Creating a company in the UAE

Introduction

A brief overview of the UAE economy

The United Arab Emirates (UAE) boasts one of the most dynamic and diverse economies in the Middle East. Historically reliant on the oil and gas sector, the UAE has undertaken a significant economic transformation in recent decades, prioritizing diversification.

The "Economy 2021-2031" plan exemplifies the UAE's commitment to reducing its dependence on oil revenues. Instead, it focuses on developing non-commodity sectors, including tourism, finance, infrastructure, and technology. The UAE is actively fostering innovation and technology hubs, attracting both startups and international corporations to participate in the growth of high-tech industries.

In light of these factors, the UAE emerges as an ideal destination for business registration, offering abundant opportunities, an innovative ecosystem, and a favorable investment climate.

Starting a business in the UAE

Advantages and disadvantages of mainland companies in the UAE

Advantages of a mainland company in the UAE
- Wide market access. Mainland companies have the right to engage in business activities across the entire UAE, allowing them to trade and interact with customers throughout the country.
- Participation in government projects. Mainland companies are eligible to participate in government projects and tenders, providing additional growth opportunities.
- International collaboration. Mainland companies can readily collaborate with other companies and investors both within the UAE and abroad.
Disadvantages of a mainland company in the UAE
- Requirements for local partners. Certain business types may require a local partner who owns a minimum of 51% of the company, limiting control and decision-making.
- Larger bureaucracy. Mainland companies are subject to stricter regulations, potentially leading to increased time and resource investment for compliance.
- Large start-up costs. The formation and registration of mainland companies may involve significant initial expenses, including government fees, labor costs, legal fees, and other expenditures.
- Limited tax and customs benefits. Mainland companies do not enjoy the same tax and customs benefits as those registered in free zones.
- Capital requirements. Some businesses may necessitate a substantial minimum investment, which could be financially challenging for certain entrepreneurs.

The pros and cons of establishing a mainland company in the UAE should be carefully weighed when considering business registration options within the mainland territory.

Mainland company registration process in the UAE: basic steps

Registering a mainland company in the UAE involves a series of steps that demand meticulous preparation and adherence to all legal requirements.

№	Stage	Description
1	Determining the company form	Decide what form your business will operate in (LLC, corporation, etc.).
2	Preparation of all required materials	Prepare documents: constituent documents, founders’ passports, bank statements, etc.
3	Choosing a company name	Find a unique title and make sure it is available in the UAE.
4	Submitting applications for registration	Submit your company registration application to the UAE government.
5	Wait for an answer	Please wait for your application to be reviewed and verified.
6	Obtaining proof of registration	After completing all the steps, provide your registration certificate.
7	Opening a business account	Create a corporate account in one of the UAE banks.

Company registration in the UAE free zones

FTZ overview

Establishing a company in a UAE free trade zone provides a range of advantages that make it an attractive choice for many foreign investors and businesses.

The most popular UAE free trade zones located in Dubai (DIFC, IFZA) and Abu Dhabi (ADGM)

Advantages of UAE Free Trade Zones:

full ownership for foreigners;
tax benefits;
efficient import and export;
simplified registration.

Initiating stages and conditions

UAE FTZ company's registration stage	Mandatory documents and actions
1. Select the appropriate zone and business structure	Begin by analyzing various free trade zones in the UAE and identifying the one that best suits your business needs. Additionally, choose a company structure that aligns with your planned activities.
2. Submission of necessary documentation	Complete the registration application form, ensuring that you provide all required documents. This step involves the submission of essential paperwork.
3. Signing the application and rental agreement	Sign the registration application and any necessary rental agreements for office or warehouse space, depending on your business requirements.
4. Create a business account	Prepare the required documents, including the registration certificate, and initiate the process of opening a business bank account. This account will be essential for conducting your company's financial transactions.

It's important to note that each free trade zone in the UAE may have its own specific requirements and procedures. Therefore, it's crucial to closely follow the guidelines provided by the selected free trade zone authority to ensure a successful registration process for your business.

