etting up a company in the United Arab Emirates is an attractive option for entrepreneurs and businesses all over the world, and these are what make it appealing: prime location, robust infrastructure, and business-friendly policies, making it a country known for innovation and global trade. The following guide details insights on establishing a business in the UAE, from processing, benefits to important considerations. (Company setup in UAE)
Why Choose the UAE for Business Setup?
The UAE offers many benefits for businesses of all sizes. Here are some of the major reasons it is a popular destination:
1. Strategic Location
Being at the crossroads of Europe, Asia, and Africa, the UAE provides easy access to major international markets, and also due to its proximity to emerging economies, it is ideal for global trade.
2. Tax Advantages
The UAE boasts a favorable tax regime, including:
0% Corporate Tax for many sectors (with some exceptions for multinational companies starting in 2023).
No personal income tax.
Low VAT at 5%.
3. World-Class Infrastructure
The UAE boasts the most up-to-date infrastructures, including the best airports, ports, and telecoms, which would therefore facilitate all business activities.
4. Diverse Business Opportunities
Opportunities range from free zones specific to certain industries to a lively local market: real estate, technology, healthcare, tourism, among others.
5. Ease of Doing Business
The UAE government is business-friendly, too, with processes streamlined for company registration, visa issuance, and licensing.
Kinds of Business Organization in UAE
When opening a business in the UAE, you have to decide which kind of legal entity you need, depending on what you need to establish your business.
1. Mainland Company
Ownership: Many sectors now allow 100% foreign ownership.
Advantages: Available to operate anywhere in the UAE, and eligible to bid for government contracts.
Licenses: Commercial, professional, and industrial licenses are offered.
2. Offshore Company
Purpose: Suitable for international trading and asset protection.
Benefits: Tax benefits with no physical office and very confidential.
How to Register a Company in the UAE
Here is a step-by-step guide to getting you through the process.
Step 1: Business Activity
Determine what kind of business activity you want to enter, as this will determine where to license and where in the free zones or offshore to locate.
Step 2: Jurisdiction
You have the choice between a Mainland, Free Zone or Offshore jurisdiction. The choice depends on your requirements for ownership, business activities, and scope of operation.
Step 3: Legal Structure
Determine an appropriate legal structure- LLC, sole proprietorship, or branch office-end that supports your business goals.
Step 4: Reservation of Trade Name
Register a unique trade name in observance with UAE naming conventions. The name shall not include offensive and religious terms and will have to be available for registration purposes.
Step 6: Documentation
Commonly required documents:
Passport copies of shareholders
Business plan-for specific free zones only
Memorandum of Association-MOA or Local Service Agent-LSA agreement-for mainland companies only
Step 7: License
Apply for the license to be granted for conducting the activity. The two types of licenses are:
Commercial License: Issued for trading activities
Industrial License: Issued for manufacturing/production.
Professional License: For consultancy or professional services.
Step 8: Set Up an Office Space
Mainland companies have to have a physical office.
Free Zone businesses can use flexi-desk or virtual office solutions.
Step 9: Open a Corporate Bank Account
Upon registration, it becomes prudent to open a corporate bank account with a UAE bank to enable transactions.
Setup Costs of Doing Business in the UAE
The cost is jurisdiction-dependent, business activity-dependent, and license-dependent.
