UAE : A Country Designed for Business

Transcription

UAE
A Country Designed for Business
UAE
A Country Designed for Business
September 2014
This page is intentionally left blank.
CONTENTS
Foreword.................................................................................. 07
N R Doshi and Partners ............................................................ 11
DFK International..................................................................... 13
UAE : A passport to a world with fewer boundaries................... 15
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Political System................................................................................. 16
Geography......................................................................................... 17
Demographics................................................................................ 17
Trade and Infrastructure..................................................................... 19
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
Economic Overview................................................................. 19
A Country Designed for Business................................................. 21
Taxation in UAE................................................................................. 26
UAE Employment Landscape............................................................. 32
Legal Structures of Business Entities....................................... 38
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Commercial Companies................................................................. 40
Civil Companies............................................................................ 40
Free Zone Entities......................................................................... 41
Sole Proprietorship........................................................................ 41
General Partnership........................................................... 42
Limited Liability Companies........................................................... 42
Foreign Company Branch or Representative Office.......................... 43
Public Joint Stock Company........................................................... 44
Private Shareholding Company...................................................... 44
Free Zones in UAE..................................................................... 51
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Jebel Ali Free Zone........................................................................ 54
Dubai Multi Commodity Centre....................................................... 55
Dubai Internet City......................................................................... 56
Dubai Media City........................................................................... 57
Dubai Knowledge Village............................................................... 58
Dubai International Academic City.................................................. 59
Dubai International Financial Centre............................................... 60
Dubai Airport Free Zone................................................................. 61
Dubai World Central...................................................................... 62
Dubai Gold and Diamond Park........................................................ 63
Dubai Health Care City................................................................... 64
Dubai Silicon Oasis....................................................................... 65
N R Doshi & Partners
UAE : A Country Designed for Business | 04
CONTENTS
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TwoFour54.................................................................................... 66
Khalifa Industrial Zone Abu Dhabi................................................... 67
Sharjah International Airport Free Zone.......................................... 68
Hamriyah Free Zone............................................................................. 69
Ras Al Khaimah Free Zone................................................................... 70
RAKIA Free Zone................................................................................. 71
Offshore Companies in UAE
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JAFZA Offshore.................................................................................... 72
RAK FTZ Offshore............................................................................... 73
RAKIA Offshore.................................................................................... 74
Industries in UAE
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Finance......................................................................................... 78
Oil and Gas..................................................................................... 80
Tourism........................................................................................... 82
Manufacturing................................................................................. 84
Retail.............................................................................................. 86
FOREWORD
For many years, our Publication on Doing
Business in UAE is well received by foreign
investors and business associations. It
gives readers a quick overview of what is
needed to do business in United Arab
Emirates. Our batteries of specialists in
their respective fields, have abetted to
accumulate this converging on what matters
to businesses, makes it a worthwhile
reference.
Our 30 years experience as a leading
accounting and consulting group with over
100 professionals and 7 offices across UAE,
N R Doshi and Partners is well-positioned to
provide foreign investors with one-stop convenience and dedicated expertise
to set up operations in the region. This, together with our strong regional and
international association with DFK International, makes us the ideal choice for
businesses looking to use UAE as a launch pad to setting up business in
Middle East.
We provide consultancy and the "tools" of setting up and doing business in
UAE to almost 3,500 businesses. Our support ranges from the formation of
companies to international tax advisory, tax compliance, accounting and
payroll support, financial audit, governance, as well as other needs like IT,
corporate finance, valuation, M&A and transaction support services. You can
count on us for specialist advice, personal attention, and trust from a global
brand name.
Rahul Doshi
Partner
CPA (USA), ACCA (UK)
[email protected]
N R DOSHI AND PARTNERS
N R DOSHI & PARTNERS
N R Doshi & Partners is established in the UAE for 30 years and currently has
over 100 professionals and 9 client service partners. Our offices are located
at
1. Abu Dhabi
5. Hamriyah Free Zone
2. Dubai
6. SAIF Zone
3. Jebel Ali Free Trade Zone
7. RAKIA
4. Sharjah
N R Doshi & Partners is led by a team of multifaceted professionals enthused
with an asset of domestic and international experience in the domains of
audit, human resource management, software development and deployment,
banking and financial services. Our employees' credentials include highly
efficient Chartered Accountants (CA), Certified Information Systems Auditor
(CISA), Certified Public Accountants (CPAs) and master minded
Administration specialists with extensive, hands-on experience in a wide
variety of industries.
With more than 3500 clientele that includes many Fortune 500 companies, we
have established our presence among market leaders in the region, providing
clients with

Audit and Assurance

Accounting Outsourcing

International Taxation

HR and Payroll

Advisory

IT Consulting

Internal Audit

System Designing and Implementation

Corporate Finance

System Audit

Company Incorporation

IT Audit
Over the years we have had the opportunity to work with leading industry
players in the region and play a pivotal role in helping them make their
success stories. At various stages of their growth, our clients look to us for
timely and independent advice in helping them in their decision making.
Our industry-focused network is designed to anticipate and address your
business needs.

