Doing business in the UAE

As a Champion of English business, the English Business Council empowers and assists English companies who want to do business in the UAE – the most bouyant market in the GCC and a vibrant commercial hub that is the world’s 31st largest economy. Whatever your preferred industry sector, we can provide expert market data and step-by-step, informed guidance on market entry and trading strategies.

Why the UAE?

The UAE offers one of the world’s most successful and stable economies and an exceptionally high standard of living. It is akin to Singapore in that it has emerged from relative obscurity to being a world-class economy in a remarkably short timeframe.

Indeed, the  UAE was only established  as recently as  1971,  and  is  in fact a federation  of seven  emirates:  Abu  Dhabi,  Dubai,  Sharjah,  Ras  Al Khaimah,  Umm  Al Quwain,  Ajman  and  Fujairah. From  the  1850s  until  the  union of  the  individual  emirates  in  1971,  the  British  colonial administration  maintained influence  in the  region  and each  emirate  entered  into  separate treaties  with  the  British  administration.  The  emirates  were  then  collectively  known  as  the Trucial States  or Sheikhdoms. 

The  UAE  is  now  known  as  one  of  the  Middle  East’s  most  dynamic  countries.  Positive planning  and  vibrant  enterprises  have  developed  a first-class infrastructure and metropolitan lifestyle fully on par with that in the world’s leading nations. Abundant  wealth in  natural  resources  such  as  oil,  coupled  with  well-planned enterprise initiatives  in  the  business  community have  resulted  in flourishing  industry,  trade  and  service  sectors. The  UAE’s  easy  and  tolerant  lifestyle  has  also  been  a major factor in  attracting  overseas investment.  The  standard  of living  is  high. Accommodation is  modern and spacious,  and most  of  the  major international hotel chains are  represented.  There  are  87  British  Curriculum  Schools  and numerous  Universities,  including six household-name British  Universities.    An important  aspect  of  the  UAE,  easily  noticeable  to  foreign  visitors,  is  that  it  is  a  virtually crime-free  country  with  one  of the  lowest  crime  rates  in  the  world.  This  congenial socioeconomic  environment  has  led  to  the  UAE  being  an  attractive  destination  for expatriate workers  with  more  than  200  different  nationalities  living  and working in the  UAE. 

Economic factfile

According to the Economic Report 2018 released by the UAE’s Ministry of Economy, the estimated GDP for 2017 rose by 0.8% at real (constant) prices, amounting to AED 1422.2 billion at the level of the state, compared to AED 1411.1 billion at the end of 2016.

The following table shows the contribution of the economic sectors in the GDP for 2017 at real prices of 2010:

Economic sector Sector contribution to the GDP for 2017 (in per cent)
(Extractive Industries (including Crude Oil and Natural Gas 29.50%
Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles 11.70%
Financial and Insurance Activities 8.60%
Construction and Building 8.40%
Transformative Industries 8.30%
Public Administration and Defense; Compulsory Social Security 5.80%
Real Estate Activities 5.70%
Transport and Storage 5.40%
Electricity, Gas and Water 3.20%
Information and Communications 2.90%
Professional, Scientific and Technical Activities 2.60%
Accommodation and Food Services Activities 2.20%
Administrative and Support Services Activities 1.90%
Other sectors 3.90%

On the level of economic diversification and the relative importance of economic activities in the GDP, preliminary estimates indicate that the GDP estimates at current prices of the non-oil sectors amounted to about AED 1092 billion, a growth rate of 3.2% (at current prices) and at a rate of 2.5% at real (constant) prices by the end of 2017 compared to its value by the end of 2016.

Features of the UAE’s solid economy

Despite recent fluctuations in oil prices, real estate values and the global economic recession, the UAE enjoys a stable economy. Some of the features of the UAE’s economy are:

  • Strategic location

The UAE enjoys a strategic location between Asia, Europe and Africa. This makes it an extremely attractive hub for nations and businesses requiring ease of outreach and accest to key world markets. For example, thousands of Chinese businesses use Dubai as a hub for trading in Africa. Indian traders use the emirate to access the world. Latin Americans see the country as a launching platform into South Asia. Western nationals use Dubai as a hub for the Middle East.

  • Strong financial reserves

The UAE maintains strong financial reserves and has a durable banking sector, which makes it safe for investment. The International Monetary Fund forecasts that the gross official reserves of the UAE would grow from USD 76.8 billion in 2015 to USD 118.4 billion in 2020. The current account surplus would grow from USD 17.6 billion in 2015 to USD 33.4 billion by 2020.

Standard & Poor’s, the world-leading ratings agency, has rated Abu Dhabi AA indicating that its capacity to meet its financial commitment is very strong in the long term.

Sharjah and Ras Al Khaimah were rated A/A-1 indicating that their capacity to meet its financial commitment is strong in the short term.

  • Large sovereign wealth fund

According to the June 2016 figures of Sovereign Wealth Fund Institute, Abu Dhabi Investment Authority is the largest sovereign wealth fund in the Middle East and the fifth largest in the world with USD 792 billion.

  • Consistent government spending

Government spending on infrastructure continues to receive a major injection of capital. Abu Dhabi continues to develop the infrastructure required for one of the wealthiest cities in the world.

Dubai is implementing new projects for hosting World Expo in 2020; AED 30 billion will be spent on infrastructure at the Expo site and the city.

The UAE plans to spend AED six billion on major infrastructure developments across the country, including road networks and federal buildings. Khalifa Initiative in the Northern Emirates is designed to ensure that inhabitants of these emirates enjoy the same facilities as those living in the larger emirates of Abu Dhabi and Dubai.

The UAE is also working on the Etihad Rail project, which will offer a significant leap in land transport by year 2021.

  • Progressive policy of economic diversification

The policy of economic diversification has led into impressive development in key sectors such as tourism, air transport, trade, financial services, manufacturing and alternative energy. The UAE has made progress towards ending its economic dependence on hydrocarbons. Oil industries accounted for around 28 per cent of GDP in 2014, down from 79 per cent in 1980.

Location 

As mentioned above, the UAE enjoys a highly favourable location for international trade, being situated in south-west Asia, bordering the Gulf of Oman and the Persian Gulf, between Oman and Saudi Arabia. It is in a strategic location along southern approaches to the Strait of Hormuz, a vital transit point for the world’s crude oil.  The UAE is strategically positioned close to the entrance of the Arabian Gulf, with extensive coastlines on its western and northern regions together with an eastern coastline bordering the Arabian Sea.  The climate of the UAE is generally hot and dry. The hottest months are July and August, when average maximum temperatures reach above 48°C (118°F) on the coastal plain. In the Al Hajar Mountains, temperatures are considerably cooler because of the higher altitude. Average minimum temperatures in January and February are between 10°C (50°F) and 14°C (57°F).  The central location of the UAE makes it convenient to speak to Singapore and the USA (or anywhere in between) during office working hours. UAE is GMT+4, while Singapore is GMT+8 and the USA (EST) is GMT-5 hours.  

Tourism

Lying on the calm, blue waters of the Arabian Gulf and flanked by extensive deserts, the UAE offers year-round sunshine and five-star luxury. The UAE has welcomed seafarers and traders to its shores for generations. Today, this tradition of courtesy and hospitality lives on. The UAE’s streets are clean and safe, and travellers are charmed by its warmth and friendliness.  The UAE has something for all holidaymakers and is also rapidly emerging as an international conference, exhibition and incentive destination. It has superb sports, shopping, and dining and entertainment facilities. 

Population

As of January 2018, the population of the UAE was 9,400,000. Expatriates make up approximatley 88% of the population and are mainly drawn from the Indian subcontinent, Europe and neighbouring Arab countries. Most of the land in the UAE is sparsely populated and the population is centred mostly in the cities of Dubai, Abu Dhabi and Sharjah.  Population growth in the UAE has been strong over the last 18 years:  

196092,612
1965150,318  
1970235,434  
1975531,265  
19801,016,789  
19851,350,433  
19901,811,458  
19952,350,192  
20003,050,128  
20054,481,976  
20108,329,453  
20159,156,963  
20169,266,971 
20189,400,000

Infrastructure

The  UAE  has  been spending  billions  of  dollars  on infrastructure  and  is  the  second-biggest  projects market  in  the  region,  after Saudi Arabia, accounting  for 28%  of total project  value  within  the  construction,  oil and gas,  petrochemicals,  power  and water  and waste  sectors.  Many  huge  investments have  been  poured  into  real  estate,  tourism  and  leisure.  These  developments  are particularly  evident  in  the  larger emirates  of Abu  Dhabi and  Dubai. Governments  in  the  northern  emirates  are  rapidly  following  suit,  providing  major incentives  for developers  of residential  and  commercial property.  Money  will be  allocated to  fund the  construction of  road networks,  new  housing  communities,  drainage  networks and other  projects,  providing  integrated solutions  to  some  infrastructure  issues  in these areas. One  of the  strategic  goals  of  the  National Transport  Authority  is  to  bolster  the  railway industry  and  achieve  a safe  and  sustainable  transport  system.  The  Etihad  Trains  Company was  set  up by  the  Cabinet  Decree  No.  2  of 2010.  The  company  will engage  in  transporting goods  and  passengers  and  invest  in  a countrywide  rail network  that  will  link  all  seven emirates. 

Real Estate

Traditionally,  only  UAE  nationals  and  nationals  of the  Gulf Cooperation  Council (GCC)/Arabian  Gulf Cooperation  Council (AGCC)  countries  could own  property  in the  UAE. However,  from  early  2004,  Dubai opened  its  real estate  ownership  to  expatriates,  limiting this  to  developments  in the  ‘free  zone’  or  ‘new  Dubai’  areas.  This  has  been  a major area of growth in the  last  five  years. Following  Dubai,  other emirates  followed  suit  and  passed  laws  whereby  expatriates  could own properties  in  free  zone  locations.   The  Real Estate  Regulatory  Agency  has  been established to  monitor  and regulate  the  sector.  The  Department  of  Lands  and Properties  issues  title deeds  for real property  rights  in  accordance  with  the  current  records  in  the  real  property register. 

Communications

The  UAE’s telecommunications  sector is  regulated  by  the  UAE’s  Telecommunications Regulatory  Authority  (TRA)  and  is  presently  serviced  by  two  telecommunications operators,  Etisalat  and  du,  both  of  which are  majority  owned  by  the  government.  Etisalat  has  been  investing  in  communications  infrastructure  and  providing,  since  its establishment  in  1976,  a full range  of telecommunications  service,  including  fixed-line telephony,  fixed and wireless  internet  access,  cable  TV  and  mobile  coverage  in  the  UAE. The  corporation operated a  monopoly  until  du launched mobile  services  in 2007.  However, Etisalat  remains  the  UAE’s  biggest  telecoms  provider  and is  heavily  expanding internationally.  Etisalat  is  now  the  16th  largest  telecommunications  firm  in  the  world  and its  international subscriber  base  is  in  the  region  of  100  million,  with  operations  covering nearly  two  billion  people  across  its  18  markets  around  the  world. Etisalat is also a top-100 business globally in terms of its yearly revenues.

