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Dubai Company Formation
-Company
Formation United Arab Emirates (UAE):
Abu Dhabi
Company
Formation United Arab Emirates (UAE):
Abu Dhabi
Federal Law No. (8) of 1984 LLC:
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ARTICLE 218
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A company with
limited liability is the company where the number of partners
may not exceed fifty and should not be less than two.
Each partner shall only be liable to the extent of his share in
the capital, whereas negotiable instruments may not represent
their shares.
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ARTICLE 219
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A limited
liability company shall have a name derived from its purposes or
from the name of one or more of the partners.
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ARTICLE 220
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Except the
businesses of insurance, banking and investment of funds for the
account of third parties, a limited liability company may
practice any other lawful activity.
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ARTICLE 221
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The company may
not resort to public subscription for the formation or increase
of its capital, nor for obtaining required loans. The company
may not issue negotiable stocks or securities.
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ARTICLE 222
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All cash and
kind shares must be distributed in the company memorandum
amongst the partners, and the value of each share should be
fully paid up at the time of incorporation.
Cash shares should be deposited in one of the banks operating in
the State. The bank may not release the cash shares except to
the company managers upon presentation or proof of the
registration of the company in the Commercial Register.
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ARTICLE 223
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If a partner
presents a share in kind, it must be valued in the company
memorandum, specifying Its kind, the name of its contributor and
the amount it represents in the capital. The contributor of the
share in kind shall be liable towards third parties for the
accuracy of the estimate of its value in the memorandum. If it
is established that the share was valued at more than its real
value, the contributor of the share must pay the difference in
cash to the company and the founder members shall be jointly
liable with their private assets for the payment of this
difference.
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ARTICLE 224
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The founder
members shall prepare a memorandum of association mentioning the
following particulars:
Name and objects of the company and its main office.
Names of the partners, their nationalities, places of residence
and addresses.
The capital amount, the share of each partner and a statement
showing the shares in kind (if any), their values names of
contributors.
Names and nationalities of the company managers and members of
the board of supervisors in the cases where it is a statutory
requirement to establish such a board.
The company dates of commencement and expire.
Profit/loss terms of distribution.
The form to be observed in the company notices addressed to the
partners.
However, the Ministry may prepare a draft memorandum of
association form including the said, and other particulars it
deems appropriate.
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ARTICLE 225
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The company
manager shall have to apply for company registration in the
Commercial Register. The application should be attached to the
company memorandum and other documents indicating that the
shares have been distributed amongst partners and their values
have been fully paid up and deposited in a bank operating in the
State.
The company may not practice any of its activities except after
its registration in the Commercial Register.
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ARTICLE 226
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If, at any time
after incorporation, the number of partners exceeds the
statutory limit, the competent authority shall notify the
company to rectify its situation. If the company does not
implement rectification within the six months subsequent to the
date of notice, the company shall be deemed dissolved and the
partners shall be personally and jointly liable for the debts
and liabilities incurred by the company as from the date of
exceeding the statutory limit of the number of partners. However,
the partners ignorant of such excess shall be excepted from this
provision.
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On Shares and
Capital
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ARTICLE 227
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The capital of
a limited liability company must not be less than one hundred
and fifty thousand Dirhams and should be comprised of equal
shares of a minimum value of one thousand Dirhams each.
A share shall not be divisible. In the event of more than one
person owning the share, they must nominate one of them to be
considered the sole owner of the share towards the company. The
company may specify a time for the owners to make the nomination,
provided that at the expire of this date the company shall have
the right to sell the share for the account of its owners. In
this case, the partners shall have the priority to purchase it.
Profits and losses shall be equally divided amongst the shares,
unless it is otherwise stipulated in the memorandum.
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ARTICLE 228
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The company
shall have to keep at its main office a special register for
partners. The register should include the following information:
Partners' names and surnames, domiciles, nationalities and
professions.