Asset Management

Automotive

Banking

Chemical

Communication

Energy & Utility

Engineering & Construction

Entertainment & Media

Financial Service

Gold & Jewelry

Healthcare

Hospitality and Leisure

Metals

Pharmaceuticals

Real Estate

Retail Consumer

Technology

Transportation & Logistics
DFK INTERNATIONAL
DFK International is a worldwide association of independent accounting
firms and business advisers.
N. R. Doshi & Partners has considerable international knowledge and
experience and is well placed to advice on the complexities that crossborder transactions and movements can bring. Through our membership of
DFK international, our clients also have access to a broad range of accounting, advisory and other business specialties in over 82 countries worldwide.
DFK International is an international association of independent accounting
firms and business advisors that has been meeting the needs of clients with
388 offices across the world for over 45 years.
DFK International World Statistics 2013
212
388
82
$1.09bn
Member firms
Member offices
Countries
Members fee income
UNITED ARAB EMIRATES
A PASSPORT TO A WORLD
WITH
FEWER BOUNDARIES
UAE : A PASSPORT TO A WORLD WITH FEWER BOUNDARIES
POLITICAL SYSTEM
GEOGRAPHY
The United Arab Emirates is situated in the south-west of Asia. It overlooks
the Gulf of Oman to the East and the Arabian Gulf to the North. The Arabian
Gulf and Gulf of Oman are linked by the Straits of Hormuz. The UAE shares
its land boundaries with Oman and Saudi Arabia. The UAE covers an area of
approximately 83,600 square kilometers (32,654 square miles), including
numerous islands. The coastal area consists primarily of salt marshes.
Inland, the topography is predominantly desert, sand dunes and gravel
plains with isolated oases, the largest of which are located at Al Ain and
Liwa. The Hajar Mountains lie close to the sea on the East Coast. The
largest of the Emirates is Abu Dhabi, with an area of approximately 67,300
square kilometers (26,290 square miles), followed by Dubai with an area of
approximately 3,900 square kilometers (1,520 square miles), and Sharjah
with an area of approximately 2,600 square kilometers (1,015 square
miles). The areas of the other Emirates range from 260 to 1,700 square
kilometers (102 to 664 square miles).
DEMOGRAPHICS
The UAE has earned a world-wide reputation for its exemplary and harmonious multicultural society, which is undoubtedly the envy of every civil
society in the world today.
UAE is a popular migration destination accommodating 7.3 million migrants
making up 88% of the total UAE population of 8.26 million (approximately).
Emiratis have a rich tradition in welcoming all other nationalities since the
early 1900's.The largest group of non-UAE nationals are South Asian
(58%), followed by other Asians (17%) and Western expatriates (8.5%).
Dubai is the largest city with a population of 1.78 million.
Tolerance, security, job opportunities, attractive environment for investment, advanced infrastructure and tax-free income are the main factors
attracting more than 200 nationalities to live and work in the UAE.
The native values, heritage and culture which have evolved over centuries,
continue to thrive notwithstanding the modern look, infrastructure, facilities
and the moderately liberal lifestyle of the Emiratis. Islam being the predominant religion with-in mean that UAE local customs and traditions are influenced to a great extent by this religion. However it does not make the UAE a
closed society. It seeks to promote the best in its traditions and customs so
that the nation becomes vibrant and attractive to all people.
The Emirati population having virtues of being polite and courteous follow
Islam and are tolerant to other religious communities.
As part of the local UAE custom the men wear the dishdasha or khandura, a
white full-length shirt-dress. Women in UAE wear the black abaya, a long
black robe that covers their normal clothes and they also wear a headscarf
in public.
TRADE AND INFRASTRUCTURE
UNITED ARAB EMIRATES - ECONOMIC OVERVIEW
UAE has the second-largest economy in the Arab world (after Saudi Arabia)
with a gross domestic product (GDP) of $390 billion in 2012. A third of the
GDP is from oil revenues. The economy was expected to grow between 4%
and 4.5% in 2014.
Since its establishment in 1971, UAE's economy has grown by nearly 231
times to $390 billion. in 2013. The non-oil trade has grown to $326 billion, a
growth of around 28 times from 1981 to 2012.
Prior to the unification in 1971, each emirate was responsible for its own
economy. At the time, pearl diving, seafaring and fishing were together the
mainstay of the economy.
H.H. Sheikh Zayed Bin Sultan Al Nahyan is credited with bringing the
country forward into the 20th century and using the revenue from oil exports
to fund all the necessary development. Likewise, H.H. vice-president
Sheikh Rashid Bin Saeed Al Maktoum had a bold vision for the Emirate of
Dubai and foresaw the future in not petroleum alone, but also other industries.
Global Rank
Growth Rate
23rd
4%
Ease in Doing
Business
GDP $ 390 bn
Ranks
4th
Trading Across Border
19th
Most Productive
Economy
3rd
Strong Public
Trust in
Politicians
Service
Manufacturing
Agriculture
0
10
20
30
40
50
60
GDP by Sector