The  power  and  water  desalination  Industry  in  the  UAE  is  characterised  by  a limited  source of  supply  struggling  to  cater  to  the  escalating  demand  for water  fuelled  by  increasing population  and  improved  standards  of living. The  current  challenges,  in  terms  of a lack  of supply,  particularly  affect  the  Federal Electricity  and  Water Authority  (FEWA)  in the  northern  emirates,  although both Abu Dhabi and  Dubai also  face  constraints.  Substantial  progress  has  been  made  in tackling  these problems.  So,  for example,  the  Dubai Electricity  and Water  Authority  (DEWA)  and Abu Dhabi Water and  Electricity  Authority  (ADWEA)  secured  financing  for  new  projects,  whilst Abu Dhabi  both extended  financial aid  for new  infrastructure  and stepped up exports  of electricity  from  its  own  power stations  to  Sharjah  and  the  northern  emirates  in  order to address  the  shortfall  in supply.  Recognising the  importance  of  sustainable  development, attention  has  also  been  paid to  promoting  public  awareness  about  the  need to  reduce electricity  and  water consumption  growth. New sources  of  energy  are  planned  in  the  form  of solar plants  and  nuclear  reactors.  One  of the  most  important  development-related events  in the  country’s  history  is  the  signing  of an AED  75  billion  (USD  20  billion)  contract  with  a consortium  of Korean  firms  to  build  four nuclear power stations  by  2020.  The  move  means  that  the  UAE  will  be  the  first  Arab  nation to  tap  atomic  power  on  a commercial scale. 

Industry

The  discovery  of oil ushered  the  UAE  into  the  industrial age.  This  industrialisation  process gathered momentum  following the  formation of  the  Federation.  During  the  last  two decades,  with the  government’s  increasing  emphasis  on  diversification  and  with the  basic building  blocks  such  as  capital and  energy  readily  available,  the  manufacturing  sector has made significant  progress  in  the  UAE. Free  zones  have  played  an  instrumental role  in  attracting  manufacturing  industries  and today  hundreds  of factories  covering  a wide  range  of  manufacturing  activities  are distributed  throughout  the  country.  Cement,  building  materials,  aluminium,  chemical fertilisers  and  foodstuffs  top  the  list,  followed  by  garments,  furniture,  paper and  carton, plastics,  fibre  glass  and  processed  metals. 

Currency

The  unit  of currency  in  UAE  is  the  UAE  dirham,  also  referred  to  as  the  Arab  Emirate  dirham (AED)  in international markets.   Each  dirham  is  divided  into  units  of 100  fils.  Currency  notes  are  issued  in  denominations  of 5,  10,  20,  50,  100,  200,  500  and  1,000  dirhams.  Coin  denominations  are  1,  5,  10,  25 and  50 fils  and  1  dirham.  However,  coins  with  a denomination  below  25  fils  are  rarely  used. As per all GCC countries – with the exception of Kuwait – the  value  of  the  dirham  has  been  fixed  to  the  US  dollar since  1997,  at  the  rate  of  1  USD  =  AED  3.67. 

Finance and Banking 

The  UAE’s  banking  and monetary  system  has  made  significant  progress  in  recent  years  due to  the  Central Bank’s  (the  regulator)  increasingly  strict  control of financial institutions.  Over the  last  12  years,  the  Central Bank  has  played  an  important  role  in  supervising  the  banking industry  and has  contributed  to  improving  the  quality  of services  and  performance  of several banks. The  number of foreign  bank  representative  offices  in  the  UAE  has  risen  steadily  over the last  several years,  a  trend  ascribed  to  the  flotation  of several new  companies  and  to  the UAE’s  membership of  the  World  Trade  Organisation  (WTO).  

Stock Exchanges

The  Dubai Financial Market  (DFM)  is  operating  as  a secondary  market  for  the  trading of securities  issued by  public  joint-stock  companies,  bonds  issued by  the  federal  government or  any  of  the  local  governments  and public  institutions  in the  UAE,  units  of  investments, local or foreign,  which are  accepted by  the  Market. 

The  Abu Dhabi  Securities  Market  (ADSM)  was  set  up  at  the  end of  2000.  Its  provisions position the  Market  as  a legal entity  of autonomous status,  with  independent  finance  and management,  and give  the  exchange the  necessary  supervisory  and  executive  powers  to exercise  its  functions.   

The  Nasdaq  Dubai (formerly  called  the  Dubai International Financial Exchange  or DIFX)  is the  international  stock  exchange  between Western Europe  and East  Asia.  Its  standard is comparable  to  those  of  leading  international  exchanges  in New  York,  London and Hong Kong. 

Religion 

The  official religion  of UAE  is  Islam.  However,  other religions  are  also  respected.  There  are a number of  Christian churches  in Dubai,  two  Hindu temples  and a  Sikh temple. 

Corporate Structures

Various  legal structures  are  available  for establishing  a  business  in the  UAE  and are collectively  addressed  by  various  laws.  The  most  prominent,  and the  one  which  may  be  of most  interest  to  foreign  entities,  is  the  Federal Law  No.  2  of  2015,  –  the  ‘Commercial Companies  Law’  and  its  bylaws.   Individual  emirates,  as  well as  the  federal government,  regulate  economic  activities.  The authorities  have  sought  to  create  an  environment  that  is  well-regulated without  being unduly  restrictive.  As  a  result,  the  UAE  offers  businesses  operating  conditions  that  are among the  most  liberal and  attractive  in  the  Gulf region. 

Emirates of the  UAE 

Abu Dhabi

 Abu Dhabi  is  the  biggest  of  the  seven emirates  and  is  the  capital of the  UAE.   It  is  one  of  the  Arab world’s  largest  producers  of crude  oil and  its  reserves  are  expected  to last  more  than  200  years.  The  emirate  constitutes  about  80%  of the  UAE’s  land  mass  and commands  a strategic  location  at  the  crossroads  of key  European,  Asia Pacific, African  and  North  American  business  hubs,  providing  greater access  to  many  important markets  and  resources.  It  boasts  an excellent  and ever-expanding  network  of air and road links  which connect  the  emirate  with  the  rest  of the  nation  and  the  world  at  large.   Abu Dhabi  made  key  strides  towards  the  implementation of  its  Plan Abu Dhabi  2030 which aims  to  diversify  the  emirate’s  economy  away  from  oil  while  developing  ambitious  plans  to become  a genuinely  sustainable  world-class  capital city.  Urban  growth  challenges,  brought about  by  demographic  and population  shifts,  need  to  be  addressed by  developing  a framework  that  will create  sustainable  communities  for future  generations. 

The  past  few  years  have  seen  the  Abu Dhabi  emirate,  which  controls  over  94%  of  the  UAE’s oil reserves  and  a similar percentage  of the  nation’s  gas  wealth,  taking  the  lead  in  setting ambitious  economic  diversification  goals  and  fulfilling  them  in  a steady  and sustainable manner.  The  emirate’s  diversification  policies  demonstrate  the  vision  of its  leadership  to achieve  a secure  energy  future  and  a  significant  reduction  in  carbon  emissions  by diversifying  away  from  fast-depleting  conventional fossil energy  sources.  This  has  resulted in  the  creation  of an  entirely  new  economic  sector in  the  country,  the  renewable  or future energy  sector,  and today  the  emirate  is  emerging  as  an investment  hot  spot  and important test  bed for  incubating  new  technologies  in this  vital sector. This  vision  has  been  further  translated into  the  development  of  many  multi-billion  projects such  as  the  world’s  first  zero-waste  and  zero-emission  city,  Masdar City,  and  later the country’s  landmark  nuclear  deal with  South  Korea,  besides  several solar power projects currently  being  developed across  the  emirate.  

Abu Dhabi  has  chosen a  group  of  South Korean firms  to  build the  country’s  first  nuclear power stations.  The  USD  20  billion  (AED 73.47  billion)  award  for four power stations  to  be  built  by 2020 will  supply  up to  a  quarter of  the  emirate’s  energy  in  ten  years  and  will drastically  cut  the  country’s  carbon  footprint. 

The  past  30  years  have  been  particularly  successful for Abu  Dhabi International  Airport (ADAC)  in  terms  of  airline  and  infrastructure  developments.  Etihad  Airways  launched  in 2003  and  was  named  the  national carrier  for  the  UAE.  Since  2011,  the  airport  has  achieved some  significant  milestones  placing  it  among  the  world’s  leading  airports  in  terms  of airport  development,  customer services  and  partner  relationships.  For example, the new 700,000 sq. m. Midfield Terminal  Building  has the ability to  handle  27–30  million  passengers  per year. 

Meanwhile, Etihad  Rail is  in  line  with  the  objective  to  further diversify  the  UAE  economy  as  set  by  the UAE  Vision  2021  and  Abu  Dhabi Economic  Vision  2030.  Etihad  Rail was  established  in  June 2009  under  Federal  Law  no.  2,  with a  mandate  to  manage  the  development,  construction and  operation  of the  UAE’s  national freight  and  passenger railway  network.  The  railway network  will be  built  in  phases  to  link  the  principal centres  of population  and  industry  of the  UAE,  as  well  as  to  form  a vital part  of the  planned  Gulf  Cooperation  Council (GCC) railway  network  linking  the  six  countries  of the  GCC–  the  Kingdom  of  Bahrain,  the  State  of Kuwait,  Oman,  Qatar,  The  Kingdom  of Saudi Arabia and  UAE. 

Dubai

Dubai  is  the  second largest  emirate,  and has  positioned  itself  as  a regional business  hub,  an  attractive  tourism  destination  and a safe  and  vibrant  place  to  live.  The  development  of  state-of-the-art  infrastructure  has  been one  of  the  main reasons  behind  its  success.  Dubai  has  invested in the  most  recent technologies  guided by  international  best  practices  to  develop  its  infrastructure  and promote  competitiveness. The  economy  of  Dubai  is  one  of  the  most  unique  and unusual  in  the  world.  As  an entrepôtor free  port  (portofranco),  duties  and taxes  are  not  imposed  on imported goods. Dubai  has  numerous  free  zones  and  has  therefore  attracted  considerable  foreign direct investment  (FDI).  The  emirate  has  a network  of industrial areas,  business  parks  and highly successful,  specialised  free  zones  of international distinction,  world  class  seaports,  a major international airport  and  cargo  village, a modern  highway  network,  state-of-the-art telecommunications  and  reliable  power and  utility  services,  all  of which  deliver efficiency, flexibility,  reliability,  reasonable  cost  and  capacity. 

