Doing Business in the UAE
It is easy to understand why doing business in the United Arab Emirates (UAE) is such an attractive concept. A predominately liberal trade regime has contributed to sustaining an impetus for growth in the UAE.
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Legal and commercial issues, which need to be considered, by companies or individuals when entering a specific market as the UAE are the following:
- The relevant Corporate Structure;
- Free Zone Legislation;
- Mainland Legislation;
- Tax Regime and Tax Exemptions;
- Intellectual property rights and data protection;
- Immigration and Resident Visa Rules;
- Employment Regulations;
- Trading Law and regulation (Fintech Service are usually heavily regulated);
- Property Law;
- Accounting Requirements and Exemptions;
- VAT Rules;
- Audit Requirements.
If I register a company in a free zone outside of Dubai, can I live and have a bank account in Dubai?
Yes, you can have a company registered outside Dubai, but reside in Dubai or any other Emirate. You do not have to live in the same Emirate where your visa belongs to. You can also have a bank account in a Dubai branch of any UAE bank of your choice.
Can I open a bank account remotely?
No, you have to visit UAE personally. It is a requirement of a UAE Central bank which all local banks have to follow. Personal visit is required to make sure that the client is known by the bank.
Do banks give debit and credit cards or loans?
Normally you can get a debit card for your newly opened company if there is only one shareholder. You can also have a credit card, but it will be given against a fixed deposit. As for the loan, it is possible to get it, but you need to show company operations and profits to the bank. Upon checking your company's turnovers and profits, a bank may approve a loan. We recommend applying for it at least after one year of company's operations.
Can a free zone company hold its offices outside the free zone?
Officially an office of a free zone company has to be located only within the free zone where this company was registered. If you need an office in Dubai, you have an option to rent a space in a Business center and use it either a few times per month or daily, depending on the package that you choose. However, the free zone minimum required space (flexi desk) cannot be cancelled.
Why do I need a flexi desk or office?
A flexi desk is an obligatory requirement for any company eligible for resident visas. UAE government obliges to have it because it's the minimum physical office space, that a company who has any individual under its visa must have. Apart from that, flexi desk is helpful for bank account opening. The compliance department of the banks needs to see that a company has some kind of office or at least a small physical seat, where it can be working from.
Do we have to pay VAT if our company is registered in the Free Zone?
VAT obligations of the company depend not only on the place of its registration, but on the place where its business takes place. To start with, VAT comes into picture once your taxable turnover reaches 375 000 AED. Taxable turnover means the turnover which was done in the UAE. If your company is registered in a Free Zone, but the trading takes place abroad (for example you sell goods from India to Africa), that turnover is not considered taxable, because the transactions are taking place out of UAE. It means that you do not have to pay VAT. But if you have a free zone company and import goods to UAE, you have to add 5% VAT to your Invoices and pay VAT. If your company is registered in a designated free and sells the goods to another designated free zone or within the same zone, VAT does not appear.
Should I pay any other TAX?
UAE is free from income tax and corporate tax. It has only imported tax 5% for the goods that you bring into the country and VAT 5% for the trading or service transactions that happened in UAE.
Why will a free zone company suit me better than an offshore or a mainland entity?
Everything depends on your business model and requirements, but a free zone setup is the most suitable for the majority of the business needs. Free Zone company has 100% foreign ownership unlike mainland where you need a local partner or agent, it can be eligible for resident visas, allows doing business both in and out of UAE, more favorable by the banks in comparison to offshore companies, can have a flexi desk space instead of an executive office like in mainland companies. Free Zone is a good way to start a business for reasonable fees and without unwanted obligations.
Can you guarantee opening of a bank account?
We do our best when we setup your company in such a way that would make account opening easier for you. Knowing your background and your business model, we can give you our estimation about the chances of successful account opening. The approval of the account fully depends on the bank. Each case goes to a few departments of the bank where it has to be approved before the account gets opened. If the bank has any questions or needs clarifications, it will contact you directly with the inquiries. The more clear picture about your business you give to the bank, the higher your chances of account opening are. Being a consultancy company, we cannot guarantee opening of a bank account, because it depends on the factors which do not depend on us. However, we do our best to prepare you and your company for smooth and fast account opening.
Should I renew my company? When? How much does it cost?
Yes, the company should be renewed annually. The cost of the renewal is usually less than the setup cost. It depends on your company package. You can get the price by downloading the Estimate from this page. Renewal does not require personal presence of the owner and can be done by your agent. After company renewal, the new license has to be shown to the bank in order to extend the bank account. It is always included into our renewal service.
Average Professional Fees:
Usually the first step in to understand if you are looking for an offshore company in the UAE, a Free Zone Company in the UAE or a Mainland Company in the UAE.
A full package to incorporate your business in the UAE includes:
- Formation of Company;
- Company registered address;
- Flexi-desks set up;
- Mail Forwarding Service.
The cost involved starts at: $2.300 + Gov Fees
EXTRA SERVICES YOU MAY CONSIDER TO EVALUATE:
- Local Director;
- Dedicated Manager;
- Bank Account Introducing Service;
- Bookeeping Service;
- Accounting Service;
- Audit Service;
- DIFC Licence;
- Real Estate Brokerage;
- Recruitment Service;
- Immigration and Visa Service;
- Taxes Regime Service.
Unlike lawyers and accountants who focus on theory, I’ve done most of the stuff for myself and I know what works – and what doesn’t – especially in the UAE there are many things to consider before you decide to incorporate your business.
Working as CEO of Astorts Group, my team and I have received many inquiries and helped lots of clients to find a cost effective way to operate in the UAE, to pick the right Free Zone in the UAE, to have all corporate, immigration and legal issues sorted in the UAE, to relocate their business to the UAE, to buy properties or emigrate to the UAE, to apply and renewal their licence in the UAE.
My main focus is all about getting you across the “finish line” as easily as possible, so you will leverage my network and my experience to successfully get where you wanted.
During the Call we will:
- Get acquainted, analyse your situation;
- Evaluate how to incorporate your business in UAE;
- Let you have a clear idea about main corporate and visa issues in the UAE;
- Evaluate the possibilities you have to emigrate to UAE;
- Develop a strategy to let you succeed in UAE;
- Have a clear idea about your obligations in UAE;
- Draw up an action plan for you or your business to relocate to the UAE.
If you already know the service you will need, book a call back with one of our Team Members and we will get you a bespoke quote.
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Take your chance to learn from who have done most of the stuff he is talking about for himself and he knows what works – and what doesn’t – in the real world.
Why to entrust Alex?
Alex is an entrepreneur, fintecher, investor, blogger and author based in London and operating mainly in Europe, Asia and Oceania.
Alex uses to dedicate part of his life to inspire others and help them achieve the most out of their lives.
Since he was 20, he had successfully founded and managed several companies operating in the field of management consulting, wealth management and fintech.
Alex is Member of Institute of Directors in London, Member of Changer Club in Riga, Member of Fintech Association of Hong Kong, Member of Singapore Fintech Association, Member of Non Executive Director Association in London and Member of Alumni Network of Draper University in San Francisco.