The UAE has a vibrant free economy with a significant proportion of revenues arising from exports of oil and gas. Successful efforts have been made to diversify away from dependence on hydrocarbons and a solid industrial platform has been created together with a strong services sector. The establishment of free zones has been an important feature of this diversification policy and the reform of property laws gave a major boost to the real estate and tourism sectors.
The Global Competitiveness Report 2016-2017 published recently by the World Economic Forum (WEF) ranks the UAE as the 16th country in the world in terms of competitiveness. The UAE has established a council of competitiveness to enhance efforts to achieve sustainable development through the setting up of legislative frameworks and the provision of developed infrastructure that will further enhance the country’s status as a regional and global hub for investments. The council continues its communication with government agencies and the private sector through workshops and meetings, to coordinate efforts and explore ways to further enhance the competitive advantages of the UAE.
Economic and fiscal policy
Since the early 1980s, the two main economic objectives set by the UAE government have been to reduce reliance on hydrocarbons and boost private sector investment. This strategy is being followed diligently in an effort to offset the country’s vulnerability to fluctuations in oil prices and to propagate economic growth and stability. The fact that there are no restrictions on current and capital account transactions, helps to implement these objectives as does the fact that foreign entities repatriate dividends, profits, interest or royalties without restrictions, with the exception of foreign banks which are required to obtain the Central Bank of UAE’s approval. The UAE aims to promote free trade with minimum restrictions on foreign trade and investment. The policy of the UAE government to encourage foreign investment is evidenced with new and impressive industrial and commercial developments frequently announced.
Infrastructure in the UAE is second to none. Telecommunications, including mobile telephony and land lines as well as internet access are at least as good as that of the world’s largest international business hubs. The road network is constantly upgraded and ports and airports are of world class standards. The UAE is creating one of the world’s biggest and most efficient cargo handling centres. To date, the government has invested heavily in infrastructure development, and it has also opened up its utilities and other infrastructure to increase private sector involvement.
Security and stability
The UAE is enjoying political stability. This has enabled the implementation of sound economic policies reinforcing the country’s social structure to develop one of the most tolerant, prosperous, secure and safe societies in the world. Dubai and Abu Dhabi have been ranked the top two cities in the Middle East region for quality of life, according to latest editions of global surveys. Long-time investors include a wide range of multinational companies headquartered across the globe.
World Expo 2020
Dubai has won the right to host the 2020 World Expo, sparking national jubilation as the business and tourism hub secured an extra recognition for its growing economy. Five years after the economic crisis, Dubai became the first Middle East location designated to host the 2020 World Expo, fending off competition from Ekaterinburg in Russia, Izmir in Turkey and Sao Paulo in Brazil in the international vote held in Paris.
Investment laws, regulations and incentives are continuously improving to encourage further foreign investment.
This includes the introduction of foreign ownership of land and stocks – Dubai became the first emirate within the
UAE to open its property market to foreign ownership, followed by Abu Dhabi.
On December 4, 2011, the UAE Federal Cabinet has approved a new Company Law that paves the way for more
relaxed foreign ownership above the existing ceiling of 49 percent in the future. In addition, the new law allows for
a simplified process of starting a business in the UAE and strengthens protection of shareholders. A new FDI law is
also in the works and, when announced, will make the investment environment even more attractive.
Some of the main features of the new company law include the following:
The existing 49 percent foreign ownership threshold will remain; however, the new law permits the Cabinet to issue a separate resolution specifying the types of businesses that may be majority-owned by foreigners.
It is expected that majority foreign ownership will initially be permitted only in business sectors in which the government seeks to increase foreign direct investment.
The new law reportedly exempts from its application public joint stock companies wholly owned by a federal or local government, and will likely focus on private joint stock companies and limited liability companies.
With respect to minimum capital requirements, the current position remains unchanged as the new law will not require new companies to have a minimum required share capital and this has been the position under the existing law since 2009.
One of the many aims of the new legislation is to reduce the length of time required to establish a company.