The  focus  on  master-planning is  also  strong in Dubai,  where  the  guiding  policy  document  is the  Dubai  Strategic  Plan 2015.  The  plan touches  on urban planning;  energy,  electricity  and water;  roads  and transportation and the  environment.  Sustainable  development  and a balanced  view  towards  new  infrastructure  are  at  the  core  of the  policy.   Dubai has  recently  attracted  world  attention  through  many  innovative  large  construction projects.  The  city  has  become  symbolic  for its  skyscrapers  and  high-rise  buildings,  such as the  world’s  tallest,  the  Burj  Khalifa,  in  addition  to  ambitious  development  projects including  man-made  islands,  hotels  and some  of  the  largest  shopping  malls  in the  region and the  world.   Tourism  is  an  important  part  of the  Dubai government’s  strategy  to  maintain  the  flow  of foreign cash into  the  emirate.  As  of 2017,  Dubai  was  the  third  most  visited  city  of the world  and  attracted  21.3  million  visitors  in that  year.  

Dubai  International Airport,  the  hub  for Emirates  Airlines, the national carrier of Dubai, is the world’s No.1 for its volume of international passengers – topping 89.1 million for 2018.  In  addition  to  being  an  important  passenger traffic  hub,  the  airport  is  the  fourth busiest international freight  traffic  terminal  in  world.  

On june 27th, 2010, a second aiport opened in Dubai, the Al Maktoum International Airport, also known as Dubai World Central. Part of Dubai South, a residential, commercial and logistics complex, it has a projected annual capacity of 12 million tonnes of freight and between 160 million and 260 million passengers. 

Opened in 2009, with an ivestment cost of USD  3.89  billion,  Dubai Metro  currently  consists  of two  lines  (the Red and  Green line)  which  run  through  the  major financial and  residential areas  of  the  city. A third line wil be operational in November 2019, linking with the Expo 2020 site and Maktoum International Airport The  exisitng limes currently have  70km  (43.5 miles)  of track  and  43  stations,  37  above  ground and ten underground.  The  Dubai  Metro  is  the  first urban  train  network  in  the  Arabian  Peninsula.  All the  trains  run  without  a  driver  and  are based  on  automatic  navigation. 

Dubai Expo 2020

On  November  27th 2013, it was announced that Dubai had won the prestigious bid to host Expo 2020, the most recent iteration of the world’s largest and oldest trade fair. Dubai defeated highly competitive bids from key cities in Brazil, Russia and Turkey, with a much-accliamed event proposal led by Her Excellency Reem Al Hashimi.

The main site of Expo Dubai 2020 occupies 438 hectares, and is adjacent to the Dubai South district. The master plan, designed by the American firm HOK, is organized around a central plaza, entitled Al Wasl, enclosed by three large Thematic districts – each dedicated to one of the sub-themes of Expo 2020: Opportunity, Mobility and Sustainability.

The site planning and build of the central Al Wasl district has given a great deal of forethought to the usage of the premises once Expo 2020 is over. The buildings will carry a decorative facade for the event itself, which can then be removed and allow easy conversion into retail units and accommodation.

133 nations will take part in Expo 2020, with the event opening on October 20, 2020. It is believed that Expo 2020 will  bring  huge  economic  benefits, generating activities  worth  billions of dirhams.  According  to  research  from  Oxford  Economics,  the event  could  create  more than  270,000 jobs.   

Sharjah 

Sharjah is  the  third  largest  emirate  in  the  UAE,  after Dubai and  Abu  Dhabi.   It  is  the  cultural capital of  the  UAE  and  has  attractive historical destinations  for tourists.  Sharjah covers  approximately  2,600  square  kilometres.  In  addition  to  Sharjah  city,  which lies  on the shores  of the  Arabian  Gulf,  the  emirate  has  three  regions  on  the  scenic  east  coast – Dibba  Al Hisn,  KhorFakkan  and  Kalba.  Sharjah  is  a close  neighbour  to  Dubai  (there is only  a  15-minute drive  from  the  centre  of Sharjah  to  Dubai International  Airport). Sharjah is  among  the  top ten business  cities  in the  Gulf  region and the  UAE’s  leading industrial  and  manufacturing  capital,  with 19  industrial  subdivisions.  Sharjah is  home  to approximately  40%  of all industry  based  in  the  UAE,  with goods  manufactured  across the  whole industry spectrum.   

Industrial areas  have  been  developed  in  specified  locations  and  Sharjah  has  two  world-class  free  zones – Al  Hamriyah  Free  Zone  and  the  Sharjah  International  Airport  Free  Zone. These  free  zones  have  become  one-stop investment  destinations,  attractive due to  their ability  to  encourage  foreign  investment  by  allowing  100%  foreign  ownership,  being  tax  free and offering  exemptions  on customs  duties. Sharjah  facilitates  businesses  through  the  establishment  of free  zones,  with  some  zoned for factories  and  others  for exhibitions  and warehouses.  With 48%  of  the UAE’s  total industrial revenue,  Sharjah  ranks  first  among  the  seven  emirates  in  this  sector.   Sharjah  also  enjoys  a cost-effective  advantage,  with  industrial  investment  costing  35%  less than  in  other emirates.  The  government  of Sharjah  bears  70%  of the  real cost  of energy consumption,  water and  electricity.  With  its  specially  modified  legislation  and  lower costs, Sharjah  aims  to  make  conducting  business  within  the  emirate  as  streamlined  and  cost-effective  as  possible,  building  lasting  relationships  with  its  trade  partners.   

Sharjah  has  also  forged  strong  economic  relationships  with  over 125  countries around the  world.  Foreign  trade  statistics  indicate  that  Sharjah’s  imports  have  dramatically increased  during  the  last five  years,  while  the  number of trade  licences  issued within the emirate  indicates  an  increase  in  domestic  trade  activities.   In  terms of  real estate,  Sharjah’s  properties  remain  reasonably  priced, with accommodation typically costing less than half that of that in Dubai and Abu Dhabi.

As  a major logistics  player,  Sharjah  continues  to  invest  in  its  ports  in  the  Gulf and  on  the east coast.  Khor  Fakkan,  bordering  the  Indian  Ocean,  increased  its  capacity  by  33%  to handle  four million  twenty-foot  equivalent  units  (TEU)  in 2009,  while  it  also  expanded the size  of its  quays  and  increased  the  number of gantry  cranes  by  a third.   

Fujairah

The  Emirate  of Fujairah  gained recognition in 1952  and became  a  member  of  the Federation at  its  inception in 1971.   It  is  the  only  emirate  located  on  the  Gulf of Oman  coast,  away  from  the  Hormuz  Strait,  and covers  an  area of 1,450  square  kilometres. It  is  characterised  by  its  mountains,  which  have different  colours,  its  fertile  valleys  full of natural water springs,  and  its  coastal belt  of  clean, golden sands  extending  over  90  km.   Due  to  its  strategic  position,  with the  UAE’s  only  access  to  the  Indian Ocean,  Fujairah has  a bustling,  important  multi-purpose  port.  In fact,  Fujairah ranks  as  one  of  the  top three bunkering  locations  in  the  world.  Fujairah  is  a  major  bunkering  port  with large-scale shipping operations  taking  place  every  day.  Shipping  and ship-related  services  are  thriving businesses of  the  city.  Due  to  the  business-friendly  environment  and  ease  of logistic support,  ships  trading  from  the  Persian  Gulf  anchor  here  for provisions,  bunkers,  repair  and technical  support,  and  spares  and  stores  before  proceeding  on long voyages.  The  city  is geographically  well-suited  for such  ship  service  activities. The  Fujairah  Port  is  an  important  port  for container liners  and  for the  world’s  largest livestock  shipping companies,  which have  set  up their  main holding station for  sheep and cattle  for the  entire  Arabian  Peninsula  here.  

The  government’s  liberalised procedures  and well-placed  infrastructure  provides  excellent  support  for entrepreneurs  to  build,  grow  and diversify.  The  Fujairah  government  prohibits  foreigners  from  owning  more  than 49%  of  any  business – unless they are located in free zones, which allow for full foreign ownership.   Fujairah’s  fertile  soil has  led  to  the  establishment  of a  strong  vegetable  and  animal husbandry  industry.  In addition, exports  of vegetables  and  flowers  have  become  a lucrative  business, and fishing has  traditionally  been a  key  business  in this  region.  Fujairah  has  also become  an important tourist  destination in the  UAE, due to  its  natural  beauty,  sandy  beaches,  historical  attractions, mountains  and oases. 

Ajman

The  smallest  of the  seven  emirates,  the  Emirate  of Ajman  is  located  on  the  coast  of the Arabian  Gulf in  between  the  Emirate  of Umm  Al-Quwain and Sharjah. Ajman  city  is  the  capital  and  the  emirate’s  main  administrative  and  business  centre, encompassing the  ruler’s  court,  governmental  departments,  companies,  banks  and factories.  Its  sea port  lies  on  the  Arabian  Gulf coast.  Due  to  its  strategic  location  at  the crossroads  between  the  emirates  of  the  UAE,  and  to  its  economic  achievements,  including modern and state-of-art  infrastructure,  Ajman  city  has  become  an  attractive  hub  for investments  and  capital,  putting  it  in  third  place  among  the  UAE  emirates  in  terms  of the number of industrial  plants  and  facilities  constructed  there.   Historically,  the  economy  of  Ajman depended  on fishing  and trade.  However,  today  Ajman has  many  diversified  activities  and  has  become  an  important  industrial and  commercial base.  The  growth  in  exports  from  local  factories  and the  high industrial  standards  adopted, have  given  the  industrial movement  here  a high  degree  of credibility.  This  has  led  to  more capital being  attracted  and  the  establishment  of more  economically  developed projects  which,  in turn,  have  contributed to  industrial  development. 

Umm Al Quwain

The  Emirate  of Umm  Al Quwain,  with  its  coastline  stretching  over 24km,  is  located on the Arabian  Gulf coast  of the  UAE,  between Sharjah to  the  south-west  and Ras  Al  Khaimah  to the  north-east.   Its  inland  border  lies  about  32km  from  the  main  coastline.  The  total area  of the  emirate  is 777 square  kilometres. Umm Al Quwain’s  economy  is  based on fishing,  pearl  diving,  agriculture  and  the  breeding of livestock.  This  has  been  further diversified  and  expanded  to  meet  the  development policy  of the  emirate.  Expansion  of creeks  and wharves,  the  construction of  Ahmed Bin Rashid Port  and the  establishment  of  a free  trade  zone,  have  all  helped boost industrialisation  here.   Fishing  is  still  a major aspect  in  Umm  Al  Quwain.  It  is  famous  for its  supply  of grouper and oriental sole,  and  is  a major exporter of sea foods  throughout  Europe  and  the  Middle  East. The  Falaj  Al Moalla includes  the  first  poultry  farm  established  in  the  UAE.  This  area is  a large  supplier of meat,  poultry  and  dairy  products  to  the  local market. 

