Starting and managing business in the UAE

Golden Fish - your trusted partner in UAE business setup, offering comprehensive company formation and support services to help businesses thrive in the United Arab Emirates.

Our Comprehensive Services:

• Company registration and establishment in the UAE
• Municipal and operational licensing assistance
• Corporate banking solutions and account setup
• Annual license renewal and compliance services
• Full-range accounting and tax support
• Professional payroll and HR management
• Local partner and service agent facilitation
• Strategic office space solutions

At Golden Fish, we understand that each business has unique requirements. Our expert team delivers tailored solutions and exceptional support throughout your company formation journey in the UAE. With our proven track record and deep market knowledge, we ensure a smooth and efficient setup process for your business.

Advantages and disadvantages of UAE company setup

Advantages of establishing companies in the UAE

👍 Low Tax Rates: No personal income taxes and a very low corporate tax rate of 9% make the UAE highly attractive for individuals and businesses seeking tax efficiency.

👍 100% Foreign Ownership: Full foreign ownership in Free Zones and Mainland LLCs without needing a local partner makes starting and running a business simpler compared to many other countries.

👍 No Currency Controls: The UAE has no restrictions on currency exchange or repatriation of capital, making it easy for businesses to access local and foreign currencies.

👍 Robust Banking Infrastructure: The UAE hosts a significant number of international banks, with 50 local and foreign banks operating in the country, simplifying financial transactions for businesses.

👍 Attractive for CIS Nationals: The UAE offers benefits particularly appealing to CIS nationals, including simplified visa processes, a large Russian-speaking community, and services catering to their needs. The UAE offers world-class infrastructure, ranging from advanced transportation networks to state-of-the-art business facilities, making it easier for expatriates to adapt.

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Disadvantages of UAE company setup

👎 High Cost of Living: The cost of living, especially in cities like Dubai and Abu Dhabi, is significantly higher than other immigration destinations, impacting the quality of life for expatriates.

👎 Complex Business Setup: The variety of business formation options and complex regulations can be confusing and overwhelming for newcomers.

👎 Sector-Specific Restrictions: Certain strategic sectors, such as banking and telecommunications, require special government approvals, limiting opportunities for foreign investors.

👎 Economic Substance Requirements: Companies in certain industries must comply with economic substance regulations, which can add to operational costs and complexity.

👎 Cultural Adjustments: While the UAE is cosmopolitan, it remains an Islamic state with specific cultural norms and regulations, which can require significant adjustments for expatriates.

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Popular Business Entities in the UAE

The UAE offers a variety of business entity options, each catering to different needs, from full foreign ownership to simplified tax structures. Below is a breakdown of the main types of business entities available in the UAE, along with their features, benefits, and ideal use cases.

Doing Business in the UAE with a Locally Registered Entity

1. The UAE Free Zone Company

This entity type is one of the most popular in the UAE. Historically, it has been favored due to the regulatory challenges and complexities associated with forming joint ventures with local partners, including shared ownership requirements and profit-sharing obligations. Today, it is often chosen for its tax advantages, such as exemptions from corporate tax, import/export duties, and 100% repatriation of profits. There are over 40 free zones across the UAE, each catering to different business needs.

Key Features:

• Ownership: Can be registered with a single shareholder and one director, who can be a foreigner without UAE residency.
• Office Requirement: A lease agreement for an office, warehouse, or industrial space within the free zone is mandatory.
• Ultimate Beneficial Ownership (UBO): Every company must establish a UBO register and provide this information to the relevant registrar or licensing authority. However, UBO, directors, and shareholders are not publicly disclosed.
• Activities: Businesses can operate without an Emirati partner, especially for international activities and dealings with other free zone companies.

Best Uses: A UAE free zone company is ideal for minimizing international taxation and conducting business with international parties or other UAE free zone companies.

2. The UAE Offshore Company

Forming an offshore company in the UAE offers a quick and cost-effective way to enter the market. However, it comes with certain limitations: it cannot sponsor employee visas, import/export products within the UAE, or issue invoices to UAE clients.

Key Features:

• Restrictions: Cannot sponsor employee visas, import/export products within the UAE, or issue invoices to UAE clients.
• Capital Requirements: There is no minimum share capital requirement.

Best Uses: Suitable for clients looking to establish a holding company, conduct international business, or hold real estate assets in the UAE.

3. The UAE Mainland Company

Foreign investors can establish a Limited Liability Company (LLC) in the mainland to provide professional services or trade with other UAE mainland companies.

Key Features:

• Foreign Ownership: Most business activities allow for 100% foreign ownership without needing a local Emirati partner, although exceptions may apply, such as activities related to oil exploration, defense, and other strategically important sectors.
• UBO Requirements: Like free zones, UBO data must be registered and submitted to the appropriate authority.

Best Uses: Suitable for clients who need to issue invoices, import and distribute products in the UAE mainland, or bid on government contracts.

Doing Business in the UAE with a Foreign Entity

4. The UAE Branch Office

A branch office allows foreign businesses to operate in the UAE under 100% foreign ownership. However, a UAE resident representative must be appointed to act as the point of contact for regulatory authorities, ensure compliance with local laws, and manage administrative processes within the country.

