United Arab Emirates

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United Arab Emirates

General information about the jurisdiction

The United Arab Emirates is the federate state in the southeast of the Arabian Peninsula, consisting of 7 emirates each of which is absolutely monarchy. The political impact of the emirate corresponds to the quantity of oil reserves on its territory.

The basis of the economic prosperity of the UAE is competent investment of the money earned on oil and gas to industry, financial sector, agriculture and tourism.

When doing business in the UAE remember about cultural and religious differences of the country, which have a huge impact on everyday life.

1. Legislation

Company activities in the UAE are regulated by Consolidate Act on Commercial Companies, International Business Act. You should remember that every emirate is able to adopt its own corporate legislation.  

2. Company formation

2.1 Types of companies

Limited Liability Company (LLC), Offshore Company (Ltd) and Free-zone Company may be registered in the UAE. The most convenient are Offshore and  Free-zone Company because foreigners can not own more than 49% of the share capital of LLC (only a resident can own 51% of LLC's shares).

Notice that Free-zone Company is a resident and is able to work in the Free zone of its registration and outside the UAE.

2.2. Offshore Company (Ltd):

  • The minimum authorized capital – not established, payment by the moment of incorporation is not required.
  • Shares – registered with per value. Bearer shares are not allowed.
  • Director – at least 1, individual or legal person, no residency required.   
  • Members – at least 1, individual or legal person, no residency required.  
  • Secretary – is required, director may be a secretary.
  • Publicly available information: information about directors and shareholders. Nominee service may be used.
  • Company is not obliged to keep and submit an annual financial report, to be audited.
  • Company can not have a registered office in the UAE. 

2.3 Free-zone

There are more than 30 free-zones in the UAE, the most popular are Jebel Ali and Ras Al Khaimah (RAK).

The benefits of Jebel Ali:

  • There are no corporate, income taxes, VAT;
  • The right to own property;
  • Access to global markets;
  • No restriction on capital and income transfer;
  • No currency restriction.

The benefits of Ras Al Khaimah:

  • Registered office in the UAE is not required;
  • Corporate directors and shareholders of any residency are allowed;
  • The right to own real estate;
  • No restriction on capital transfer;
  • No currency control, quotas.

A company registered in RAK is not able to do business in the UAE, to obtain a resident visa.

3. Taxes

An offshore company and free-zone company are exempt from taxation.

No capital gains tax.

4. Currency control

None

5. Agreements on avoidance of double taxation

The UAE concluded a lot of agreements on avoidance of double taxation, but not with Ukraine.

6. Features

It should be noted that corporate requirement are different in every emirate and free zone. Dubai is one the most prestigious as well as expensive emirate but there is low level of confidentiality (names of founders are in the articles of association) and it does not give resident visa.

Moreover, you will need a license ($1000 - $4100) to do business in the UAE.