The number and value of shares owned by each partner.
Transactions carried out with regard to the shares indicating
the date thereof.
The company managers shall be jointly liable for maintaining
this register and for the accuracy of its contents. The partners
and any concerned party shall have the right to review the
register.
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ARTICLE 229
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Every January,
the company shall provide both the Ministry and the competent
authority with the particulars recorded in the register referred
to in the preceding article and any developments that had
occurred thereto.
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ARTICLE 230
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A partner may
assign his share to another partner or to a third party in
pursuance of a formal document prepared in accordance with the
provisions of the company memorandum. This assignment shall only
be valid towards the company or third parties as from the date
of recording it in the company register and the Commercial
Register.
The company should not refrain from recording the assignment in
the register, unless it is In violation of the stipulations of
the company memorandum. In all cases, the assignment must not
result in the reduction of the shares of the national partners
in the company capital to less than 51% of the total shares, nor
to increase the number of partners to be In excess of the number
stipulated in article (218).
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ARTICLE 231
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If a partner
intends to assign his share to a non-partner person, whether
against or without indemnification, he shall have to notify all
other partners via the company manager of the terms of such an
assignment. Upon receipt of the notice, the manager shall
immediately notify the partners. Each partner may apply to
acquire the share at the price to be agreed upon. In case of
disagreement on the price, the company's auditor should evaluate
the price as at the time of acquisition. If at the expire of
thirty days from the date of notice none of the partners had
exercised his right to acquire the share, the partner shall be
free to dispose of his share.
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ARTICLE 232
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With
consideration to the provisions of Article (227), if more than
one partner exercised his right to acquire the share, the
involved share or shares, which are to be sold, shall be
proportionately distributed amongst them as per the share of
each of them in the capital.
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ARTICLE 233
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The share of
each partner shall devolve to his heirs. A legatee shall be
considered as an heir.
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ARTICLE 234
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If a creditor
of a partner commences executive proceedings against an indebted
share, he may agree with the debtor and the company on the
method and terms of sale. Otherwise, the share should be offered
for sale in a public auction.
The company may, within fifteen days from the date of
adjudication, acquire the sold share for the benefit of one or
more partners with the same conditions that the auction had
reached.
These provisions shall, also apply in case of a bankrupt partner.
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On Company
Management
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ARTICLE 235
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The limited
liability company shall be managed by one or more managers to be
selected from amongst the partners or others, provided that
their number should not exceed five.
The managers shall be appointed in the memorandum or by a
separate contract for a limited or an unlimited period.
If the managers are not appointed in the manner stipulated in
the preceding paragraph, they shall be appointed by the partners'
general assembly.
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ARTICLE 236
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if the company
manager is appointed in the company memorandum without a limited
term in office, he shell remain as manager for the duration of
the company unless the memorandum provides that he may be
dismissed, in this case, dismissal of the manager shall be by
the same majority required for the amendment of the company
memorandum, unless a different majority is stipulated in the
memorandum.
If the company memorandum does not provide that the manager may
be dismissed, he may be dismissed by a unanimous vote of the
partners or by a judicial decree where serious causes justify
it. ARTICLE 236
if the company manager is appointed in the company memorandum
without a limited term in office, he shell remain as manager for
the duration of the company unless the memorandum provides that
he may be dismissed. In this case, dismissal of the manager
shall be by the same majority required for the amendment of the
company memorandum, unless a different majority is stipulated in
the memorandum.
If the company memorandum does not provide that the manager may
be dismissed, he may be dismissed by a unanimous vote of the
partners or by a judicial decree where serious causes justify
it.
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ARTICLE 237
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Unless his
powers are specified in the company memorandum, the manager
shall have full capacity to manage the company. His actions
shall be binding on the company when being corroborated by
stating the capacity for his actions.
The manager's responsibility shall be the same as that of the
members of the board of directors In a joint stock company. Any
provision in the company memorandum to the contrary shall be
void.