The UAE is richly endowed with oil resources and is home to around 10% of
the world's total proven oil reserves. Abu Dhabi is the largest and most
powerful, oil-based traditional emirate. Dubai, which lacks oil resources,
has a more modern atmosphere and depends on international retail, tourism
and financial services. The other five emirates have always played a minor
role. For almost four decades, oil and global finance have driven the UAE's
economy. The UAE has accumulated substantial wealth, and the country's
per capita GDP is now on a par with those of leading Western European
nations.
With imports totaling to USD 269.6 billion in 2012, UAE surpassed Saudi
Arabia as the largest consumer market in the region while the total exports
of USD 368.9 billion makes UAE the second largest exporter of the region.
a
Kore
pa n
Ja
Imports
$269.6bn
Machinery and
Transport Equipment,
Chemicals and Food
In
dia
Crude Oil, Natural Gas,
Re-exports, Dried Fish,
Dates
Germ
a
Exports
$368.9 bn
ny
I
na
C hi
Thailand
S.
e
or
ia
nd
Sin
ga
p
UAE and India are each other's main trading partners with total trade over
USD 75 billion. The UAE also has significant economic ties with the USA,
UK and other European countries.
J
U SA
a
ap
n
Ira
n
A COUNTRY DESIGNED FOR BUSINESS
For two and a half millennia, the Gulf coast has been a
crossroads of the world. From the Persian Royal Road
to the Han Dynasty's Silk Road, from the trading posts
of the 19th century to the hypermodernity of today's
UAE, people have always converged here.
The UAE enjoys a strategic location on the new
Southern Silk Road between Asia, Europe and Africa, a
situation that provides optimum trading conditions and
means the UAE is poised to take advantage of economic activity among the world's fastest growing and
developing economies as part of the 'South-South'
trade trajectory. Thousands of Chinese businesses use
Dubai as a hub for Africa. Indian traders use the
emirate to access the world. Latin American
'multilatinas' see Dubai as a launch pad into South
Asia. And, of course, Western multi-nationals use
Dubai as a hub for the Middle East. Dubai is both a
unique trans-continental trade hub and a nexus for
innovation in the fields of technology, culture and the
wider knowledge economy.
Dubai Ranks
9th
Busiest
Shipping Port
Dubai Ranks
13,300
Container Traffic
(in thousand TEUs)
Dubai Ranks
4th
Busiest
Passenger
Airport
It is strange to imagine that 20 years ago, UAE's cityscape was mostly sand.
It is now one of the world's most modern urban landscapes, linked by multilane highways and a technologically advanced Metro system. Indeed, in
four decades, the country's soft and hard infrastructure has developed to
such an extent that the UAE today might be one of the most hyperconnected places on the planet, where more than 200 different nationalities
mingle daily.
UAE's business and governance structures play an increasingly pivotal role
in the global economy of a nation that continues to blossom, attracting
foreign investment and creating jobs. Its position as a central hub for trade
and tourism continues to bring people to UAE, allowing it to forge new
partnerships and improve on the strong transport links that it has developed. The opening of new terminals at both Jebel Ali Port and Dubai World
Central will further strengthen this network.
The Middle East's top trading economy – the UAE is a dynamic hub for
global commerce, with unmatched infrastructure that provides seamless
connectivity for businesses worldwide.
Dubai International Airport stands alongside Paris, London and Hong Kong
as the world's busiest in terms of international passengers. Last year more
than 66 million people passed through its terminals, and it is projected to
have the highest footfall of any international airport by 2015. Dubai's flagcarrier, Emirates Airline, is also on track to become the biggest in the world,
w h i l e D u b a i r a n k s s i x t h g l o b a l l y m e a s u r e d b y a i r c a r g o t r a ffi c .
UAE's shipping ports are also among the world's top 10 busiest, with Jebel
Ali ranked as the world's 7th largest port globally.
UAE scored 6.4 out of 7 and ranks 4th for its overall infrastructure. It ranks
1st for its quality of roads, 4th for its Port Infrastructure and 3rd for its
quality of Road Infrastructure.
The UAE economy enjoys a competitive mixture of cost, market and environmental advantages that create a supreme and attractive investment
climate for local and expatriate businesses alike. In fact, these advantages
not only rank UAE as the Middle East's leading multi-purpose business
center and regional hub, but they place it at the top of the globes, dynamic
and emerging market economies.
‘In more recent years, UAE has become a major venue for a number of
growing, profitable industries. Business have preferred UAE for its.‘
Manufacturing
Business
Industrial
Consulting
Information
Communication
Technology
Exhibition
UAE a Major
Venue for Number
of Rising,
Profitable Industries
Tourism
Corporate HQ
Transport
Distribution
Logistics
Banking
Finance
Insurance
1. Strategic Location: UAE is a time zone bridge between the Far East and
Europe on the East-West axis and the CIS and Africa on the north-south
axis. It is a opening to a market that can be described as:

