Whether you are an ambitious start-up, an individual entrepreneur investing in an existing business, or a foreign corporation establishing a formal presence in the UAE, clear and skilled advice will ensure that you are making the right business decision to reduce your risk and increase your chances of achieving a successful, well-managed business.
Drawing on our expertise of over two decades, our corporate team has gained comprehensive knowledge and developed the business acumen skills you need to guide you through selecting the most suitable legal form to set up your venture, whether as a mainland, free zone, offshore, or freelance.
We advise on the full spectrum of the UAE companies’ law and can efficiently contribute to the achievement of our clients’ goals and objectives and help them navigate the legal complexity and market challenges to successfully executing their business strategy.
Initial Business Setup Advisory
Setting up your new business in the UAE would require careful consideration of certain factors and conditions, such as the nature of business activities, the selection of the right business structure/legal form and the most suitable incorporation jurisdiction (Mainland, Free Zone, Offshore), the accounting and booking keeping requirements, the labour and immigration laws, bank account opening and TAX & VAT.
Mainland Limited Liability Company
One of the most used mainland setups in Dubai is the Limited Liability Company (LLC) which can be licensed to carry on diverse trading, commercial and industrial activities. With latest amendments in the UAE Commercial Companies Law, LLCs may also be incorporated to conduct some professional activities.
Depending on the nature of the business activities to be carried on, the LLC may be 100% foreign owned. An LLC must have a registered office space to operate and managed by a General Manager who will become a UAE resident. There is no minimum capital requirement. However, some business activities would require a higher capital.
Mainland companies are governed by the Regulatory Authority in Dubai – Department of Economic Development (DED) and governed by the UAE Commercial Companies Law No. 32 of 2021, as amended.
NOTE: Is it recommended to have the law as HL
FREE ZONE COMPANY
With over 40 free zones across UAE offering company formation solutions, it becomes challenging to select in which free zone to set up your business.
Dubai offers more than 30 free zone and has some of the renowned free zones in the world. Dubai free zones offer world-class business amenities, flexible set ups options (flexi-desk and flexi-office).
While maintaining complete privacy with limited reporting requirements, foreign investors can own 100% of the share capital and are allowed to repatriate 100% the company’s profits. Investors can set up two types of free zone companies, a Free Zone Establishment (FZE) for one shareholder or a Free Zone Company (FZCO) for more than one shareholder. A Branch or Representative office of a foreign company may also be registered in a selected free zone.
An Offshore Company is mostly used as a Holding Company. It can also be used for international trading, contracting, consulting services, and asset/intellectual property protection.
It’s 100% tax free and you will also be able to keep 100% of the returns. There is no audit requirement, Names of shareholders and directors are not available on public record, however, annual legal compliance requirements must be fulfilled.
Offshore company may not carry on business in the UAE, and also it doesn’t offer residence visa in the UAE
Branch of Foreign Company
A branch of a foreign company is registered in the UAE as a supplement of the foreign company (often called ‘Parent Company’ or ‘Mother Company’) located abroad. A branch will carry the same name and conduct the same business activity of the foreign company. A branch can be registered either in mainland or in a Free Zone.
We can advise as to the legal/financial Pros and Cons of a branch registration for your company’s expansion in the UAE.
A Rep Office of a foreign company is registered in the UAE merely to market and promote the foreign company’s products and services. A Rep Office is not allowed to trade in the UAE. However, it offers a residence visa to its employees.
Civil Partnership for Professional Activity
A Civil Partnership is formed between two or more partners to carry on professional or service-related activities. The partners in a civil partnership do not enjoy liability. They are jointly liable for any losses or debts which may arise out of the Civil Partnership Company.
A Civil Partnership Agreement must be entered into by the partner and signed before the Notary Public in Dubai. The Civil Partnership is governed by the UAE Civil Transactions Law No. 5 of 1985, as amended.
A Sole Proprietorship is established in the UAE by a single individual with a trade/professional license issued in his/her name. Sole Proprietorship’s owner is responsible for all financial liabilities of the company.
A freelance license is a work permit that enable individuals to be self-employed without being tied to one company for a long term.
Dubai provides individuals with various opportunities to venture off in their own business journey and succeed as a freelancer.
Freelance permits in Dubai are usually issued for specific industries including Media, Education, and IT Services. Besides the residence visa that freelance license offers, a freelancer can open his/her own bank account in the UAE.
Ready Made-Shelf Company
If you are looking to buy a ready-made (shelf) company up to 15 years old, we have a list of UAE’s Offshore and Free Zone companies with well-known shareholders/financial history and clear bank records.
A nominee director is a person who agrees to become an officer of a company even though they will have no involvement in the actual operation of the company.
It is a legal requirement for a UAE Free Zone or an Offshore Company to have at least one director. Corporate directors are allowed; however, one individual is essential to be appointed as director on the company’s records.
We do provide nominee director services for UAE Free Zone and Offshore companies incorporated in Dubai, UAE.
Nominee General Manager
A nominee director is simply a resident of the UAE who will be appointed as the nominee manager on the license of the company. A nominee manager may be involved in the actual operation of the company as agreed with the shareholders.
We do provide nominee manager services for UAE Free Zone companies incorporated in Dubai, UAE.
Bank Account Assistance (Corporate/Personal)
One of the main reasons you have incorporated a company in the UAE is to have a bank account so you can operate your business in the UAE.
We assist with the bank account opening formalities in the UAE to including introducing you to your banking relationships, submitting the documents which identify the ownership of the company and the identity of the shareholders, assisting in filling in the required KYC forms, and providing guidance and oversight of the account opening process.