Ras Al Khaimah

Ras  Al Khaimah,  the  most  northerly  emirate  on  the  UAE’s  west  coast,  has  a coastline  of about  64km  on  the  Arabian  Gulf,  backed  by  a fertile  hinterland,  with  a separate  enclave  in the  heart  of the  Hajar Mountains  to  the  south-east. The  city  of  Ras  Al  Khaimah is  divided into  two  sections  by  Khor  Ras  Al Khaimah.  Within  the western  section,  known  as  Old  Ras  Al  Khaimah,  is  the  Ras  Al Khaimah  National  Museum and a  number  of  government  departments.  The  eastern part,  known  as  Al Nakheel,  houses the  ruler’s  office,  several government  departments  and  commercial companies.  Both  parts of  the  emirate  share  borders  with  the  Sultanate  of Oman. During  the  past  two  decades,  Ras  Al Khaimah(RAK)  has  witnessed  remarkable advancements,  particularly  in commerce  and education.  Connected to  the  other  emirates by  modern highways,  this  emirate  has  an  efficient  infrastructure,  which includes  hotels, hospitals,  shopping  centres  and restaurants.  Today,  it  is  a dynamically  developing  emirate, with excellent  scope  for  industrial  and  business  growth. 

The  economy  of  RAK,  based on the  government’s  plans,  will follow  the  Dubai model in  its strategy  for  economic  growth.  The  future  plans  for  its  economy  lie  in  the  real estate, infrastructure  and  tourism  sectors.  The  plan largely  focuses  on developing  the  tourism sector to  attract  investment  and  having  the  necessary  regulations  to  encourage  and  sustain economic  growth. In  RAK,  the  private  sector plays  a leading  role  in  the  local economy,  which is  characterised by  its  success  in  business  activities,  particularly  in  the  industrial  field.  The  business-friendly policies  adopted by  RAK  are  ensuring  a  healthy  increase  in  FDI  and  have  helped  in growing the  emirate  to  become  a  top choice  of  destination  for leisure  and business.  Unlike other emirates in the UAE, RAK has negligible hydrocarbon deposits and has therefore sought diversification of its economy over the last few decades by opening up to foreign investors and industries.                                                

Foreign Investment

The  UAE  offers  international business  entities  a wide  range  of opportunities  for varied activities  and  operations. Activities  include: 

•  Trade 

•  Transport  and distribution 

•  Manufacturing  and  processing 

•  Regional offices. 

Government initiatives and incentives

The  government  has  been proactive  in ensuring  the  availability  of infrastructure  and services of  the  highest  international standards,  facilitating  efficiency  and  quality.   Among the  attractive  benefits  of  doing  business  in the  UAE  are  its: 

•  Free enterprise  system 

•  Highly  developed  transport  infrastructure 

•  State-of-the-art  telecommunications 

•  Sophisticated  financial and  services  sector 

•  Top international  exhibition  and conference  venues 

•  High-quality  office  and  residential accommodation 

•  Reliable  power,  utilities  and  allied  services 

•  First-class  hotels,  hospitals,  schools,  shopping  and marketing  outlets

 •  Cosmopolitan  lifestyle 

•  World-class  airlines  (Emirates  Airlines  and  Etihad)  connecting  most  of the  major  cities  of the  world with Dubai  and Abu Dhabi. 

International companies  setting  up  in  Dubai can  obtain  significant  cost  advantages  not generally  available  internationally.  The  major factors  for this  are: 

•  No corporate  taxes 

•  No income  tax 

•  Regulated and  least  cumbersome  foreign exchange  control 

•  No trade  barriers 

•  Low import  duties  (4%  with many  exemptions) 

•  Low labour costs •  Competitive  real estate  costs 

•  Competitive  financing  costs  and  high  levels  of liquidity 

•  While VAT at the rate of 5% was introduced in January 2018, there is no corporate  profit  or personal income  taxes  (except  for oil companies  and  branches  of foreign banks). Under the  federal constitution,  and  under  the  powers  reserved  by  each  individual  emirate, ‘free  zones’  have  been  set  up  each  emirate.  It  is  estimated  that  there  are  more  than  50,000 companies  operating  out  of  the  30  various  free  zones. Some of the  advantages  offered by  the  free  zones  are: 

•  100% foreign owned ventures  are  possible 

•  A local sponsor or  local partner  is  not  required 

•  No corporate  taxes  for at  least  15  years  (renewable  for  an  additional  period  of 15  years) 

•  No restrictions  on  the  repatriation  of capital and  profits 

•  No personal income  taxes 

•  No administration  problems  and  easy,  efficient  services 

•  No currency  convertibility  restrictions 

•  Efficient  communications  infrastructure 

•  Option to  lease  land and develop it  according  to  business  needs. 

Business Etiquette

Foreign investment  and expatriate  populations  in the  UAE  have  grown rapidly  and  business customs  here  are  generally  the  same  as  in  the  West.   However,  foreign businessmen/women  should bear  in mind a  few  points  when doing business  in the  UAE: 

•  They  should always  be  on  time,  although also  be prepared  to  accept  delays  or  even postponements  of  meetings  at  short  notice.  Patience  is  a virtue  and  people  are  often expected  to  wait  no  matter how  important  they  are.  This  is  purely  a matter  of local custom  and  the result of a much  slower lifestyle 

•  Business  meetings  tend  to  be  less  formal.  At  an  initial  meeting  there  may  be  others  in the  room.  Staff  or  other  visitors  may  often interrupt  the  host.  It  should  be  noted that  the purpose  of  a first  meeting is  often  to  arrange  a further private  meeting 

•  In  any  meeting  or telephone  conversation,  a period  of  small talk  is  expected  before  the purpose  of  the  meeting  or call is  discussed 

•  Business  cards  should  be  printed in both  English  and  Arabic.  All  brochures  and  leaflets should be  glossy,  full  of  photographs  and  should  also  be  printed in both English and Arabic 

•  Confidentiality  should  be  respected since  the  UAE  can  be  a very  small community  and word  can  get  around  very  fast.  It  is  therefore  important  that  all business  discussions  are kept  in  strictest  confidence.  Breaches  of  confidence  are  not  appreciated 

•  Oral agreements  are  binding  and  any  negotiator must  be  careful  not  to  commit  verbally unless  they  intend to  do.  It  should  be  remembered  that  bargaining  is  important.  An  Arab will take  great  pride  in  obtaining  a  good deal.  This  is  not,  however,  an excuse  to overcharge  at  the  outset.  There  must  be  a  reason  for  every  price  reduction  so  as  to avoid  suspicion  of overpricing. 

•  Given  the  nature  of Arab  courtesy,  a proposal is  unlikely  to  be  rejected  outright  at  a meeting.  An indication  that  a  purchase  may  take  place  may  be  nothing more  than  polite interest  in the  product. 

Setting up a business

Various  legal structures  are  available  for establishing  a business  in  the  UAE,  which  are collectively  addressed  by  various  laws.   There  are  three  main  types  of business  entities  possible  in  the  UAE,  as  described below: 

•  Mainland  companies  –  these  are  governed by  the  Federal  Law  No.  2 of  2015  concerning   Commercial Companies.  However,  the  application  of this  law  is  different  for each emirate  and  may  lead  to  some  differences  in  its  implementation  and  regulations 

•  Companies  in the  free  zones  –  each  free  zone  has  its  own  laws  and  implementing regulations  and/or rules.  The  main  feature  of this  type  of company  is  100%  expatriate ownership as  opposed to  maximum  of  49%  in  mainland  companies 

•  Offshore  companies  –  this  is  the  most  recent  type  of business  entity,  which  is  available under  the  Offshore  Company  Regulations  in  the  Emirate  of Dubai,  Emirate  of Ajman  and the  Emirate  of Ras  Khaimah. Individual emirates,  as  well as  the  federal government,  regulate  economic  activities.  The authorities  have  sought  to  create  an  environment  that  is  well-regulated without  being unduly  restrictive.  As  a  result,  the  UAE  offers  businesses  operating  conditions  that  are among the  most  liberal and  attractive  in  the  Gulf region. 

Mainland Companies

Mainland companies  are  governed by  the  Federal  Law  No.  2  of  2015  concerning   Commercial Companies.   This  law  stipulates  that  a total equity  of not  less  than  51%  should  be  held  by  a UAE  national in  any  commercial company,  except  in  the  following  cases: 

•  Where the  law  requires  100%  local ownership 

•  Businesses set  up  in  a free  zone •  For activities  open  to  100%  GCC  ownership 

•  Where wholly  owned  GCC  companies  enter into  partnership  with  UAE  nationals 

•  In  respect  of foreign  companies  registering  branches  or  a representative  office  (where  a UAE national service  agent  is  required) 

•  In  professional companies  where  100%  foreign  ownership  is  permitted  (where  a  UAE national service  agent  is  required). 

All business  activities  are  primarily  covered  by  three  categories  of  licence: 

•  Commercial  licences  cover  all kinds  of trading  activities 

•  Professional  licences  cover  professional services,  other  services,  craftsmen  and  artisans 

•  Industrial  licences  are  for establishing  an  industrial or manufacturing  activity. 

The  Commercial Companies  Law  and  its  bylaws  govern the  operations  of various  types  of business  structures,  which  are  classified  into  eight  categories: 

•  General partnership  companies 

•  Partnership-en–commendams 

•  Share  partnership companies 

•  Joint  venture  companies 

•  Public  shareholding  companies 

•  Private  shareholding  companies 

•  Limited  liability  companies 

•  Foreign  companies  (branches  and  representative  offices). 

General Partnership Companies

The  establishment  of general partnership  companies  is  limited  to  UAE  nationals  only. 

Partnership-en-commendams & share partnership companies

The  government  does  not  at  present  encourage  the  establishment  of  partnership-encommendams and share  partnership companies. 

Joint venture companies

A  joint  venture  is  a contractual agreement  between  a foreign  party  and  a local party licensed  to  engage  in  the  desired  activity.  The  local equity  participation  in  the  joint  venture must  be  at  least  51%,  but  the  profit  and  loss  distribution  can  be  prescribed  otherwise. There  is  no  need for  the  joint  venture  to  be  licensed or  the  agreement  to  be  published.  The foreign  partner deals  with  third  parties  under the  name  of the  local partner  who  (unless the  agreement  is  publicised)  bears  all liability. In  practice,  joint  ventures  are  seen  as  offering  a suitable  structure  for companies  working together  on specific  projects. 