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ARTICLE 238
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The company
managers shall prepare the company balance sheet and profit and
loss account. They shall also prepare an annual report of the
company's activities, its financial position and their proposal
concerning the distribution of profits. All the above should be
done within three months before the end of the financial year.
The managers shall, within ten days following the ratification
of the balance sheet and profit and loss account, lodge them
with both the Ministry and the competent authority.
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ARTICLE 239
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If there is
more than one manager, the company memorandum may provide for
the formation of a board of managers, specify the method of
operation of this board and the required majority for adopting
its resolutions
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ARTICLE 240
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If the number
of partners exceeds seven, supervision must be entrusted to a
board formed of at least three partners. The company memorandum
shall appoint this board for a specific period. The general
assembly may re-appoint the members after the expire of this
period, appoint others from amongst the partners, or may dismiss
the members at any time for an acceptable reason.
The managers shall not have the right to vote for the election
or dismissal of the members of the board of supervisors.
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ARTICLE 241
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The board of
supervisors may inspect the company books and documents, then
carry out stocktaking of available funds, goods, financial
papers and other documents substantiating the company rights.
The board may also request the managers at any time to submit a
report on their management. The board will supervise the budget,
the annual report, the distribution of profits and submit its
report in this regard to the general assembly of partners at
least fifteen days before convening it.
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ARTICLE 242
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The members of
the board of supervisors shall not be liable for the actions of
the managers unless they become aware of the faults committed
and fail to mention these faults in their report presented to
the general assembly of partners.
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ARTICLE 243
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The partners
who are not managers in companies having no board of supervisors
shall have the same rights of supervision as those accorded to
general partners in a general partnership in accordance with the
provisions of article (36).
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ARTICLE 244
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A limited
liability company shall have a general assembly composed of all
partners. The general assembly shall convene upon a call by the
managers at least once every year during the four months
subsequent to the end of the financial year at the date and
place specified in the company memorandum.
The managers must call the general assembly to convene if so
requested by the board of supervisors or by a number of partners
holding not less than a quarter of the capital.
Invitations to attend the general assembly shall have to be sent
by registered mail, along with an acknowledgment of receipt
addressed to each partner at least twenty-one days before the
date of convening the assembly. The Invitation letters must
Include the particulars of the agenda and the place and time of
the meeting.
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ARTICLE 245
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Every partner
is entitled to attend the general assembly irrespective of the
number of shares he owns. He may delegate another partner who is
not a manager to represent him by proxy at the assembly. Each
partner shall have a number of votes equal to the number of
shares he owns or represents
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ARTICLE 246
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The agenda of the general
assembly at its annual meeting must include the following
matters:
Review the managers' report on the company activities and its
financial position during the year. Also, review the reports of
both the board of supervisors and the auditor.
Discuss and ratify the balance sheet and the profit and loss
account.
Determine the share of profits to be distributed amongst the
partners.
Appoint the managers or the members of the board of supervisors
and determine their remuneration.
Other matters that are within its competence in accordance with
the provisions of this law or the memorandum
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ARTICLE 247
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The general assembly may not
deliberate on other matters not included in its agenda unless
serious facts were disclosed during the meeting, which requires
discussion thereof.
If one of the partners requests a specific matter to be included
in the agenda, the managers must grant the request, otherwise
the partner shall have the right to appeal to the general
assembly
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ARTICLE 248
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Every partner shall have the
right to discuss the items included in the agenda. The managers
are obliged to reply to the partners' questions up to the extent
that may not jeopardize the company's interests. If one of the
partners considers the reply to his question insufficient, he
may appeal to the general assembly whose resolution in this
regard must be enforceable.
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ARTICLE 249
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Resolutions of the general
assembly shall not be valid unless adopted with the approval of
a number of partners representing at least one half of the
capital, unless the company memorandum provides for a larger
majority.