We assist in both corporate and personal accounts.
Economic Substance Regulations (ESR)
As part of the UAE’s commitment as a member of the OECD Inclusive Framework, and in response to an assessment of the UAE’s tax framework by the European Union Code of Conduct Group on Business Taxation, the UAE issued:
- Economic Substance Regulations (Cabinet of Ministers Resolution No. 31 of 2019), (the “Regulations”) on 30 April 2019.
- Guidance on the application of the Regulations was issued on 11 September 2019 (Ministerial Decision No. 215 of 2019),
- and Cabinet Decision No. 58/2019 on the Determination of Regulatory Competencies lists the Regulatory Authorities tasked with the administration and enforcement of the Regulations.
- Amendments to the Regulations were made by Cabinet of Ministers Resolution No. (57) of 2020 on 10 August 2020, and updated Guidance was issued on 19 August 2020 (Ministerial Decision No. (100) of 2020.
The Regulations require UAE onshore and free zone companies and certain other business forms that carry out any of the defined “Relevant Activities” to maintain and demonstrate an adequate “economic presence” in the UAE relative to the activities they undertake (“Economic Substance Test”).
Companies based in the UAE need to assess if their business activities fall within the Relevant Activities defined in the ESR. In the affirmative, they are required to submit an ESR Notification by 30 June of each calendar year. Depending on their business activities, they would need to file an ESR Report with the UAE Ministry of Finance (MoF) by the end of their financial year, or by 31 December the calendar year.
Which UAE businesses are required to submit an Economic Substance Report?
During a Reportable Period, businesses that are not Exempted Licensees and who generate Relevant Income from any of the following Relevant Activities must file an Economic Substance Report:
- Banking Business
- Insurance Business
- Investment Fund Management Business
- Lease-Finance Business
- Headquartered Business
- Shipping Business
- Holding Company Business
- Intellectual Property Business
- Distribution and Service Centre Business
Ultimate Beneficial Owner Regulations (UBO Regulations)
The Ultimate Beneficial Owner Regulations (the “UBO Regulations”) issued by UAE Cabinet Resolution No. (58) of 2020 are aiming to regulate Beneficial Owner Procedures.
All companies licensed and registered in the UAE – except those that are wholly owned by a local or federal government body, or those set up in the DIFC or ADGM financial free zones – are required to maintain registers with updated information and adequate records of its ultimate beneficial owners (UBOs), beneficial owners (BO’s), shareholders, and nominee directors.
Companies Registrars must maintain, at all times, updated UBO Register to include the following information for each UBO:
- Full name, nationality, and date and place of birth.
- Place of residence or notice address.
- Valid Passport or identification number, country, and date of issue and expiry.
- The basis on which the natural person is identified as a beneficiary.
- The date on which the person became a UBO, and if applicable, the date on which they ceased to be one.
The BO Register – identifying shareholders, partners, directors/nominee directors to be maintained by Registrars must include the following information for each partner or shareholder:
- The number and class of shares/equity held, and the voting rights attached.
- The date on which the shareholder/partner acquired the shares/equity.
- For shareholders/partners that are natural persons, the same information is required as for UBOs.
For shareholders/partners that are legal entities:
- Name, legal form, and memorandum/articles association.
- Address of main office or headquarters, and if the legal entity is foreign, the name and address of its legal representative in the UAE must be included.
- Names of the persons holding senior management positions (including their passport or identification number, country of issue, date of issue, expiry date).
Who is an Ultimate Beneficial Owner?
A UBO is a natural person that directly hold or control at least 25% of a company’s shares or has voting rights over a certain percentage of that company. Or indirectly via the control of another company, entity or structure that controls or has influence over that company’s business, and its strategic plans, decisions, transactions, and financials.
Ultimate Beneficial Owner Vs Beneficial Owner
Legally, an ownership can be classified into two; 1. Legal and 2. Beneficial ownership. A legal owner is a person who holds the legal title under their name. Alternatively, a beneficial owner is the person who enjoys the benefits of ownership even though the title is in another name.
In other words, a registered shareholder (person or company) is deemed as the legal owner of the shares registered under his/its name, but he/it may be holding such shares for the interest and benefit of a beneficial owner pursuant to a trust or nominee arrangement.
There can be multiple beneficial owners in one company, but the Ultimate Beneficial Owner (UBO) is often the natural person who ultimately owns and controls a company, hence, benefits the most from all beneficial owners, however, this person does not have to be known directly as the owner.
- Attestation and Legalization of documents
- Residence Visa
- Golden Visa
- Spouses/Children Visa
- PRO Services
- Company Secretarial Services
- Power of Attorney Drafting
- Business Structuring & Bankruptcy
- Shareholders/Board Meetings Resolutions
- Partnership Agreements
- Share Sale & Purchase Agreements
- Share Transfer in the Event of Death
- Bankruptcy Procedures
- Merger & Acquisition
- HR Department’s Manual/Training
- Corporate Compliance
Day-To-Day General Corporate Advice/Support
We also provide general corporate advice and consulting services on issues that affect our client’s day-to-day operations, including advising directors and senior executives on complex management and employment matters, ensuring corporate compliance with rules and regulations, drafting and vetting on wide range of corporate and commercial contracts, conducting due diligence on target companies, and assisting with local authorities’ requirements.
Our services can be offered either remotely or physically on a part time basis in your company’s office.
If you would like to discuss business setup options, feel free to email us and arrange for an appointment.
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