Today, the UAE has one of the most open and dynamic economies in the world. A number of global business indexes have recognized the advantages that the UAE brings to international business. AT Kearney ranks the UAE as one of the top 20 best places in the world for global service business. And the UAE is ranked in the top 30 on the World Economic Forum’s “most-networked countries”—ahead of all other Arab nations, as well as countries like Spain, Italy, Turkey, and India. The UAE also gets positive rankings from Transparency International and the World Bank’s Worldwide Governance Indicators for control of corruption, ranking in the top quarter of the least corrupt countries in the world.
Other clear advantages to doing business in the UAE include: |
- No restrictions on profit transfer or repatriation of capital
- No corporate or income taxes
- A currency, the Dirham, that is stable, secure and pegged to the US dollar
- Very low, or non-existent, import duties
- Competitive labor costs
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These factors, combined with a strategic geographic location, an expanding infrastructure and an extremely safe environment, make the UAE an ideal place to do business. |
Establishing a Business
In the UAE, regulation of the establishment and conduct of businesses is shared at the federal and emirate levels. There are two paths for doing business in the UAE: through joint partnerships or through a Free Zone. |
Joint Partnership
In order to establish a business that sells products or services freely throughout the UAE, at least 51 percent of the business must be owned by a UAE national. (Forming this type of joint partnership is the best and easiest way to establish a business in the UAE.) All businesses require a license and licensing procedures vary from Emirate to Emirate. Specific information is available at individual Chambers of Commerce: |
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Free Zones
Establishing a business entity in one of the numerous UAE Free Trade Zones (FTZs) can be an attractive option for foreign investors and businesses. All seven Emirates already have, or are developing, such economic zones.
The major advantages in operating in a free zone are: |
- 100 per cent foreign ownership of the enterprise
- 100 per cent import and export tax exemptions
- 100 per cent repatriation of capital and profits
- No corporate taxes for 15 years, renewable for an additional 15 years
- No personal income taxes
- Less burdensome documentation, mostly in English
- Assistance with labor recruitment, and additional support services such as sponsorship and housing.
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There are over 20,000 companies in 21 Free Zones around the UAE. The largest Free Zones, by number of companies, are the following: |
- Jebel Ali Free Zone (6,000 companies)
- Sharjah Airport International Free Zone (3,900 companies)
- Dubai Airport Free Zone (1,300 companies)
- Dubai Media City (1,200 companies)
- Dubai Internet City (1,000 companies)
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Procedures
An independent Free Zone Authority (FZA) governs each free zone and is responsible for issuing FTZ operating licenses and assisting companies with establishing their business in the FTZ. Investors can either register a new company in the form of a Free Zone Establishment (FZE) -- a limited liability company governed by the rules and regulations of the Free Zone in which it is established -- or simply establish a branch or representative office of their existing company based within the UAE or abroad.
The procedures for establishing a business in a Free Trade Zone are usually very straightforward and can be completed in a short space of time, especially if there are no environmental issues involved. Individual Free Zones may have specific requirements, but general steps are: |
- Questionnaire from the relevant Free Zone Authority which will assist in assessing a company's requirements
- License application, planning documents, and a consumer request for electricity
- Provisional approval and lease agreement
- Meetings with the authority to finalize details of the project
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Licenses
Once a legal presence has been established in the Free Zone, the business will need to lease premises or land and acquire an operating license from the FZA. Different types of licenses apply in the different types of free zone, however, it is important to understand that companies with trade and industrial licenses can only conduct business within the Free Zone or abroad. To sell products in the UAE, a UAE official agent is required, and a joint venture needs to be formed. |
When not to choose a Free Zone
There are a few scenarios in which a prospective company might not want to choose to do business in a Free Zone, and should instead opt for a regular joint partnership. These are if a company: |
- Practices a regulated profession
- Requires a lot of visas or warehouse/office space
- Plans a long presence in the UAE and wants to reach a wider portion of the UAE market
- Has a particular UAE company or individual with which to partner
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Key Industries
Sectors with strongest demand and opportunity include: |
- Construction services
- Materials and supplies
- Defense – Aerospace
- Energy – Alternative Energy
- Professional services
- Select tourism products/services
- High end hotel brands
- Creative/profitable arts and culture entertainment products
- High end, strongly - branded medical service providers and cutting edge products
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Contacts
Abu Dhabi Chamber
Main Building of Abu Dhabi Chamber of Commerce, Cornishe Road
PO Box 662
Abu Dhabi, United Arab Emirates
Phone: +971 02 6214000
Fax: +971 02 6215867
Website: http://www.adcci-uae.com/
Ajman Chamber
PO Box 662
Ajman, United Arab Emirates
Phone: +971 06 7422177
Fax: +971 06 7427591
Website: http://www.ajcci.gov.ae
Dubai Chamber
Main Building of Dubai Chamber of Commerce, Bani Yas Road
PO Box 1457
Dubai, United Arab Emirates
Phone: +971 04 2280000/ 2224651
Fax: +971 04 2211646
Website: http://www.dubaichamber.ae/
Fujairah Chamber
PO Box 738
Fujairah, United Arab Emirates
Phone: +971 09 2222400
Fax: +971 09 2221464
Website: http://www.fujcci.ae/
Ra's al–Khaimah Chamber
PO Box 87
Ra’s al–Khaimah, United Arab Emirates
Phone: +971 07 2333511
Fax: +971 07 2330233
Website: http://www.rakchamber.ae/
Sharjah Chamber
PO Box 580
Sharjah, United Arab Emirates
Phone: +971 06 5682888
Fax: +971 06 5681119
Website: www.sharjah.gov.ae/
Umm al–Qaiwain Chamber
PO Box 436
Umm al–Qaiwain, United Arab Emirates
Phone: +971 06 7651111
Fax: +971 06 7657055
Website: http://www.uaqcci.ae/
Other Resources
World Bank Doing business report:
http://www.doingbusiness.org/Documents/CountryProfiles/ARE.pdf
Banks in UAE:
http://uaeinteract.com/business/bbanks.htm
Trade Shows in UAE:
http://moft.gov.ae/en/events.htmx
Trade laws in UAE:
http://moft.gov.ae/en/crules.htmx |
