Welcome to Sovereign Dubai.
With two active offices in Dubai since 1998, and over 30 staff, we are well placed to assist you with all your Dubai requirements, big or small.
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Some of local services include:
1. Dubai Offshore Companies.
2. UAE FreeZone Companies (Jebel Ali, Ras Al Khaimah, DAFZA, Fujairah etc).
3. BVI, Cayman, Channel Islands Offshore Companies (all offshore jurisdictions covered, with "shelf companies available").
4. DED License applications ("LLC’s").
5. "Onshore" companies with local Trade License, Visa and Work Permit.
6. Residency applications.
7. Mutual Fund formation (Cayman, BVI, Gibraltar, Isle of Man etc).
8. Banking introductions (local and overseas).
9. Property structures and assistance at the Dubai "Lands Department".
10. Pension services (Qrops and Qnups).
11. Aircraft and Yacht Registration.
A UAE Synopsis:
The United Arab Emirates (UAE) comprises seven member states: Abu Dhabi (the capital), Dubai, Sharjah, Ajman, Umm Al Qaiwain, Ras Al Khaimah and Fujairah. The total area of the country is approximately 83,600 square kilometres located on the eastern coast of the Arabian peninsula in the south west corner of the Arabian Gulf.
Dubai is the second largest Emirate and is situated on the banks of the Dubai Creek, a natural inlet from the Gulf that divides the city into the Deira district to its north, and Bur Dubai on its south. The city ranks as the UAE’s most important port and commercial centre.
The Supreme Council of the UAE, comprising the rulers of the seven Emirates is the highest federal authority. It is responsible for general policy matters involving communications, education, defence, foreign affairs and development and for ratifying federal laws. The UAE became a member of the United Nations and the Arab league in 1971. It is a member of the International Monetary Fund, the Organization of Petroleum Exporting Countries, World Trade Organization and other international and Arab organizations.
The official language is Arabic, although English, Urdu and Hindi are widely spoken. Arabic and English are the official business languages.
The non-oil sector of the economy currently contributes some 80% of the total produced domestic products of Dubai and is continuing to expand in importance. A long trading tradition has earned Dubai the reputation within the Middle East as the ‘City of Merchants’ and this remains an important consideration for foreign companies looking at opportunities in the region today.
The UAE has concluded advantageous tax treaties with China, Czech Republic, Egypt, Finland, France, Germany, India, Indonesia, Italy, Malaysia, Netherlands (air transport), Pakistan, Poland, Romania, Singapore, Sri Lanka (air transport), Switzerland (air transport), UK (transport). It should be noted that the UAE is not on the OECD, UN or EU blacklists so Companies incorporated in this jurisdiction, if carefully structured with professional advice, may be extremely useful for tax planning purposes.
REGISTRATION IN DUBAI
There are a number of different ways of creating an establishment in Dubai, depending upon the function to be carried out. A Limited Liability Company (via the "DED" or Dept of Economic Development) is the most common way of registering in Dubai and is recommended where the purpose of the entity is to make sales within the region. It should be noted, however, that 100% foreign ownership of such an entity is not yet permitted, albeit each year the local Government consider changing this policy. Currently, you require a 51% local Emirati shareholder on your board, however flexible arrangements can be made to limit possible exposure.
A "Professional Licence" from the DED will enable the provision of many services, and not just professional services and does NOT require a local shareholder, while a branch or representative office will be suitable where there is no requirement to actually conduct sales or manufacturing, only to provide information and negotiate sales.
1) LIMITED LIABILITY COMPANY (LLC)
This type of company allows for a joint venture between national and foreign partners. Non-national partners are permitted to hold shares not exceeding 49% of the capital, with the national partner holding the remaining 51%. The law provides that for SOME activities, the minimum share capital required is AED 300,000 (US$ 81,750). Share capital must be fully paid up and deposited with a local bank (can be transferred out once the company is registered). The shares of such companies are not open for subscription by the public. Despite the split in shareholdings, profits may be divided in other ratios agreed upon taking into consideration efforts of non national partners in management, provision of technology or expertise. The expatriate partner may undertake management of the company.
