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Company Formation in United Arab Emirates

Overview :

UAE is today one of the most developed country in the world based on various socio economic factors such as per capita, energy consumption per capita. The country has liberal social and economic policy and its foreign policy is based on pro western cultures. Apart from oil, high class tourism, and international finance are the new sector starting to develop as a new source of revenue. Cement, building materials, aluminium, garments, furniture’s, paper, plastic, fibre glass, processed metals and gold are the major business in UAE.

Advantages of Incorporating Business in UAE
  • By incorporating a business in UAE, you get access to a diversified economy.
  • The UAE is located at the centre of some of the world’s most important trade and commerce routes.
  • By establishing your business operations in the United Arab Emirates, you will have access to the markets of Asia, Africa, Southern and Eastern Europe and the Middle East.
  • The UAE’s government offers attractive tax incentives to businesses doing business in the country. There are currently no foreign exchange controls, trade barriers and no personal or corporate taxes which can help take a significant financial and administrative burden off of international businesses.
  • With the most modern facilities and infrastructure, such as the Dubai Media City, the country is the perfect place to advance your operations.
  • The country has the necessary facilities to accommodate international trade, with state-of-the-art air and maritime ports, making doing business in the UAE an attractive endeavour.
Attractive Tax Regime

Income Tax :

There is no individual income tax in the United Arab Emirates.

Investment Income :

There are no taxes in the United Arab Emirates on investment income.

Property Rental Income :

There is no taxation of rental income in the United Arab Emirates.

Wealth Taxes :

There are no wealth taxes in the United Arab Emirates.

Capital Gains Tax :

There is no capital gains tax in the United Arab Emirates.

Inheritance and Gift Tax :

There are no inheritance or gift taxes in the United Arab Emirates.

Regional and Municipal Taxes :

Municipal taxes are levied in most Emirates the rate and application of which varies from Emirate to Emirate.

Property Taxes :

There are no property taxes in the United Arab Emirates.

Stamp Duty/Transfer Tax :

There is no stamp duty in the United Arab Emirates.

Sales Tax :

There are no consumption taxes or VAT in the UAE except some specified goods like liquor & cigarette etc.

Types of entities

General Partnerships :

This entity may only be established between UAE nationals. A general partnership may be established between two or more general partners who are jointly and unlimitedly, to the extent of their personal assets, responsible for the company’s liabilities.

Limited Partnerships :

This entity is comprised of at least one jointly associated partner liable for the partnership’s obligations to the full extent of their assets, along with at least one inactive partner liable for the partnership’s obligations limited to this partner’s capital contributions. This entity usually has one active partner who manages the company and a silent partner who does not participate in day-to-day management.

Joint Participation :

This entity is an association between at least two partners who will share the profit and loss in one or more commercial businesses conducted by one of the partners in his or her own name.

Public Joint Stock Companies :

This entity comprises any company whose capital is split into publicly subscribed negotiable shares of equal value or any company in which a UAE public body holds any share capital. There is a minimum capital requirement of AED 10 million and that capital must adequately achieve the objectives of the company. This entity requires a minimum of 10 founding members. UAE businesses involving banking, insurance or investment of funds on behalf of third parties must take the form of a public joint stock company.

Private Joint Stock Companies :

This entity requires a minimum of three founding members who, between them, fully subscribe to a minimum capital of AED 2 million. The shares of private joint stock companies may not be offered for public subscription. Private joint stock companies may be converted into public joint stock companies on fulfilment of some specific conditions.

Limited Liability Companies :

This entity is defined as an association with a maximum of 50 partners and a minimum number of two partners. Each partner’s liability is limited to the extent of its share participation in the capital of the company. Foreign companies wishing to establish an LLC in the UAE should seek guidance on the current practice of the relevant Emirate regarding minimum share capital.

Partnerships Limited with Shares :

This entity is formed by general partners who are jointly liable to the extent of their personal assets and participating partners who are liable to the extent of their share participation in the company. General partners must be UAE nationals. The minimum capital required to form a partnership limited with shares is AED 500,000, and participating partners are prohibited from being involved with the day-to-day management of the partnership. They may, however, participate in its internal administrative affairs.

Time Required

It usually takes 8 days to incorporate a business in United Arab Emirates.