REGISTRATION OF A BUSINESS (FIRM) IN THE UAE

In recent years, the United Arab Emirates (UAE) has demonstrated impressive and stable economic development, focused, in particular, on the development of innovative technologies.

It is these factors that have contributed to the fact that many international companies choose the UAE as a place for their business.

The main advantages of registering a company in the UAE are:

• Tax benefits

The UAE is known for its low or zero business tax rate.

• Simple registration process

The process of registering a company in the UAE consists of just a few simple steps, which allows you to quickly start operating. In addition, digital platforms are available for obtaining a commercial license and establishing a company online, where an application with the necessary documents will lead to a license in minutes.

• Privacy

Information about the owners and members of the company is not public.

• Loyal legislation

The UAE has business-friendly laws that protect investors and businesses in general. The UAE Government’s policy is aimed at attracting investors and foreign capital. Shareholders and employees of the company, as well as their family members, can obtain UAE residency.

• International Access

Thanks to its geographical location and well-developed infrastructure, companies in the UAE have access to a wide international market.

Types of companies in the UAE:

There are different types of companies in the United Arab Emirates. The choice of the type of company depends on various factors, namely: type of activity, place of registration, number of owners and founders, etc.

The main types of companies in the UAE are:

1. Free Zone Company

This is a company operating within the free economic zone. They give foreign investors broader rights to own and manage the company.

2. Limited Liability Company (LLC)

This type of company allows foreign investors to establish a joint venture with local partners. A foreign investor can own up to 49% of the enterprise.

3. Offshore Company

It is a company registered in an offshore zone to carry out international operations and avoid double taxation.

4. Public Joint Stock Company (PJSC)

This is a type of company whose shares can be publicly traded on a stock exchange.

5. Private Joint Stock Company (PrJSC)

Also a company with shares, but a limited number of shareholders who can participate.

Citizens of other countries can open an offshore company in the UAE, a local company, and a company in a free economic zone (the most popular is Dubai).

The list of main documents that must be prepared for company registration in the UAE:

• A detailed business plan with a description of the organizational structure of the company and management, the directions of the future company, a description of the product or services, marketing strategy, with financial forecasts for the next 3 years, and a plan for attracting investments.
• Information about the shareholder/s and director/s: national and foreign passports, a detailed CV for each, and proof of address of the shareholder/s and director/s translated into English and notarized.

The list of documents may vary depending on the type of activity, type of company, place of registration, number of shareholders, etc., as each of the seven emirates has its own legal requirements for registration and business activities.

Physical presence in the UAE is not required during the company registration procedure. Be that as it may, it will be required during the visa procedure (up to 7 working days in the case of applying for a visa outside the country) and for the procedures for opening bank accounts.

The main stages of company registration are:

1. Consulting, choosing a company name, and preparing a package of corporate documents
2. Submission of documents for preliminary consideration
3. Carrying out registration actions and obtaining a license, obtaining permits, submitting documents to local authorities
4. Registration of immigration documents
5. Opening a bank account

Obtaining a residence visa

Obtaining a resident visa is required for the purpose of registering a company in the UAE and includes the following steps:

• Medical Insurance

In some cases, you may need health insurance to obtain a residency visa.

• Sponsorship

In most cases, you need to have a sponsor in the UAE, which can be your company or a legal partner who acts as a guarantor for your visa.

• Preparation of documents

You usually need to have your passport, photos, copies of previous visas, and other necessary documents to apply for a residency visa.

• Application Submission
• Medical examination and fingerprinting

Depending on the type of visa, a medical examination and fingerprinting may be required.

• Obtaining a visa

Once your application is approved, you will receive a resident visa that will allow you to live and work in the UAE.

It should be borne in mind that the requirements for obtaining a residence visa may differ depending on the specific circumstances and type of visa, so it is recommended to get additional advice.

Taxation of UAE companies

The taxation system for companies can vary depending on several key factors, such as the type of company, type of activity, location, etc.

Types of corporate taxation in the UAE:

1. Tax on corporations (corporate tax)

Most companies in the UAE registered outside free zones are subject to corporate tax, the amount of which depends on the size of the company’s revenues.

2. Value added tax (VAT)

Value-added tax is 5%, which is paid when they sell goods/services in the UAE.

3. Sales tax (SME)

Some local organizations may be subject to a sales tax (the so-called SME Tax) of 0-5% depending on the type of activity.

4. Personal income tax

Individuals working in the UAE may be subject to income tax by the conditions and regulations set by local authorities.

5. Taxation of offshore companies

Offshore companies registered in the offshore zones of the UAE may have certain tax benefits or may be exempt from some forms of taxation ranging from 0-9%.