Establishing a Business

www.uae-embassy.org

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:

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

Created 01-Jan-2009. Last updated 15-Apr-2009.

“The United Arab Emirates is one of the best business platforms in the world … This country is a testament of what can be accomplished when tolerance, technology and tradition are in harmony.”

Frank Lavin
Former US Under Secretary of Commerce

“The UAE is a case of a country that says we want to get beyond oil and gas, we understand the changes in globalization, we're going to develop a service-oriented economy … And it's the exact example of what we want to be encouraging.”

Robert Zoellick
World Bank President and former US Trade Representative

Additional Resources