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SFM IN PRESS

Changes to UAE Policies on Business Ownership and Residency

28 June 2018

The United Arab Emirates, which previously did not allow 100% ownership of foreign business entities or long residency, recently changed both policies. In a move that’s delighted business leaders right across the board, the country’s cabinet announced the changes would come into effect at the end of the year.[..]

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Our approach to protect data

20 May 2018

Much echo is being given nowadays to the looming implementation of the new European regulations regarding the processing of personal data, the General Data Protection Regulation (GDPR), and not only in the European Union.[..]

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FREQUENTLY ASKED QUESTIONS

Setup Business in Dubai
 

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

The UAE, and Dubai particularly, has, for good reason, garnered a lot of media attention recently. Dubai enjoys a central location between Europe, Africa and Asia. This makes it a prime business destination for many sectors and industries. You will not find a city as cosmopolitan or as advanced anywhere within a five-hour flight from Dubai. The city’s highly-regulated environment adheres to international best practices operating with zero rates for personal and corporate taxes. Businesses in Dubai enjoy 100% capital repatriation with no currency restrictions. This level of financial freedom is rarely found in areas with such a developed business environment. One can find numerous opportunities in the UAE and across a wide range of sectors. Dubai is a leading commercial center with state-of-the-art infrastructure and outstanding business environment. Other reasons include:

 

  • A liberal economy fully-integrated with the world economy.
  • The city is central, located between Europe, Asia and Africa, attracting approximately five million investors and tourists each year.
  • 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.
  • The education system in Dubai is suitable for all cultures and languages.
  • Dubai enjoys world class healthcare.

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

SFM has more than 15 years of experience in company formation and bank account opening. Our internal network of specialists in Dubai is unparalleled.

We are members of many international fiscal planning organisations, providing tailor-made advice to clients and providing full integration of the latest laws.

We are a competitive incorporation specialist firm in Dubai, committed to providing you with the best service at reasonable prices.

 

What types of company structure are available in the UAE?Go to Top

1. Free Zone Entities – this type allows 100% foreign ownership and exempt from corporate and personal taxes for a specified number of years. These entities are not licensed for business outside of the free zones. This model is ideal for import/re-export or for industrial and/or manufacturing companies. Service related companies also use the free zones as bases of operations.

2. Onshore structures in UAE are commonly misunderstood. They garner attention due to the legal requirement of a nominated ‘local sponsor’. This is also a requirement in other countries, Switzerland for example. This ensures that there is a liable person, in the country, able to provide answers and direction in any event where the foreign owner is unable or unwilling to assist. A limited liability company is set up with the local sponsor owning 51% of the shares. However, under business law, corporate profits need not be distributed in proportion to the shareholder holdings. 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.

3. The professional license allows 100% of the shares to be allocated in the name of a foreigner. The local sponsor is a designated ‘Local Service Agent’. This entitles him to a yearly fixed fee for his role as a sponsor in the trade license. The license owner must have and provide evidence of formal qualifications in the professional service.

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 for a local service agent but there is no obligation to be a company shareholder.

All companies registered in the UAE require a physical office. SFM can help you find 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 is RAK; the second is the more expensive JAFZA. RAK offshore is a purely offshore structure; JAFZA offshore entitles the owner to one residence visa. It is the only offshore structure that permits property ownership in the emirate of Dubai. JAFZA offshore requires a minimum of two directors and one shareholder.

Do I require a residence visa? Go to Top

Anyone wishing to live and work in the UAE needs a residence visa. To employ staff in your organisation, a manager of the entity must have a residence visa. This will then enable the company to recruit staff. Offshore incorporations do not require a residence visa as they do not entitle the holder to do business in the UAE. The free zone incorporations allow for issuing residence visas depending upon the size of the rented or purchased premises of the establishment.

When should 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 must pay a 5% import duty 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 opening bank accounts. We will 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 owns the company through a share certificate. One or more people may own a company through shares. The director is the person responsible for the management of the company. He signs business contracts and account opening forms, etc. Shareholders usually elect directors, but sometimes they are appointed by resolution. A company can have one or more directors.

How can I settle my fees? Go to Top

You can pay by bank transfer, credit card, cheque, banker's draft or with cash at any of our offices. SFM charges all incorporation fees in advance. If extra services are required, we will charge this on a timesheet basis and add the cost of all fees paid during the process.

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

We maintain our own offices and staff in the UAE. The work we carry out on your behalf occurs in-house and at reasonable prices. Associates needed for the incorporation process are hand-picked and priced economically, therefore passing cost savings to our clients.

How long does the incorporation process take? Go to Top

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

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

Clients may only apply for a residency visa once the company is established. This is a streamlined process; once the applicant has completed their medical examination, the results are electronically sent to the relevant naturalization and residency department after which the residency is issued and entered in the holder's passport.

Do I need to visit UAE to incorporate the company? Go to Top

We can incorporate offshore companies without needing your physical presence. However, in the event of incorporation in the free zones and onshore jurisdictions, we can start the process without you but your presence will eventually be required. You are expected to sign 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 can complete the incorporation procedures without requiring you to visit the UAE

Can the same person be a manager 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

We offer consultation to help you decide, considering your immediate needs for the company and future vision. There are many different advantages to consider. You should take the time to explore all options with one of our specialist consultants.

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

All educational and corporate documents required during the incorporation process and for the issuing of residence visa process will need attesting 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. This renders 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 guarantee the opening of a bank account, we can say that we have never encountered a refusal of this service.

Which banks do you work with? Go to Top

We work with Emirates NBD, Abu Dhabi Commercial Bank and NOOR Bank. We can 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

All UAE banks have a minimum balance requirement. If you do not maintain this minimum, there is a maintenance cost of USD 30 per month.

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 banks provide online transactional banking and debit/credit cards which you may use worldwide.

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

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

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

Yes, office space is required for UAE incorporations. You may wish to minimise cost with a small space or explore large office options to bring your headquarters to UAE. In both these instances, SFM will advise you on the best possible office space. Appropriate decisions can be made from there.

Do I require a sponsor in UAE? Go to Top

Depending on which incorporation structure you choose, you may require a sponsor. There are many ways a local sponsor can help businesses just like yours. The position and background of a sponsor can aid in many areas of a business located in the UAE. Our vast knowledge of the industry and region means we can provide specific information.