Key Features:

• Operations: Operates under the same name and business scope as the parent company, and it is authorized to issue invoices and enter into local contracts.
• Guarantees: Requires a bank guarantee of AED 50,000 (US$13,650) and an issuance fee of AED 7,000 (US$1,920). Monthly fines may apply for delayed bank account setup.
• Restrictions: Branches cannot engage in manufacturing or import/export activities.
• Liability: Not a separate legal entity, meaning the foreign parent company has unlimited liability for the branch's operations.

Best Uses: Suitable for service-based businesses looking to conduct operations locally for a defined period.

5. The UAE Representative Office

A representative office is ideal for promoting a parent company and conducting market research in the UAE.

Key Features:

• Limitations: Cannot conduct commercial operations but can promote the business and gather market intelligence.
• Similar Registration: The registration requirements align closely with those of a branch office.

Best Uses: Suitable for businesses looking to assess the UAE market without engaging in commercial activities.

Comparison of UAE Entity Types

Feature	Resident LLC	Free Zone LLC	Branch Office	Offshore LLC
CORE BUSINESS ACTIVITIES
Business Scope	All products & services	All products & services	Same as parent company	International only
Local Business Permitted	✅ Full access	ℹ️ With restrictions	✅ Yes	❌ No
Government Contracts	✅ Yes	ℹ️ With exceptions	✅ Yes	❌ No
Local Invoicing	✅ Yes	ℹ️ With restrictions	✅ Yes	❌ No
SETUP REQUIREMENTS
Minimum Capital	US$1	Varies by zone	Location dependent	US$1
Setup Timeline	5 weeks	6 weeks	6-8 weeks	2-4 weeks
Travel Required	❌ No	❌ No	❌ No	❌ No
Physical Office	Required	Required	Required	Not required
Bank Account Timeline	8 weeks	8 weeks	8 weeks	10-12 weeks
Total Setup Period	3.5 months	3.5 months	4 months	3-4 months
LEGAL STRUCTURE
Limited Liability	✅ Yes	✅ Yes	❌ No	✅ Yes
Foreign Ownership	✅ 100%	✅ 100%	✅ 100%	✅ 100%
Public Registry	❌ No	❌ No	❌ No	❌ No
DTAA Access	✅ Yes	✅ Yes	✅ Yes	❌ No
Government Recognition	High	High	High	Limited
BUSINESS OPERATIONS
Trade Finance	✅ Available	✅ Available	✅ Available	✅ Available
Visa Sponsorship	✅ Yes	✅ Yes	✅ Yes	❌ No
Local Banking	✅ Full access	✅ Full access	✅ Full access	ℹ️ Limited
Import/Export	✅ Unrestricted	✅ Through free zone	ℹ️ Limited	❌ No
ANNUAL REQUIREMENTS
Audit Required	✅ Yes	✅ Yes	✅ Yes	ℹ️ Varies
Tax Filing	✅ Required	✅ Required	✅ Required	ℹ️ Limited
License Renewal	Annual	Annual	Annual	Annual
Compliance Level	High	High	High	Low
FINANCIAL ASPECTS
Setup Costs	Moderate	High	High	Low
Maintenance Costs	Moderate	Moderate-High	High	Low
Bank Guarantee	No	No	AED 50,000	No
Office Costs	Flexible	High	Required	Not required

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Overview of Business Licensing in the UAE

In the UAE, every registered company must acquire an operational license to conduct business legally. Failure to do so can result in significant fines, legal action, or even forced closure of the business. There are three main types of business licenses in Dubai:

• Commercial Licenses: These are for companies engaged in commercial activities, allowing them to conduct trading operations and invoice customers. If your business involves buying or selling goods, this license is likely the most suitable.
• Industrial Licenses: Designed for businesses involved in productive activities such as manufacturing or repackaging products. This license is appropriate if your operations involve any form of production or transformation of goods.
• Professional Licenses: Suitable for service providers in fields like consulting, accounting, or law. If your business focuses on offering specialized services based on intellectual or educational skills, this license is ideal.

All business licenses must be renewed annually, typically within 30 days before the expiry date. The renewal process involves submitting updated documentation and paying the necessary renewal fees to the relevant authorities.

It is essential to differentiate these operational licenses from regulatory licenses, which are additional authorizations required for specific products or services. For instance:

• A business providing banking services must obtain a separate banking license from the Central Bank of the UAE.
• A healthcare provider must secure a medical license from the relevant health authority.
• An educational institution needs an education license from the Ministry of Education.

Restrictions on Holding Multiple Licenses

Companies based in Dubai's mainland are generally not permitted to hold two distinct licenses under the same corporate entity. This restriction helps maintain regulatory clarity and ensures compliance with specific business activity requirements. However, exceptions exist, such as forming subsidiary entities or applying for additional approvals, which may allow a business to engage in multiple activities. As a result, companies cannot simultaneously engage in two different business activities, like product trading and management consulting, under a single license.

