INTRODUCTION
If we disregard various complex criteria used to categorize corporate structures in the UAE,
we can broadly speak about the following company types:
- Offshore entities, which are not allowed to do business in the UAE but only outside;
- Free zone companies, where they are considered to be UAE resident companies operating both inside and outside of the U.A.E, though sometimes having certain activity limitations;
- Mainland companies, enjoying all business freedoms in the emirate of registration.
KEY DIFFERENCES FROM OTHER JURISDICTIONS
U.A.E. entities of any type do not require a director UAE citizen or a UAE resident, like some jurisdictions.
Almost all companies do not pay any taxes, except a concise list of taxable activities and for the exception of 5% VAT, which becomes due once the company’s taxable turnover for the past 12 months reaches USD 50,000.00 to USD 100,000.00 in equivalent.
Nominee services are not enshrined in any U.A.E. government laws, decrees, resolutions, etc.
All free zone and mainland companies are issued licenses regardless of the business activity exercised. In contrast, in other countries, licenses are issued to specific businesses, such as banks, other financial institutions, insurance companies, and more.
U.A.E. companies annually pay separate registration renewal charges, as opposed to one-time registration payments in some jurisdictions.
U.A.E. companies cannot exercise an almost endless list of business activities, like in some jurisdictions. Instead, one would have to register several companies to be able to combine everything.
Any business activity which may potentially generate or already generates income shall be licensed.
COSTS INVOLVED
Costs involved in a company formation in the U.A.E. depend on:
- The type of company to be formed (offshore / free zone / mainland), with the U.A.E. offshores being the most economical options and mainland entities being the most expensive due to the requirement to rent a physical office space;
- The choice of emirate and registration authority, as pricing policies are different and costs of set-up in the northern emirates are generally lower;
- The number of business activities included on the company’s license, as most authorities have a threshold for the same, and a policy of extra charges for additional activities applies;
- The nature of business activities exercised, as some require additional external approvals from various government authorities, and this involves payment of additional charges annually;
- The type of license chosen for the company, as General Trading Licenses, Industrial License, and some others, require more investments as compared to traditional licenses;
- The corporate structure of the U.A.E. entity, since having a foreign company as a shareholder of a U.A.E. entity involves annual fees for corporate documents legalization;
- The resident status of the shareholder and the manager of a U.A.E. company, as a UAE resident will not require to pay for resident visa for the second time.
In general, total investments in a company registration process in the U.A.E. may vary from as little as USD 3,000.00 to USD 20,000.00 and more.
TIMEFRAMES AND PERSONAL PRESENCE
U.A.E. has been working hard to increase its business ranking globally. This is why the registration processes are constantly streamlined and the timelines shortened.
The company registration process, depending on the complexity of the business itself and corporate structure, may take anywhere between two (2) to five (5) days in the northern emirates and two (2) to three (3) weeks in the emirates of Dubai and Abu Dhabi.
Today one can establish companies in some of the free zones in the United Arab Emirates entirely remotely. Where a personal appointment attendance is required to register a company, a corporate service provider can use a Special Power of Attorney to complete the entire company formation process without you. Registration renewal process and many corporate amendments can be requested and completed without personal presence.
