UAE: Land of Opportunities! Business Setup in UAE

Wish to explore investment opportunities in UAE?

The UAE has established itself as the economic capital of the Arab world by providing an enabling economic and business landscape. The UAE is Western Asia’s second-largest foreign direct investment (FDI) beneficiary, according to the UN Conference on Trade and Development’s Global Investment Report (UNCTAD). The UAE is the country with the highest number of expats. UAE and its emirates always welcome foreigners to work, study, and travel.

The UAE provides incentives through tax exemptions and legislation aimed at attracting the private sector. The UAE increasingly focused on providing major investment incentives for priority sectors, as well as specific geographic areas. Some of the key benefits are as under:

1. 10 Year golden Visa for investors, property owners, and highly talented individuals
2. Zero Tax on Personal Income
3. 1 Year ‘Digital Nomad Visa’ for Entrepreneurs, start-up founders, and remote workers
4. Flexible business presence such as onshore, offshore and free zone
5. 100% ownership for foreign investors
6. No Minimum Capital Requirements

What are the options to establish a business in UAE?

There are two ways to establish business in UAE i.e. Physical presence and virtual presence.

In physical presence, the investors get the following three options to establish their business:

1. Onshore Corporate Structures
2. Free Zone Corporate Structures
3. Offshore Corporate Structures

In a Virtual presence, the investors are allowed to establish a business by setting-up Commercial Agencies, Distribution & Franchises.

Legal forms of Entities

Following are a few options for different types of entities to establish a business in UAE:

1. Sole Proprietorship
2. General Partnership
3. Limited Liability Company
4. Foreign Company Branch or Representative Office (Outside Free zone)
5. Public Shareholding Company
6. Private Shareholding Company
7. Civil Companies

Major jurisdiction to establish a business in UAE

The UAE has the following three major jurisdictions, where one can establish its business:

1. Mainland: The economic zone in the Emirates monitored by the Department of Economic Development (DED) is called the mainland. Under this economic zone, Companies can operate both within the local market and internationally.
2. Free Zone: A Free Zone Company in the UAE operates as a separate legal entity with its own set of laws and regulations, which can conduct business both within and outside the UAE.
3. Offshore: An offshore company is an international business company with the flexibility of a mixture of features of being registered in one jurisdiction and being operated and set up outside of that registered jurisdiction.

Which are the main Free Zones in UAE?

There are around 46 Free Zones operating in UAE. The Major Free Zones are as under:

• There are about 28 Free Zones in Dubai such as International Free Zone Authority (IFZA), Dubai Multi Commodities Centre (DMCC), Dubai Airport Free Zone, Jebel Ali Free Zone, Dubai Biotechnology & Research Park (DuBiotech), etc.
• The Free Zones in Abu Dhabi include Masdar City Free Zone, Abu Dhabi Airport Free Zone (ADAFZ), Khalifa Industrial Zone, Abu Dhabi Global Market, twofour54 etc.
• The Free Zones in Sharjah include Sharjah Airport International Free Zone, Sharjah Media City Free Zone (Shams), Hamriyah Free Zone, etc.

• Some of the Free Zones in the Northern Emirates are the Ras Al Khaimah Economic Zone (RAKEZ), Ras Al Khaimah Media Free Zone, Ajman Media City Free Zone, Fujairah Free Zone, Ras Al Khaimah Investment Authority, etc.

What are the advantages of setting up a business in Free Zones?

With around 46 different free zones across the UAE and with many more under development, free zones have helped make the UAE an attractive option for foreign businesses looking to relocate or expand their global footprint. The common benefits of doing business in a UAE free zone include the following:

• 100% foreign ownership of the enterprise
• Ease of recruiting international employees, with all free zones providing one-stop-shop services for work visas
• Access to world-class logistic facilities
• 100% import and export tax exemption
• 100% repatriation of capital and profits
• Benefits from economies of concentration (given the zones dedicated to industries)

What type of licenses are required to establish different types of entities in UAE?

• Industrial Licence
• Commercial Licence
• Service Licence
• Logistics Licence
• Media Licence
• Education Licence

Factors differentiating Mainland from Free Zones?

The common question every prospective investor who is planning to start a business in the UAE market asks is “What is the difference between mainland and free zone companies?”

The following are the major factors that differentiate between Mainland and Free Zones:

• Scope of business,
• Visa Eligibility,
• Company Audit
• Capital Prerequisite
• Approvals related to business setup

How MBG can help?

MBG has a comprehensive program to guide prospective investors with respect to investment decisions in UAE.

With our multinational locations, we are your one-stop shop to manage all your business investments in the UAE. Our expert team of professionals will assist you in business valuation, company incorporation, investment advisory, project feasibility study, and providing advisory services relating to the nature and type of entities required to set up business in UAE and/or the requirement of licenses/permits/ registration and drafting the policies such as grievance policy, HR policy, etc., required as per the prevailing laws of UAE, accounting solutions and assurance services in UAE. Contact us now to seize the global advantage.

Also Read:- Business Setup in UAE

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