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Company Registration In The UAE

Healy Consultants Group PLC
26 November, 2014

There are numerous advantages to registering a company in the United Arab Emirates.  The country is the second largest economy in the Arab world.  The country’s gross domestic product has grown a staggering 231 times since 1971.  It is the perfect gateway to the Middle Eastern and African markets.  Also, since there is a highly developed infrastructure, the country makes for a great distribution center for trading companies.  Foreign investors who wish to invest in the United Arab Emirates can establish a tax exempt business, which allows them to collect the proceeds from subsidiaries incorporated within the Middle Eastern and African region.  Along with this, United Arab Emirates is known to be on the most livable country in the Middle Eastern African region, due to its liberal laws, first class work and residential infrastructure.  The United Arab Emirates is known to have the highest per capita incomes in the Middle East, which means a high demand for foreign goods and services exists in the country.  There are currently 38 free zones operating in the United Arab Emirates, including: Abu Dhabi Airport Free Zone, Dubai Academic City, Dubai Gold and Diamond Park, Economic Zones World, and Virtuzone Free Zone.  Due to these free zones being present, investors generally enjoy the following: 100% foreign ownership enterprise, 100% import and export tax exemptions, 100% repatriation of capital and profits, corporate tax exemptions for up to 50 years, no personal income taxes, assistance with labor recruitment and additional support services. 

There are five business entities in the United Arab Emirates which can be 100% foreign owned, including: a free zone company, professional services company, United Arab Emirates branch office, United Arab Emirates representative office, and offshore company.  A free zone company permits foreign entrepreneurs to incorporate their company in the form of a limited liability company, without the involvement of a United Arab Emirates shareholder.  A large amount of the business conducted in a free zone company is done outside of the United Arab Emirates.  A professional services company also allows for a foreign investor to incorporate a limited liability company which will provide professional services without the involvement of a United Arab Emirates partner.  A United Arab Emirates branch office requires that a United Arab Emirates resident be appointed at a local service agent.  This type of entity allows for a foreign company to incorporate a branch office to invoice United Arab Emirates customers, sign contracts, and receive income from local customers.   A United Arab Emirates representative office’s business capacity is narrowed to activities which promote the parent company.  This business entity is prohibited from conducting business within the United Arab Emirates, and lastly, an offshore company, this type of entity does not actually have a physical presence within the United Arab Emirates; therefore, does not conduct any business within the country.  This entity allows for foreign entrepreneurs to work with the African and the Middle Eastern markets without incurring any tax liabilities.

Taxes are collected in the United Arab Emirates from companies which deal in oil, gas, and petrochemicals.  All other companies pay no corporate, capital gains, or withholding taxes.  However, all companies are required to pay a 5% tax on imports.  The United Arab Emirates currently has 66 Double Taxation Agreements, including: Austria, Belgium, Canada, Malaysia, Singapore, Indonesia, and New Zealand. 

Legal and compliance rules state that it is required that every United Arab Emirates incorporated company appoint a manager.  The manager has the responsibility for all of the administration carried out by the company; however, the company itself is accountable for all actions taken by the manager.  All resident firms are required to file returns with the relevant authorities which presents information about a company’s directors and shareholders.  Along with this, all of this information is publicly accessible. 

There are also several disadvantages to incorporating a company in the United Arab Emirates.  Successfully operating a company in the United Arab Emirates can be quite difficult due to the high incorporation costs and complex corporate laws.  This is especially true if an investor were to invest in a free zone, due to the clients being required to comply with national laws, emirate laws and individual free zone laws.  The government also tends to favor United Arab Emirates nationals over foreigners, and also companies who employ United Arab Emirates nationals.  

About the Author

Healy Consultants Group PLC

Since 2003, Healy Consultants assists international Clients with company incorporation services worldwide. Our services include: company registration, opening of corporate bank account, accounting and tax services, legal services, jurisdiction comparisons...more.

To inquire more information about global business set up; call us on +65 6735 0120 or email us at email@healyconsultants.com


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