Doing Business in Dubai

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  • Dubai is gradually freeing its economy from dependency on oil and focusing on services industry. That's why the city has kept a firm focus on establishing more and more businesses regardless of their type and size. In its effort to strengthen the emirate's business sector, international businesses have also been encouraged to move to the city. If anyone want to establish a new business in Dubai Free Zone, or move their running business to the city, there are many things one should consider mentioned in the respective page https://www.flyingcolour.net/services/dubai_free_zone_company_formation.php
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Doing Business in Dubai

  1. 1. Doing Business in Dubai
  2. 2. United Arab Emirates(UAE)1 of 26UAE is a constitutional federation of seven emirates:• Abu Dhabi (capital and the largest city of the federation)• Dubai• Sharjah• Ajman• Umm al-Qaiwain• Ras al-Khaimah• FujairahThe federation was formally established on 2nd December, 1971
  3. 3. UAE AT A GLANCE2 of 2665%18%13%4%Asians UAE Nationals Arab Expatriates Europeans and OthersPopulation : 7,890,924 (2011)UAE national : 18 %Religion : IslamLanguages : Arabic , Urdu , English , HindiPer Capita : $48,000GDP :360.25 billion US dollars in 2011Currency Exchange Rate: 1 USD = 3.67AED
  4. 4. DOING BUSINESS IN DUBAI3 of 26Lorem Ipsum is simply dummy text of theprinting and typesetting. Lorem Ipsum hasbeen the industrys standard dummy.Lorem Ipsum is simply dummy text of theprinting and typesetting. Lorem Ipsum hasbeen the industrys standard dummy.Doing business in Dubai is very attractive due to following reasons; No personal income and capital taxes No corporate taxation 100% repatriation of capital and profits No currency restrictions Competitive import duties Access to wider Middle East and African region Easy access to both seaports and airports 100% Ownership in free Zones Cosmopolitan Life Style
  5. 5. CORE BUSINESS ACTIVITIES4 of 26 Tourism Constructions IT Health Care Banking & Finance Oil & Gas Real EstateBUSINESS HOURS The official weekend is on Fridayand Saturday. Government offices open at 7.30a.m. and close at 3.00 p.m. Private offices 8 a.m. to 6 p.m. During Ramadan 8a.m. to 2p.m
  6. 6. DUBAI EXPORTS AND IMPORTS5 of 26Dubai ExportsDubai’s Total Exports crossed $ 117.4 billion in the year 2012.Major Exports destinations : Iran. India Saudi ArabiaDubai ImportsDubai’s total import is 179.4 USD billion in 2012Major Import destinations Japan. China. United states.
  7. 7. PRINCIPAL FORMS OF BUSINESS6 of 26LLCBranch &RepresentativeProfessionalFree ZoneOffshoreSoleEstablishmentOther Forms : Partnership Joint Venture Public & private LimitedCompany
  8. 8. LIMITED LIABLITY COMPANY7 of 26 Most Common type of Business entity in Dubai UAE national’s participation of 51% is mandatory Managerial & operational powers vested to Investors Can operate in local & international markets Liability is limited to the capital of the company Number of Share holders minimum of 2 and maximum of 50 Profit and loss distribution can be prescribed. UAE nationals is acting as a sleeping partner and normally he is paid a lump sum yearlyfee and he is not interfered in the operations of the company. Customs duty is 5% applicable Special approvals is required for certain business activities from concern department
  9. 9. BRANCH OF FOREIGN COMPANY8 of 26 100% ownership with parent company Local service agent is mandatory- Local service agent must be a UAE national or acompany fully owned by UAE national. Managerial, operational and banking powers vested to the representative of theparent company A branch office can enter into transactions and offer its service to customers Better possibility for market penetration by utilizing the brand name. Only Parent Company products and services can be offered 100% tax benefits.
  10. 10. REPRESENTATIVE OFFICE9 of 26 100% ownership with parent company Only allowed to promote/market the business activity of parent company. Local service agent is mandatory Representative offices cannot enter into a business transaction Trading can be done only through a distributor or directly by the parent company.
  11. 11. PROFESSIONAL FIRM10 of 26 License are issued only for professional activities 100 % ownership is allowed Share holders must have qualification & experience in related activity /business Local service agent is mandatory Local service agent must be a UAE individual /100 % UAE local owned company Trading activities are not allowed
  12. 12. SOLE ESTABLISHMENT11 of 26Activities like real estate , hospitality, education can be formed as SoleEstablishment. 100 % UAE individual owned company 100 % tax benefits Unlimited Liability International & local business can be possible Investors can enter into an agreement to participate in these business activities
  13. 13. PARTNERSHIP FIRM12 of 26 Partnership entities are limited to UAE nationals only 100% owned by UAE nationals. Do local and International BusinessJOINT VENTURES Local equity participation must be at least 51% Profit and Loss distribution can be prescribed It’s a contractual agreement between foreign party and localparty to a specific project
  14. 14. PUBLIC & PRIVATE SHARE HOLDING COMPANY13 of 26 Minimum capital required is AED10 million (USD 2.17 Million) for publicholding company. Minimum capital required is AED 2 million (USD 0.545 million) forprivate share holding company. Directors of the company must be UAE nationals.