Registration of an offshore company in the UAE

Offshore business is often chosen to optimize tax obligations, increase confidentiality and simplify administrative procedures. Offshore companies in the UAE operate in accordance with special legislation, providing investors with privileges and more flexible conditions.

Registering an offshore company in the UAE can bring the following benefits.

Tax benefits: Offshore companies in the UAE are generally exempt from income tax, income tax, property tax and other taxes. This makes the UAE an attractive jurisdiction for international business.
Ease of administration: Offshore companies in the UAE usually have minimum reporting requirements and administrative procedures. This simplifies doing business and reduces the burden on the entrepreneur.
International recognition: The UAE has a good reputation in the global economy. Registering a company in the UAE can give your business additional status and international recognition.

Launch of an investment project in the UAE

Planning and analysis process

The planning and analysis process plays a key role in the successful start of an investment project in the United Arab Emirates. It includes the following steps.

Step I

Idea and concept: defining project goals, analyzing risks and potential opportunities. This will help create a clear vision for the project.

Step II

Business planning: development of a detailed business plan, including a description of the product or service, market analysis, marketing and sales strategy, projected financial indicators.

Step III

Financial analysis: assessing the financial viability of the project, determining investment requirements, expected income and expenses.

Step IV

Technical planning: determining the technical aspects of the project, required resources, suppliers, and partners.

Step V

Risk analysis: identification of possible risks and development of a strategy for their management.

Step VI

Assessing the significance of the project: analysis of the expected social, economic and cultural benefits from the project, including possible long-term consequences and contribution to the overall development of the region.

Incentives and support for investors in the UAE

The UAE is actively trying to attract investors, offering many privileges and forms of support:

100% ownership for foreigners: in certain industries, most notably free zones, investors are allowed to own the company outright without finding a local partner.
Tax benefits: the UAE offers tax privileges, in particular, exemption from income tax and VAT in free economic zones.
Modern infrastructure and convenient geographical location: the UAE has excellent infrastructure and a convenient location that facilitates trade and logistics operations.
Help and advice: government agencies and business associations offer comprehensive assistance and advisory services at all stages of investment.

Investing in the UAE can provide many opportunities due to its attractive business atmosphere, accessibility to major global markets and strong government support. However, before starting any project, it is necessary to deeply understand the peculiarities of the market, conduct a comprehensive analysis, identify potential risks and make the most of the incentives offered.

Stages of implementing an investment venture in the UAE

Carrying out an investment undertaking in the UAE involves a sequential set of actions that require a methodical approach and strict adherence to established procedures. The key stages for implementing an investment undertaking in the UAE are given.

Stage	Description
Market analysis	Conduct an in-depth analysis of the UAE market and target industry. Assess demand, competition, regulation and other aspects affecting business activity.
Creating a business plan	Develop a comprehensive business plan that includes product or service characteristics, marketing strategy, economic projections, and an assessment of potential risks.
Preparation of documentation	Prepare all the documents necessary to register your company or obtain the appropriate licenses, such as founders’ passports, contracts, financial reports, etc.
Selecting a location	Decide where you want to register your company - on the continent or in a free zone, according to your business goals.
Company registration	Go through the process of creating a company with your chosen legal form. Submit all required documents to the appropriate agencies.
Obtaining licenses	If your business requires certain licenses, prepare and submit all necessary documents to purchase them.
Infrastructure development	After completing all legal processes, prepare everything you need to start your business: premises, equipment, technological solutions, etc.
Hiring	Organize the hiring process, obtain visas and permits for workers. Please note the requirements for the number of local workers.
Starting business operations	After completing all stages of preparation, proceed to the implementation of your enterprise. Develop a promotion strategy, start production or providing services.
Networking	Aim to create partnerships and client connections, take part in relevant events to promote your business.

Implementing an investment project in the UAE requires deep planning, careful implementation of all procedures and active efforts to develop the enterprise. Features of the process may vary depending on the chosen niche, legal form and other conditions.

Registration of family foundations in the UAE

Steps for registering a family foundation in the UAE

The process of registering a family foundation in the UAE involves several key stages.