If this quorum Is not achieved at the first meeting, the
partners must be called to a second meeting to be convened
within twenty-one days of the first meeting. Resolutions at this
meeting are adopted with a majority of votes represented at the
meeting unless otherwise stipulated In the company memorandum.
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ARTICLE 250
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The managers may not
participate in voting for resolutions relating to absolving them
from the responsibilities of management.
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ARTICLE 251
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Minutes adequately summarizing
the discussion of the general assembly should be prepared. These
minutes and the resolutions of the general assembly should be
recorded in a special book kept at the company headquarters. Any
of the partners may review the book personally or through an
attorney. They may also review the company balance sheet, profit
and loss account and the annual report.
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ARTICLE 252
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The company memorandum may not
be amended or its capital increased or reduced unless approved
by a number of partners representing three quarters of the
capital, unless the company memorandum provides for a numerical
majority of the partners in addition to this quorum. However,
the liabilities of the partners may not be increased without
their unanimous approval. The resolution to reduce the company
capital shall not be valid unless approved by the competent
authority.
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ARTICLE 253
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The company
shall have one or more auditors selected each year by the
general assembly of partners. The provisions concerning the
auditors of public joint stock companies shall apply.
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ARTICLE 254
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Without
prejudice to the rights of boa fide third parties, a resolution
adopted by the general assembly of partners in violation of the
provisions of this Law or the company memorandum, adopted for
the benefit of certain partners or to cause damage to other
partners without due consideration to the interests of the
company shall be void. In this event only the partners who had
objected to the adoption of the resolution or those who were
unable for acceptable reasons to object thereto, may request the
nullification of the resolution.
The judgment nullifying the resolution will lead to the
resolution being considered as nonexistent for all the partners.
A case of nullification is time barred on the expire of one year
from the date of adopting the resolution. Initiating the case
will not suspend the implementation of the resolutions unless
otherwise ordered by the Court.
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ARTICLE 255
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The company
shall allocate 10% of Its net profits each year to create a
statutory reserve. The partners may suspend the allocation if
the reserve reaches half the capital.
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Licensing Procedures
Registration of New
Membership
- Trade Name Approval issued by the Department of
Planning & Economy
-
Photocopy of :
- Passport
- Tenancy Agreement
- Specimen Signature duly attested by the
Notary Public
- Amendment in the Ownership or Services
Agency Agreement
- License & Approval
Issued by the Competent Authority ( Department of Planning
Economy - Abu Dhabi Tourism Authority - Higher
Corporation For Specialized
&
Economic Zones
-
Photocopy of :
ˇ
Passport
ˇ
Tenancy Agreement
ˇ
Specimen Signature duly
attested by the Notary Public
ˇ
License & Approval Issued
by the Competent Authority Department of Planning Economy
- Abu Dhabi Tourism Authority - Higher Corporation For Specialized
& Economic
Zones
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Original Membership
Certificate
Alteration
& Modification
Trade Name
1.
Photocopy of :
ˇ
Trade Name Approval issued
by the Department of Planning & Economy
ˇ
Tenancy Agreement
ˇ
Amendment in the
Partnership Agreement Modifying in the Capital
ˇ
Advertisement in the
Newspaper
ˇ
License Issued by the
Competent Authority with change of Name ( Department of Planning economy
- Abu Dhabi Tourism Authority - Higher Corporation For Specialized
&
Economic Zones
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Original Membership
Certificate
Relocation
1.
