Business Formation and Setup. Local Sponsorship, Legal and Official Documentation
United Arab Emirates is one of the best countries to open a business. UAE has started giving 100% ownership to foreign Expats. There are so many options to set up business in UAE.
Onshore or offshore freezone is the one which is most known to foreign entrepreneurs as freezone companies are exempt from corporate and personal tax. Also, freezone companies can have 100% ownership and 100% repatriation of their capital and profits. Freezone companies can also engage in import and export.
Whereas when it comes to Dubai mainland, Dubai is the heart of UAE. This is where masses of foreigners dream of opening businesses. Basically, Dubai mainland has two types of licenses, commercial and professional.
A commercial license is basically a trading license whereby the business plans to sell any types of products. The best part of this license is you don’t require any local Emiratis for this kind of business E.g., furniture trading, electronic trading and so on.
Whereas a professional license is a service orientated license which is given to individuals with a certain area of expertise and educational background. Examples of professional licenses are IT consultancy, or technical services. A professional license will always have a local Emiratis who will also function as a local service agent, but they will never hold any shares.
Apart from the commercial and professional licences there are other licenses E.g., Travel agency, planning/logistic activities which are LLC (Limited Liability Company). It is possible that the local agent holds 51% of the shares.
When an investor invests in a mainland company in the UAE, the company may trade in the UAE local market as well as outside UAE.
Free zone Company – A free zone company is a company formed within a special authority that comes under a particular Emirate.
When it comes to offshore companies, basically offshore companies are those that are registered in the UAE having only an office address. They are not entitled to run business activities in UAE. Offshore companies have more privacy in banking terms. Similarly, like mainland offshore can also be setup in seven different Emirates. The only thing that is lacking in offshore companies is that they cannot take visas under the company. It will just be a license. But offshore companies can open their business bank account in UAE.
What are freezone companies and what are their benefits?
Free zone companies are those which are run under freezone jurisdictions and can be
easily opened without being physically present In UAE and with simple documentation such as
passport copy, visa copy and valid E-mail ID and phone number.
The key benefits of free zone companies are: –
100 % foreign ownership
100% repatriation of profits and capital
100% tax exemption for import and export
100% exemption from corporate and income taxes.