Public & Private Shareholding Companies

The  Commercial Companies  Law  stipulates  that  companies  engaging  in  banking,  insurance or  financial activities  should  be  run  as  public  shareholding  companies.  Foreign  banks, insurance  and  financial companies,  however,  can  establish  a presence  in  the  UAE  by opening  a branch  or representative  office. Shareholding  companies  are  suitable  primarily  for large  projects  or  operations  –  the minimum  capital required  is  AED  10  million  (USD  2,725  million)  for a public  company,  and AED  2  million  (USD  545,000)  for a private  shareholding  company.  The  chairman  and majority  of directors  must  be  UAE  nationals  and  there  is  less  flexibility  for  profit distribution  than  is  permissible  in  the  case  of  limited  liability  companies. 

Limited Liability Companies

A  limited  liability  company  can be  formed by  a  minimum  of  two  and  a maximum  of 50 people  whose  liability  is  limited  to  their share  in  the  company’s  capital.  Such  companies  are recognised  as  offering  a suitable  structure  for organisations  interested in developing a long-term  relationship  in  the  local market. The  minimum  capital requirements  vary  in each  emirate  and  are  contributed  in  cash  or in kind.  While  foreign equity  in the  company  may  not  exceed 49%,  profit  and loss  distribution can  be  prescribed  otherwise.  Responsibility  for the  management  of a limited  liability company  can be  vested with the  foreign  or national partner or a third  party.   

Foreign Companies (branches and representative offices)

The  Commercial Companies  Law  covers  the  formation  and  regulation  of  branches  and representative  offices  of foreign  companies  in  the  UAE  and  stipulates  that they  may  be 100% foreign-owned,  provided a  local  agent  is  appointed. Only  UAE  nationals  or companies  100%  owned  by  UAE  nationals,  may  be  appointed  as  local agents  (which  should  not  be  confused with  the  term  commercial  agent).  Local agents,  also often  referred  to  as  sponsors,  are  not  involved in the  operations  of  the  company  but mainly  assist  in  obtaining  visas,  labour cards,  etc.  and  are  paid  a lump  sum  and/or a percentage  of  the  profits  or  turnover. 

Professional Firms (Governed by Dubai Local Order No. 63 of 1991 on Service Establishments)

In setting  up a  professional firm,  100%  foreign-owned,  sole  proprietorships  or civil companies  are  permitted.  Such  firms  may  engage  in  professional or artisan  activities  but the  number  of  staff  members  that  may  be  employed  is  limited.  A  UAE  national  must  be appointed as  a  local service  agent,  but  he/she  has  no  direct  involvement  in the  business and  is  paid  a  lump  sum  and/or percentage  of  profits  or  turnover.  The  role  of  the  local service  agent  is  mainly  to  assist  in  obtaining  licences,  visas,  labour cards,  etc. 

Free Trade Zones of the UAE

Free  trade  zones  (FTZ)  in  the  UAE  allow  100%  foreign  ownership  and  have  nil taxes  (exept VAT) usually guaranteed  for 15  or 50  years.   Companies  outside  a FTZ  require  a local sponsor and  allow  a maximum  49%  foreign ownership. Each  FTZ  has  its  own  specific  requirements  regarding  minimum  office/warehouse  space and  permitted  activities.   An independent  free  zone  authority  (FZA)  governs  each  FTZ  and  is  responsible  for issuing FTZ  operating  licences  and  assisting  companies  with  establishing  their business.  The procedures  for establishing  a  FTZ  business  are  usually  very  straightforward  and  can  be completed  in  a short  space  of time,  especially  if there  are  no  environmental issues involved.   Most  of  the  FTZs  in  the  UAE  are  ‘general-purpose’  free  zones  that  cover  trading,  services, manufacturing  and  distribution.  Some  of the  larger  FTZs  are  built  around  seaports  and airports.  There  are  also  FTZs  in the  UAE  that  cater  to  specific  business sectors such  as semiconductors  manufacturing,  films  and  creative  arts,  website  and internet  technologies, healthcare,  biotechnology  etc. The  activity  to  be  carried  out  by  the  free  zone  entity  to  be  set  up  is  a primary  factor in determining  which free  zone  should be  used.  For  example,  the  Dubai Airport  Free  Zone  is intended for  businesses  that  import  and export  goods,  whereas  Media City  would  be  more suitable  for media-related  enterprises. Different  types  of companies  which  can  be  established  are  the: 

•  Free zone  company  (FZCO/FZC) 

•  Free zone  establishment  (FZE) 

•  Free zone  limited  liability  company  (FZ  LLC) 

•  Free zone  branch. 

Different  types  of  licences  which can be  issued are  the: 

•  Trading  licence 

•  Industrial  licence 

•  Service  licence 

•  National  industrial  licence. 

A list  of all  the  FTZs  is  given below,  with the  major  ones  described in the  section following.   

Abu Dhabi

 •  Abu Dhabi  Airport  Free  Zone 

•  Abu Dhabi  Ports  Company  (ADPC) 

•  Sadiyat  Free  Zone  Authority 

•  Abu Dhabi  Exhibition Centre •  Twofour54  (Two  Four  Fifty  Four/54)  Media  and Production Free  Zone 

•  Masdar City   

•  Khalifa Port  and  Industrial Zone.   

Dubai 

•  Jebel  Ali  Free  Zone  (JAFZ) 

•  Dubai Multi Commodities  Centre  (DMCC) 

•  Dubai South  (formely  called  Dubai World  Central) 

•  Dubai Airport  Free  Zone  (DAFZ) 

•  Dubai Internet  City  (DIC) 

•  Dubai Media City  (DMC) 

•  Dubai Gold  and  Diamond  Park  (DGDP) 

•  Dubai Cars  &  Automotive  Zone 

•  Dubai Multi Commodities  Centre  (DMCC) 

•  Dubai Health  Care  City  (DHCC)

•  Dubai International  Financial Centre  (DIFC) 

•  Dubai Maritime  City 

•  Dubai Logistics  City 

•  Dubai Outsource  Zone  (DOZ) 

•  Dubai Techno  Park  (DTP) 

•  Dubai Silicon  Oasis  Authority  (DSOA) 

•  Dubai Studio  City  (DSC) 

•  Dubai Textile  City  (DTC) 

•  Dubai Flower  Centre  (DFC) 

•  Dubai Carpet  Free  Zone 

•  Dubai Biotechnology &  Research  Park  (DuBiotech) 

•  Dubai World  Central 

•  Meydan Free  Zone 

•  Dubai Design District  

•  Dubai Knowledge  Village   

•  Economic World Zones  

Sharjah

•  Sharjah Airport  Free  Zone  (SAIF  Zone) 

•  Hamriyah Free  Zone  (HFZ)

Ras Al Khaimah

•  Ras Al Khaimah  Free  Trade  Zone  (RAKFTZ) 

•  Ras Al Khaimah  Media Free  Zone 

•  Ras Al Khaimah  Investment  Authority  (RAKIA) 

•  Ras Al Khaimah  Maritime  City   

Fujairah

•  Fujairah Free  Zone  (FFZ) 

•  Fujairah  Creative  City 

Ajman 

•  Ajman Free  Zone  (AFZ) 

Umm Al Quawain

•  Ahmed Bin Rashid Free  Zone

General Free Zones

The Jebel Ali Free Zone

 In  1985,  the  government  of  Dubai  founded the  first  free  zone  in the  UAE,  the  Jebel  Ali  Free Zone  (JAFZ)  on the  outskirts  of  Dubai  (in  an  area known  as  Jebel Ali). This  area is  principally a designated  location  spanning  approximately  100kmsq  (38  miles  sq)  and  lies  about  50km (30  miles)  from  Dubai City. New  developments  at  the  JAFZ  and the  surrounding  region are  designed to  make  it  one  of the  world’s  most  efficient  sea-air hubs,  complete  with  a six-lane  highway  to  help keep goods  custom-bound (helping  to  minimise  processing  time)  as  they  are  transported  from port  to  cargo  aircraft  in  just  20  minutes.  

The  JAFZ  is  the  world’s  only  free  zone  located between  one  of the  world’s  largest  airports  and  a sea port. The  JAFZ  has  the  Jebel Ali Port,  the  world’s  seventh largest  container  port  on one  side  and the  Jebel Ali International  Airport,  one  of the  world’s  largest  cargo  airports  on  the  other side. Because  of its  location,  the  JAFZ  benefits  from  being  an  efficient  regional  distribution  point with access  to  a  huge  network  of  people.  Although  the  free  zone  is  located  in  Dubai, companies  established  there  are  legally  treated  as  free  zone  companies  and  are  therefore subject  to  the  free  zone’s  laws  and  regulations  as  distinct  from  Dubai law. A  general trading  licence  allows  the  holder to  import,  distribute  and  store  all items  as  per JAFZA rules  and regulations: 

•  A trading  licence  allows  the  holder to  import,  export,  distribute  and  store  items  specified on the  licence.  An industrial  licence  allows  the  holder to  import  raw  materials,  carry  out the  manufacture  of  specified products  and export  the  finished product  to  any  country.  

•  A  service  licence  allows  the  holder to  carry  out  the  services  specified  in  the  licence within the  free  zone.  The  type  of  service  must  conform  to  the  parent  company’s  licence, issued  by  the  Economic  Department  or  Municipality  of the  relevant  Emirate  in  the  UAE.   

•  A  national industrial  licence  is  designed for  manufacturing  companies  with  AGCC ownership  or a minimum  51%  AGCC ownership.  The  added  value  to  the  product  in the free  zone  must  amount  to  a  minimum  of  40%.  This  licence  allows  the  holder the  same status  as  a local or AGCC-owned company  inside  the  UAE. 

The Dubai Multi Commodities Centre (DMCC)

Established  in  2002 by Royal  Decree,  Dubai Multi Commodities  Centre  (DMCC)  has been voted – four times in succession – the world’s leading free Zone by Financial Times fDi magazine. DMCC is  a strategic government  initiative  of  the  Government  of  Dubai  that is both a trading hub for the gold,  diamond,  pearl,  precious  metals and tea  industries, as well as being a free zone landlord representing more than 15,400 member companies in the vicinity of Jumeirah Lakes Towers. Officially  recognised  as  fastest -growing  Free  Zone  in the  United  Arab  Emirates,  DMMC’s  aim  is  to  consolidate  their position  in  the  international market  as  a commercial  centre  of excellence  for companies choosing to  operate  from  Dubai.   

The  multiple awards by Financial Times fDi magazine recognise DMCC’s  sustainable  growth,  strong  customer  service and its  outstanding eco-system, offering businesses  a complete one-stop service for everything from business formation to entrerprise growth consultancy

Dubai South

Dubai  South  –  the  rebranded  Dubai World  Central  –  is  an emerging  145  sq.  km.  masterplanned  city,  projected to sustain  a population  of approximately  one  million.  As  an  economic  platform,  it  is  designed to  support  a vast spectrum of  industries,  creating  500,000  jobs. Launched as  a  Government  of  Dubai  project  in 2006,  Dubai  South falls  under  the  umbrella of Dubai Aviation  City  Corporation. It is also host to the  Al Maktoum  International  Airport, set to  become  the  world’s  largest airport,  and  Dubai Expo  2020. 