Determining the structure.
1. Define the primary objectives of establishing the fund, such as asset preservation, generational wealth transfer, charitable activities, etc.
2. Choose the most suitable type of family foundation based on its specific features and advantages.
3. Evaluate and classify the assets to be included in the foundation, which may include real estate, stocks, bonds, artwork, and more.
Selecting a jurisdiction.
1. DIFC known for its stringent regulation and modern infrastructure.
2. ADGM offers a high level of confidentiality and flexible terms for family foundations.
3. IFZA offers innovative approaches to regulation, flexibility in asset structuring, and maintains international corporate governance standards and transparency.
Preparing statutory documents.
1. Fund charter is the main document that governs the foundation's operations, structure, goals, and asset management rules.
2. If multiple family members are involved in the foundation, create agreements to define their roles and relationships within the fund.
Submitting the application for registration.
1. Gather all necessary documents required for registering a family foundation in the chosen jurisdiction.
2. Pay government fees, which are associated with the registration process.
Obtaining regulatory approval.
1. The regulator reviews the submitted documents to ensure compliance with UAE legislation.
2. A license to establish a family foundation is issued if all requirements are met.

Required documentation for opening a family foundation in the UAE

Here is a list of the essential documents needed to open a family foundation in the UAE.

Type of document	Description
Fund's statutory documents	The primary document that outlines the foundation's structure, objectives, and operational principles.
Documents confirming identity and financial status	Copies of passports, bank statements, and other documents verifying the identity and financial status of the founders and beneficiaries.
Investment strategy and policy description	A detailed document describing the foundation's investment principles, strategies, risks, and expected returns.
Fund manager details (if applicable)	Resumes, qualifications, and work experience of the fund manager. If a third-party manager is used, information about their license and registration is required.
Confirmation of asset source	Documents confirming the source of assets to be transferred to the foundation, such as purchase and sale agreements, tax records, inheritance documents, etc.
No criminal record confirmation	Certificates from relevant authorities confirming that the founders and key individuals of the foundation have no criminal records or history of prosecution.

Before proceeding with registration, it is advisable to seek expert guidance in this field.

Regulation of family foundations in the UAE

Family foundations in the UAE are subject to the regulations of individual financial centers, each with its unique characteristics:

Regulation of family funds in DIFC
- Regulator: Dubai Financial Services Commission.
- Emphasis on corporate governance, investor information, and transparency.
- Requires regular reporting to the regulator, including financial and asset portfolio information.
Regulation of family funds in ADGM
- Regulator: Financial Services Regulatory Authority.
- Places particular importance on anti-money laundering and anti-terrorist financing measures, in addition to standard corporate governance and transparency requirements.
- Requires regular reporting.
Regulation of family funds in IFZA
- Regulator: International Free Zone Authority.
- Focuses on attracting international investment and offers flexible business conditions with reduced administrative barriers.
- Reporting requirements may be less stringent compared to DIFC and ADGM, depending on the nature of the activities.

Regardless of the chosen jurisdiction, the main objective of regulating family foundations in the UAE is to ensure transparency, protect the rights of investors and beneficiaries, and prevent the misuse of financial systems for illegal purposes. The UAE actively cooperates with international efforts to combat money laundering, reflecting international standards and recommendations in its national legislation.

Use of trusts in the UAE

Process and objectives of establishing a trust in the UAE

Establishing a trust in the UAE involves several key steps and serves various objectives:

centralization of asset management;
ensuring asset protection;
choosing the right jurisdiction;
development of basic trust documents;
transfer of assets to the trust;
tax optimization.

List of required documentation to create a trust in the UAE

Trust documents.
Documents confirming the identity of the principal and beneficiaries.
Description of the asset management model.
Confirmation of the source of assets.
Agreement between the principal and the trustee.

