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Embassy of the United Arab Emirates in Washington DC
www.uae-embassy.org
THE BUSINESS-TRADE section

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:

For more detailed contact information for these offices, please visit the Resources page.

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.

There are over 20,000 companies in 21 Free Zones around the UAE. The largest Free Zones, by number of companies, are the following:

  • TwoFour54/Abu Dhabi Media Zone
  • 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)

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

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

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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