Detailed comparison of UAE entity types
Summary
| Compare different UAE entities | Resident LLC / Subsidiary | Free Zone LLC | Branch Office | Offshore LLC |
|---|---|---|---|---|
| Summary | Ideal for conducting local business and signing government contracts, providing complete operational flexibility. | Suitable for global trading, with Free Zone benefits and some mainland restrictions. | Best for replicating parent company operations in the UAE, ensuring consistency. | Suitable for international business without a local physical presence. |
| Best use of company? | All products and services conducted by local businesses sign Government contracts. | All products and services do global trading | To conduct the same business as the parent company in the UAE | All products and services are only for international business |
| Permission to do business on the UAE mainland? | Yes | Yes, with some exceptions | Yes | No |
| Allowed to sign contracts with and issue invoices to local Clients? | Yes | Yes, with some exceptions (e.g., specific Free Zones may require a local agent or have restrictions on direct mainland invoicing) | Yes | No |
| Does our Client need to travel for company setup? | No | No | No | No |
| Reputable by the Government and banks? | Yes | Yes | Yes | No (due to lack of physical presence and limited regulatory oversight) |
| Can you secure UAE work and residency visas? | Yes | Yes | Yes | No |
| Access to DTAAs? | Yes | Yes | Yes | No |
| Enjoys limited liability? | Yes | Yes | No | Yes |
| Public register of shareholders and directors | No | No | No | No |
| Minimum paid-up share capital? | US$1 | Depending on the free zone (e.g., DMCC requires US$13,600, while Dubai South has no minimum requirement) | Depending on the location (e.g., mainland companies may require higher capital based on business activity) | US$1 |
| Can bid for UAE Government contracts? | Yes | Yes, with exceptions | Yes | No |
| Can secure trade finance? | Yes | Yes | Yes | Yes |
| How long does it take to set the entity up? | 5 weeks | 6 weeks | 6 to 8 weeks | 2 to 4 weeks |
| How long does opening a corporate bank account after company registration take? | 8 weeks | 8 weeks | 8 weeks | 10-12 weeks |
| Average total engagement period? | 3.5 months | 3.5 months | 4 months | 3 to 4 months |
Company Law
| Parameter | Resident LLC / Subsidiary | Free Zone Authority | Depends on the location | Free Zone Authority |
|---|---|---|---|---|
| Regulated by which government body? | Department of Economic Development (DED) | Free Zone Authority | Depends on the location | Free Zone Authority |
| Is a resident director/manager required? | No | No | Yes | No |
| 100% foreign ownership allowed? | Yes | Yes | Yes | Yes |
| Local shareholder required? | No | No | No | No |
| A minimum number of directors? | One | One | One | One |
| Minimum number of shareholders? | One | One | Parent company | One |
| Individual shareholders allowed? | Yes | Yes | No | Yes |
| Are corporate shareholders allowed? | Yes | Yes | Yes | Yes |
| Is a resident company secretary required? | No | No | No | No |
| Does the foreign director need a residence visa? | Yes, it is required by the bank (banks require a residence visa to ensure the director has a legal presence and accountability in the UAE) | Yes, it is required by the bank (banks require a residence visa to ensure the director has a legal presence and accountability in the UAE) | Yes, it is required by the bank (banks require a residence visa to ensure the director has a legal presence and accountability in the UAE) | No |
| Security deposit to be kept with the Government? | No | No | Yes, if registered in mainland | No |
| Must sign an office lease agreement? | No | Yes | Yes | No |
| Are temporary physical office solutions available? | Yes | Yes | Yes | Yes |
| Corporate shareholders and directors' documents to be attested? | Yes | Yes | Yes | Yes |
Migration
| Parameter | Resident LLC / Subsidiary | Free Zone LLC | Branch Office | Offshore LLC |
|---|---|---|---|---|
| What probability do I need a UAE residency/work permit? | 80% (depending on the business activity and operational requirements) | 80% (based on Free Zone regulations and employee roles) | 80% (influenced by the need for physical presence and compliance) | N/A |
| How easy is it to secure a residency and work permit? | Easy (minimal paperwork, such as copies of passport, company registration documents, and proof of address, with a streamlined process) | Accessible (minimal paperwork, including passport copies, company documentation, and proof of residency, with quick approval times) | Easy (standardized process with parent company support, involving the submission of critical documents like passport copies and employment contracts) | Not possible |