Photocopy of:
ˇ
Tenancy Agreement for the
new Location
ˇ
Alteration of Trade Name
in the Partnership or Services Agency Agreement ( Department of
Planning
Economy - Abu Dhabi Tourism Authority - Higher Corporation For
Specialized
&
Economic Zones
ˇ
Original Membership
Certificate
Ownership Alteration
- Photocopy of:
- Amendment in the Ownership or Services
Agency Agreement
- Advertisement in the Newspaper
- License Issued by
the Competent Authority with Change of Name Department of
Planning Economy - Abu
Dhabi Tourism Authority - Higher Corporation For Specialized
&
Economic Zones
ˇ Original
Membership
Capital Alteration
- Photocopy of :
- Amendment in the Partnership Agreement
Modifying in the Capital
- License Issued by
the Competent Authority with change of Name Department of
Planning Economy - Abu
Dhabi Tourism Authority - Higher Corporation For Specialized
&
Economic Zones
ˇ Original
Membership Certificate
- Trade Name Approval issued by the Department of
Planning
- Economy Service Agent
Agreement duly legalized by Notary Public&
- License Issued by the Department of Planning &
Economy
- Approval Letter from Ministry of Planning &
Economy
- Decision Board of Directors
- Specimen Signature duly attested by the Notary
Public
- Passports of the Resident Representative &
Service Agent
- Service Agent Agreement duly legalized by Notary
Public
- Documents issued from
the Mother Company must be duly legalized by the
Concemed Authority & UAE Embassy from
the Count
Company formation Dubai /UAE-
Introduction/summary
Dubai has a unique set of
selling propositions, namely:
- No corporate tax
- No income tax
- No capital gains tax
- No property tax
- No wealth tax
- Low property transaction cost
- Ease of access to home finance
Dubai/UAE
has double taxation agreements = DTA with most other countries. EU freedom
of establishment is not applicable. For approval of the permanent
establishment according to tax laws, a commercially equipped business
operation must be installed in Dubai/UAE, and active business must be
transacted in UAE/Dubai.
Since only oil
companies and banks are subject to taxation in the UAE/Dubai, and any
other companies do not pay any taxes, this results in interesting
opportunities for investment in Dubai/UAE. In order to be able to use the
tax advantages, a permanent establishment according to DTA must be
installed in Dubai. On the one hand, a Dubai company is no offshore
company in this sense, since the UAE/Dubai also maintain double taxation
agreements with many countries – including Sweden and Denmark – but on the
other hand, the EU freedom of establishment is not applicable. Therefore,
the following prerequisites for approval of a permanent establishment
according to tax laws in Dubai must be met:
- Place of management: A manager resident in the UAE/Dubai according to
tax laws must – at least on the outside – control the company’s
businesses.
There must be a commercially equipped business operation, i.e. at least
one office and one employee.
It
must be demonstrated that the Dubai company does actively transact
business in the UAE.
Under
the stated conditions, for example the Swedish could be a majority
shareholder of the Dubai company, but nevertheless Dubai/UAE has the sole
right of taxation, provided that the Articles of Association state that
all relevant decisions are made at the shareholders’ meetings, which
exclusively take place in Dubai, at which the Swedish shareholder must be
present. However, the UAE company law stipulates that 51% of the
company shares must be held by persons resident in Dubai. As a rule, the
founder will use a “sponsor”. This requirement may be omitted in case of
company formations in the free zones. In the free zones, 100 % of the
shareholders may be foreigners.
Introduction
The basic requirement for all
business activity in Dubai is one of the following three categories of
licence:
- Commercial licences covering all kinds
of trading activity;
- Professional licences covering
professions, services, craftsmen and artisans;
- Industrial licences for establishing
industrial or manufacturing activity.
These licences are all issued
by the Dubai Economic Department. However, licences for some categories of
business require approval from certain ministries and other authorities:
for example, banks and financial institutions from the Central Bank of the
UAE; insurance companies and related agencies from the Ministry of Economy
and Commerce; manufacturing from the Ministry of Finance and Industry; and
pharmaceutical and medical products from the Ministry of Health.
More detailed procedures apply
to businesses engaged in oil or gas production and related industries.
Practising some trade
activities (e.g. jewellery and insurance) requires the submission of a
financial guarantee issued by a bank operating in Dubai.