Regulation of trusts in the UAE

Trusts in the UAE are regulated at the financial center level, with each center establishing norms and requirements focused on transparency, corporate governance, and the protection of the rights of trust participants. Here's an overview of trust regulation in key UAE financial centers:

Dubai International Financial Center
1. Regulator: DFSA.
2. Emphasis: Corporate governance, beneficiary information, and transparency.
3. Requirements: Financial statement preparation, secure record storage.
Abu Dhabi Global Market
1. Regulator: FSRA in ADGM.
2. Focus: Anti-money laundering and counter-terrorist financing measures.
3. Requirements: Source of assets demonstration, strict risk management.
International Free Zone Authority
1. Regulator: IFZA.
2. Approach: Flexible registration and administration conditions.
3. Requirements: Tailored transparency and governance in line with international standards.

These financial centers prioritize international cooperation and compliance with global standards. Trusts in the UAE are used for tax planning, asset management, and protection. Compliance with specific regulations of the relevant financial center is crucial for trust participants and professionals.

Establishing a crypto company in the UAE

Stages of establishing a crypto company in the UAE

Starting a crypto company in the UAE involves several crucial stages. Here's an overview of these steps:

Step I

Definition of a business model.

Market analysis: thoroughly analyze the current cryptocurrency market in the UAE to identify potential niches and opportunities.
Product or service specification: define the specific products or services your company will offer. This may include cryptocurrency transactions, wallet services, ICOs, and more.

Step II

Choice of jurisdiction.

Exploring the regulatory environment: research and understand the regulatory landscape in the UAE for cryptocurrency companies, considering the key differences between various jurisdictions.
Deciding on the place of incorporation: based on your analysis, select the most suitable jurisdiction within the UAE for incorporating your crypto company.

Step III

Preparation of statutory documents.

Legal consultations: work with the UAE legal experts to ensure that all your company's documents comply with current legislation.
Determining the company structure: define the company's structure, roles, and responsibilities of key participants.

Step IV

Obtaining a license.

Collection of necessary documentation: prepare all the required documents for obtaining a crypto license in the UAE.
Submitting an application: submit your application to the relevant UAE regulatory authorities, such as the DFSA or the FSRA, depending on your chosen jurisdiction.
Waiting for a decision: await approval and the issuance of a license to conduct cryptocurrency activities.

Step V

Infrastructure setup.

Technical implementation: build and configure the necessary IT infrastructure, including servers and security systems.
Testing: conduct rigorous testing to ensure the security and reliability of all systems.
Launch: after successful testing, officially launch your company's services in the market.

Launching a crypto company in the UAE requires careful planning, adherence to regulatory requirements, and robust technical infrastructure. Seek legal and industry-specific advice to navigate the complexities of the cryptocurrency business in the UAE effectively.

List of necessary documentation for creating a crypto company in the UAE

Title of the document	Description
Company's statutory documents	They determine the structure, management rules, and basic principles of the company’s activities.
Documents confirming the identity of the founders and key managers	Includes passports, birth certificates, and other identification documents.
Business plan	Describes the company's main activities, development strategy, risks, and financial forecasts.
Security documentation	Includes a description of the measures taken to protect user data and funds, as well as information about the appropriate security standards that the company follows.
Confirmation of the source of initial capital	Documents confirming the origin of the company's initial capital, which may include bank statements, contracts, and other financial documents.

Regulation of crypto companies in the UAE

Dubai International Financial Center
- Regulator: DFSA.
- Priorities: Transaction security, transparency, anti-money laundering.
- Emphasis on robust systems for client asset safety.
Abu Dhabi Global Market
- Regulator: FSRA.
- Focus: Consumer protection, international compliance.
- Requirements: Transparent transactions, risk management.

The UAE aims to foster blockchain and cryptocurrency development while ensuring investor and consumer security through its favorable regulatory framework.

Updated UAE tax policy

The updated tax system affects both local and foreign organizations operating in the Emirates. For all companies, excluding those located in the technological special zone, the following taxes are established:

Tax	Rate
VAT	5%
CIT	0-9% Some economic regions and certain sectors of the economy are not subject to this tax update.
Property tax	Variable rate
Customs duties	Variable rate

These tax adjustments underscore the UAE's desire to build an economy that is more stable, diverse and conducive to investment and innovation. Before you start registering a business or investment project, it is strongly recommended that you understand in detail the current tax system and its requirements.

