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The UAE business entities

Companies in Dubai and other Emirates

The UAE was formed on the 2nd of December 1971, and consists of 7 Emirates which are Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah, and Umm al-Quwain.

Within the UAE there are many free zones, Free Zones are part of the country’s territories but considered to be outside the customs territory and subject to customs control other than normal customs procedures.

The currency of the UAE is the Arab Emirates dirham (AED) often said as just Dirham. The two most popular Emirates for company formation are that of Dubai and Ras Al-Khaimah.  Dubai and Ras al-Khaimah are the only ones in the UAE to have their own court that is not part of the UAE system. Jabel Ali was the first freezone and was established in 1979.

Compare to many other jurisdictions incorporation and registration of companies formed within the UAE are relatively quick and straight forward with a minimum amount of bureaucracy. Throughout the United Arab Emirates the registration process and criteria may vary slightly  from one free zone to another.

Why choose a company in Dubai?

There are many reasons to choose a company in Dubai. As well as it is being a fresh relatively new and dynamic place which means along with the massive constant investment it has a superb infrastructure. It makes for the perfect business environment with only 11% of Dubai’s 107.1 Billion USD revenues coming from oil and an estimated GDP growth of 6.1% for 2014. Its geographical location makes it perfect as it sits at +3GMT it is just ahead of Europe and just a little behind Asia regarding time, it also has great international hub ports both for air and sea making business trips and cargo movement easy and quick. With only 15% of the local population being actual Emirati’s it has a diverse mix of nationalities and English is widely spoken and used. If all this was not enough and just the sheer prestige of having a company in Dubai did not tempt you then surly the 0% tax rates would. Simple put Dubai is up there with the top business centers of the world yet has all the benefits of the old fashioned “tax havens”.

Taxation in Dubai

Taxation of Physical persons:

  • Income tax – 0%
  • Tax on interest and dividends – 0%
  • Inheritance tax – 0%
  • Tax on property sales – 0%
  • Tax on property rental income – 5% (from an average statistical rent, normally paid by the tenant)
  • Asset tax – 0%

Taxation of legal entity in Dubai:
For most businesses except oil, tourism and banking sectors the tax is 0%

  • Corporate tax – 0%
  • Vat – 0%
  • No limits on exports of profits and capital.
  • Salaries tax and other contributions and expenses – 0%
  • Companies located in the free zone customs duties for import and export of good and services – -0%

Companies registered outside of the free zone are liable to pay pensions for UAE locals working in the company, payments are 14% from the salary.

Representative Office

Activity of a representative office is limited to business or sales promotion activities and may be used as regional headquarters or a liaison facility. It may not import goods, effectuate sales or make contractual commitments.

Banking in Dubai

If you would like a bank account in the same jurisdiction there are a variety to choose from, of course all the big banks are there such as HSBC, Citi, Barclays but it is normally preferred to use some of the local banks. Local banks offer all the usual services including internet banking and multi-currency, all at very competitive prices. It is relatively straight forward to open accounts with them although you will be asked to make a personal visit to the bank. Although we are happy to help open accounts with all banks two banks we have a good connection with and frequently use are Noor Bank and NBD bank both of which have an excellent reputation.

This is just a few reasons why you may consider incorporating your company within the UAE.

Why form a company in Dubai?

  1. NO INCOME TAX
  2. NO VAT
  3. NO SALARY TAX
  4. NO DIVIDEND TAX
  5. HIGH CONFIDENTIALITY STANDARDS
  6. ONE OF THE TOP BUSINESS CENTERS IN THE WORLD
  7. INDEPENDENT FROM EU