The new law is likely to increase stock subscription amounts for raising capital for newly founded public joint stock companies.
Intellectual property rights
The UAE is a regional leader in the protection of Intellectual Property Rights, with continuous improvements of
copyright, trademark and patent laws. The rate of software piracy in the UAE is regarded as one of the lowest in
the Middle East and Dubai is acknowledged as the best performer.
There is no federal corporate or income tax levied in the UAE (except on oil companies and foreign banks). Dubai introduced a local income tax under the Dubai Income Tax Ordinance of 1969; however, the tax has not been implemented and it is understood that there are no plans to do so. In addition, free zone entities are subject to a number of tax concessions. There is no value added tax or sales tax in Dubai or the UAE. There are no exchange controls on the remittance of proﬁts or repatriation of capital and there are virtually no restrictions on foreign trade.Corporate governance Dubai has embraced the need to develop and encourage principles of good corporate governance in the Middle East which can only help to attract foreign direct investment. Hawkamah Corporate Governance Institute, the ﬁrst institute of its kind in the UAE, has been established with the mission of assisting the countries and companies of the Middle East region to develop and implement sound and globally well-integrated corporate governance frameworks.
Dubai’s serious attitude to developing corporate transparency and principles of good corporate governance and anti-money laundering is a beacon for the Middle East region and is a signiﬁcant attraction to the international investment and ﬁnancial community.
Over the past years, the UAE has increasingly emerged as one of the most popular jurisdictions worldwide for the relocation of high net worth individuals (HNWIs), even becoming a preferred alternative to traditional jurisdictions such as the UK, Switzerland, Monaco and Singapore.
With no taxes applied on individuals, straightforward administrative requirements and low processing costs, coupled with political stability, excellent accessibility and sunny weather all round, the UAE is indeed a very attractive proposal as a residency jurisdiction.
The UAE's position has further been reinforced by the ongoing tax backlash in other hubs - eg amended UK regimes pertaining to "non-doms", first signs of erosion of the lump sum tax system in Switzerland as well as plans from various countries to tighten the screw on Europe's tax havens.
Why Relocate in the UAE?
exemption from income tax and wealth tax for individuals
no quotas on the number of issued residence permits
no requirement to obtain a fiscal quitus from the foreign country
no minimum requirement regarding time spent annually in the jurisdiction other than visiting the UAE at least once every six months
no requirement to effectively reside in the UAE
competitive costs for issuance and renewal of the residence permit
competitive costs of ongoing substantiation
presence of internationally recognized financial legal and tax service providers
primary hub and platform to access international business
Individuals, other than UAE and GCC citizens, must have a residence visa if they want to live in the UAE. Obtaining a residence permit is the primary condition for being considered as resident in the UAE. As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction.
For many expatriates, the company that employs them will act as their sponsor and secure them residence visa. For those who do not come on an employment contract, there are two other ways for obtaining UAE residency:
investment in real estate (property residence visa)
set up of corporate structure to act as sponsor
Real estate investor/property residence visa
UAE government in June 2011 introduced a new system extending the validity of the visa granted to real estate investors for up to 3 years. The following rules and conditions govern the issuance of a real estate investor visa:
the property is built and ready for accommodation
the applicant proves ownership (title deed issued by the Land Registrar)
the property is worth minimum AED 1 million (equivalent to US$300.000) with no mortgage
the applicant's income is higher than AED 10.000 (US$3.000) monthly
The other way to obtain residency is through a corporate structure. As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction. For foreigners, setting up a company is a practical way of obtaining sponsorship.
As far as the company is concerned, it must have physical presence in the UAE. In that regard, the most interesting and cost effective options are proposed by free zones situated in the northern Emirates. Usually, these options consist of "flexi desks" or "flexi offices".