In general, all commercial and
industrial businesses in Dubai should be registered with the Dubai Chamber
of Commerce and Industry.
Fifty-one per cent
participation by UAE nationals is the general requirement for all
Dubai-established companies except:
- Where the law requires 100% local
ownership;
- In the Jebel Ali Free Zone, Dubai
Internet City, or the Dubai International Financial Centre;
- In activities open to 100% AGCC (Gulf
Cooperation Council) ownership;
- Where wholly owned AGCC companies
enter into partnership with UAE nationals;
- In respect of foreign companies
registering branches or a representative office in Dubai;
- In professional or artisan companies
where 100% foreign ownership is permitted.
In the past, each emirate
followed its own procedures governing the operations of foreign business
interests. In practice, however, Dubai and the other emirates followed the
same general system, whereby foreign companies operated in one of three
ways: with a local sponsor, through a partnership with a UAE national or
company, or through a private limited company or public shareholding
company incorporated by Ruler's decree.
Since 1984, steps have been
taken to introduce a codified companies law applicable throughout the UAE.
Federal Law No. 8 of 1984, as amended by Federal Law No. 13 of 1988 - the
"Commercial Companies Law" - and its by-laws have been issued. In broad
terms the provisions of the Law are as follows:
The Federal Law stipulates a
total local equity of not less than 51% in any commercial company and
defines seven categories of business organisation which can be established
in the UAE. It sets out the requirements in terms of shareholders,
directors, minimum capital levels and incorporation procedures. It further
lays down provisions governing conversion, merger and dissolution of
companies.
The seven categories of
business organisation defined by the law are:
General partnership company
Partnership-en-commandite
Joint venture company
Public shareholding company
Private shareholding company
Limited liability company
Share partnership company
Partnerships
Partnership companies are limited to UAE nationals only. The Dubai
government does not presently encourage the establishment of
partnerships-en-commandite or share partnership companies.
 Joint Venture
Company
A joint venture is a
contractual agreement between a foreign party and a local party licensed
to engage in the desired activity. The local equity participation in the
joint venture must be at least 51%, but the profit and loss distribution
can be prescribed. There is no need to license the joint venture or
publish the agreement. The foreign partner deals with third parties under
the name of the local partner who - unless the agreement is publicised -
bears all liability.
In practice, joint ventures
are seen as offering a suitable structure for companies working together
on specific projects.
Public and
Private Shareholding companies
The law stipulates that
companies engaging in banking, insurance, or financial activities should
be run as public shareholding companies. Foreign banks, insurance and
financial companies, however, can establish a presence in Dubai by opening
a branch or representative office.
Shareholding companies are
suitable primarily for large projects or operations, since the minimum
capital required is Dh. 10 million (US$ 2.725 million) for a public
company, and Dh. 2 million (US$ 0.545 million) for a private shareholding
company. The chairman and a majority of directors must be UAE nationals
and there is less flexibility of profit distribution than is permissible
in the case of limited liability companies.
Limited
Liability Company
A limited liability company
can be formed by a minimum of two and a maximum of 50 persons whose
liability is limited to their shares in the company's capital. Such
companies are recognised as offering a suitable structure for
organisations interested in developing a long term relationship in the
local market.
In Dubai, the minimum capital
is currently Dh. 300,000 (US$ 82,000), contributed in cash or in kind.
While foreign equity in the company may not exceed 49%, profit and loss
distribution can be prescribed. Responsibility for the management of a
limited liability company can be vested in the foreign or national
partners or a third party.
The following steps are
required in establishing a limited liability company in Dubai:
- Select a commercial name for the
company and have it approved by the Licensing Department of the
Economic Department;
- Draw up the company's Memorandum of
Association and have it notarised by a Notary Public in the Dubai
Courts;
- Seek approval from the Economic
Department and apply for entry in the Commercial Register;
- Once approval is granted, the company
will be entered in the Commercial Register and have its Memorandum of
Association published in the Ministry of Economy and Commerce's
Bulletin;
- The licence will then be issued by the
Economic Department;
- The company should then be registered
with the Dubai Chamber of Commerce and Industry.