Acquisition of an established business in the UAE

Regulatory aspects of purchasing registered companies in the UAE

Strict oversight:

the regulatory authorities in the UAE maintain a vigilant and meticulous oversight of the entire process involved in buying and selling operational companies. Their primary aim is to ensure transparency and strict compliance with the prevailing laws and regulations.

Consideration of reputation risks:

acquiring a registered company in the United Arab Emirates carries inherent risks associated with its prior business activities. Regulatory bodies are committed to ensuring that prospective owners fully comprehend these risks and are willing to shoulder the responsibility for any potential consequences.

Client-owned company sales:

the sale of an existing company in the UAE is a relatively uncommon occurrence, partly due to the regulatory authorities' occasional reservations about this approach. Most companies that establish operations in the UAE have a long-term growth and expansion strategy. However, circumstances can change, leading clients to decide to sell their companies. Various factors, such as shifts in business strategy or personal circumstances, can contribute to this decision.

Stringent due diligence requirements:

when acquiring a pre-existing company, regulators may mandate a thorough due diligence process to ensure the legality of the transaction and the adherence of all parties to established requirements.

Benefits of acquiring a pre-established company in the UAE

Swift business commencement: a shelf company allows investors to kickstart their business activities in the UAE without undergoing a lengthy and intricate registration process.
Established business relationships: by acquiring an existing company, investors inherit pre-established business connections and reliable suppliers.
Functional structure: typically, a shelf company boasts a well-structured management hierarchy, a skilled workforce, and streamlined operational processes.
Pre-existing licenses and permits: acquiring a publicly traded company in the United Arab Emirates often means it already possesses the necessary licenses and permits, saving investors from time-consuming application procedures.
Proven financial track record: a shelf company comes with a meticulously documented financial history, which can be of great value when seeking loans or attracting investments.

Investors are advised to meticulously evaluate all the advantages and potential risks associated with acquiring a shelf company in the UAE to make well-informed decisions aligned with their specific business objectives.

Key Q&A for investors and businessmen considering setting up a business in the UAE

What is the first step before I start setting up a business in the UAE?

It's worth thinking through everything in advance. So deep planning is a must.

Decide on your goals, scope of activity, expected results, and necessary resources. This approach will ensure an informed choice regarding the type of business and place of its registration.
Research the UAE economic environment and the industry that interests you. Analysis of the competitive environment, demand, consumer audience, and current trends will allow you to adjust your business plan in accordance with the market situation.

Who can help me with the company registration in the UAE?

Business registration issues in the UAE requires certain knowledge and experience. We recommend consulting legal and tax experts who have experience working in the UAE.

How can I select the appropriate type of company and location for registration?

It may be mainland or free economic zone. Your choice will influence tax burden, legal aspects, and market accessibility.

What is needed to initiate the process of registering a company in the UAE?

Preparation of documentation. Make sure you know all the documentation requirements for opening a company and prepare the necessary papers: constituent materials, passport details of the founders, business plan, and so on.

Budget planning. Calculate the initial and ongoing costs of creating and operating your business. Also, consider taxes and other responsibilities to plan your budget properly.
Accounting. The UAE has strict accounting and financial reporting regulations. Make sure you are prepared to meet these obligations and may need help from professionals in this area.

What unobvious factors influence the success of business activities in the UAE?

Cultural respect. The UAE adheres to strict ethical standards. Adhere to these standards while considering local culture and traditions to ensure a productive and long-lasting relationship

Our experts are ready to help you with providing all the necessary information and accompany you at all stages of opening a business in the UAE. To contact our team, fill out the form on the website or select a convenient method of communication in the "Contact Us" section. We will reply to you as soon as possible.

Assistance with registering and conducting business in the UAE

Features of jurisdiction

Demanded business sectors

Remote registration is an option

Corporate taxation

Foreign investors' attitudes

Banks

The legal system

United Arab Emirates

The procedure for registering a company in the UAE

Primary prerequisites