Each state has a unique legal system and government structure. Those terms and concepts with which many are accustomed to operate are interpreted and perceived completely differently in the United Arab Emirates. Therefore, even if you read information about how to quickly and efficiently carry out company registration in uae, you will need an explanatory dictionary to correctly interpret some terms. We decided to help you with this and describe basic instructions for beginning businessmen in the UAE.
In order to be able to conduct business in the UAE, you must obtain a resident visa, which provides the right to live, work and engage in commercial activities in the country. A residence visa is issued for a period of three years and can be extended in accordance with the established procedure.
The main document that allows you to conduct any business in the UAE is a license. In the emirates, a license is not a special permitting document, but a general means of identifying a company and the type of activity it plans to engage in.
In the UAE, you can obtain three types of licenses:
- a commercial;
- professional;
- industrial.
A commercial license is issued to those who plan to engage in trade, a professional license to those who provide services, and an industrial license to those who are directly involved in the production of goods.
Regardless of the type of license, they are all issued for a maximum period of one year and require regular renewal. The cost of a license depends on the type of activity that the businessman plans to engage in. It takes about 5 days to obtain a license. Operating without a license is severely punished with very hefty fines.
When deciding whether to open a business in the UAE, you should decide which tax jurisdiction best suits the planned type of activity. UAE legislation provides the opportunity to choose one of three jurisdictions:
- local company;
- company in a free economic zone;
- company in an offshore zone.
To create a local company, it is necessary to attract a local partner, who must own a controlling stake in the company (51%). Such companies are most free to choose the place of activity and the type of such activity, and have full access to the domestic market of the UAE.
A company registered in a free economic zone has its own specifics. Free economic zones, of which there are about 50 in the emirates, provide their companies with preferential conditions for carrying out activities and optimal taxation regimes. In addition, the zones provide their subjects with offices and access to infrastructure. Registration in a free economic zone allows a company to have 100% foreign participation. The only limitation for such a company is entering the local sales market, which can only be realized through a distributor registered as a local company.
Offshore jurisdiction is suitable for business conducted outside the UAE. Offshore companies have the opportunity to open a bank account in the emirates and use it to make various transactions not related to the import of goods or conducting other business in the UAE.
After choosing a jurisdiction, obtaining a resident visa and complying with other formalities, you should think about the office. Here the emirates offer a fairly wide range of opportunities. You can rent an office in its traditional sense. Some free economic zones provide a so-called workplace, which at the same time serves as a legal address.
So, have you decided to open a business in the Emirates? You are now familiar with the basic terms, concepts and procedures used.