There is little crime in the UAE and the country is clean, with modern facilities. Foreign newspapers, magazines, films and videos are readily available. Alcohol is available for consumption by non-muslims in certain emirates and may be consumed at home, in hotels and on licensed club premises. There is also a wide range of entertainment available including clubs, cinema, theaters, desert safaris, and there are many sporting facilities, restaurants and hotels. Women are permitted to work and can drive and move around unaccompanied.
The UAE has a comprehensive road network with driving on the right hand side of the road. Taxis are the main form of public transport. Visitors may hire a car if they hold an international driving license. Major international car rental companies operate in the UAE.
There are government schools in all the emirates providing free primary and secondary education to UAE nationals. There are private foreign schools offering the academic curriculum of the UK, the US and other countries such as Italy, Japan, Iran, France, Germany, India and Pakistan as well as the international baccalaureate.
The department of health and medical service provides medical care to all UAE nationals, visitors and resident expatriates. The department issues health cards to individuals that entitle them to subsidized consultation and free medicines. Fees on medical examination by consultants in hospitals are less for health card holders than for non-card holders while UAE nationals who hold health cards are exempt from these charges.
Normal hours of work are 8 hours a day.
Relocation to Dubai described as "new Switzerland"
Dubai is widely described as the "new Switzerland". Many advantages exist for HNWIs in Dubai to fit this description, including:
pro-business and advantageous tax regime, no personal and corporate taxes, no capital restrictions and 100 percent repatriation of capital and profits
bank confidentiality and no exchange of information agreements with any country
sound and developed economy with significant natural resources, state reserves and growth prospects
mature, safe, well capitalized and regulated banking sector
banking system that allows 24/7 online transfer capabilities and cash withdrawals
stable currency pegged to the US dollar eliminating currency risks
a regime that prohibits unethical and high risk activities
no social unrest and low crime rate
abundance of high end accommodation facilities, marinas, entertainment, luxury lifestyle and world class shopping
business hub with significant commercial activity and profusion of top end office space, staff and executives for employment
word class health system
top international schools and universities at all levels
air connections via world class airports with significant direct flights and major transit hub
a good climate, sunny for the most of the year at the sea cost
1. What is the real use of an offshore company?
Registration of an offshore company is a recognized and effective tool for tax planning and asset protection. Offshore companies in the UAE stand out from other alternative jurisdictions that offer registration of offshore companies.
Registration of an offshore in the UAE gives foreign shareholders – legal entities and individuals – 100% ownership with full tax exemption. There are no requirements for minimum share capital, no restrictions on capital and profits expatriation. UAE company law and banking regulation offers reliable mode of confidentiality, and a reliable and efficient banking system. The United Arab Emirates, in fact, being a tax-free country, do not fall under the category of “tax heavens” and have never been blacklisted by European countries as an offshore jurisdiction.
2. What is the real use of an onshore company in Free Trade Zone of the UAE?
Apart from significant tax optimization, an onshore company in a Free Trade Zone can greatly minimize the cost of production and/or operational control of the operative business in the country. Due to the absence of corporate tax on most types of business activities and no income taxes, minimal deductions related to the payment of wages, the UAE are a very effective place to do business.
In addition to significant tax advantages, the UAE have well-developed infrastructure, cheap energy and a favorable geographical position in the region between the West and the developing East. The Emirates are favored from other countries by progressive and friendly legal framework for doing business.
The uniqueness of onshore companies registered in the UAE Free Zones is that there are no taxes despite the fact that a company can have a real working office and actually be managed in the UAE.
On-shore companies registered in the Free Trade Zones of the United Arab Emirates – is not offshore, but a full resident company with no taxes (except taxes on the oil industry and tourism).
A company that is registered in a Free Trade Zone allows its owner to get a resident visa of the UAE and benefit from the extensive network of double tax treaties available.
3. How long have you been in the business?
The company’s shareholders have over 26 years of joint experience in this business, including accounting/audit, corporate services, management consultancy, banking, financial and legal consulting in the UK, Cyprus and the UAE.
