- August 4, 2015
- Posted by: aon
- Category: Blog
What makes UAE a thriving destination for businesses?
An amalgamation of seven emirates – Abu Dhabi, Dubai, Sharjah, Pas Al Khaimah, Umm Al Quwain, Fujairah and Ajman, UAE has emerged as one of the leading business hubs of the world. With Abu Dhabi as its capital and Dubai as the second largest emirate, it has positioned itself as both a business hub and tourist destination.
Being an open and dynamic economy, UAE has enhanced its global economic standing and offers a number of advantages to businesses across the globe.
· No restrictions on profit transfer or repatriation of capital
· No corporate or income taxes
· A currency, Dirham, which is stable, secure and pegged to the US dollar
· negligible import duties
· low labor costs
These advantages combined with a strategic, accessible location for major regional markets, state-of-art infrastructure and extremely pleasant, safe and stable working environment make UAE a thriving destination for businesses.
Establishing a Business in UAE
UAE lies in the heart of a strategic crossroad where trade, commerce and diverse cultures co-exist and have been interacting for years. In UAE, regulations of the establishment and documentation process is very simple. One can establish a company in the UAE in a period of 2 weeks.
There are three ways to set up business in UAE – joint partnership companies, free zone companies and offshore companies.
Joint Partnership is one of the best and easiest to establish in the UAE. In this at least 51% of the business must be owned by a UAE national.
Limited Liability Company (LLC) is among the top joint partnership forms of business and most popular one as well. More and more business owners are establishing LLC because of their exceptional benefits.
While there is no minimum capital requirement for establishment of the company, it offers unrivalled access to wider UAE economy and the foreign equity partnership does not exceed 49%. Also, in a LLC profits and losses can be shared at a ratio different from the shared capital.
Free Zone Company
Companies set up in a free zone are allowed to conduct all kinds of businesses such as trading, service and industrial activities. They can also conduct business in UAE but cannot do business outside the free zone.
Unlike partnership companies where ownership is shared, free zone allows setting up companies with 100% foreign ownership. Here are some advantages of establishing a business in free zone in the UAE:-
· 100 % import and export tax exemptions
· 100 % repatriation of profits and capital
· No corporate taxes for 15 years, Renewable for additional 15 years
· No customs or other duties on import into or exports from the free zones, provided the goods do not become imports in the mainland UAE.
· No personal income taxes
· Very less documentation
Free zones in UAE include:-
· Jebel Ali Free Zone
· Sharjah Airport International Free Zone
· Dubai Airport Free Zone
· Dubai Media City
· Dubai Internet City
Free zones contribute to a large portion of foreign commercial activities and have helped UAE become a thriving destination for businesses.
UAE is one of the well-known jurisdictions in the world for establishing an offshore company. The country offers a business friendly environment, state-of-art infrastructure and simple registration process for offshore companies.
Benefits offered by UAE to offshore companies are as follows:
· 100% foreign ownership is allowed
· No need for a UAE national, a shareholder or sponsor
· There is no public register of company officers
· Complete privacy and anonymity
· The company has freedom to own real estate properties on the approved areas by the Authority
· The company can hold multi-currency bank accounts
· The company is exempted from all corporate and income taxes
· There are no foreign currency restrictions on the company
· The companies are allowed full repatriation of the capital and profits
· The establishment costs are comparatively less
· There is no onshore office and accordingly, there are no employees and related costs
· Only minimum capital is required to establish an offshore company
· Minimum of 1 Director / Shareholder is needed to set up the company
Holding the second largest economy of the Arab World, UAE is constantly diversifying its economy and thriving to become an ideal destination for doing business. Be it a trading firm, manufacturing unit or a service provider, UAE offers wide range of opportunities to entrepreneurs, eco-friendly working conditions and has world class infrastructure to boot.
Feel free to get in touch with our expert consultants at AON Management as they can guide you through the intricacies of establishing a business within the UAE, and provide complete assistance for the same as well.