The United Arab Emirates (UAE) is a federation of seven emirates or states, each with its own unique character and personality but united with a common goal and destiny. The seven emirates are Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Ras Al-Khaimah and Fujairah. The UAE is an amazing amalgamation of the traditional values of the east and the modern technologies of the west and a melting pot of various nationalities and cultures living together and working in harmony.
There are three different kinds of corporate entities that you can set up in UAE: Local Companies (also sometimes called Mainland or Onshore), Free Zone companies and Offshore companies.
A Mainland Company or Local Company is a company which is licensed by the Dubai-based Department of Economic Development (DED).
There are different kinds of entities that can be registered under the Local Company category.
A Local Company has no geographical restrictions on doing business in UAE, can issue employment visas to owners and employees and in most cases, needs to have a physical office.
FREE ZONE COMPANY
The Free Zones are clearly defined parts of the territory of the UAE. Within their territory, you can find special conditions of taxation, customs fees, etc. Free Zones may vary by types of activity, amount of initial capital required, the cost of the annual license renewal as well as the range of services provided.
The benefits of having a business here are impressive:
These are just some benefits from a wide list of advantages, offered by the government of the jurisdiction for foreign investors, willing to register a Free Zone company in UAE.
There are several Free Zones in Dubai and these are again categorized in terms of the activity of the proposed company. Some of them are as follows:
Apart from Dubai, there are Free Zones in Fujairah, Ajman, Sharjah, Umm Al Quwain, Ras Al Khaimah and Abu Dhabi.
If you are trading outside UAE or looking for a vehicle to hold property, the best way would be to setup an Offshore Company. There are two types of Offshore Companies that Zenesis can setup: UAE Offshore Company and International Offshore Company.
Following are the benefits of having an UAE Offshore Company:
A UAE Offshore Company is a good vehicle to help with owning property and avoiding local inheritance problems that may arise on death of the owner of the property.
Here are the benefits of having an International Offshore Company:
If you set a up Local Company licensed by the Department of Economic Development (DED) then you need to have a UAE national partner. In case of companies with a Trading License, the UAE national partner will own 51% of the company though memorandums are set in place to give full operational powers to expatriate investors. In case of companies with a Professional License, the expatriate investor will own 100% of the company while the UAE national will only act as a service agent and will no share in the company.
A Free Zone company can be formed in all of the Emirates of UAE. It allows for 100% foreign ownership and can be used for either trading or professional services. Most Free Zones have no share capital or audit requirements and allows for 100% repatriation of funds and also have flexible office facilities which helps in keeping the operating costs low.
There are various flexible office packages ranging from 0 to 6 visa packages.
Local attendance for setting up a company would depend on the type of entity. In case of local mainland company or Jebel Ali offshore Company and few free zones entities, either personal presence is needed or a power of attorney attested by a UAE embassy has to be issued. However some Free Zone company do not need to have physical presence and the application forms can be done via email.
Renting an office space depends on the nature of activity. There are some licenses that allow you to operate from Flexi office or virtual office. Shared office space is also possible with same ownership and when the activities are similar. However the number of visas would depend on the office space so smaller the space, fewer the visas.
The main difference between a Local Company and other companies is that the Local Company needs either a UAE national partner (in the case of Trading Licenses) or a UAE national service agent (in the case of professional companies)
Free Zone Company can have 100% foreign ownership and flexi office facilities
Offshore Company – Mainly used for holding property and investments. It cannot do business with local residents and businesses. It does not have a license and cannot issue visas
Offshore companies are generally easier to incorporate and cheaper to maintain annually. However the main advantage of having an UAE Offshore Company is to hold property and assets to avoid the local inheritance laws dictated by Sharia.
A Rak Offshore company can be set up without local presence of the Shareholders but in case of Jebel Ali offshore Company, the shareholders have to be present in Jebel Ali or give POA to someone in UAE to represent them. The POA needs to be notarized and attested upto the UAE Embassy.
Also a Jebel Ali offshore company can hold most free hold property in UAE while RAK Offshore Company can hold property only in RAK
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