4. Why cannot I register a company myself?
There are more than 30 Free Trade Zones in the United Arab Emirates, where it is possible to register onshore or offshore companies for almost any type of business activity. In addition, each Free Trade Zone has its own specifics. When you choose a FTZ, it is important to understand the purpose of incorporation in order to foresee any misstep, which may subsequently lead to large financial losses. Besides, a dominant number of different issues related to the company activity (including its renewal) can be solved only by personal visit to the relevant authorities, which can be handled by our Advisors. In addition, even though you can save on professional services of a consulting company, there is a higher risk that you may probably choose not the best option for the company, its license type, permitted activities, the number of visas and different expenses. In this case, eventually, there is a higher probability that you will have to pay significantly more and to deal with some unexpected questions and challenges.
5. How quickly can I open a company and a bank account in the UAE?
Time required for the incorporation of offshore companies in the UAE - around 2 to 7 working days depending under which Free Zone the company is registered with. RAK IBCs can take as little as 1 day to register, JAFZA IBCs may take up to 7 days.
Opening a bank account takes from one to three weeks, considering a period that a bank needs to activate internet banking system.
The time required for the opening of an onshore company varies from 2 to 20 days. It usually depends on type and complexity of obtaining the license, and the set of documents submitted by the Customer.
6. How many days do I need to spend in the UAE to register a company and to open a bank account?
One day. The rest of the steps to complete incorporation of your company will be performed by our Advisors.
7. Do I have to come again to renew the company?
No, you needn’t. Renewal of the company will be carried out by our Advisors for you.
8. What are the advantages of the UAE compared to other jurisdictions?
Classic offshore companies cannot be managed from the territory they are registered at (otherwise, as a rule, taxation will be applied in the country of its registration). That is why classic offshore companies can often define residence not by the country of its registration, but by country, where the company is actually controlled from. This fact usually entails significant tax risks in relations with tax authorities in different countries. In case of registration of a company in the UAE, these risks are not applicable. If the business processes are properly structured, the company can prove its residency in the UAE without any tax complications due to the absence of taxation in this country.
The question of the actual residence of companies has recently become particularly acute. Business relationships with offshore companies have become very complex. This situation is getting even more complicated in recent months. Companies in the UAE efficiently solve this problem.
Companies in the UAE Free Trade Zones are more expensive than ones in classic offshore jurisdictions. However the absence of taxes, stability and recognition of this jurisdiction by other countries, effective banking services and availability of Double Tax Treaties outweigh the costs difference.
Onshore companies registered in the Free Trade Zones of the United Arab Emirates are not considered offshore, but a full resident company, with no tax (except taxes on the oil industry and tourism). Unlike classic offshore companies, where any financial flows result in high attention from bank supervisory authorities, companies that are registered in the UAE, usually do not draw in any concern from authoristies.
In addition to the above:
The presence in the UAE may open new opportunities for new work within the GCC region.
Ability to transfer part of the production chain to the Free Zones without any taxes and cheap labor forces.
Powerful UAE logistic infrastructure can be effectively used when working with international markets.
9. What are the real business advantages of the UAE, including logistics, manufacturing etc.?
When opening a new operational business in the UAE, you can greatly minimize the costs of production and/or operational control of the business. Since there is no corporate tax on most types of activities and no income tax, absolutely little deductions related to the payment of wages, the UAE is a very effective place to do business.
Along with significant tax advantages, the UAE has an extensive logistic infrastructure and cheap energy. It also has a fortunate geographical position in the region and can be favorably compared with progressive and friendly legal framework for doing business.
10. How to open a bank account in the UAE?
Given the fact that each bank is unique – different sets of services – from classical retail to full corporate or private banking, different documentation requirements and minimum balance, different tariffs, specialization in certain sectors or countries, etc., correct choice of bank is the key to continued success of cooperation with it. Taking into consideration the specificity of each bank, it becomes noticeable that opening a bank account abroad is an important step in the structuring of foreign business and tax planning. It requires serious analysis and approach in each case, as well as proper preparation of all necessary documents for the bank.
