Company Registration in UAE

There are three main types of companies/businesses thar can be set in the UAE (Free Zone companies; Companies in the mainland; Offshore companies).

The characteristics of free zones include their own regulations, the possibility of 100% company ownership for all kinds of activities, exemption from income tax and dividend tax, and the ability to conduct business within the free zone, with other free zones, and outside the UAE.

There are in approximately 50 free zones in the UAE.

The client is allowed to:

• run business both within the free zone and outside the UAE;
• work with organizations from other free zones and with local businesses, provided they offer services at their office;
• recruit employees, obtain resident visas for them, and rent office space;
• receive a certificate of tax residency.

There are no restrictions on company ownership by foreign nationals, allowing 100% foreign ownership.

Free Zone is an intermediary between your company and the public authorities (GDFRA, Ministry of Human Resources, Municipality, etc.), greatly facilitating communication and acting as a one-stop center.

• renting an office outside the free zone where the company is located;
• selling and distributing products within the free zone where the company is registered (a company may sell the goods to the mainland through the local distributors);

• the specialization of the free zone;
• requirements for corporate structure;
• residency requirements for employees;
• infrastructure offered by the free zone;
• budget for setting up a company;
• audited reporting requirements to state authorities.

• obtain a business license; the business license is valid for one year and can be renewed at regular intervals;
• obtain a UAE resident visa;
• open a corporate bank account.

A UAE mainland company is a DED-licensed onshore business entity permitted to conduct business in both the local market and internationally without restrictions. Mainland registration is a practical choice for establishing a legal entity, though certain regulations must be followed during the registration process.

The primary law governing the registration of onshore companies is the Companies Act, which outlines all rules that must be observed before and after incorporation.

In general terms, doing business on the mainland is characterized by the following:

• flexibility to conduct business anywhere in the UAE;
• no restrictions on the number of visas;
• additional activities available for licensing.

1. Sole Proprietorship.
2. Limited Liability Company (LLC) – This structure is one of the most popular with non-residents on the mainland. Investors can incorporate an LLC in Dubai or any other Emirate, usually with a minimum of 2 shareholders (up to a maximum of 50). Liability in an LLC extends only to the shareholding owned by the investors.
3. Professional Mainland Company – Owners maintain 100% of the company shares. However, this does not waive the local service agent requirement. While the requirement remains, but the local service agent does not participate in the shareholding or management of the firm. This type of business requires a professional license to operate in certain sectors, such as business consulting, accounting and auditing etc.
4. Public or Private Limited Company.
5. Foreign Subsidiary: The parent company may be located in the UAE or abroad. Foreign organizations can establish a subsidiary or branch office in the UAE, which can be a profitable investment for foreign companies seeking to enter the local markets of the UAE. A representative office allows large organizations to optimize business operations in new markets.
6. Branch of a company incorporated in a Free Zone.
7. Joint Venture.

• Professional
• Commercial
• Industrial

• determining the line of business;
• choose the form of incorporation;
• Select a company name;
• Obtain preliminary approval of the Department of Economic Development;
• Rent an office;
• Sign Memorandum of Association;
• Obtain additional permits (if required);
• Obtain the business license.

An offshore is an organization registered in an offshore jurisdiction. What is the purpose of an offshore company?

Primarily, it benefits individuals who wish to protect their capital from political instability in their home country and have the freedom to manage it internationally.

Secondly, if the companies are engaged in foreign trade activities: offshore setup can simplify the paperwork, accelerate financial transactions and optimize taxes. These are just a few examples; in fact, there are many other benefits.

• The right to own property in the UAE;
• global visibility;
• ability to open accounts in domestic banks;
• tax exemptions;
• 100% foreign ownership;
• no limitations on the number of shareholders;
• no minimum equity capital requirements;
• no restrictions on capital repatriation;
• no requirement to file financial statements with the local tax authorities (however, since 2018 companies must file quarterly VAT returns 5% rate, which will be zero if there is no activity in the UAE;
• low registration and maintenance cost;
• exemption from office rental requirements;
• confidentiality;
• easy share transfer process;

• All commercial operations within the UAE are prohibited.
• Offshore companies cannot have visas or rent an office.
• Challenges with opening of a bank account.

An offshore company does not obtain a license; it gets a certificate of incorporation. A business license can only be issued for mainland and free zone companies.

• Company Limited by Shares (CLS)
• Company Limited by Guarantee (CLG)
• Unlimited Company (UC).

1. Choosing an agent to register an offshore business: Under local company law, all offshore companies in the UAE must nominate an authorized registered agent to handle the entire registration process and provide an office address. This is essential for understanding international law and the company formation process.
2. Selecting an Offshore Jurisdiction.
3. Selecting a company name and the type of business (According to the rules, the company name should end with “Limited”).
4. Drafting and signing of documents: The required documents will depend on the selected jurisdiction, but the basic types typically include:
   – Articles of Association;
   – document appointing an agent;
   – certified passport copy;
   – confirmation of the shareholder’s address.
5. Applying for and obtaining a company registration certificate.

The stated period for incorporation an offshore company varies from 3 to 20 business days, depending on the jurisdiction. After this period the client will receive a certificate of incorporation for the offshore company.