United Arab Emirates and Dubai in particular, is considered an excellent location for investors and for setting up a new business.
The benefits of setting up a company in Dubai or any location in the United Arab Emirates (UAE) are numerous. Available are different locations, providing different advantages to investors. However, a prime reason is the tax exemption offshore company in Dubai enjoys when operating an offshore business in the United Arab Emirates. Moreover, Dubai is a well-known supporting international business center, supporting foreign investors’ initiatives.
United Arab Emirates offers different and many opportunities to open your own company in any jurisdiction. You’ll be able to choose between free zones and offshore jurisdiction and LLC Companies. Below these options are briefly addressed.
1. UAE Free Zones Companies
UAE has over four dozen Free Zones, offering specialised environments (ie: Internet City, Media City, Health Village, Knowledge Village, etc) and more generalised environments such as DMCC, RAKIA, SAIF Free Zones. Free Zone companies permit 100% foreign ownership and may engage in a wide range of activities but trading within the UAE is not permitted unless done through a locally licensed distributor or agent. Such companies are considered residents in UAE for Double Tax Treaty benefits, can apply for residency visas, lease premises within the free zone, and employ staff. Free zone companies may establish Branch / Representative offices in [mainland] Dubai provided they are also active within the Free zone and utilise the services of a local service agent. Free zone companies benefit from full banking facilities including credit / ATM cards. Being considered a UAE resident company, they offer more credibility to the outside world and send a serious message about your presence in the UAE.
All free zones in Dubai will offer you the following benefits for your business development:
- 100 % of ownership for all investors, including foreign investors.
- No restriction on the repatriation of profits and capital.
- Full exemption on personal and corporate income tax for 15 years. This exemption is renewable for another 15 years.
- Full exemption from all import and export duties.
- Free zones in Dubai provide flexibility to engage in international business.
- All investors can hold properties, participate in multiple activities, and open a bank account in any local bank.
- As an investor, you can get easy access to handy offices, warehouse facilities, and many other similar services. Also, you can receive assistance in housing facilities, and staff visas, among other support services.
Below are the popular free zone destinations of RAKEZ (Ras al Khaimah – head office in Dubai) and IFZA (Dubai).
RAKEZ Free Zone Company:
Setting up a company in RAKEZ free zone. This is located in the northernmost part of the United Arab Emirates, specifically in the heart of Ras Al Khaimah. Due to its strategic location, it facilitates the connection between investors and markets in the Middle East, North Africa, Europe, and South and Central Asia. With more than 50 flourishing industries and 14.500 successful companies in it, RAKEZ offers a cost-effective and world-class economic zone with customizable packages, services, and facilities to help its clients succeed at their goals.
RAKEZ Free Zone Company’s main benefits:
- Cost-effective business packages.
- Shared workstations in a premier business center.
- Ready or customizable offices of various sizes.
- Simplified and fast-track business set-up processes.
- Secretarial and business center services.
- One-stop shop for all government services.
RAKEZ Free Zone Company time-frame:
The License will be released after an average of 2-5 working days. The visa process will be after that and that takes 10-15 working days on average. Overall the process will take 3-5 weeks.
IFZA Free Zone Company:
Setting up a company in the IFZA free zone, which is one of the newest free zones in the country. It has gained an excellent reputation in a short time, which is due to the facilities and the support it provides to its entrepreneurs and investors, allowing them to start their businesses in the free zone without wasting time. This free zone operates with around 400 local and international company formation specialists, having more resources to help its new investors to thrive in the market and accomplish their goals with their many different companies and businesses. Not only will you be granted benefits and advantages, but also services and different packages to boost your business and make it more profitable. IFZA free zone offers a wide range of flexible business setup solutions to help you save time and effort.
IFZA Free Zone Company’s main benefits:
- Strategically located in Dubai, which provides world-class access to global markets.
- Convenient access to all Free Zone business formation and administration services.
- An expert multinational team who can advise on the perfect fit for you from their 2,000+ business activities.
- Business licenses are available through the incorporation of FZCOs or the formation of branch offices.
- Professional, Commercial, and Industrial activities can be combined under one IFZ license.
- Competitive General Trading license available.
- Transparent and competitive pricing.
- Fast and efficient company incorporation processes.
- No physical presence of the business owners is required during the incorporation process.
- No paid-up share capital requirement.
- No NOC from current visa sponsor.
IFZA Free Zone Company Formation time-frame:
The Application for security clearance takes about 2-4 days. Once signed they issue a license, the Client can then apply for an establishment card (2-6 days). Once issued IFZA can proceed with e-Visa. The full process dependent on immigration and client pace takes about 3-5 weeks.
2. Dubai – UAE Offshore Companies
These companies are relatively quick to set up, inexpensive, and easy to manage. They are modeled on the BVI offshore company structure and are available through Jabel Ali Free Zone Authority and Ras al Khaimah Free Trade Zone Authority. Offshore companies permit 100% foreign ownership, can have bank accounts in Dubai (becoming increasingly difficult), and are good for asset holding, international trading, and consultancy activities. Trading within the UAE is not permitted unless done through a locally licensed distributor or agent. The client is not obliged to visit Dubai for company set-up (RAK IC only). Corporate shareholders are permitted. Offshore companies are the least expensive option and a good way to test the market.
Dubai/ United Arab Emirates Offshore Company Main Advantages:
- UAE company can be 100 % owned by foreign ownership.
- Tax and duty exemption (no corporate, income, VAT, inheritance, or property tax).
- Full repatriation of profits is possible.
- There is no currency restriction, which means the company can use any currency as capital.
- Investors have better access to global funding.
- It is not a requirement to deposit the money in an offshore bank account.
- There’s the available option of purchasing real estate in approved areas.
- Minimum capital requirement.
- Investors have access to a stable and business-friendly legal system.
- Offshore business is a gateway for international market expansion.
- Offshore companies enjoy the benefits of the DTAA (Double Taxation Avoidance Agreement) with 115 countries, including the UK.
- UAE companies can hold separate assets from operating entities, like Intellectual Property.
Where can you set up a United Arab Emirates Offshore Company?
The three main locations in the emirate of Dubai, where you can form an offshore company are JAFZA (Jebel Ali Free Zone), RAK (Ras Al Khaimah), and Ajman.
3. UAE LLC Companies
These companies are registered and licensed by the Dubai Economic Department and are permitted to carry out all activities (except restricted ones such as banking, insurance, etc). They are free to trade both within the UAE (B to B and B to C) and overseas. However, they need to have a 51% local sponsor (shareholder). Please note that the 51% local shareholding has now been relaxed with 100% ownership for some activities. There are no restrictions on hiring staff, leasing office space in mainland Dubai and obtaining residency visas. If the business model entails dealing within the UAE, then an LLC company is highly recommended. However, these companies are expensive to set up and quite bureaucratic to manage.
The United Arab Emirates has many free trade zones and free industrial zones, in which more than a thousand companies operate, many of which are well-known brands. Each zone offers all or some of the above options. Each investor should seek the advice of a consultant to reach the final choice and to know all the relevant details of the documents required.
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