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Characteristics

GENERAL
Type of entity
Free Zone Company
Offshore Company
Limited Liability Сompany (LLC)
Legislation
Сivil Law principles and the Islamic Shari’a Law
Our time to establish a new company
8-10 days
Corporate taxation
0 %
Withholding tax
0 %
Double taxation treaty access
More than 60 countries
SHARE CAPITAL OR EQUIVALENT
Standard currency
UAE dirham, US $
Permitted currencies
Any
Minimum paid up
1 $
DIRECTORS OR MANAGERS
Minimum number
1 director
Local required
No
Corporate directors permitted
Yes
Publicly accessible records
No
Location of meetings
Anywhere
SHAREHOLDERS OR MEMBERS
Minimum number
1 shareholder for Free Zone Company and Offshore Company
1 local shareholder who holds at least 51% of the shares (for LLC)
Publicly accessible records
No
Location of meetings
Anywhere
COMPANY SECRETARY
Required
Yes
Local or qualified
No
ACCOUNTS
Requirement to prepare
Yes
Audit requirements
Yes
Requirement to file accounts
Yes
Publicly accessible accounts
No
OTHERS
Language
Arabic, English is widely used in business environment
Controlled foreign companies,
transfer pricing,
thin capitalization, exchange control
No
Change in domicile permitted
Yes

INTEREST OF THE JURISDICTION

Advantages of a company in Dubai

  • Dubai is one of the best places for business and investment;
  • A politically and economically stable country with a high level of economic development;
  • 0 % corporate tax;
  • 0 % withholding tax;
  • A simple procedure for incorporation;
  • High level of confidentiality.

Possible disadvantages of a company in Dubai

  • For the creation of certain types of companies, it is necessary to attract a citizen of Dubai;
  • Not all types of companies have the right to operate in the UAE.

Main info

The United Arab Emirates is a state on the Arabian Peninsula, which consists of seven emirates.

Dubai is one of the most important emirates, the financial center of the whole Middle East, it is located on the shore of the Persian Gulf.

The state structure of the United Arab Emirates has elements of a republican and monarchical political system. The supreme body of legislative power is the Supreme Council of the United Arab Emirates. His powers are quite broad, starting from the definition of the foreign and domestic policy of the state before the change of the state system of the country. This body also approves the candidacy of the vice-president. The supreme executive body is the Council of Ministers, which is headed by the Sheikh of the Dubai Emirate. The government is engaged in the implementation of social, economic, foreign policies, manages the economic life of the country and enforces laws.

The head of state is the president-emir. This post is held by the Sheikh of the capital’s emirate of Abu Dhabi.

The legal system of the UAE is based on the principles of civil law and Islamic sharia. Legislation is divided into sectors that define the principles of law, regulate various civil, commercial procedures, the creation and operation of companies, intellectual property, immigration, maritime, industrial, banking and labor relations in the country.

The judicial system is divided into first instance courts, appellate courts and cassation courts. The Supreme Court is located in the capital of the UAE in Abu Dhabi.

It is important to note that the UAE is a Muslim country. The conservatism of Islamic morals here has a significant impact on all the relations arising in society.

Types of companies and incorporation procedure

In Dubai, you can create Onshore Corporate Structures, which requires the participation of a citizen of Dubai.

01. Limited Liability Company

The most common form of such a company is Limited Liability Company (LLC).

Such companies are created if it is planned to operate in the territory of Dubai and conclude deals with local residents.

To create such a company, as a rule, requires the participation of a local shareholder who must own at least 51% of the share capital.

Otherwise, the liability of shareholders of such a company is limited to their capital contributions. It must have at least two partners.

There is no requirement for the size of the authorized capital, but the company must have a share capital sufficient to conduct activities to achieve the company’s goals. It is allowed to carry out a wide range of commercial activities, excluding activities in the insurance, banking and several other areas.

Procedures for incorporation in Dubai usually include several stages, which include the choice and approval of the name, the preparation of a business plan, obtaining the necessary licenses and permits, the appointment of a director or manager.

02. Free Zone Company

Free zones in Dubai attract businessmen and investors, as they offer a number of advantages:

  • Possibility of full 100% possession by a foreign person;

  • Corporate income tax rate and withholding tax 0%;

  • Absence of currency control and restrictions on the movement of capital in different currencies;

  • No import or re-export fees.

The free trade zones in Dubai offer two types of companies for the opening of a free zone economic enterprise (FZC, usually operating within the UAE) and the Offshore Company, which can operate around the world. They are independent legal entities with limited liability. The liability of the shareholders is limited to their capital ontribution and there must be at least one (or two for FZC) shareholder.

Taxation

  • The undisputed advantage of the jurisdiction of Dubai is the corporate income tax rate of 0%. In Dubai, corporate income tax is imposed only on companies involved in the oil industry and branches of foreign banks.

    Currently, there is no sales tax, value added tax or similar charges in the UAE.

  • In addition, taxes are not withheld in Dubai, with payments such as royalties, interest or dividends, etc., which are paid by resident companies of Dubai to another company.

    Tax on the transfer of real estate, called “registration fees”, is charged with the transfer of ownership of real estate and is 4%.

    Currently, the UAE does not have a transfer pricing regime.

    Another hallmark of Dubai is the free economic zones. Companies operating in such zones are completely exempted from paying taxes and customs duties. Such companies can carry out their activities not only in the territory of free zones, but also outside the UAE.

  • Today, it can be unequivocally noted that many large international companies are trying to open a branch or representation in Dubai, or transfer their business to this country. This is primarily due to the beneficial features of taxation, namely:

    • Absence of withholding tax, tax on capital gains and corporate income tax, as well as additional taxes;

    • Transfer pricing, the regime of controlled foreign companies, currency control are not applied in Dubai.

Banking system and economy overview

Diversified and highly developed economy of Dubai has turned it into a global center of business, trade and finance. The basis of the economy is the sphere of services and information and communication technologies, tourism, trade, financial services, aviation. The oil industry occupies only 1% of the total income.

In Dubai, there is everything for the oil business, including the developed infrastructure and free economic zones, market principles are being introduced and privatization is intensifying.

Today Dubai is one of the most popular tourist destinations and the world-famous commercial and business center.

Dubai has a reputation for a country with political stability, security, tolerance, cultural diversity, and a high standard of living. For businessmen and entrepreneurs, Dubai is a profitable and attractive place to invest, largely due to free economic zones.

Speaking about the banking system of the Emirate of Dubai in the UAE, it should be noted that the National Central Bank is the central structure that controls the banking institutions represented on the local financial market, finances and renders consultative support to the government.

Banking institutions and institutions operating in the territory of the Emirate can be conditionally divided into two separate categories: local banking institutions; Foreign banks that have received the relevant state license.

In the history of national banking institutions, there was no case when a local bank went bankrupt. In addition, banks in Dubai provide customers with a high level of confidentiality.

HOW TO
PROCEED

To incorporate or purchase a company the following documentation should be provided:

01

A completed application form signed by the company or by the representative

03

A personal bill, which is less than 3 months old from the date of the application

02

Copy of valid passport

04

Payment of our fees

Note: additional documents may be required depending on the certain offshore bank.

Set-up time: From the moment, we are in possession of all required documents:

3 days

Incorporation of
a company or purchase
of an existing company

15 days

Delivery of the original
company documents

3 weeks

Offshore Bank: offshore
bank account opening