The United Arab Emirates have been known by its flagships Dubai and Abu Dhabi and there are a total of 7 emirates. These include Abu Dhabi, Ajman, Dubai, Fujairah, Ras al-Khaimah, Sharjah and Umm al-Qaiwain. Ra’s al-Khaimah or written „Ras al Khaimah“ (RAK) next to Dubai and Abu Dhabi is becoming increasingly important and is considered to be very strong in the establishment of new international companies.
What to consider if I want to start a company in the Emirates? Are there taxes in the Emirates? How expensive is an incorporation? David Paulson from Swiss Financial Yard in Switzerland specialized in company formation in Dubai, Ras al Khaimah and Abu Dhabi is active since 2009 in this field. He gives 10 tips for starting a company in the United Arab Emirates.
Tip 1
The perfect provider
The internet is teeming with vendors setting up new firms in Dubai, Ras al Khaimah and Abu Dhabi offer. Ask for the so-called „corporate services license“. This license is required to be able to offer company formation in the UAE. If this is not the case, it is usually an intermediary but takes no responsibility for possible problems or delays in the incorporation process. It should be noted that the Emirates are not the cheapest country for business start-ups. However, the benefits are considerable. Excellent infrastructure, central location, excellent international reputation, not on any blacklist for tax havens and yet fully exempt from tax.
Tip 2
Personal contact
Keep general distance from online company incorporations. Personal contact is relevant and also required by the Free Trade Zones. Registered Agents of or for the United Arab Emirates are obliged to identify their clients. Either personally or through a notary.
Tip 3
The choice of the appropriate Emirates
The emirates Dubai and Ras al Khaimah (RAK) are most appropriated by foreigners. Both Emirates have established so-called Free Trade Zones. Free Trade Zones are independently controlled and spatially restricted zones, that allow foreigners without a so-called „local“ (min. stake of 51% by a local) to start a company. Thus, a 100% ownership by a foreign investor is guaranteed. In addition, the Free Trade Zones are generally exempt from any tax. The tax exemption on earnings, sales, as well as payroll taxes is guaranteed. Please note that any tax follow at a foreign domination (shareholders and management based abroad) can be caused. In such a case it is likely that where the shareholders are resident, the state provides taxes. This should be discussed prior to establishing a company with an expert.
Tip 4
The choice of an appropriate legal form
If you plan only to work with international clients in your business model, a solution is the International Business Company (IBC) in Ras al Khaimah. Ras al Khaimah offers the advantages of a „Free Zone Company“ and allowes this type of society international transactions, except itself in the emirates. Conclusion: Low annual cost and tax advantages. If you plan, however, to do business with the UAE directly, so you should choose either a FZE (Free Zone Company), accordingly, with license (eg commercial license, consulting license, etc.) that allows you to do business with all the Free Trade Zones in the UAE or you should form a so-called LLC (Limited liability Company – e.g. construction companies), fully licensed for the entire room in the UAE. It should be noted that most companies have set up their companies in the UAE in a Free Trade Zone (tax benefit) and thus in many cases an FZE (free zone entity) is sufficient.
Tip 5
Pure Offshore Companies
Only so-called „International Business Companies“ can be established in a few days, as they can do business exclusively in international markets, however, they do not receive a license for the UAE, which significantly shortens the start-up process. The right type of company, a bank reference of its founder and director, a confirmation of residence are required for the establishment and account opening (also possible in the form of a bill that comes regularly to the country), as well as a copy of your passport.
If the founder is a company, the documents of the parent company must be certified at an embassy of the UAE, as well as be legalized at the „Ministry of Foreign Affairs“ in Dubai (this will delay the start-up process by approximately 1 week). The establishment of an International Company can be completed without a visit to the Emirates. The duration until entry usually takes 5-10 days. The deposit of initial capital is not mandatory.
Companies with license (active in UAE)
Companies in Free Trade Zones with licenses are more compley and usually last for 6 weeks up to entry. A share capital of the equivalent of EUR 20 „000 is required for the foundation (similar to a limited liability company) and the is fully available for the company. The deposit to the account of the new company will be required to release the license and to be active. Companies which want to actively work outside of the Free Trade zones (LLC) will be established depending on the Free Trade Zone and with higher original capital contributions (legal obligatory).
Tip 6
Choosing the right bank
Banks in the UAE, with a focus on Dubai, Ras al Khaimah and Abu Dhabi are quite different to evaluate. Reputable provider of company formations in Dubai inform you that a personal visit to the respective bank is mandatory. Banks require a personal identification of all account entitled persons. Plus banks usually require a bank reference letter, resume, business plan (in abbreviated form), as well as a confirmation from the residence of all the authorized person, and any other documents.
Important is the contact person at the bank
Often employees are of Indian origin and this may cause problems because of the different mentalities. Make sure that the firm many years of experience with banks in the UAE and excellent relationships with banks. Be aware of online suppliers offering automated start-ups with account openings.
Tip 7
The official language is English
Make sure that all documents are in English and / or have been translated into English. The official language of the UAE is English.
Tip 8
Travel (Identification at the bank)
In general, the bank account will be opened in Dubai, as the banks in Dubai can be reached within a short distance from the Dubai International Airport. The main street called Sheikh Zayed Road stretches from Dubai airport to the beaches of Jumeirah and can be considered as a reference point, because it runs straight through Dubai. The banks are located on this street or in the immediate area and are also in the DIFC (Dubai International Financial Centre) resident. Recommendations to banks are difficult because it actually depents on
www.swissfinancialyard.ch – more informations
Internationale Firmengründungen, Kontoeröffnungen, Verwaltungen von Firmenstrukturen,
Kontakt:
Swiss Financial Yard AG
David Paulson
Grabenstrasse 32
6300 Zug
+41417406020
d.paulson@swissfinancialyard.ch
http://www.swissfinancialyard.ch