The Dubai Airport Free Zone

The  Dubai Airport  Free  Zone  (DAFZ)  was  formed  in  accordance  with  Law  No.  2  of  1996  for the  Establishment  of  a  free  zone  in  Dubai International Airport  by  the  Ruler  of  Dubai,  H.H. Sheikh Maktoum  Bin Rashid Al  Maktoum. Complementing  rather  than competing  with  the  Jebel  Ali  Free  Zone,  the  DAFZ  provides similar yet  diverse  incentives  to  both  local  and  foreign  investors  because  of its  location  in the  Dubai  Airport  area.  Companies  or  establishments  set  up  in  the  DAFZ are  legally regarded as  free  zone  companies  and subject  to  DAFZ  law.  The  DAFZ  is  one  of the  fastestgrowing  free  zones  in  the  region  and  is  currently  home  to  over  1,300  companies  from various  industry  sectors,  including  the  aviation  industry,  pharmaceutical products,  logistics and  freight,  jewellery,  IT  and mobile  phone  accessories. The  DAFZ  is  wholly  owned by  the  government  of  Dubai and  is  one  of the  fastest- growing government  projects  in the  country.  It  offers  100%  foreign  ownership  and the  company formation  period  is  10-30 days. The  need  for visas  depends  on  the  size  of the  office  space  leased.  However,  no  restriction for industrial/assembly  units  operating  in  pre-built  warehouse  and  leased  land  is  required for  business  activity. Port  facilities  include  Dubai  Airport,  Port  Rashid  and  the  Jebel Ali Port. Companies  operating  in the  DAFZ  will  be  granted an industrial  licence,  trading  licence  or  a service  licence  by  the  FZA.  Companies  have  the  option  of renewing  their  licences  for a period  of either one  or three  years.  More  than  one  licence  can be  obtained.   If  a  company  wishes  to  conduct  business  and sell  its  product  within the  UAE,  it  may  do  so by  appointment  of a UAE  official distributor or any  other company  holding  a valid  trade licence.  The  DAFZ  does  not  grant  general  trade  licences  to  companies  under  any circumstances. 

The Sharjah Airport International Free Zone

Strategically  placed  at  the  crossroads  of major trading  routes  between  the  east  and  west, Sharjah  offers  excellent  global,  sea,  land  and  air transport  links  with  access  to  a  market  of more  than  2  billion  consumers  in  states  of  the  GCC  and  the  Arab world,  Iran,  CIS  countries, the  Asian subcontinent,  parts  of  Africa  and the  eastern  Mediterranean. Adjacent  to  Sharjah  International Airport,  and  just  a few  minutes  from  Sharjah  City  and Port  Khalid,  the  location  of  the  SAIF-Zone  is  enhanced  by  its  secondary  seaport  facility  on the  Gulf of Oman  at  Port  KhorFakkan.  The  120km  road  transfer can  save  up  to  48  hours’ shipping time,  cutting  freight  and insurance  costs  for both  importers  and  exporters.   The  SAIF-Zone  is  an  ideal  hub  for all  types  of business  that  require  a  fast,  efficient  and trouble-free  working  environment.  The  SAIF-Zone  provides  state-of-the-art  facilities  with fully  serviced  and  furnished  executive  office  suites  with  receptions,  pre-built  warehouses  in two  sizes  with  adjacent  office  space,  service  and  lease  land  for unrestricted  private development,  a  container parking  area and  temporary  storage  capability. From  55  companies  in  1995,  the  year  in which the  zone  started operating,  there  are now  more  than 3,900  companies  doing  business  in the  zone,  making  the  SAIF-Zone  the fastest-growing  free  zone  in  the  region. 

Hamriyah Free Zone

The  Hamriyah  Free  Zone  (HFZ)  development  was  announced in the  Emiri  Decree  No.  (6),  12 November 1995. The  vision  of the  Hamriyah  Free  Zone  Authority  (HFZA)  is  to  provide  the  international business  investor  with a  unique  investment  opportunity  in a  free  market  environment.  HFZA is  currently developing  first  class  services  and  facilities  that  will complement  its  14  metre-deep  water port. As  the  free  zone  is  designated a  ‘green  zone’,  it  is  the  intention  of  the  HFZA  to  attract environmentally  friendly  industries.  Land  is  allocated  for heavy,  light,  service  and commercial industries. Almost  any  activity  is  permitted  by  the  HFZ as  long  as  the  activity  is  environmentally friendly  and  in  accordance  with  local rules.  

Ajman Free Zone

The  Ajman Free  Zone  (AFZ),  established  in 1988,  was  granted autonomous  status  under  the Amiri decree  no.3  of 1996.  The  AFZ  has  been  named  as  the  sole  regulatory  agency  for the free  zone  in the  emirate.  The  formation  of the  FZA  in  1996 has  given  a  great  impetus  to industrial activity  in  the  free  zone – and an additional, multi-million  dirhams  development, occupying  one  million square  metres,  is  also now under  progress. On completion,  it  will be  able  to accommodate  600  companies.  Strategically  situated  at  the  entrance  of the  Arabian  Gulf, the  AFZ is  well-placed  to  serve  eastern  and  western  markets.  

Ras Al Khaimah Free Trade Zone

The  Ras  Al  Khaimah  Free  Trade  Zone  (RAKFTZ)  has  already  become  a major business  hub, featuring state-of-the-art  infrastructure  and  hi-tech  facilities  for industrial growth and development.  The  free  zone  offers  customised support  services  to  its  investors.  It  is  one  of the  most  cost-effective  free  zones  in  the  region and  most  importantly,  offers a customer-friendly  environment, crtically important to enterprise success. RAKFTZ  has  registered  more  than  4,500  companies originating  from  106 countries  worldwide.  RAKFTZ’s customers  come  from  markets  in  the  Middle  East  , Europe,  North  America and  Asia,  as  well as  from  elsewhere. The  Ras  Al Khaimah  Free  Trade  Zone  Authority  has  created  a system  of four unique  free zone  parks  to  suit  and  serve  every  investor according  to  their requirements.  The  four  parks concept  includes  the  Business  Park,  Industrial Park,  Technology  Park  and the  Al Ghail Park, offering  offices,  equipped  warehouses  and land  facilities.  

Ahmed BIn Rashid Free Zone (Umm Al Quwain)

The  Ahmed  Bin  Rashid  Free  Zone  was  established in  April  1998  and  is  55km  from Dubai International Airport.  The  total size  of the  free  zone  is  118,000  square  metres. The  free  zone  complex  consists  of 845m  of quay  wall with  400m  capable  of  handling oceangoing  vessels  and  118,000m²  of land  reserved  for light  industrial  development. Standard  services  of water,  electricity,  communications  and labour  supply  are  all available. In addition,  the  free  zone  provides  comprehensive  administrative  and  logistics  support  to its tenants. 

Abu Dhabi Airport Free Zone

The  Abu  Dhabi  Airport  Free  Zone  (ADAFZ)  was  established  by  the  Abu Dhabi  Airports Company  (ADAC).  Its  creation is a key milestone  in  Abu  Dhabi’s quest to  establish  itself as  a dynamic  business  centre.  The  free  zone  will take  advantage  of Abu  Dhabi  International Airport’s  strategic  geographical position  at  the  crossroads  between east  and west,  and the large-scale  economic  development  of the  emirate. The  ADAFZ’s  owner,  ADAC,  was  incorporated  in  March  2006  to  spearhead  a major redevelopment  of  the  emirate’s  aviation  infrastructure.  ADAC’s  creation  was  part  of an ambitious  restructuring  initiative  launched by  the  government  of  Abu Dhabi,  aimed at delivering  better  services  to  support  the  emirate’s  long-term  economic  and  tourism strategies  and to  help build  a more  vibrant  economy  that  attracts  and  promotes  private sector  investment. 

Theme Free Zones

Theme  free  zones  are  a  vision of  H.H.  Sheikh Mohamed Bin Rashid Al  Maktoum,  the  ruler of Dubai and  Vice  President  of the  UAE. These  theme  free  zones  provide  the  same  benefits  as  regular free  zones,  but  have  the distinction  of  being ‘industry  specific  free  zones’. 

Dubai Internet City

Dubai  Internet  City  was  the  first  complete  information  technology  and  telecommunications centre  in  the  world  to  have  been  built  inside  a free  trade  zone.  Dubai Internet  City  offers modern,  ready-to-operate,  fully  serviced  office  space  catering  for the  specific  needs  of today’s  new  economy  companies.  These  offices  offer  cutting  edge  technology  and provide both  wired  and  wireless  networks. Dubai  Internet  City  is  the  biggest  IT  build in the  Middle  East  and has  the  latest  generation internet  protocol  telephony  system  in the  world. Sets  of  intellectual  property  and cyber  regulations  have  been implemented to  protect  the integrity  of e-business.  A  dedicated government  agency  has  been created to  ensure enforcement  of these  regulations. Dubai Internet  City  has  issued  licences  to  a host  of global information  technology companies.  Microsoft,  Oracle  and  Hewlett-Packard  are established long-term tenants.   

Dubai Media City

Dubai Media City  (DMC)  is  designed to  be  the  region’s  media  hub.  DMC  has  been established  by  the  Dubai  Technology,  E-Commerce  and  Media Free  Zone  Authority  to provide  the  infrastructure  and  environment  that  will enable  media-related  enterprises  to operate  globally  out  of Dubai.  Global  entities  such  as  CNN  &  CNBC  have  set  up  offices  in the  DMC.   

Dubai Gold and Diamond Park

Dubai  has  moved towards  expanding its  jewellery  industry  by  building  the  Dubai  Gold and Diamond  Park  (DGDP)  at  a  cost  of  USD 40  million.  The  project,  which  is  part  of  the government’s  policy  to  achieve  economic  balance  and  a diversification  of income  sources, is  also  designed  to  enhance  the  city’s  economic  infrastructure. Officially  opened  in  May  2001,  this  project  aims  to  satisfy  increasing  world  demand  for manufactured gold and diamonds,  and  provide  all facilities  under one  roof in  a secure, comfortable  and business-friendly  environment. The  park  is  part  of  the  Jebel  Ali  Free  Zone,  giving  companies  the  same  benefits.  The facilities  include  infrastructure,  office  and  manufacturing  units,  650  parking spaces,  and landscaping.  It  is also  home to government  centres  that  provide  the  necessary  certification  and approval  of  gold content  and quality. 

