Doing Business in the UAE
Over the past two decades the United Arab Emirates have proven themselves to be the No.1 hub for investors and entrepreneurs from all over the world. And understandably so. The UAE, especially Dubai, has developed into the world’s most prosperous economic ecosystem with world-class infrastructure, a wide range of business activities you can engage in, low tax rates and transparent regulations and laws.
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Incorporation of a Freezone entity in the UAE
While we can surely help incorporating a business in any freezone of your choice, we highly recommend the following freezones due to their flawless international reputation, transparent and business-friendly regulations, the possibility of obtaining a crypto license and/or cost-effective incorporation process:
Incorporation of a Freezone entity in the UAE
While we can surely help incorporating a business in any freezone of your choice, we highly recommend the following freezones due to their flawless international reputation, transparent and business-friendly regulations, the possibility of obtaining a crypto license and/or cost-effective incorporation process:
If you are looking to engage in your business activities all by yourself (especially providing services like copywriter, photographer, video editor, content creator, etc.) and are not looking to hire other people, obtaining a Freelance License and visa instead of incorporating a Freezone entity could save you some money.
Incorporation of a UAE Mainland entity
If you are looking to permanently relocate to the UAE and conduct business within the UAE (coffeeshop, restaurant, retail shop) you probably should consider incorporating a company in Mainland.
Incorporation of an Offshore Entity in the UAE
If you are not looking to relocate to the UAE and conduct your business only outside the Emirates on the other hand, an offshore entity with RAK ICC will probably be the best and most cost-effective choice for you.
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Once your company is incorporated, you will need to setup a bank account.
We will be happy to assist and support you in case you will need a business account (current business account, a merchant business account or a saving business account) or a personal bank account. Click on the follow link to have more info
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After the incorporation process is finished you will also need to register with the Federal Tax Authority in the UAE.
As of June 2023, every business needs to register for Corporate Tax in the UAE which is 9% of the net profit. If you provide your services or sell your goods within the UAE and your turnover exceeds AED375.000 you will also need to register for Value Added Tax (VAT).
We will be happy to assist you in registering for VAT and Corporate Tax, as well help you with the bookkeeping!
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If you are wondering what VISA to choose and how to apply for it, here is what you need to consider beforehand.
There are a few different types of visas you can choose from:
- UAE Golden VISA for investors, remarkable talents, and highly educated specialists
- UAE Green VISA for skilled employees, self-employed and freelancers
- UAE Property Investor VISA for those who invest in UAE property worth at least AED 2.000.000
Remember, based on what type of VISA you choose, the validity of your residency VISA may vary between 2 and 10 years!
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If you will live and do business in the UAE, you may also want to consider the following services:
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FAQ
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?
In general, an office of a free zone company has to be located only within the free zone where the company is registered. As for now, Meydan is the only free zone that gives you the possibility to rent an office space outside of Meydan for a yearly fee of AED 2500 in addition to the license fee.
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?
As from June 2023, every UAE based company needs to register for corporate tax with the Federal Tax Authority. Corporate tax in the UAE is 9%
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 business needs. A free zone company offers you 100% foreign ownership whereas for most mainland entities you will be required to hire a local agent or partner. There are only few business activities in UAE mainland at the moment that would allow a foreigner to have 100% ownership over the company. Another advantage of a free zone company is that it allows you and your close family members and employees to obtain a residency visa. With a free zone company you are free to choose a flexi desk office space over an executive office and therefore save a lot of money. You also can conduct business both within and outside of the UAE. Compared to an offshore entity, a company registered in a free zone will be favoured by any bank in the UAE since it has more substance than an offshore company.
To sum up, a free zone entity is a good way to start your business in the UAE for a reasonable price 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.
Who needs to register for corporate tax?
As already mentioned before, every UAE based company needs to register for corporate tax, but you should know that not every company will have to pay. Only companies with a taxable income exceeding AED 375 000 are required to pay corporate tax.
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