Large - well established trading links exist with the greater than 1.5
billion people in the neighboring region covering the Gulf, Eastern
Mediterranean, Central Asia, Africa and the Asian sub-continent;

Growing - UAE's total international trade has grown on average by
over 11% per year since 1988 and regional economic growth and
liberalization should boost demand further;

Prosperous - a buoyant local economy strategically located in the
midst of one of the world's richest regions and well-endowed with
ample supplies of cheap energy and primary aluminum; also adjacent
to major regional suppliers of vital agro-export commodities;

Diversified - varied and significant import requirements generate
opportunities for product suppliers and re-exporters;

Accessible - served by over 120 shipping lines and linked via 85
airlines to over 130 global destinations;

Open - no exchange controls, quotas or trade barriers.








No foreign exchange controls,
No trade barriers or quotas,
Competitive import duties
Competitive labor costs – labor force is multi-lingual and skilled,
Competitive energy costs,
Competitive real estate costs,
Competitive financing costs and high levels of liquidity,
No taxes on personal income or on corporate profits
(except for oil companies and branches of foreign banks).
TAXATION IN UAE
The UAE economy is considered throughout the world to be among the most
liberal and most diversified in the region. Of all the countries globally, the
UAE is probably among the very countries where no taxation on corporate
profits is levied with the exception of branches of international banks, hotels
and major oil and gas companies. The UAE does not levy any personal tax,
capital gains tax, value added tax or withholding tax.
No
Personal
Tax
No
Capital
Gains Tax
No
Value
Added Tax
No
No
Corporate Tax
Withholding
except on limited
Tax
industries
While UAE has not legislated any tax laws, each Emirate can enact its own
tax law. The Emirates of Abu Dhabi, Dubai and Sharjah have enacted tax
laws for their respective Emirates. The Governments of these Emirates do
not enforce their tax laws with an exception of the Emirates of Abu Dhabi
and Dubai who levy taxes on oil, gas and petrochemical companies and
branch offices of foreign banks. Service tax is levied on Hotel Services and
Entertainment at a flat rate between 10% and 15%.
Taxation on Oil
and Gas
Companies
Pay up to a maximum
55%
Flat rates on
annual profits
of Branches of
Foreign Banks
Flat rates
service tax on
Hotel Services
and
Entertainment
Pay
Pay
20%
10-15%
Custom Duty
Under the terms of the Gulf Co-operation Council regulations (comprising
the member states of UAE, Saudi Arabia, Qatar, Oman, Kuwait and
Bahrain), a unified customs tariff of 5% of the c.i.f. value applies to the
taxable imports of all of the GCC member states as from 1 January 2003. All
existing taxes and duties on imports within the GCC member states have
been abolished.
Tobacco and tobacco products are subject to a 100% customs duty, and for
alcohol the rate is 50%.
Exemptions from customs duties apply in the UAE and other GCC member
states, to various items including basic foodstuffs, raw materials for manufacturing industries, spare parts for civilian airlines, diplomatic and consular
missions' imports, imports for military and internal security forces, personal
effects and charitable organizations' imports.
50%
custom tariff
on Alcohol
Unified
Custom tariff
5%
on all other items
100%
custom tariff
on Tobacco
Special Incentives
An entity manufacturing goods in UAE can export its goods to GCC countries without duty if its manufacture involves 40% value addition and the
entity is owned 51% by GCC National.
Property Tax
In most Emirates, tax is payable by residential tenants at a rate of 5% of the
annual rent and or commercial tenants at 10% of the annual rent.
In Abu Dhabi a property tax in charged on the renewal and obtaining of a
business license. These taxes are assessed at around 5 to 10% of the
applicant's annual office rent and 5% of the annual rental of the residence of
the manager/license holder.
In Dubai, all residential properties are subject to an annual property tax
payable to the Dubai Municipality. Dependent upon the employment status
of the tenant a tax of between 5-15% will be payable. All professional,
managerial and other senior employees in commercial and industrial
sectors are charged at the rate of 5% of their annual rent, whereas in the
banking sector the rate increases to 15%.
In Sharjah, all leased residential properties are subject to an annual property tax payable to the Sharjah Municipality. This tax will be equal to 2% of
the annual rent shown in the tenancy agreement.
Double Taxation Avoidance Agreement
The UAE's double taxation treaties are actually designed to make it an even
more attractive destination and prospect for those individuals and companies who originate from countries with aggressive taxation policies.
The treaties are in place to further reduce any potential taxation burdens
being levied against foreign companies and citizens operating in the UAE
who remit their profits abroad.
Many countries have anti-avoidance provisions which either set minimum
levels of tax from income to benefit from tax treaties or set out lists of lowtax countries which do not qualify under tax treaties.
The main agreements formed are :