Dubai Knowledge Park (formerly, Knowledge Village)

Dubai Knowledge  Park  is  a vibrant,  connected  learning  community  that  is home to a number of leading universities, and wasdesigned to develop the region’s  talent  pool  and accelerate  its  move  to  the  knowledge  economy.  This  education and training  hub  also  complements  the  aims of the two adjacent  clusters  –  Dubai  Internet  City,  as  the  IT  hub,  and Dubai  Media  City,  as  the  media hub.   

Dubai Health Care City

Dubai  Health Care  City  (DHCC)  has  been  launched to  fill  the  gap  between Europe  and south-east  Asia and  establish  a  regional  gateway  for customers  and  patients  to  receive world-class  healthcare  and  enjoy  first  class  medical and  wellbeing  services.  Dubai  will offer significant  business  opportunities  to  local and  international investors,  regional businesses and the  global  healthcare  industry  by  establishing  the  DHCC.  It  creates  an  integrated healthcare  community  providing  a  comprehensive  medical  treatment  and  prevention portfolio  with  an  optimised  process  and  patient/customer flow. The  purpose  of  the  DHCC  initiative  is  to  provide  the  highest  quality  healthcare  services  to medical care  and  wellbeing  seekers  by  creating  a  renowned  cluster of healthcare professionals  and  service  providers  at  the  heart  of  Dubai.  

Dubai International Financial Centre

Dubai International Financial Centre  (DIFC)  is  a capital  market  directly  modelled  on  the  City of London  and  Wall Street.  It has established the emirate  and  the  UAE  as  a  crucial  centre  in  global  finance  and  as  a  regional  centre  of financial  services  between  Singapore  and  Frankfurt.  The  DIFC  is  designed  to  be  similar to facilities  in  London,  New  York,  Singapore,  Hong Kong  and Tokyo. 

Dubai Maritime City

Dubai  Maritime  City  is  a  business  unit  within the  Ports  Customs  and Free  Zone Corporation,  part  of the  government-owned organisation that  developed Palm  Island and Jebel Ali Free  Zone.  It incorporates  the  stability  of public  sector backing  together with  the  energy,  drive  and ambition  of a private  sector enterprise.  Dredging  and  rockworks  commenced  in  August 2003.   Dubai Maritime  City  is  located between  Port  Rashid and Dubai  Dry  Docks.  This  is  a project of phenomenal proportions,  creating  a  peninsula reclaimed  from  the  sea covering  over 2.16  million  square  meters  with  open  sea access  and  a  truly  stunning  location  for maritime businesses.  As  it  evolves,  it  will cluster together every  amenity  that  the  global maritime community  will need  to  build,  work,  live  and  learn. Dubai Maritime  City  is  now fully  reclaimed. 

Dubai Outsource Zone

Dubai  Outsource  Zone  (DOZ)  provides  a  comprehensive  infrastructure  and  environment  for outsourcing  and offshore  companies  to  set  up global  or  regional  hubs  servicing  the worldwide  market.   DOZ’s  offering  includes  100%  exemption  from  taxes (exceot VAT),  arguably  the  world’s  most  reliable technology  and communications  infrastructure,  easy  access  to  talent,  a  one-stop-shop of support  services  and the  best  possible  working  environment. Dubai Outsource  Zone  is  the  perfect  base  for companies  that  provide  mid-  to  high-end IT and business  processes  outsourcing  (BPO)  services.  Some  of  the  key  sectors  covered  are finance,  accounting,  IT,  payroll  processing,  graphic  design,  engineering,  biotech,  R&D  and design.  It  also  serves  as  a  centre  for disaster recovery  facilities  for call centres  located offshore  elsewhere  in  the  world.  The  zone  caters  to  offshore  requirements  from  Europe, the  US,  the  Middle  East,  Asia and  Africa. 

Dubai Techno Park

Dubai  Techno  Park  (DTP)  is  designed  to  attract  foreign  investment  in  research  in  oil and gas,  desalination and environment  management.  It  was  launched in 2002  by  the  Ports, Customs  and Free  Zone  Corp (PCFC). It’s  a  unique  business  zone  that  gives  the  advantage  of  Dubai’s  location  while  offering  a common platform  to  three  of the  Middle  East  region’s  core  industries  –  water  desalination, oil and  gas,  and  environmental  research.  Affiliated  with  the  International Association  of Science  Parks  (IASP),  DTP  offers  high technology  companies  a  uniquely  supportive  and likeminded community  in which to  work. 

Dubai Silicon Oasis Authority

Dubai Silicon  Oasis  Authority  (DSOA),  a  100%-owned entity  of  the  government  of  Dubai – and  its urban master-planned community  spans  7.2  square  kilometres  of state-of-the-art office  towers,  R&D  and  industrial zones,  educational institutions,  luxury  apartments,  villas, hotels,  healthcare  and  a  full range  of lifestyle  facilities. Businesses can  flourish  with  the  unrivalled  package  of incentives,  including  100% ownership,  and  high-end  IT  infrastructure  that  allows  companies  to  begin  operating immediately. 

Dubai Studio City

Designed  to  accelerate  the  growth  of  the  broadcast,  film,  television  and  music  production industries,  Dubai Studio  City  (DSC)  is  an  ultra-modern  facility  integrating  every component  under one  roof.  Spread  across  22  million  square  feet,  it  includes  production, post-production,  equipment  rental,  a  business  centre  and  satellite  facilities  among  others. It  will also  have  residential areas,  hotels,  an  entertainment  centre,  film  schools  and  training institutes.  This  unique  combination  of world-class  infrastructure,  qualified  professionals and  a  unique  networking  environment  will makes  it  the  ideal location  for creative  professionals  to unleash  their imagination.   

Dubai’s International Media Production Zone

Dubai’s  International  Media  Production Zone  (IMPZ)  seeks  to  create  a unique  cluster environment  for media production  companies  from  across  the  industry  value  chain,  and from  across  the  world,  to  interact  and  collaborate  effectively.  Catering  exclusively  to companies  in  the  ‘3P’  industries  –  printing,  publishing  and  packaging – the  IMPZ is  an initiative  of the  Dubai government,  under the  patronage  of parent  company, Dubai  Holding. As  a master developer, the  IMPZ  provides  an environment  of  growth by  building  key facilities,  investing  in  infrastructure,  and  forming  a  unique  free  zone  that  incorporates industrial,  commercial,  and  residential and  community  service  projects  under its  mantle. Housed  across  a territory  of over 43  million  square  feet  of land; the  IMPZ initiative  is  part  of Dubai’s  vision  to  develop  itself into  a global  media  hub.  

Dubai Biotechnology and Research Park

The  Dubai  Biotechnology  and Research Park  (DuBiotech)  is  a  science  and business  park dedicated to  the  biotechnology  and pharmaceutical  industry  and is  modelled on  the  free zone  concept. A  member  of Dubai Holding,  DuBiotech  will accommodate  biotechnology  industry  and facilitate  government-funded  R&D.  DuBiotech’s  world-class  infrastructure  includes  facilities and  services  for incubators,  R&D  labs,  biotech-related  educational and  research institutions,  manufacturing  facilities,  as  well as  organisations  in  supporting  and convergent industries. 

Dubai Carpet Free Zone

The  Carpet  Free  Zone  targets  the  handmade  carpet  sector  and is  located in the heart of  Deira-Dubai, the traditional centre of artisanship and crafts. 

Industrial City of Abu Dhabi

The  Industrial City  of Abu  Dhabi (ICAD)  is  located  30km  from  the  centre  of Abu  Dhabi City and 25km  from  Abu  Dhabi International Airport.  It  has  shown  very  rapid  recent  growth with  610  major manufacturing  companies  employing  more  than  50,000  workers.  The  ICAD provides  all basic  services  and  facilities  for a wide  range  of industrial activities. 

Offshore Companies

The  UAE  offers  an  opportunity  for the  establishment  of an  offshore  entity  in  a jurisdiction that  offers  certain  facilities  not  available  in  other areas. Offshore  companies  are  governed by  the  jurisdiction  under  which they  are  incorporated. However,  in most  cases  they  can enter  into  arrangements  and contracts  which can be made subject  to  the  laws  of  other  jurisdictions. 

Banking Facilities

One  of the  most  important  aspects  of managing  an  offshore  company  is  personal or corporate  banking  facilities. The UAE  not  only  offers significant  banking  support  from  local banks  but also  all leading  international banks  have  a  presence  in the  country. 

Offshore Centres in the UAE

Jebel Ali Free Zone

The  Jebel Ali  Free  Zone  (JAFZ)  is  located  in  the  emirate  of Dubai in  the  UAE  and  is  40km  from  the  Dubai International Airport.  The  JAFZ  is  run  by  the  Jebel  Ali  Free  Zone Authority  (JAFZA). The  JAFZA  introduced  regulations  in  2003  for the  establishment  of Jebel Ali Free  Zone Offshore  Companies.  The  international business  community  can now  establish offshore entities  at  JAFZ in  line  with  other international offshore  jurisdictions. JAFZ caters  to  the  Dubai Port  which  ranks  13th  in  the  world  in  terms  of container traffic and  is  one  of the  world’s  largest  and  fastest  growing  free  zones.  JAFZA  offers  its  customers world-class  infrastructure  supported  by  quality,  value  added  services  and  incentives.  It further  provides  community  amenities,  enhancing  a  dynamic  and thriving  business environment. 

Features  of  JAFZA-registered  offshore  companies  are: 

•  Establishment  of limited  liability  companies 

•  No minimum capital requirement 

•  Requirement  to  have  an approved registered agent  either  within the  free  zone  or  in the emirate  of  Dubai 

•  Minimum of one  shareholder, no  upper  limit  on maximum  number  of shareholders 

•  Minimum of  two  directors 

•  Appointment  of  one  secretary  is  compulsory 

•  Bearer shares  are  not permitted 

•  No personal or corporate  income  tax 

•  Issue  of  shares  of only  one  class  permitted 

•  Requirement  to  have  accounts  audited on annual  basis. 

Offshore  companies  are  allowed  to: 

•  Have contacts  with  legal consultants,  lawyers,  accountants  and  auditors 

•  Have a  bank  account  in the  UAE 

•  Become shareholders  in  a new  or existing  FZE,  FZCO  or  an  LLC. 

•  Hold  a  shareholders  and  directors  meeting  within  the  UAE 

•  Hold  a  lease  of property  for use  as  a registered  office  or own  real estate  property approved by  the  authorities 

•  Carry  out  international trading. Offshore  companies  are  not  allowed  to: 

•  Carry  out  business  with persons  resident  in  the  UAE 

•  Own an interest  in  real estate  property  situated  in  the  UAE,  other than  a lease  property referred  to  in  the  regulations  or  approved by  the  authorities 

•  Carry  on a  banking business 

•  Carry  on  business  as  an  insurance  or re-insurance  company,  insurance  agents  or insurance  brokers 

•  Carry  on any  other  business  which may,  by  regulations  be  prohibited by  the  authorities. 

