Company Formation in UAE- A Detailed Overview

Company Formation in UAE- A Detailed Overview

What are the different options for setting up a company in UAE?

1. Free Zone Licence
2. Main Land License
3. Offshore License

 Free Zone Company Formation

• In UAE more than forty free Zones are available.
• DAFZA, JAFZA, DMCC, DWC, DSO & TECOM are some of the main Free Zones in Dubai.
• SAIF Zone, AFZ, RAKFTZ, Abu Dhabi Airport Free Zone are some of the Major free zones outside Dubai.
• Free Zone Company (FZCo);
• Free Zone Establishment (FZE); for the single shareholder.
• Branch; for existing companies wishing to establish a base in Free Zone.

Free Zone Company Formation: Pros & Cons

• 100% foreign ownership
• 100% repatriation of capital
• Zero income tax
• Zero corporate tax
• No import or export tax
• Low cost of operations
• Fast-track business set-up & licensing
• Dedicated business support services including integrated online E-Business system offering tenants fast and efficient services at the touch of a button
• Access to a regional pool of talented technical and engineering professionals
• Stable and clear regulation
• Can do the business activity inside the free zone only.
• Certain activity restrictions.
• Can have an office inside the free zone area only.
• Limited chances of expansion.
• Warehouse and office cost are high

Free Zone License Requirements

• Passport copy with signature page and visa page if applicable.
• A business plan with activity details
• No Objection certificate if UAE visa holder.
• 5-6 Trade names.
• If Corporate partners all the legal documents of parent company to be attested.
• A board resolution has to be passed for the authorized manager and also to be attested.

Main Land Company Formation-

Doing Business in the Main Land area other than the free zone. Different types are;

• Sole Establishment
• Limited Liability Company
• Professional firms
• Branch Company or Representative offices of Foreign Companies

Main Land Company License: Pros & Cons

• Local sponsor required (depending upon the activities/selection of license the type of sponsorship will change)
• 100% repatriation of capital
• Zero income tax
• Zero corporate tax
• Can do business anywhere in UAE (No restrictions like free zone or mainland)
• Required office facility/Warehouse facility.
• The office space has to be inside the same emirate where the license is registered.

Main Land License: Requirements

• Passport copy with signature page and visa page if applicable.
• A business plan with activity details
• No Objection certificate if UAE visa holder.
• 5-6 Trade names.
• If Corporate partners all the legal documents of the parent company to be attested.
• A board resolution has to be passed for the authorized manager and also to be attested.

Offshore Company Formation

Offshore companies are the preferred company structure to achieve anonymity and privacy protection, keep all business details confidential and combine all this with limited liability and tax exemption

Offshore License: Pros & Cons

• Anonymity, confidentiality and the highest level of privacy protection.
• Limited liability without any paid-up capital requirement.
• Legal tax exemption; no taxation on any kind of income.
• No accounting, no reporting, no filing, no auditing.
• No accountant costs.
• Business can be conducted internationally
• Can hold assets including property, stock etc in respective emirates.
• Bank Accounts can be opened.
• No visa will be provided, not even to the owner of the company.
• You cannot be able to perform any operations of the company inside the jurisdiction.
• Only international invoicing is possible

Offshore Company Formation: Requirements

• Passport copy of the shareholders
• Original Utility bill to confirm their residence address.
• Bank reference letter/Latest last six months original bank statements.
• Resume of all the partners.
• 5-6 trade names
• Activity details

Liquidation Service in the UAE

We provide liquidation services for all entities – limited liability companies, free zone companies and offshore companies across UAE. There are two stages for liquidating a company.

First: Notice of Company’s Dissolution & Appointment of a Liquidator:

• Submission of Registration & Licensing Application Form
• Duplicate of an official document showing the dissolution of the company, appointment of a legal liquidator and mentioning his name and determining the method of liquidation. This may either be by a resolution of the company’s partners or general assembly duly notarized, or by court order.
• Certified copy of the signature of the company’s director(s), and the company’s legal liquidator, as the case may be, authenticated by the Notary Public.
• Original Certificate of Registration in the Commercial Register + the original trade license.

Second: Cancellation of license(s) & cancellation from the Commercial Registration:

• Certificates issued in the other Emirates indicating cancellation of license(s) (if any).
• News Paper Advertisement.
• Original copy of the final account of liquidation approved by the partners or general assembly and stamped by the legal liquidator.
• No-objection letter concerning cancellation issued by the Ministry of Labour & Social Affairs.
• Visa Cancellation of the partner(s) in case they are sponsored by their license.
• Copy of the notice of the company’s dissolution & appointment of a liquidator to be published in the official newspapers.
• Letter from the partner for the agreement of the liquidation of the company.

Contact For Company formation and Liquidation Service in UAE

Mr. Viju Divakaran | Sr. Consultant
Mob: +971 554028899
Email: viju@emiratesca.com