2) PROFESSIONAL LICENCE
It is possible to apply for a professional licence as a means to providing a professional service in Dubai. This involves issuing a licence in the name of an individual who must hold a relevant professional qualification. A UAE resident must be appointed as a "service agent" whose role is to facilitate visa applications and other administrative issues. Normally the local agent will be paid an agreed lump sum which is subject to negotiation but will normally be a minimum of US$ 5,000 per annum and may be considerably larger depending on the standing of the local involved.
3) BRANCH OR REPRESENTATIVE OFFICE
Foreign companies may establish a branch or representative office in the UAE. Branches and representative offices may, subject to obtaining the necessary licences, carry out promotional activities and facilitate contracts but cannot sell or manufacture goods locally. As described above, a UAE resident must be appointed as a service agent. Please note it is a requirement that the parent company is well established, usually with the ability to present at least 2 years worth of audited accounts.
The approximate set-up cost for the registrations detailed above is AED 70,000 (approximately US$ 20,000). This includes fees for local sponsor/local agent but excludes visa charges, rent and municipality tax. Please note that this figure is an estimate only as the very nature of these types of registrations makes it impossible to give a standard schedule of requirements/costs as each registration is unique and processed on a case-by-case basis. An exact quote can be given once an application has been processed.
FREE ZONE REGISTRATIONS IN DUBAI AND OTHER EMIRATES
The UAE now boasts many free zones including DMCC (Dubai Multi Commodities Centre), Jebel Ali Free Zone, Dubai International Airport Free Zone, Dubai Internet City, Dubai Media City, Sharjah Airport International Free Zone, Ajman Free Zone and Ras Al Khaimah Free Trade Zone. The main attraction of establishing an entity in one of the free zones is that there is no UAE national shareholding requirement.
A common procedure is to register a branch of an offshore company, but it is also possible to incorporate a Free Zone Establishment or a Free Zone Company. In all cases the following benefits apply:
• 100% foreign ownership
• 100% repatriation of capital and profits
• 100% corporate and personal income tax exemption
• No currency restrictions
• Abundant and inexpensive energy
• Modern efficient communications
• Excellent support services from local authorities
Once a company has been accepted into a free zone it will typically operate under one or more of four different licences being commercial licence, general trading licence, industrial licence and service licence. Free zone registrations do not require a local sponsor. Companies registered in the free zones have to pay 5% duty and appoint a local service agent if they wish to sell goods or services within the Emirates. Overseas sales are free of any duty.
The usual method of establishing a free zone business is to register an offshore company as a branch, with the British Virgin Islands being the favoured jurisdiction. Costs, which include incorporation of an offshore company, will be in the region of US$ 4,000 and licence fees (which will depend on the type of licence applied for) range from US$ 1,000 to US$ 4,000. Free Zone Establishments and Free Zone Companies have differing minimum share capital requirements dependant upon the free zone of incorporation and must also pay licence fees.
Please note new free zones are being created and some of the existing free zones are reaching capacity. Please contact the Dubai office for free zone specific information.
UAE OFFSHORE COMPANY
There is now an option to set up a company in Dubai, at low cost, which has been designed for international business, but the companies can also be used for holding local bank accounts and local property:
Jebel Ali Offshore Company
Jebel Ali Free Zone set up the first "Dubai offshore company" in 2003, under the "Jebel Ali Free Zone (JAFZ) Offshore Companies Regulations 2003". This company can be used to trade internationally, hold bank accounts in UAE, and own any real estate properties in UAE. After January 2011, the local authorities banned all other offshore companies from owning Dubai properties. "Jafza Offshore" is now the only choice when it comes to structuring property ownership in the UAE.
A minimum of one shareholder and two directors are required. Corporate shareholders are authorized, but corporate directors are NOT permitted. One residence visa can be issued for one director provided the company maintains an office in the JAFZ, but the company will not be allowed to do business within UAE, with UAE residents or trade in JAFZ/UAE unless it has first obtained the appropriate licence in the free zone.
The company can hold a bank account in the UAE for conducting routine operational transactions.
Last reviewed: Monday, August 06, 2012
Whilst every effort has been made to ensure that the details contained herein are correct and up-to-date, it does not constitute legal or other professional advice. We do not accept any responsibility, legal or otherwise, for any error or omission.