Typical UAE Company Incorporation Steps and Timeline

The process for company formation in the UAE can vary depending on the Emirate in which you plan to establish your business. For detailed information on the requirements for each Emirate, consider visiting official government resources such as the Department of Economic Development websites for Dubai, Abu Dhabi, or Sharjah. For instance, the requirements and timelines in Abu Dhabi can differ significantly from those in Dubai or Sharjah. However, the following are the typical steps involved in the company formation process:

1. Agree on the UAE Corporate Structure: Decide on the type of company and shareholding structure suitable for your business goals.
2. Document Preparation, Translation, and Legalization: Prepare all required documents, ensuring they are translated and legally attested as necessary.
3. Obtain Preliminary Approval: Secure initial approval from the Department of Economic Development (DED) or the relevant Free Zone Authority.
4. Secure a Business Premise and Open a Corporate Bank Account: Find a suitable office location and complete the bank account opening process.
5. Apply for the Appropriate License: Depending on the nature of your business, apply for a trade license, industrial license, or professional license.

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Typical UAE company formation timeline

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UAE accounting & tax considerations

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Opening a corporate bank account in UAE

Golden Fish recommends these banks to our clients:

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UAE visas for businesses

Long term residence visa

UAE issues 5-year and 10-year residence visas to eligible investors, entrepreneurs, and special talents. The benefits of this visa are extended to the spouse and the children as well.

Employment visa

Company owners can apply for this visa when hiring foreign employees.

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UAE Business Setup FAQ

UAE Business Setup FAQ

General Ownership Requirements

Will there be restrictions on ownership if foreigners set up a UAE company?

Certain UAE business entities, such as those involved in specific strategic sectors, will require clients to appoint Emirati shareholder(s). Therefore, choosing the optimal business entity to suit your corporate needs is essential to proceed with a UAE business setup.

Can my company be 100% foreign-owned?

Yes, most business activities enjoy 100% foreign ownership.

Company Registration

How do you register a company in the UAE free trade zone?

For incorporation of a free zone entity in the UAE, Golden Fish will:

1. Obtain the necessary permissions from the relevant authorities.
2. Reserve the company name.
3. Prepare the incorporation documents.
4. Notarize the documents at the public courts.
5. Apply for the business license.
6. Register the company for VAT (if required).
7. Obtain work visas for clients and their employees.

What are the benefits of starting a free zone entity in the UAE?

UAE free zone companies offer several benefits, including:

1. No requirement for a resident shareholder, i.e., an FZ company can be 100% foreign-owned.
2. No obligation to hire staff.
3. No customs duties on goods entering or leaving the zone.
4. High-quality infrastructure.

Directors and Shareholders

How many directors must be appointed to register in a UAE free trade zone?

Only one director is required to form a UAE free zone company.

How many shareholders are required to incorporate in a UAE free trade zone?

Only one shareholder is required to start a free zone entity in the UAE.

How many shareholders are required for an offshore company in the UAE?

Only one shareholder is required for starting an offshore company in the UAE.

Is a resident director required?

No.

Are shareholder/director details available for public viewing?

No.

Logistics and Premises

Am I required to visit the UAE to incorporate a company there?

No, Golden Fish can legally incorporate your UAE company without you needing to travel.

Do I need to rent premises for my company?

The requirements differ based on the type of company:

Company Type	Office Requirement
Free Zone Company	A lease agreement for office premises or a flexi-desk is required before incorporation.
Mainland Company	Only a virtual or registered address is needed.
Offshore Company	Only a virtual or registered address is needed.

This comparison table helps clarify the differences between the requirements for free zone, mainland, and offshore companies.

Compliance and Taxation

Will I be required to get a full audit if I set up a small business in the UAE?

Yes, most entities will require audited financial statements.

What are the tax implications of a UAE company setup?

Corporate Income Tax (CIT) has been implemented in the UAE at a standard rate of 9%. Additionally, depending on the volume and nature of the business, some companies are liable for VAT (5%) and/or customs duties. Specific industries, such as oil and gas and branches of foreign banks, may have special tax considerations or exemptions.

Is a UAE company required to submit an annual tax return and/or financial statement?

Yes, all companies in the UAE are obliged to submit annual audited accounts to the government.

Banking Solutions

Which banks are recommended for UAE business banking solutions?

Golden Fish recommends several local UAE bank options, including:

1. Emirates NBD
2. First Abu Dhabi Bank
3. Abu Dhabi Commercial Bank
4. Dubai Islamic Bank
5. Mashreq Bank

These banks are known for good customer service, which is essential when starting a new business in the UAE.

How do I open an offshore bank account in the UAE?

Clients will not be required to register a local company to open an offshore bank account in the UAE. However, the KYC procedures will be more stringent than those for opening a bank account for a resident company. Attestation documents will also be required. Please refer to our bank account opening guide for UAE companies for more detailed information.

Can Golden Fish assist with Islamic Banking services in the UAE?

Yes, Golden Fish can assist clients with their Islamic banking needs.

Visas and Residency

How long is a UAE business residence visa issued for?

UAE business residence permits are typically issued for 2 to 3 years.

Book a free consultation to discuss your corporate banking needs