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SETUP BUSINESS IN DUBAI

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UAE’s most dynamic free zone jurisdiction

22 November 2017

As the rapid success of the UAE continues, Ras Al Khaimah provides spectacular economics opportunities. Ras Al Khaimah is a place great to live with its high quality and affordable housing, shopping malls, and lots of family activities; it could offer a fabulous lifestyle matched only by an environment that is a great place to conduct business [...]

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VAT in the UAE

12 February 2017

As announced in February 2016 by the UAE Minister of State for Financial Affairs, His Excellency Obaid Humaid Al Tayer, the UAE will introduce a Value Added Tax (VAT) of 5% beginning January 1, 2018. The six other states that make up the Gulf Cooperation Council (GCC) region will also be implementing a VAT during this time and/or by January 1, 2019 at the latest [...]

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FREQUENTLY ASKED QUESTIONS

Setup Business in Dubai

 

 

 

Questions concerning formation of your company



Why choose the United Arab Emirates to incorporate my company?

Why choose SFM to incorporate in the UAE?

What are the different types of company structures in the UAE?

Does the UAE have an offshore corporate structure?

Do I require a residence visa?

When do I renew my corporate documents?

Do I pay taxes in the UAE?

What are the bank account opening procedures?

What is the difference between a shareholder and a director?

How can I settle my fees?

Why are your fees lower than your competitors?

How long does the incorporation process take?

How long does the residence visa process take?

Do I need to go to UAE to incorporate the company?

Can the same person be a manager and a shareholder at the same time?

Which incorporation is most suitable for me?

Do my documents need to be notarised and attested?

Do I need to meet the bank in person to open an account?

Does opening a company mean that a bank account will automatically be opened for the company?

Which banks do you work with?

Is it possible to open a private account as well as an account in the name of my company?

What fees apply for maintaining the bank account?

Can I have a bank account in different currencies?

How can I access my account?

Can I get a Residence visa for family and dependents?

Do I require an office space in the UAE?

Do I require a sponsor in UAE?





Why choose the United Arab Emirates to incorporate my company? Go to Top

The UAE, and in particular Dubai, has been garnering a lot of media attention recently and for good reason. Dubai enjoys a central location between Europe, Africa and Asia, making it as a prime business destination for a variety of sectors. A five-hour flight from Dubai in any direction, will not bring one to any cosmopolitan city anywhere near as advanced as this city. Dubai’s highly regulated environment adheres to international best practices, while operating with zero personal and corporate tax rates, as well as 100% capital repatriation with no currency restrictions. This type of financial freedom is seldom found in such a highly developed business environment, therefore one can find numerous opportunities provided in the UAE and across a wide range of sectors. Dubai is a leading commercial center with a state-of-the-art infrastructure and outstanding business environment. Among the many reasons to make a base in Dubai and invest in the city are:

 

  • • A liberal economy that is fully integrated with the world economy.
  • • The city is central, located between Europe, Asia and Africa and attracts approximately five million investors and tourists on an annual basis.
  • • It is one of the safest cities in the world.
  • • More than 200 nationalities live in harmony and call Dubai their home.
  • • Dubai is well serviced by international and local financial institutions.
  • • There is an advanced educational system in place suited to the full spectrum of cultures and languages.
  • • Dubai enjoys a world class healthcare system.


Why choose SFM to incorporate in the UAE? Go to Top

• Our professionals have more than 15 years of experience in company formation and bank account opening formalities. During this time we have been able to develop an internal network of specialists that remains unparalleled.

• Our company is a member of many international fiscal planning organisations. We provide tailor-made advice to our clients, fully integrating the latest laws.

• We are one of the most competitive incorporation specialist firms and we are committed to providing you with the best service at the most reasonable price.

 



What are the different types of company structures in the UAE? Go to Top

1. Free Zone Entities – allow 100% foreign ownership of the companies, and are exempt from corporate and personal taxes for a specified number of years. These entities are not licensed to do business outside of the free zones. They are most commonly used to import/re-export or for industrial and/or manufacturing companies. Many service related companies also use the free zones as their base of operations.

 

2. Onshore structures are the most misunderstood structures in the UAE. They are the ones which garner a lot of attention due to the compulsory rule of having to nominate a ‘local sponsor’. In essence this is the exact same requirement that other countries have, for example Switzerland. This is only to ensure that there is a liable person, in the country, whom is able to provide answers and direction in any event where the foreign owner is unable or unwilling to assist. The limited liability company is set up with the local sponsor owning 51% of the shares, however, under companies law, the profits of the corporation need not be distributed in proportion to the shareholder holdings. In essence the local sponsor is paid a yearly fixed fee to use his name while the resident director/owner and the foreign owner manage and distribute the profits at their will.

 

3. The professional license, allows 100% of the shares to be allocated in the name of a foreigner and the local sponsor is only designated a ‘local service agent’ role. This entitles him to a yearly fixed fee for his role as a sponsor in the trade license. The owner of the license must be educationally qualified in the professional service, which they intend to provide.

 

4. A representative office license is also available to the incorporator; this allows the company to engage in marketing and gathering information on behalf of a parent company. In this case, there is a requirement to have a local service agent, who is not, however obliged to be a shareholder of the company.

 

All companies registered in the UAE require a physical office, we are able to assist you in finding an office or to arrange for a lease for the incorporation process.

