is the choice of many foreign entrepreneurs. In this article, we will consider the main points that must be taken into account by the future owner when registering and operating the company.
Various types of companies that will have completely different properties are available to open business in Dubai. The most popular among foreign investors is opening a company in one of the free zones.
In total, more than fifty free zones have been created in all UAE emirates. Each free zone provides an opportunity to register a company within this zone. Such a company will work according to the rules established by the administration of this free zone.
Thus, each zone, providing its own rules and its own infrastructure, provides absolutely unique opportunities for the company. An important feature of free zones is not only the complete absence of taxes but also the fact that you can own your company 100% completely. There are no restrictions on the return of capital and the withdrawal of profits. Import and export operations in the free zones are not subject to duties.
The downside of such companies is that they cannot trade in the local UAE market without the involvement of a distributor.
Registration of offshore and local companies
An offshore company is a non-resident company in the UAE. Such a company does not have a physical office requirement. Shareholders cannot receive a UAE resident visa. An offshore company in the UAE is not required to obtain any license, since the company cannot trade and manufacture in the UAE.
An offshore company is an appropriate means to protect assets and accumulations, but not in every free zone it is possible to open this type of company. RAK free zone company setup and several other free zones will suit in such case.
For such a company, there are no requirements for a minimum authorized capital and there is no duty on import and export. A foreigner can own 100% of such a company. An offshore company may own real estate in the UAE and open accounts in UAE banks.
If a foreign businessman registers a local company in Dubai, then a local sponsor or local agent will be required. If a business is registered in the form of a limited liability company, then such a company must have a local owner (local sponsor), which will own at least 51% of the company. Thus, a foreign businessman will own no more than 49% of the company.
However, it is worth noting that the profit can be distributed not in these proportions. Usually, a local sponsor simply receives an annual reward for his participation, and all profits are completely left to the foreign entrepreneur.
Types of licenses available for doing business in UAE
In order to engage in any type of activity in the UAE or in the free zone, the company must obtain a license. In the UAE, there are several different types of licenses.
Available license types depend on the selected free zone. For example, after Ajman free zone business setup it will be possible to obtain such types of licenses:
- Trading License – may be in the form of a General Trade License, or in the form of a license to trade in certain types of goods. Usually, a license to trade in certain types of goods allows the sale of several fairly close groups of goods. A general trade license allows you to trade many types of goods at once.
- Industrial license – permits to produce any product from any raw material. It also permits the assembly of final goods from semi-finished products or parts using industrial facilities. An industrial license will also be required for packaging products.
- Professional License – allows conducting professional activities, such as engineering consultancy, research, audit and accounting, business registration, medical and educational services and other similar services.
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