About the UAE and Market Entry

As the geographic and economic lynchpin of the Middle East, worldwide investors see the United Arab Emirates (UAE) as a vital element of their operations. It is well established as the prime destination for multinationals to set up their regional base and serve the high growth markets in the Middle East, Africa and South Asia. It is also the perfect location for new business setups across diverse sectors.

Dubai is the second largest emirate and ranks as the UAE’s most important port and commercial centre. It has worked to transform itself into a broadly diversified economy. Critical sectors include manufacturing, logistics, financial services, information technology, retail, travel, tourism, healthcare and education, in addition to a strong focus on green technologies.

To attract international business Dubai has invested heavily in its transport, telecommunications, energy and industrial infrastructure. There are no income or capital taxes in Dubai, except for oil and domestic banking, and no withholding taxes. Companies in Dubai can obtain further significant advantages from the absence of foreign exchange controls, trade barriers or quotas, making it an ideal location for business setup and company formation.

Company formation in Dubai

A foreign company wanting to start a business in the UAE can choose to set up operations as a branch, representative office or registered company, or it can appoint a commercial agent to sell its products in the UAE market or export them. New companies can also choose to conduct their activities from a Free Zone, which is a designated, self-regulated area set up to catalyse economic activity within an emirate and is governed by its own set of rules and regulations. There are around 40 Free Zones in the UAE, with more under development.

Foreign ownership restrictions are contained in the Commercial Companies Law (CCL), which requires that UAE nationals or their wholly owned companies hold a minimum of 51% of the shares of all companies established in the UAE. The CCL provides for the establishment of the following business entities for foreign investors: joint stock companies (JSC), limited liability companies (LLC), unincorporated joint ventures and branch offices of foreign companies. The CCL does not apply to companies that are established in the free zones.

It is important to have a full understanding of your options before deciding how to establish your company’s presence in the UAE. Overall growth for your company in the UAE can be hampered by making the wrong choice, so please consider the following points when deciding the best structure for your needs.

The current nature of your business
Business expansion plans
Current capital to invest
Need for outside investors, or desire to attract investors in the future
Tax implications of structure
Personal liability and company risk
Audits and other requirements to remain compliant locally
Mixture of Persons and Companies
Speak with one of our Company Formation consultants

UAE Company Formation – FAQs

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