Establishing business in UAE is an excellent way to legitimately book international profits without paying any tax. Besides, there are no capital gains or personal income taxes in UAE.
Company formation in UAE is a reputable, regulated and international trading solution. It is appropriate to use as holding or Investment Company, and is an excellent, long-term option.
The UAE economy is clearly divided between the onshore sector, dominated by local business interests, with restrictions on foreign ownership, and the offshore sector that consists of a number of Free zones.
The Federal Government regulates economic activity separately in each of the seven emirates as well as. Dubai authorities have created an environment that is well ordered without being unduly restrictive and offers operating conditions that are among the most liberal and attractive in the region. There are many options available to international companies and the advantages of having a presence in the Middle East are considerable. It is well known now that businessmen and women in the region prefer to deal with people they know and trust. Relationships are far more important in the Arab world than in western regions.
Advantages of the companies in free zones:
- 100% foreign ownership.
- 100% corporate and personal income tax exemption.
- 100% repatriation of capital and profits.
- Less expensive.
- Abundant and inexpensive energy.
- No currency restrictions.
Compulsory Requirements For Business Setup in Mainland Companies
In mainland, it’s compulsory to have a local sponsor (UAE national) involved when setting up a new business. A trading company must have legal documents to show that 51% of the shares is owned by a local. An expatriate may only own the remaining 49%. However, through a Memorandum of Understanding, these terms can be adjusted to suit the investor’s purposes.
In the case of a professional practice, a local service agent is required, but this agent has no involvement in the company’s business operations, management or profit sharing. The agent will merely be a figurehead representative when drafting legal agreements and establishing other business documentation required in Mainland.
An office address that can be verified by the Dubai Municipality is also a necessity when setting up a new business in Dubai. Office space requirements are varied based on the type of license and it’s the investor’s responsibility to ensure a valid tenancy contract for an office is available at the time of applying for the license.
However, these regulations do not apply to free zone company formations. Dubai free zone companies are 100% owned by the investors/partners and are established within a few days through the relevant free zone authority. Free zones offer sophisticated infrastructure, all facilities and residency visas for investors.
Small Business Owners: Why We Recommend A Dubai Economic Department License For You
1) JAFZA: minimum AED 500,000/-) for a free zone business. No capital is required for a Dubai mainland (DED) license.
2) A free zone license is strictly associated with free zone office space (you have to rent it), but Dubai mainland businesses can be run from a business centre with cheaper rent and all-inclusive services (special provisions are available)
3) Free zone business license and visa costs are cheaper, but it restricts you to work within free zones and international regions only – with a Dubai mainland (DED) license, you can have clients from anywhere in UAE as well as internationally
4) The long-term free zone benefits and services are more appropriate for a large international company than a small business owner.
In both types of companies, there are no income taxes and if you’re thinking of starting a professional practice, you own the company 100%, regardless of whether it’s in free zone or mainland Dubai.
There are over 25 fully operational free zones in Dubai and the neighboring emirates.
Please note: All free zones require you to have share capital arrangements before applying for a license.
List of Free Zones in Dubai and UAE
The UAE has seven emirates, out of which Abu Dhabi is the largest emirate and also the country’s capital. While Abu Dhabi has oil riches and sovereign wealth, it’s Dubai that has gained a reputation for its trading ports and free zones. The free zones listed below offer a range of benefits for entrepreneurs and we are able to act as the mediator to ensure you are provided with everything you need all throughout the establishment process and afterwards.
- Jebel Ali Free Zone
- Dubai Internet City
- Dubai Media City
- Dubai Airport Freezone
- Dubai Knowledge Village
- Dubai International Financial Centre
- Dubai Multi Commodities Centre
- Gold & Diamond Park
- Dubai Silicon Oasis
- Dubai Health Care City
- Dubai Maritime City
- Jumeirah Lake Towers
- Dubai Outsource Zone
- Sharjah Airport International Free Zone
- Hamriyah Free Zone
- Ajman Free Zone
- Ras Al Khaimah Free Trade Zone
- Fujairah Free Zone
Upcoming Dubai Free Zones
- International Media Production Zone
- Dubai Studio City
- Dubai Flower Centre
- Dubai Automotive Zone
- Dubai Biotechnology & Research Park
- Dubai Logistics City
- International Humanitarian City
- Dubai Design City
- Dubai Energy City
- Heavy Equipment & Trucks Zone
Dubai Free Zone Benefits
UAE Free Zones are fully equipped and ready for business with all the amenities, communicational infrastructure and facilities made available for investors. The large number of free zones operating in Dubai and throughout the UAE allows investors to pick and choose the most beneficial form of setup.
Since no local sponsorship or staff recruitment essentials are imposed in free zones, the investor has the complete ownership of the business. Imported raw materials and equipment are exempt from customs duty and exports are free of any levies in free zones.
100% import and export tax exemptions
100% company ownership for investors
100% repatriation of capital and profits
Corporate tax exemptions for 15 years and a further 15 years upon renewal
Personal Income tax exemption
Assistance with all support services, such as staff visas, housing and facilities