Branches and
Representative Offices
The Commercial Companies Law
also covers the formation and regulation of branches and representative
offices of foreign companies in the UAE and stipulates that they may be
100% foreign owned, provided a local agent is appointed.
Only UAE nationals or
companies 100% owned by UAE nationals may be appointed as local agents (which
should not be confused with the term "commercial agent"). Local agents --
also sometimes referred to as sponsors -- are not involved in the
operations of the company but assist in obtaining visas, labour cards, etc
and are paid a lump sum and/or a percentage of profits or turnover. In
general, branches and offices of foreign commercial companies are not
licensed to engage in importing activity except for re-export or in the
case of products of a highly technical nature.
To establish a branch or
representative office in Dubai, a foreign commercial company should
proceed as follows:
- Apply for a licence from the Ministry
of Economy and Commerce, submitting an agency agreement with a UAE
national or 100% UAE owned company.
- Before issuing the licence, the
Ministry will forward the application to the Economic Department to
obtain the approval of the Dubai government and will forward the
application specifying the activity that the office or branch will be
authorised to undertake in the UAE, to the Federal Foreign Companies
Committee for approval;
- Once this has been done, the Ministry
of Economy and Commerce will issue the required Ministerial licence
specifying the activity to be practised by the foreign company;
- The branch or office should be entered
in the Economic Department's Commercial Register, and the required
licence will be issued;
- The branch or office should also be
entered in the Foreign Companies Register of the Ministry of Economy
and Commerce;
- Finally the branch or office should be
registered with the Dubai Chamber of Commerce and Industry.
Branches and
Representative Offices of Foreign Professional Companies
Branches and representative
offices of foreign professional firms may be 100% foreign owned provided
UAE nationals or 100% UAE owned companies are appointed as local agents.
Such agents are not involved in the operations of the firm but assist in
obtaining visas, labour cards etc and are paid a lump sum as remuneration.
The Economic Department is the authority in charge of licensing such
branches or representational offices.
Sole
Proprietorships
In setting up a professional
firm, 100% foreign ownership, sole proprietorships or civil companies are
permitted. Such firms may engage in professional or artisan activities but
the number of staff members that may be employed is limited. A UAE
national must be appointed as local service agent, but he has no direct
involvement in the business and is paid a lump sum and/or percentage of
profits or turnover. The role of the local service agent is to assist in
obtaining licences, visas, labour cards, etc.
Offshore-Companies in the United Arab Emirates
Since the year 2003 the United Arab Emirates allow the
formation of offshore companies in the Jebel Ali Freezone in Dubai. With
this step Dubai is positioning itself as a regional alternative among the
worldwide network of offshore locations such as Liechtenstein, Madeira,
Malta and the Canal Islands.
The advantages of establishing an offshore company in the United Arab
Emirates are obvious: there are no corporate or individual taxes existing
in the Emirates as well as no value added tax, inheritance tax or tax on
assets. In addition to the tax free environment there is a double taxation
treaty existing since 1995 between Germany and the Emirates, which exempts
German producers located in the Emirates from taxation according to the
German tax law.
Substantial legal regulations for forming and operating an offshore
company can be found in the „Jebel Ali Free Zone Authority Offshore
Companies Regulations“ (consists of 126 paragraphs). Concerning the
activity of the offshore business there is no limitation except for
banking or insurance businesses. The offshore company does not require its
own personnel or maintain office space in the Emirates. In every case the
company has to appoint a local representative (so called registered agent),
who acts as the contact person for authorities in the United Arab
Emirates.
Due to the low magisterial requirements the formation of an offshore
company in the Jebel Ali Freezone offers an interesting alternative for
foreign companies.
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