Ras Al Khaimah International Corporate Centre   

RAK  International Corporate  Centre  (RAKICC)  is  a Corporate  Registry  operating  in  Ras  Al Khaimah,  United  Arab  Emirates. RAK  International Corporate  Centre  is  the  consolidation  of two  company  registries  in  Ras Al Khaimah;  namely  RAK  International  Companies  (formerly  a part  of RAK  Free  Trade Zone)  and  RAK  Offshore  (formerly  a part  of RAK  Investment  Authority).  RAK  International Corporate  Centre (RAKICC)  was  formed  as  per  the  Decree No.12  of  2015  and  as  amended by  Decree  No.4 of  2016. RAK  International  Corporate  Centre  is  responsible  for  the  registration  and  incorporation of International  Business  Companies,  as  well as  providing  a full suite  of  Registry  services related  to  International Business  Company  activity.  RAK  International Corporate  Centre  is a modern,  world  class  Company  Registry  operating  in  full compliance  with  international standards  and  best  practices  in  the  International  Business  Company  formation  industry. 

RAK  International Corporate  Centre  aims to be at  the  forefront  of International  Business Company  formation  services  and  continually  develop  our  suite  of  products  to  meet  the needs  of  our  customers. RAKICC  is  a highly  regulated  and  compliant  jurisdiction  offering  state  of the  art  products with  detailed  attention  to  the Channel  Partners/  Registered  Agents.  The IBCs incorporated  with  the  Jurisdiction  are  mostly  used  for wealth  management  and  assets protection,  holding  shares  in  local companies  and  companies  established  internationally, holding  assets,  real  properties,  open  bank  accounts  at  local and  international banks. Ras  Al Khaimah  offshore  companies  offer the  following  features: 

•  Conducting business  as  an  international  entity 

•  Foreign Ownership 

•  Dispute resolution  for  settlement  of  commercial  disputes 

•  Open bank accounts  locally  and  internationally 

•  Conducting  business  without  corporate/personal  taxes 

•  Protecting  investments  in  other  foreign  countries 

•  Simpler transfer  of assets  and  properties  held  in  several countries 

•  Transfer  of domiciliation  or  Continuation 

•  Companies  can  be  formed  with  a  minimum  of one  shareholder and  there  is  no upper  limit  on the  number  of  shareholders 

•  A minimum  of one  director  and  secretary  is  required and there  is  no  restriction in one  person assuming  these  offices  or  exercising  the  said  responsibilities 

•  No minimum capital requirement 

•  Shareholders  and  directors  are  not  required  to  be  personally  present  before  the authorities  for incorporating  the  company 

•  Requirement  to  have  an approved registered agent  either  within the  free  zone  or outside  the  free  zone.

Within  the  UAE Ras  Al Khaimah  offshore  companies  are  allowed  to: 

•  Have contacts  with  legal consultants,  lawyers,  accountants  and  auditors 

•  Have a  bank  account  in the  UAE  

•  Hold assets  in areas  of  the  Zone  designated by  RAK  ICC 

•  Hold shareholders  and  directors  meeting  within  the  UAE. Ras  Al Khaimah  offshore  companies  are  not  allowed  to: 

•  Carry on  business  with  persons  in  the  Zone  unless  expressly  authorised  to  do  so  by RAK  ICC 

•  Carry on any  other business  which  may,  by  regulations  made  by  RAK  ICC,  be prohibited  by  RAK  ICC 

•  Carry on banking business  in  the  UAE  or  the  Zone 

•  Carry on business  as  an  insurance  or  reinsurance  company,  insurance  agent  or insurance  broker  in  the  UAE  or  the  Zone.   

Labour

Administered  by  the  Federal Ministry  of Labour and  Social  Affairs,  the  labour law  in  the UAE  – the  UAE  Law  No.  8 of  1980,  as  amended  by Law  No.  12 of  1986 (the  Labour  Law) – is loosely  based on the  International Labour Organisation’s  model. The  law  governs  most  aspects  of  employer/employee  relations  such  as: 

•  Hours of work 

•  Holiday  leave 

•  Termination  rights 

•  Medical benefits 

•  Repatriation.   

The  Labour Law  is  protective  of employees  in  general and  overrides  conflicting  contractual provisions  agreed  under another jurisdiction,  unless  they  are  beneficial to  the  employee. Trade  unions  do  not  exist.  However,  there  have  been recent  talks  to  legalise  such associations  to  protect  the  working  community.  These  talks  are,  however,  still  at  a preliminary  stage.  In  the  case  of  disputes  between  employers  and employees,  or  over  the interpretation  of the  Labour Law,  the  Ministry  of Labour and  Social Affairs  will  initially  act as  an  adjudicator.  If a  party  wishes  to  appeal any  decision  made,  it  can  take  its  case  to court.  Strikes  and  lockouts  are  forbidden. 

Normal maximum  working  hours  are  eight  hours  per day  or 48  hours  per week.  However, these  hours  may  be  increased to  nine  daily  for  people  working  in  the  retail trade,  hotels, restaurants  and  other such  establishments.  Similarly,  daily  working  hours  may  be  reduced for difficult  or dangerous  jobs.  As  in  all Islamic  countries,  Friday  is  the  weekly  day  of rest. In  practice,  commercial and  professional  firms  work  40–45  hours  a  week  and  government ministries  around  35.  The  weekend  for government  workers  is  now  Friday  &  Saturday. During  the  Muslim  holy  month of  Ramadan,  normal working  hours  are  reduced by  two hours  per  day. 

Visas

All foreign  nationals  must  obtain  valid  entry  visas  to  enter the  UAE  with  the  exception  of nationals  of GCC  countries.  Foreign  nationals  may  enter the  UAE  under transit  visas,  visit visas  or resident  visas.  No  quota system  is  imposed  on  immigration  into  the  UAE. Transit  visas  are  valid  for up  to  14  days.  A  visit  visa is  valid  for 30 days  or  90 days.   Foreign nationals  wishing  to  take  up employment  in  the  UAE  must  obtain employment visas,  which  are  issued  by  the  Ministry  of  Labour,  and  residence  visas  which  are  issued  by the  Department  of Immigration.  Employment  visas  are  valid  for either two or three  years  and  are renewable  for additional two or three-year periods.  Residence  visas  are  granted to  dependents  of foreign  nationals  who  have  employment  visas  and  who  satisfy  certain  income  and  status conditions. 

Taxation

Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. The rate of VAT is 5 per cent. The rationale behind the introduction of VAT is to provide the UAE with a new source of income which will be used to provide high-quality public services. It will also help the UAE move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.

Implications of VAT for businesses

Businesses are responsible for carefully documenting their business income, costs and associated VAT charges.

Registered businesses and traders are required to charge VAT to all of their customers at the prevailing rate and incur VAT on goods/services that they buy from suppliers. The difference between these sums is reclaimed or paid to the government.

VAT-registered businesses generally:

  • must charge VAT on taxable goods or services they supply
  • may reclaim any VAT they have paid on business-related goods or services
  • keep a range of business records which will allow the government to check that they have got things right

VAT-registered businesses must report the amount of VAT they have charged and the amount of VAT they have paid to the government on a regular basis. It is a formal submission and reporting is done online.

If they have charged more VAT than they have paid, they have to pay the difference to the government. If they have paid more VAT than they have charged, they can reclaim the difference.

Accounting for VAT returns

VAT Return Filing must be done by not later than the 28th day of the month following the Tax period. For example; if the first VAT return period is January 2018 to March 2018, the VAT return due date will be 28th April 2018. Where a payment is due, it should also be paid by the same deadline. Where the due date falls on a weekend or a national holiday, the deadline is extended to the first business day thereafter. Late filing of VAT return attracts penalty of AED1,000 for the first time of occurrence of a delay. The penalty would be increased for subsequent non-compliance of filing of VAT Return.

The standard Tax period applicable to a Taxable Person is a period of three calendar months. However, FTA has assigned different Tax Periods for certain group of Taxable Persons. Some of them have Tax Period on monthly basis. A Taxable Person has an option to request to the FTA to change his Tax Period. However, it is at the FTA’s discretion to accept the request.

VAT in the GCC

The UAE coordinates VAT implementation with other GCC countries because the nation is connected with them through ‘The Economic Agreement between the GCC States’ and ‘The GCC Customs Union’.

Other taxation

There  is  no other federal tax  legislation  in  the  UAE,  with  each  emirate  having  its  own  tax  law. The  following  taxes  are  not  applicable  in  the  UAE: 

•  Personal income tax 

•  Capital gains tax 

•  Withholding tax 

•  Corporate tax. 

Legislation  is  currently  in force  in the  Emirates  of  Abu Dhabi,  Dubai  and  Sharjah  which establishes  a  general corporate  taxation  regime: 

•  Abu Dhabi  Income Tax Decree  of  1965  (and its  amendments) •  Sharjah Income  Tax  Decree  of  1968  (and amendments)   

•  Dubai Income  Tax  Decree  of  1969  (and amendments). 

In  practice  however,  only  oil,  gas  and  petrochemical companies  and branch offices  of foreign  banks  are  required  to  pay  taxes.   There  are  some  forms  of  indirect  taxation  in the  UAE  on individuals  and  companies  in  the form  of  municipality  fees,  transfer fees  on property  and housing  fees.  These  are  levied  by the  respective  authorities. 

Accounting and Reporting

The  regulatory  authority  since  1980  has  been  the  UAE  Central Bank.   Some  56  commercial banks  operate  in  the  UAE,  with  a total of around  400  branches,  of which about  30  are  foreign banks  with  around  200  branches  combined.  Federal law restricts  foreign banks  to  no  more  than eight  branches  each. For  medium-  or long-term  industrial finance,  local companies  can  approach  the  Emirates Industrial  Bank,  set  up  by  the  UAE  government  with an initial  capital  of  AED 500  million. Its main  objective  is  to  help  develop  the  private  sector.  However,  a trend  is  appearing  where most  banks  participate  in  large  syndicated  lending  for  infrastructure  projects  and  other large  ventures  in  the  region. Banking  credit  facilities  (funded  and  non-funded)  are  typically  structured  for  working capital requirements  of  businesses.  Long-term  financing  is  available  but  on  a very  selective basis  or else  on  a largely  collateralised  basis.  Leasing  and  hire  purchase  are  available  from local finance  companies  specialising  in this  business.  Factoring  has  been recently introduced in the  UAE  though only  a  few  institutions  have  been offering  this  service. Import  and export  financing can  be  arranged  through  commercial  banks.  The  banks  often require  margins.  Such  margins  and  the  facilities  offered  by  the  banks  will mainly  depend  on their relationships  with  their customers. 

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