| Residency/work visa validity | Two years | Two years | Two years | N/A |
| How easy is it to renew the visa? | Easy (quick processing times and minimal documentation required) | Easy (quick processing times and minimal documentation required) | Easy (standardized renewal process, minimal paperwork) | N/A |
| Can the entity hire expatriate staff in the UAE? | Yes | Yes | Yes | No |
| Expatriate to local staff ratio? | No restrictions | No restrictions | No restrictions | Not applicable |
| How long does it take to get a work permit approved? | 6 weeks | 6 weeks | 6 weeks | N/A |
| How long must our Client stay in the UAE to finalize the visa process? | 2 weeks | 2 weeks | 2 weeks | N/A |
| How much does a two-year residency and work visa cost? | US$4,950 | US$4,950 | US$4,950 | N/A |
| Minimum statutory annual salary? | US$0 | US$0 | US$0 | US$0 |
Accounting, Compliance, and Tax Considerations
| Parameter | Resident LLC / Subsidiary | Free Zone LLC | Branch Office | Offshore LLC |
|---|---|---|---|---|
| Is corporate tax registration mandatory? | Yes (note: recent tax law changes may provide exemptions for specific sectors) | Yes (subject to evolving Free Zone tax regulations) | Yes (recent amendments may include exemptions for specific business activities) | Yes (depending on international tax treaties and offshore regulations) |
| VAT payable on sales to local customers? | 5% | 5% | 5% | N/A |
| Annual financial statements to be submitted? | Yes | Yes | Yes | No |
| Audit of the financial statements required? | No | Depending on the Free Zone (e.g., Jebel Ali Free Zone requires audits while others do not) | Depending on the location | No |
| Is ESR return and UBO filing required? | Yes | Yes | Yes | Yes |
| Does this entity enjoy Government incentives? | Yes (e.g., tax holidays, grants, reduced fees; examples include Dubai Airport Free Zone and Jebel Ali Free Zone) | Yes (e.g., tax holidays, grants, reduced fees; examples include DMCC and Dubai South) | Yes (e.g., incentives for operational expansion, especially in strategic sectors such as logistics and manufacturing) | No |
| Withholding tax on payments to shareholders? | No | No | No | No |
| Average customs duties suffered on imports? | 5% | 5% | 5% | N/A |
| Overseas remittance currency controls? | No | No | No | No |
Banking Considerations
| Parameter | Resident LLC / Subsidiary | Free Zone LLC | Branch Office | Offshore LLC |
|---|---|---|---|---|
| Are multi-currency bank accounts available? | Yes | Yes | Yes | Yes |
| Are corporate visa debit cards available? | Yes | Yes | Yes | Yes |
| Quality of e-banking platform? | Good | Good | Good | Good |
| Do I have to travel to UAE before my bank account is open? | Yes (exceptions may apply, such as using a power of attorney) | Yes (exceptions may apply, such as using a power of attorney) | Yes (exceptions may apply, such as using a power of attorney) | Yes (exceptions may apply, such as using a power of attorney) |
| Crowdfunding available? | Yes (available through approved platforms such as Beehive, depending on business activity; some sectors, like financial services, may have restrictions) | Yes (subject to Free Zone regulations and approved crowdfunding platforms; eligibility varies by industry) | Yes (based on sector-specific regulations; restricted in sectors such as finance and insurance) | Yes (limited to international platforms with appropriate licensing; restrictions may apply based on business type) |
Timeframe
| Parameter | Resident LLC / Subsidiary | Free Zone LLC | Branch Office | Offshore LLC |
|---|---|---|---|---|
| How soon can you invoice Clients/sign sales contracts? | 5 weeks | 6 weeks | 8 weeks | 2 to 4 weeks |
| How soon can you hire staff? | 6 weeks (subject to obtaining work permits and regulatory approvals) | 6 weeks (subject to obtaining work permits and regulatory approvals) | 8 weeks (depending on regulatory approvals and work permit processing) | 2 to 4 weeks (minimal regulatory requirements) |
| How soon can you sign a lease agreement? | 3 weeks (depending on availability of office space and regulatory checks) | 3 weeks (depending on availability of office space and regulatory checks) | 4 weeks (subject to office availability and regulatory approvals) | 2 to 4 weeks (subject to minimal regulatory checks) |
| How long does it take to supply corporate bank account numbers after the company setup? | 8 weeks | 8 weeks | 8 weeks | 10-12 weeks |
Other Information
| Parameter | Answer |
|---|---|
| This country is a member of WIPO/TRIPS? | Yes |
| This country is a member of the ICSID? | Yes |