 



Does the UAE have an offshore corporate structure? Go to Top

Yes, there are two offshore structures that we recommend, the first being the RAK offshore and the second being slightly more costly JAFZA offshore structure. The RAK offshore is a purely offshore structure, whereas the JAFZA offshore entitles the owner to one residence visa and it is the only offshore structure that is allowed to own property in the emirate of Dubai. The JAFZA offshore requires a minimum of two directors and one shareholder.



Do I require a residence visa? Go to Top

In order to live and work in the UAE, you will need a residence visa. In order to employ staff in your organisation, a manager of the entity must have a residence visa, which will then enable the company to recruit staff. There is no need to have a residence visa for offshore incorporations, as these do not entitle the holder to do business in the UAE. The free zone incorporations do allow for the issuing for residence visas depending upon the size of the rented or purchased premises of the establishment.



When do I renew my corporate documents? Go to Top

In the UAE all licenses are renewable annually. Failure to renew on time will result in penalties and the cancellation of all residence visas linked to that company.



Do I pay taxes in the UAE? Go to Top

There are no corporate or personal taxes in the UAE. Companies will need to pay a 5% import duty if they wish to clear their goods from the port into the country.



What are the bank account opening procedures? Go to Top

SFM can assist you with the opening of bank accounts. We will be able to ask the bank to send their representative to our offices, minimising your waiting time and avoiding the inconvenience of going to the bank and having to wait in line.



What is the difference between a shareholder and a director? Go to Top

The shareholder is the person who owns the company through a share certificate. A company can be owned by one or several shareholders. The director is the person responsible for the management of the company. He will sign any business contracts and account opening forms, etc. Directors are usually elected by the shareholders, but sometimes are appointed by resolution. A company can have one or several directors.



How can I settle my fees? Go to Top

You can either pay by bank transfer, credit card, cheque or banker's draft or also with cash at our offices, if you prefer. SFM charges all incorporation fees in advance. In the event that certain extra services are required, we shall charge on a time sheet basis and add the cost of all fees paid during the course of the procedure.



Why are your fees lower than your competitors? Go to Top

We maintain our own offices and staff in the UAE. The work that you contract us to do is done in-house and at the most reasonable prices. Our associates needed for the incorporation process are all hand-picked to be priced economically therefore passing the eventual cost savings to our clients.



How long does the incorporation process take? Go to Top

The process of incorporation can be done in as little as five working days or can take up to six weeks for some of the free zone entities. The initial stage is the trade name registration and once that is complete, it is a matter of gathering all the documentation required for that particular type of incorporation and relevant license issuing authority.



How long does the residence visa process take? Go to Top

The residency visa can only be applied for once the company has been established. This is a very streamlined process; once the person applying has completed their medical examination, the results are electronically sent to the relevant naturalization and residency department, after which the residency can be issued and entered into the holder's passport.



Do I need to go to the UAE in person to incorporate the company? Go to Top

For offshore companies, we are able to incorporate without your physical presence. However, in the event of incorporation in the free zones and onshore jurisdictions, we are able to start the process, but your presence will eventually be required as you are expected to sign the formal incorporation documents at the notary public here in the UAE.

However, if you were to provide us with a power of attorney, certified and attested by a UAE embassy or consulate abroad, we would be able to complete the incorporation procedures without your physical presence in the UAE



Can the same person be a director and a shareholder at the same time? Go to Top

Yes, this is possible for all UAE incorporations.



Which incorporation is most suitable for me? Go to Top

This is a decision that can be reached after consulting with us and after taking into consideration your immediate needs for the company and also your future vision. There are many different advantages to take into consideration and time should be spent in exploring all of these with one of our specialist consultants at your disposal.



Do my documents need to be notarised and attested? Go to Top

All educational and corporate documents that are to be used during the incorporation process and the issuing of residence visa process, will need to be attested at the corresponding UAE embassy or consulate in the country of the document origin. These documents must then be attested by the UAE Ministry of Foreign Affairs in Dubai thus rendering them officially accepted documents.



Do I need to meet the bank in person to open an account? Go to Top

Yes, this is a mandatory requirement for a bank account in the UAE.



Does opening a company mean that a bank account will automatically be opened for the company? Go to Top

Although we cannot completly guarantee the opening of a bank account, we can say that we have never been unable to open a bank account.



Which banks do you work with? Go to Top

We work with Emirates NBD, Abu Dhabi Commercial Bank and NOOR Bank. We are also able to provide Swiss banking options to our clients.



Is it possible to open a private account as well as an account in the name of my company? Go to Top

Yes, this is possible.



What fees apply for maintaining the bank account? Go to Top

There are minimum balance requirements for all UAE banks. Should this balance not be maintained, it is approximately USD 30 per month for maintenance costs.



Can I have a bank account in different currencies? Go to Top

Yes, this is possible.



How can I access my account? Go to Top

All the banks provide online transactional banking and debit/credit cards, which can be used worldwide.



Can I get a residence visa for family and dependents? Go to Top

SFM will arrange for the medical tests and residence visa formalities for your dependents and extended family also, at your instruction.



Do I require an office space in the UAE? Go to Top

Yes, an office space is required for incorporations in the UAE. At the outset, you may wish to minimise cost with a small space or maybe you wish to have big offices in order to bring your headquarters to UAE. In both these instances SFM will advise you on the best possible office space, and appropriate decisions can be made from there.



Do I require a sponsor in the UAE? Go to Top

Depending on which incorporatin structure you chose, you may require a sponsor. There are many different assistances that a local sponsor can provide a business. The position and background of a particular sponsor can aid in many areas of a business located in the UAE. Due to our vast knowledge of the industry and region, we are able to provide specific information in this regard.