Types of companies in the UAE
There are three types of companies in the UAE: Mainland, Free Zone and Offshore. Each type of company has certain features that are important to consider before you start registering.
Mainland companies
“A Mainland company is a company registered by a government agency of a specific emirate. In Dubai, this is the DED (Department of Economy & Tourism), which issues a business license and charter (MOA). Mainland companies are subject to the laws of the Federal level and the specific emirate.” Sergey Kovalkov, Head of International Practice инкорпораций
Peculiarities
- They can operate in the territory of the emirate where they are registered.
- For most types of activities, 100% foreign participation is possible. However, for a number of important types of activities, a founder with UAE citizenship is required, whose share will be at least 51%. In addition, for companies registered as a civil company, as well as a sole establishment, a local agent is required. An agreement is concluded with him, but he is not included in the authorized capital.
- The personal presence of shareholders at the notary is required to sign the constituent documents, or it is necessary to issue a notarized power of attorney for the representatives of shareholders.
- To register a company, you need a rented office with an area of at least 13 m2. However, for some types of activities, a virtual office is possible.
Free Zone of the company
Free Zone company is a company registered in a free economic zone (free zone).
There are over 45 free zones in the UAE. Each free zone has its own regulations and requirements for company registration.
"The UAE legislation applies to some free zones to a limited extent. For example, the Federal Law on Virtual Assets does not apply to the DIFC financial free zone, since the DIFC has its own regulation of virtual assets and cryptocurrencies." Egor Lvov, юрист
Peculiarities
- If a number of conditions are met, a company from the Free Zone can count on a zero rate of income tax.
- 100% foreign participation is allowed. Founders can be both individuals and legal entities.
- As a rule, company registration takes place remotely.
- Some free zones are Designated Free Zones. This means that when importing and exporting goods within the free zone and outside the UAE, you do not have to pay VAT and customs duties. For example, this is DAFZ.
- Free Zone companies cannot directly conduct business in the UAE Mainland. For example, they cannot sell products directly to consumers. However, Free Zone companies can provide services to Mainland companies. In some Free Zones, you can obtain a dual license so that your company can conduct business throughout the UAE.
- A Free Zone company's office can usually only be located within the territory of the Free Zone where the company is registered.
We have carried out work on analyzing and systematizing information on the most popular free zones in the UAE and created the Free Zones Atlas, in which you can find up-to-date information on the free zone you need and choose the right one for yourself.
Offshore companies
An offshore company is a company registered in the UAE offshore zone and operating, as a rule, outside the UAE.
"There are several offshore zones. For example, Ras Al Khaimah International Corporate Centre (RAK ICC) and Jebel Ali Free Zone (JAFZA). Usually, offshore companies are registered for holding purposes (owning shares and stocks of other companies), as well as owning real estate." Artur Faniev, commercial директор
Peculiarities
- There is no requirement to have an office.
- Closed register of shareholders: information about the founders is not publicly disclosed. However, the company is required to submit information to the register of beneficial owners and update it.
- It is not possible to issue a visa to a shareholder or employees.
- It is more difficult to open a bank account in UAE banks.
- Usually, to register a company, a special agent is required who represents the interests of the company before the administration of the offshore zone.
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About Versus
Versus is a leading consulting group providing legal and accounting services in key foreign markets.
Over the years of working in the UAE and other MENA countries, we have acquired a deep knowledge of local legislation, which, combined with knowledge of international standards, allows us to offer solutions tailored to the unique needs of each client.
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