The United Arab Emirates welcomes businesses and companies to start operating within their country. However, a company needs to be registered so that they can be considered legitimate business. There are many kinds of registrations available for businesses in the UAE. A company should be registered with the correct license according to the requirements or they can suffer avoidable restrictions while conducting businesses.
This registration is perfect for those companies who wish to dabble in the international trading but also need access to the local bank accounts. These companies also get the ability to own real estate inside the United Arab Emirates.
This is the cheaper option for the companies and they can only have international business activities. Inside the UAE, these companies can hold shares or other offshore companies or free zone companies. Trading can also be conducted inside the UAE but with other offshore companies only. Offshore companies cannot enjoy the tax benefits of UAE tax treaties. Additionally, the owners or managers of these companies are not entitled to a UAE Residents Visa. The offshore companies do not need a designated office space inside the UAE but can own real estate and have bank accounts in UAE banks.
UAE Local Free Zone Companies: Limited Liability Companies
Companies registered under this license allow them to have local trading activities in the as area which is designated as Free Zone. They can even trade internationally. These companies are allowed to own real estate inside the UAE. Companies with license can enjoy each and every benefit that offshore companies enjoy but there are a few differences. They have certain advantages as well.
There are a few specific license types available under this broad category. A company will only be allowed to deal in activities that are allowed under their specific license. The activities of the company will be restricted to a particular kind like trading. These companies need to have a designated office inside the Free Zone. Each investor of the company will be entitled to an investor visa that is valid for 3 years and an Emirates ID will be provided for the spouses and also the dependents.
These companies are given a status of onshore tax resident which allow them access to the benefits of UAE tax treaties. Trading is permitted with other companies in the Free Zone and also the international companies but not inside the other companies in the UAE.
Onshore Limited Liability Companies
According to the UAE law, these companies can only be created as a joint venture between an UAE National, also called the local sponsor and an expatriate. The UAE National must have the controlling majority of shares in the company. However, it is also possible to make a UAE government agency act as the UAE national in order to set up the company. This eliminates the need to risk working with the unknown parties.
Additionally, in this type of arrangement, the local sponsor will not have any control over the shares. Moreover, the sponsor will not have the right to claim the dividends from the shares. In return for these benefits, a fee or a percentage of returns need to be paid to the government agency.
These companies can get access to the local market of the UAE and can freely conduct the trade activities inside the country. Certain conditions, dependent on the size or activities of the companies, will be imposed on them. Be that as it may, these conditions can be easily managed and are generally quite reasonable.
There are various fees associated with the registration process and licenses which need to be paid before the company can get registered in the UAE as an entity.