Know the A-Z of setting up business in UAE
Types of Companies: In the UAE, there are several types of companies you can incorporate, including
- Free Zone Company: These are established in specific economic zones, offering various benefits like 100% foreign ownership, tax exemptions, and simplified customs procedures.
- Mainland Company: These are registered under the UAE federal laws and require a local sponsor or agent.
- Offshore Company: These are established in offshore jurisdictions like Jebel Ali Free Zone, Ras Al Khaimah, and Ajman, providing benefits such as tax optimization and asset protection.
Benefits Of Forming A UAE Company Registration Service Providers
Strategic Location
Strong Economy
Business-Friendly Environment
Tax Benefits
Free Zones
Access to Skilled Workforce
Infrastructure and Connectivity
Political Stability and Security
Cultural Diversity and Openness
Growing Consumer Market
Records Required To Incorporate A Company In UAE
To incorporate a company in the United Arab Emirates (UAE), you will need to provide various documents and information. While the specific requirements may vary based on the type of company and the emirate where you plan to establish your business, here are the common records generally required for company incorporation in the UAE
Trade Name Reservation
Memorandum of Association (MOA)
Articles of Association (AOA)
Passport Copies
Residence Visas
Address Proof
Share Capital Details
Shareholders’ and Directors’ Details
Corporate Structure
Legal Representative Appointment
No Objection Certificates (NOCs)
Additional Licenses and Approvals
What Are The Different Forms Of Legal Entities Formed, And Why?
Sole Proprietorship: A sole proprietorship is the simplest form of business entity. It is owned and operated by a single individual who assumes all liabilities and enjoys all profits. Although it is the easiest and most cost-effective form to set up, the owner has unlimited personal liability for the company’s debts and obligations.
General Partnership: A general partnership involves two or more individuals who come together to carry out a business venture. In this form, partners share the profits, losses, and liabilities in accordance with their partnership agreement. Each partner is personally liable for the partnership’s debts and obligations.
Limited Partnership: A limited partnership is composed of general partners and limited partners. The general partners manage the business and have unlimited personal liability, while the limited partners contribute capital but have limited liability. Limited partners are not involved in the day-to-day management of the business.
Limited Liability Company (LLC): The LLC is one of the most popular forms of business entity in the UAE. It offers a flexible structure and combines elements of partnerships and corporations. An LLC can have one or more owners (referred to as members) who enjoy limited liability protection, meaning their personal assets are generally shielded from the company’s liabilities.
Public Joint Stock Company (PJSC): A PJSC is a company whose shares are listed on a stock exchange and can be publicly traded. It requires a minimum number of shareholders and a significant capital investment. A PJSC is subject to strict regulations and reporting requirements.
Private Joint Stock Company: Similar to a PJSC, a private joint stock company requires a minimum number of shareholders but is not listed on a stock exchange. It is often formed for large-scale projects or businesses that plan to go public in the future.
Branch Office: A foreign company can establish a branch office in the UAE to conduct business. The branch operates as an extension of the parent company and is subject to the same regulations and liabilities.
Free Zone Company: Free zones in the UAE offer businesses tax incentives, customs benefits, and full foreign ownership. Companies formed in free zones are typically limited liability companies, providing legal protection to the shareholders.
What Is The Process Of Business Setup In That Country?
Setting up a business in the United Arab Emirates (UAE) involves several steps and considerations. The specific process may vary depending on the emirate and the type of business activity you wish to engage in. However, here is a general overview of the steps involved in setting up a business in the UAE:
Determine the Legal Structure: Decide on the legal structure of your business, such as a sole proprietorship, partnership, limited liability company (LLC), or branch of a foreign company. The most common option for foreign investors is an LLC.
Choose a Business Activity: Identify the type of business activity you intend to pursue and ensure it complies with UAE regulations. Certain activities may require special permits or licenses from specific authorities.
Select a Company Name: Choose a unique name for your company that adheres to the guidelines set by the UAE authorities. The name should not violate any religious or cultural sensitivities.
Find a Local Sponsor: If you’re planning to set up an LLC, you’ll need a local Emirati sponsor who will hold a majority (51%) share in the company. This sponsor can be an individual or a company, but they will not have any direct involvement in the business operations or profit-sharing.
Secure Initial Approvals: Submit the necessary documents, including a business plan, to the Department of Economic Development (DED) or the relevant licensing authority in the specific emirate where you wish to establish your business. Upon approval, you will receive initial documentation.
Lease Office Space: Rent a physical office space that meets the requirements of the relevant licensing authority. The size and location requirements may vary depending on the type of business activity.
Finalize Legal Documents: Prepare the Memorandum of Association (MOA) and Local Service Agent (LSA) agreement (for branches) or a Partnership Agreement (for partnerships). These legal documents outline the rights and responsibilities of all parties involved.
Obtain Trade License: Apply for a trade license with the DED or the appropriate licensing authority. You will need to submit the required documents and pay the necessary fees. The trade license will specify the permitted business activities.
Register with Authorities: Register your company with other relevant authorities, such as the Federal Tax Authority (FTA) for VAT registration, the Ministry of Human Resources and Emiratisation (MOHRE) for labor-related matters, and any industry-specific regulatory bodies.
Open Bank Accounts: Open a corporate bank account in the UAE. Different banks have varying requirements, but typically you will need the necessary documents, such as the trade license, MOA, and proof of address.
Obtain Visas and Permits: If you plan to have employees, you’ll need to apply for residence visas and work permits for them. This process involves medical tests, obtaining Emirates IDs, and fulfilling other immigration requirements.
Commence Operations: Once you have completed all the legal formalities, you can begin operating your business in the UAE.
Overseas Direct Investment Regulation By The Reserve Bank Of India
The overseas direct investment regulation is the latest regulation mandated by the Reserve Bank Of India (RBI) to facilitate the ease of business in a foreign country. Moreover, the regulations by RBI aim to promote easier investment by Indian-owned foreign corporations in Indian companies, which earlier would be charged as round tripping
Conclusion
In conclusion, incorporating a company in the United Arab Emirates (UAE) requires several records and documents to be submitted. The specific requirements may vary depending on the type of company and the emirate in which you plan to establish your business. However, some common records typically required include trade name reservation, Memorandum of Association (MOA), Articles of Association (AOA), passport copies of shareholders and directors, residence visas (if applicable), address proof, share capital details, shareholders’ and directors’ details, corporate structure documents (if applicable), board resolution (if applicable), appointment of a legal representative (if applicable), No Objection Certificates (NOCs) (if applicable), and any additional licenses and approvals relevant to your business activities.
To ensure compliance with the latest regulations and procedures, it’s advisable to consult with a local business setup consultant or engage with the relevant government department in the UAE. They will provide you with up-to-date information and guidance specific to your business requirements and location.