  15. 15. FREE ZONES14 of 26Free Zones are separate entity : To promote FDI in Dubai To create Dubai as a Import , Export and re-export business hub To Promote Dubai as a hub for distribution channels to GCC and middleeast regionsFree Zone Entity can be established as Free Zone Establishment (FZE)with single share holder Free Zone Company (FZC) with minimum 2 and maximum 5 shareholders Branch / Subsidiary of foreign company.
  16. 16. FREE ZONE ADVANTAGES15 of 26The major advantages of free zones are: 100% foreign ownership 100% exemption from taxes and duties levied 100% repatriation of profit and capital 100% import and export tax exemptions No corporate, withholding and inheritance taxes No personal income taxes No currency restrictions Availability of skilled and experienced workforce Abundant and inexpensive source of energy Highly developed infrastructure High level of administrative support Modern and efficient communication system
  17. 17. WHAT ARE THE FACTORS THAT NEED TO BECONSIDERED FOR CHOOSING A FREEZONE16 of 26 Distance from international air- and seaports Facilities and infrastructure offered at the free zone Real estate options Types of activities allowed by the respective free zone authority Annual rent for office space and size of office units Minimum capital required Processing time of application
  18. 18. FREEZONE LIMITATIONS17 of 26 Restricted to do direct business with the UAE Local Market UAE local market business can be made through only aDistributer For local business transactions 5 % custom duty is applicable Office premises must be within the free zone area
  19. 19. FREE ZONES IN DUBAI18 of 26More than 20 free zone are located in Dubai for specific business activities : Jebel Ali Free Zone Dubai Media City Dubai Internet City Dubai Knowledge Village Dubai Airport Free Zone Dubai Silicon Oasis Dubai Multi Commodity Center Dubai Gold and Diamond park
  20. 20. OFFSHORE COMPANY19 of 26 Entity that is formulated in a low tax or no tax jurisdiction Improving the investor’s wealth management To gain confidentiality over one’s financial affairsUAE has 3 Offshore jurisdictions Jebel Ali Free Zone (JAFZA) Ras Al Khaimah Free Trade Zone (RAKFTZ) Ras Al Khaimah Investment Authority (RAKIA)
  21. 21. WHY UAE OFFSHORE IS UNIQUE20 of 26 100% foreign ownership is permitted. 0 % income tax Conduct international business No physical of office Hold multi currency bank accounts in Dubai Freehold ownership and title Own shares of other companies No capital requirements Accounting & Audits Report is not mandatory Assets protection Security of property rights.
  22. 22. TAXATION ENVIRONMENT21 of 26 No personal income taxes No corporate taxes No VAT levied in the UAE No withholding taxes No transfer pricing rules No requirement to file corporate tax returns in the UAE 5% import tariff on most goods levied ONLY ONCE at thefirst port of entry to the GCC The UAE has signed double taxation treaties with over 40countries
  23. 23. LABOUR RULESwww.hlbhamt.com22 of 26 Employment visa has to be obtained from the Ministry of Interior after the approval from Ministry ofLabour Labour contract signed between the employer and employee and registered with the Ministry of Labour Work permit is mandatory for all employees Salary transferred through the bank under the Wage Protection System (WPS) No maximum and minimum salary requirement Maximum working hours permissible 8 hours per day and 48 hours per week For every completed year of service employee is eligible for 30 days annual leave For the termination of employment 1 month notice period is applicable An employee is eligible for gratuity at the end of his service depends upon the period of his employment
  24. 24. IMMIGRATION & VISA REQUIRMENTSwww.hlbhamt.com23 of 26 Citizens of the Gulf Cooperation Council ( Qatar, Kuwait, Saudi Arabia, Bahrain, Oman, and the UAE ) donot require a visa to enter UAE Citizens of few countries who are automatically entitled to visit visa on arrival at UAE airport All other visitors who wish to visit UAE must obtain a visit visa in advance through a sponsor. The sponsor can be a travel agency, a hotel, a company or department with which one is doing business inthe UAE, or an individual ( e.g., a relative or friend who is a resident in UAE. ) There are several types of visas ( like the tourist visa, transit visa, visit visa, multiple entry visa andresidence visa etc.) and these primarily depend on the purpose of entry into the UAE. Investors in UAE ( except in offshore jurisdictions ) are eligible to get investor/residence visas in UAE.
  25. 25. BANKINGwww.hlbhamt.com24 of 26 Many international banks as well as local banks are available in Dubai No exchange controls International financial transactions are relatively simple Foreign currency can be easily converted to local currency and vice versa through money exchange houses Companies can open multi currency bank account Personal bank account can be opened without residency and the requirements of documents variesbank to bank Easy repatriation of funds Minimum balance is applicable and it varies bank to bank Corporate bank facilities are extended depends on the tenure of the company and business turn over
  26. 26. AUDIT & ACCOUNTING25 of 26 All the companies operating in UAE, the requirements for maintaining accounting records andfor financial reporting are prescribed in the Commercial Companies Law and the CommercialTransactions Law. Accordingly, businesses must keep ledgers and books according to their specific businessrequirements, but in all cases should at least keep the daily journal and general ledger. Allaccounting information and evidencing documents are to be retained for a period of fiveyears.
  27. 27. FOR ANY ASSISTANCE26 of 26Mr Davis V KadavanMob : 00971509330152Email : davis@hlbhamt.com
  28. 28. THANK YOUContact UsSuite No 1801,City Tower 2Sheikh Zayed Road,DubaiUAE,P.O Box : 32665

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