Agreements on taxation depending on the income resulting from
air transport

Agreements on avoidance of double taxation on income & profits
resulting from international air transport

Agreements on avoidance of double taxation on income, capital
gains & evasion of taxes
77
DTAA treaties
signed by UAE
Prominent countries having double taxation treaties with the UAE are the following:
Continent
Countries
Africa
Algeria, Egypt, Morocco, Sudan, Tunisia
Asia
China, India, Indonesia, Japan, Malaysia, Mongolia, Pakistan,
Philippines, Singapore, South Korea, Sri Lanka, Thailand,
Turkmenistan
Europe
Belgium, Bosnia, Finland, France, Germany, Italy, Malta,
Netherlands, Poland, Romania, Spain, Switzerland, Greece, Holland,
Belarus, Turkey, Bulgaria
Middle East
Jordan, Kuwait, Lebanon, Syria, Yemen
North America
Canada
Oceania
New Zealand
UAE TAX TREATY STATUS AND RATES
Jurisdiction
Status
Dividends
Interest
Royalties
Notes
Albania
Signed Mar 13, 2014
0%
0%
0%
Algeria
Eff. Jan 1, 2005
0%
0%
0%
Armenia
Eff. Jan 1, 2004
0%
0%
0%
Austria
Eff. Jan 1, 2005
0%
0%
0%
Azerbaijan
Signed Nov 20, 2006
0%
0%
0%
Not yet in force.
Bangladesh
Signed Jan 17, 2011
0%
0%
0%
Not yet in force.
Belarus
Eff. Jan 1, 2002
0%
0%
0%
Belgium
Eff. Jan 1, 1995
0%
0%
0%
Benin
Signed Mar 11, 2013
0%
0%
0%
Bosnia & Herzegovina
Signed Sep 18, 2006
0%
0%
0%
Not yet in force.
Brunei
Signed May 21, 2013
0%
0%
0%
Not yet in force.
Bulgaria
Eff. Jan 1, 2010
0%
0%
0%
Canada
Eff. Jan 1, 2004
0%
0%
0%
China
Eff. Jan 1, 1995
0%
0%
0%
Cyprus
Signed Feb 27, 2011
0%
0%
0%
Czech Republic
Eff. Jan 1, 1998
0%
0%
0%
Egypt
Eff. Jan 1, 1996
0%
0%
0%
Estonia
Eff. Jan 1, 2011
0%
0%
0%
Fiji
Signed Sep 4, 2012
0%
0%
0%
Finland
Eff. Jan 1, 1997
0%
0%
0%
France
Eff. Jul 1, 1990
0%
0%
0%
Georgia
Eff. Jan 1, 2012
0%
0%
0%
Not yet in force.
Not yet in force.
Not yet in force.
Not yet in force.
Germany
Eff. Jan 1, 2009
0%
0%
0%
Greece
Signed Jan 18, 2010
0%
0%
0%
Not yet in force.
Guinea
Signed Nov 13, 2011
0%
0%
0%
Not yet in force.
Hong Kong
Signed Jul 20, 2010
0%
0%
0%
Not yet in force.
Hungary