11. Obtaining residence permit in the UAE.
One of the most important factors in the further successful development of Dubai is a liberal policy of the state in relation to foreigners, who lives, works, or just visits the country. That is why Dubai has become home to more than 150 nationalities. The local population is currently slightly more than 11%, the rest people are arrived foreigners. At the same time the UAE have created such conditions for life and work that no one feels like a foreigner in this country.
12. What are the taxes for companies and individuals?
The UAE has no income tax for individuals. As for the tax on corporate profits, it is charged only from banks and the activities related to oil industry and tourism.
Companies registered in the UAE Free Trade Zones are not taxable; there is no either VAT or fees related to the payment of wages. In addition to the above, companies have significantly reduced paperwork with regards to invoicing, acts of completion, reporting to different institutions. There are no tax inspections, audits, any risk of bribes or any other risk that the company will be blocked from trading working for any reason. If your business is well set up, the necessary licenses are in acquired, your business will be traidng on a going concern!
13. How comfortable is it to live and work there?
The United Arab Emirates is a unique combination of opportunities for business and recreation. You can be amazed by entire business areas, including financial districts with a modern stock exchange, wonderful stadiums, theatres, museums and recreation parks, expanding of the existing airport and building of another one (the largest in the world), modern logistics and manufacturing facilities in the Free Economic Zones, well-developed all business and social infrastructure – all of them are put into operation.
14. What are the living costs in the UAE?
Dubai is very diverse in all aspects of life. This diversity is affordable for people of completely different income and social statuses. This can be easily seen in a huge prices range. For example, a prestigious restaurant of the highest building in the world, Burj Khalifa, keeps very high, ”royal” price bracket. At the same time, another restaurant, with spectacular views on the musical ”dancing” fountain, can offer delicious food at very reasonable prices for you. The same principle is true for each emirate. When you arrive in the UAE, you will be able to choose from the most expensive to the cheapest market segments. But even the quality of the last ones will leave you more than satisfied.
Statistics show that the annual population growth rate is 7%. It points out the dynamic development of the UAE, and that residence in this country becomes more and more comfortable.
Your attention can be grabbed by the fact that luxurious lifestyle in the UAE costs much cheaper than in Western or Eastern Europe. Let us take an example of purchasing a prestigious and expensive vehicle: a car, selected in a price range from 120 to 150 thousand dollars in Vienna, will cost $ 80-90 thousands in the UAE. The same formula is valid for the prices in luxurious restaurants and everything that involves the concept of “luxury.” A similar difference is applied to the prices of economy class.
In the UAE, people are really caring of children and, therefore, pay great attention to their education and their leisure time – whether it is malls, recreation areas, parks or restaurants. On the other hand, you can rest assured regarding developing part of your children’s lives, because children’s education in the UAE is presented very diversely. You can select from different branches of prestigious schools and universities of the USA, Canada, Australia, Britain France etc.
15. My knowledge of the language - how to deal with everything?
The UAE is a multinational country and everybody speak English. It is perfect if you know English language at advanced level, you know how to write, read, and easily speak. However, even if you took only several language courses, you can come to the UAE without any hesitation. People here got used to different accents, and you will not feel that sort of inconvenience and discomfort that you usually come with communicating amongst English-speaking society, when you are always afraid that you say something wrong.
An important advantage in the UAE is that you can be served by people, who speak almost any language of the world at all basic services (shops, pharmacies, doctors, hairdressers, etc.).
The company’s shareholders, who have many years of experience in bank sector, legal and financial consulting, where confidentiality policy is an indicator of professionalism and absolutely essential part of business, incessantly have followed and continue following the regime of maintaining of absolute confidentiality of client information and embody the principle of this approach at all levels of our company.
17. Can you provide a complete back office, including the preparation of accounts, contracts, and other issues?
Our office can take on all aspects of your company's administration from starting from setting up your company maintaince of records as well as preparation of accounts, audit, general administration and management advice. Click here to for list of services.