Company registration in UAE

The United Arab Emirates is located in the eastern Arabian Peninsula. The region is rich in minerals, has a developed infrastructure, and has high economic growth rates. At the same time, the region maintains political stability and transparent rules for doing business. Therefore, entrepreneurs ask, “How to open a business in the UAE?” are advised to assess the region’s advantages and the main procedural points of incorporating a new business in Dubai, Abu Dhabi, or any other emirate.

Advantages of owning a company in the UAE

Having an offshore in the UAE or any other business is potentially beneficial due to::

• openness to the implementation of new business ideas;
• higher level of confidence in UAE companies;
• simplicity and clarity of registration procedures, along with compliance with all generally accepted standards of compliance;
• absence of exchange control;
• the availability of free economic zones (FEZs);
• tax conditions that create a relatively low burden on business.

Ways of doing business in the UAE

Business registration in the UAE is possible in one of the following forms:

• Limited Liability Company is the most popular form of business in the UAE, where the financial and legal liability of the participants is limited to the amount of their investment. The number of participants varies from 2 to 50. The minimum authorized capital is 300,000 dirhams, but the amount may vary depending on the emirate and FEZ.
• A joint-stock company is suitable for large businesses to attract external financing. The financial and legal liability of the participants is limited to the amount of their investment. JSC can be of several types: (1) closed, under which there is no public offering of shares (minimum authorized capital – AED 5 million), or (2) open, which can offer its shares to third parties, including on the stock exchange (minimum authorized capital – AED 30 million).
• A branch is an option for a non-resident company that plans to test the capabilities of local markets before investing more substantial sums.

Procedural aspects of opening a company in the UAE

You can register a company in the UAE after going through some interrelated steps:

1. Drawing up a business plan with a list of activities the company plans to carry out.
2. Selection and reservation of the name for the future company in the UAE.
3. Obtain preliminary registration approval from the Department of Economic Development or other competent authority of the FEZ which has been selected to register the company.
4. Drawing and executing all required documents for a new legal entity registration.
5. Selecting and renting an office (to meet the substance requirement).
6. Passing a medical examination and getting an Emirates ID.
7. Opening a bank account.
8. Submission of documents for review and registration.
9. Registration to pay taxes and mandatory social contributions.
10. Registration of required permits and licenses (for regulated activities).

Regulatory environment of the region

Any person, natural or legal, resident or non-resident, can register a company in the UAE. For an offshore or FEZ company, 100% foreign ownership is allowed. For an onshore company, the share of UAE resident(s) must be at least 51%.

The registration procedure is simple and is completed quickly if the formal legal requirements are met. It is also possible to buy a company in Dubai UAE, preferably with an audit of the accounts and previous transactions.

Taxation of onshore and offshore companies in the UAE

The UAE tax system provides for such basic taxes for local companies:

• Corporate tax – (1) for oil and gas companies – up to 55%, (2) for branches of foreign banks – 20%, (3) for most other companies and branches – 0%;*
• Income tax – not applicable
• VAT – 5%
• Withholding tax – not applicable
• Capital gains tax – not applicable

*from 1.06.2023, they plan to introduce a corporate tax of 9% (for activities within the UAE).

UAE offshore companies are exempt from paying taxes in the UAE.

How Prifinance specialists are ready to assist:

• form a pool of data that is necessary for the registration of a legal entity and compliance;
• prepare and execute, following the requirements of UAE legislation, all registration and incorporation documents for the company;
• conduct all necessary negotiations with the representatives of local authorities, including during the registration of a new offshore or onshore in the UAE;
• to open bank accounts;
• provide legal support in the course of further activities of the company.

Provide input on your current business objectives and the background of your business case. Then, Prifinance specialists are ready to develop an individual registration plan and provide comprehensive legal support at all stages of its implementation.