SETTING UP BUSINESS IN THE UNITED ARAB EMIRATES

With its tax-free nature, the UAE has attracted many entrepreneurs from all over the world; and because it adheres to strict implementation of its policies on privacy and confidentiality, it can also be concluded that the UAE is one of the best jurisdictions for setting up a company.

SETTING UP BUSINESS IN THE UNITED ARAB EMIRATES

With its tax-free nature, the UAE has attracted many entrepreneurs from all over the world; and because it adheres to strict implementation of its policies on privacy and confidentiality, it can also be concluded that the UAE is one of the best jurisdictions for setting up a company.

An added enticement to foreign investors is the UAE's Agreement with several countries, on the Avoidance of Double Taxation, which aims to mitigate tax burden, and therefore, promote international investment opportunities among nations.

Setting up a company in the UAE can be categorized into two, the Non-Free Zone incorporation, which requires at least 51% local ownership; and the Free Zone incorporation, which allows 100% foreign ownership. The following table will illustrate the main difference between a Non-Free Zone and a Free-Zone company:



NON-FREE ONE

FREE ZONE

Requires 51% local ownership

Allows 100% foreign ownership

Allows business transactions within the UAE

Business transactions must be within the Free Zone. Trading of products outside the Free Zone can be done through a local distributor or agent, licensed by UAE




Free Zone Business set up can also be classified into two, the Free Zone Onshore incorporation and the Free Zone Offshore incorporation. The main characteristics of an Onshore and an Offshore company can be illustrated as follows:

ONSHORE

OFFSHORE

100% ownership

100% ownership

100% tax free

100% tax free

Business activities can be conducted inside UAE

Business activities must be carried out outside UAE

The company can have a physical office

The registered office of the company will have to be the office of the registered agent, licensed by the government

The investor and/or employee can apply for a UAE residence visa under the sponsorship of the company

No visa application is allowed


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