Andreas Danos Law Firm would like to announce that it has started successful cooperation with a Dubai law firm, mainly concerning companies’ registration, which would enable our clients to set up a company in the United Arab Emirates.
Even though the United Arab Emirates do not have the “tax heaven” stigma, registering a company there have a lot of advantages. First of all, for the entities registered in the UAE there is 0% corporate income tax. Further company registration’s details depend on the emirate where the entity is registered and the type of the entity.
There are several legal solutions for foreign companies wishing to conduct a successful business in the UAE. One of them is to register a company in numerous free-trade zones in the UAE. Those areas have a special tax, customs and imports regime and are govern by their own framework of regulations. Within the most investors-friendly free zones in the UAE are Dubai free zones. There are several free zones in Dubai and each of them is specified for the exact branch of business (f.e. Dubai Silicon Oasis, Dubai Media City, Dubai Internet City). Dubai free zone company can be established using the 3 following entities: Free Zone Establishment, Free Zone Company and branch. The two firstly mentioned enjoy limited liability, while the branch has unlimited liability for the parent company. All three types of entities allow the 100% foreign ownership, appointment of corporate directors and visa applications for foreign employees. The Dubai free zones companies are obliged to rent an office in the zone (but it is not necessary to hire the staff), appoint a resident company secretary, submit annual audited financial statements and annually renew the business licence. What is more, free zone companies do not require a UAE national shareholder and are excellent solution for investors wishing to use Dubai as a gateway to the consumer markets in Africa and the Middle East. Exemption on corporate tax minimalizes withholding tax on remittance to other countries and no customs duties are imposed on goods imported or exported from the free zone.
Another solution for the investor is opening a Dubai offshore company, which is an ideal, tax efficient and cost effective corporate structure for entrepreneurs who wish to conduct international trade. An offshore entity is sometimes called the ‘nonresident paper company”, because it allows foreign entrepreneurs to trade with Africa and Middle East without administrative obligations. The main difference between the Dubai free zone company and the Dubai offshore company is that the offshore company is not allowed to trade in Dubai and in the UAE. Besides that, a Dubai offshore company is quick and simple to set up and the shareholders and directors are not required to register their names and details for public record. What is more, an offshore company is exempt from all annual accounting and tax obligations.
The less popular corporate structure is the Dubai Limited Liability Company. This entity is advised for companies wishing to conduct consulting business (legal and accounting consultancy, IT and management consultancy, marketing consultancy). In other industries, the Dubai authorities require foreigners to create a joint venture with an UAE national, who must hold at least 51% of the shares.