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Dubai Company Formations

The main advantages of Dubai are, Zero income tax, zero capital gains tax, minimal crime and clear freehold title to any real estate purchases. Another big plus since the savings tax directive came into force in the EU has been the fact that there is no reporting of interest or investments to the 27 EU member countries. Most people are also unaware that Dubai is very politically stable and is one of the fastest growing offshore centres in the world.

Dubai is part of the United Arab Emirates, a constitutional federation of seven emirates located along the south eastern tip of the Arabian Peninsula. Qatar lies to the west, Saudi Arabia to the south and west and Oman to the north and east. The federation was formally established on 2 December 1971.

The initial development of Dubai was funded by its oil wealth but reserves are rapidly becoming depleted and the government has devoted enormous resources to developing an economy, which will prosper in the future without requiring the support of oil revenues. It has been spectacularly successful in its efforts. The national airline, Emirates, is one of the fastest growing in the world and there has been massive investment in hotels and property of all descriptions, shopping centres and other facilities for tourists. Restrictions on the ownership of land and businesses by foreigners are also being relaxed.

Dubai has long been a major port and the Jebel Ali Free Zone has attracted multinationals from around the world to take advantage of its strategic location for servicing the Gulf markets and its situation midway between east and west.

The Dubai International Financial Centre is expanding rapidly and providing stiff competition for the longer established banking institutions of Bahrain. A more recent innovation has been the adoption of the Offshore Company Regulations back in 2003, which introduced the Dubai Offshore Company, also known as the Jebel Ali Offshore Company.

Taxation
Dubai does not impose income tax, capital gains tax or estate or inheritance taxes. It is said to be considering a value added tax. The duties on imports are only 5%. However residents pay higher charges for government services, which actually fund the department in question.
 
Legal system 
The legal system of Dubai is based on the Sharia law and this needs to be borne in mind by non- Moslems acquiring assets in the Emirate. Sharia law incorporates strict rules, for example, in the matter of inheritance and this can result in unintended consequences for the unwary.

These licences are all issued by the Dubai Economic Department. However, licences for some categories of business require approval from certain ministries and other authorities: for example, banks and financial institutions from the Central Bank of the UAE; insurance companies and related agencies from the Ministry of Economy and Commerce; manufacturing from the Ministry of Finance and Industry; and pharmaceutical and medical products from the Ministry of Health.

Dubai Forms of Offshore Operation

Companies approved for operation in Jebel Ali Free Zone are granted one of the following types of licences, renewable annually for as long as the company holds a valid lease from the Free Zone Authority:

  • A General Trading Licence allows the holder to import, distribute and store all items as per Jafza rules and regulations.
  • A Trading Licence allows the holder to import, export, distribute and store items specified on the licence.
  • An Industrial Licence allows the holder to import raw materials, carry out the manufacture of specified products and export the finished product to anycountry.
  • A Service Licence allows the holder to carry out the services specified in the licence within the Free Zone. The type of service must conform to the parent company's licence, issued by the Economic Department or Municipality of the relevant Emirate in the UAE.
  • A National Industrial Licence is designed for manufacturing companies with an ownership or shareholding of at least 51% AGCC (Arabian Gulf Co-operation Council).

A Free Zone Establishment - or FZE - is an establishment formed and registered in Jebel Ali and regulated solely by the Free Zone Authority.

Such establishments must have a capital of at least AED1 million and liability will be limited to the amount of paid-up capital. A FZE need only have a single shareholder and is an independent legal entity.

Any company, organisation or individual wishing to form a Free Zone Establishment must submit a completed application form to the FZE Department of the Free Zone Authority. A decision on whether permission has been granted will be given within 30 days of receipt of the application and any other information and documentation required.
 
If permission is granted, the Authority will record all relevant details in the FZE Register and issue a Certificate of Formation. This will specify the date of registration after which the FZE will be free to conduct any such business as is permitted in its Special Licence.
 
In mid-2010, over one-quarter of Dubai's GDP was generated by the Jebel Ali Free Zone, which at that time had over 6,500 companies operating within the zone. More detailed procedures apply to businesses engaged in oil or gas production and related industries.
Practising some trade activities (e.g. jewellery and insurance) requires the submission of a financial guarantee issued by a bank operating in Dubai.  In general, all commercial and industrial businesses in Dubai should be registered with the Dubai Chamber of Commerce and Industry. Fifty-one per cent participation by UAE nationals is the general requirement for all Dubai-established companies except:
The Dubai International Company

Referred to above, the Dubai Offshore Company incorporates most of the features to be expected in an offshore company. Its main characteristics are set out in the table below. Some of the other salient features are,

The Dubai offshore company regulations

Type of entity - Limited by shares

Type of law - Offshore Company Regulations 2003
Government Fees - U.S. $545
Corporate taxation - Nil
Double taxation treaties available - No
Share Capital 
Usual currency - AED
Minimum paid up - AED 1

Directors 
Minimum number - 2
Local resident required - No
Corporate Directors permitted - No
Records publicly available - No
Location of Meetings - Anywhere

 
Shareholders / Members 
Minimum number - 1
Corporate Shareholder permitted - Yes
Records publicly available - No
Location of Meetings - Anywhere
 
Company Secretary 
Required - Yes
Local or qualified - No
 
Accounts 
Required - Yes
Audit required - Yes, by an auditor from the approved list
Filing required - Yes
Publicly available - No
 
Other 
Annual return required - No
Change of domicile permitted - No
 
What are the options for a Dubai company formation? 

In Dubai there are 2 types of companies that we can incorporation: 

- Limited Liability Company (LLC):
For this type of company it is not possible to do it online without you coming to Dubai. The LLC companies being a bit more complicated to incorporate, and the right choice of the business license and the offshore zone, will necessitate that you come to Dubai and meet with our adviser/lawyer to better identify your exact needs. A weeks stay in Dubai might be required to go through all the process of setting up a new LLC company in one of Dubai's free zones. 

- Free Zone Company / Offshore Status/ (FZCO):
The offshore type of company is much more simple to form. We can do everything through via the internet and mail.
However, compared to other offshore countries Dubai require some specific steps in order to form your company without coming to Dubai. You will need to print and sign and then notarize a Power of Attorney (POA) and get it apostiled by the U.A.E embassy of your country. Once you have this Legalized POA you will have to send it back to our agent so that they can incorporate the offshore Dubai company on your behalf.
 

- Or we form a UK or US company for you and we appoint one of our staff to be Nominee Director. And our nominee director will go and get the POA legalized by the U.A.E Embassy in UK or US and send it back to our Dubai agent. This way you will have an additional holding company in UK or US that will own your Dubai entity and you will not need to get a legalized POA yourself.

If you do not wish to go through this step of POA Legalization we have 2 alternatives:
- You can come to Dubai to sign the POA and other documents, a 4 to 5 days stay will be necessary.

Bank account for an Offshore Dubai company: 

It is almost impossible to open a bank account in Dubai for a non Emirate resident. Thus we are offering the opening of a Business Offshore account in many of our other recommended offshore centres. Our preference is Cyprus due to its location between Europe and the Middle East.

Company formation Cost including the following services: US$22,000 / £13,750/ EUR16,500


UK / Ireland020 7175 0041
(International +44 20 7175 0041)
US / Canada1 954 866 5986
(INTERNATIONAL +1 954 866 5986)
Australia and New Zealand+61 2 9191 7472
(INTERNATIONAL +61 2 9191 7472)
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