Signed Apr 30, 2013
0%
0%
0%
Not yet in force.
India
Eff. Jan 1, 1994
0%
0%
0%
Indonesia
Eff. Jan 1, 1997
0%
0%
0%
Ireland
Eff. Jan 1, 2011
0%
0%
0%
Italy
Eff. Jan 1, 1993
0%
0%
0%
Japan
Signed May 2, 2013
0%
0%
0%
Not yet in force.
Jordan
Signed Jun 13, 2005
0%
0%
0%
Not yet in force.
Kazakhstan
Eff. Jan 1, 2010
0%
0%
0%
Kenya
Signed Jul 5, 2011
0%
0%
0%
Korea, South
Eff. Jan 1, 2003
0%
0%
0%
Latvia
Eff. Jan 1, 2014
0%
0%
0%
Lebanon
Eff. May 21, 1999
0%
0%
0%
Not yet in force.
Jurisdiction
Dividends
Interest
Royalties
Signed Apr 1, 2013
0%
0%
0%
Not yet in force.
Lithuania
Signed Jun 30, 2013
0%
0%
0%
Not yet in force.
Luxembourg
Eff. Jan 1, 2010
0%
0%
0%
Malaysia
Eff. Jan 1, 2000
0%
0%
0%
Malta
Eff. Jan 1, 2008
0%
0%
0%
Mauritius
Eff. Jan 1, 2008
0%
0%
0%
Mexico
Signed Nov 20, 2012
0%
0%
0%
Libya
Status
Mongolia
Eff. Jan 1, 2001
0%
0%
0%
Morocco
Eff. Jan 1, 2001
0%
0%
0%
Mozambique
Eff. Apr 15, 2004
0%
0%
0%
Netherlands
Eff. Jan 1, 2011
0%
0%
0%
New Zealand
Eff. Sep 1, 2004
0%
0%
0%
Pakistan
Eff. Jan 1, 1995
0%
0%
0%
Panama
Eff. Jan 1, 2014
0%
0%
0%
Philippines
Eff. Jan 1, 2009
0%
0%
0%
Poland
Eff. Jan 1, 1995
0%
0%
0%
Portugal
Eff. Jun 21, 2012
0%
0%
0%
Romania
Eff. Jan 1, 1997
0%
0%
0%
Notes
Not yet in force.
Montenegro
Signed Mar 26, 2012
0%
0%
0%
Seychelles
Eff. Jan 1, 2008
0%
0%
0%
Singapore
Eff. Jan 1, 1992
0%
0%
0%
Slovenia
Signed Oct 12, 2013
0%
0%
0%
Spain
Eff. Apr 2, 2007
0%
0%
0%
Sri Lanka
Signed Sep 24, 2004
0%
0%
0%
Not yet in force.
Sudan
Signed Mar 18, 2001
0%
0%
0%
Not yet in force.
Switzerland
Eff. Jan 1, 2012
0%
0%
0%
Syria
Signed Jan 26, 2000
0%
0%
0%
Tajikistan
Eff. Jan 1, 2001
0%
0%
0%
Thailand
Eff. Feb 1, 2001
0%
0%
0%
Not yet in force.
Not yet in force.
Not yet in force.
Tunisia
Eff. Aug 26, 1997
0%
0%
0%
Turkey
Eff. Jan 1, 1995
0%
0%
0%
Turkmenistan
Eff. Jan 1, 1999
0%
0%
0%
Ukraine
Eff. Jan 1, 2005
0%
0%
0%
Uzbekistan
Signed Oct 26, 2007
0%
0%
0%
Venezuela
Eff. Jan 1, 2012
0%
0%
0%
Vietnam
Signed Feb 16, 2009
0%
0%
0%
Not yet in force.
Not yet in force.
Yemen
Signed Feb 13, 2001
0%
0%
0%
Serbia
Eff. Aug 1, 2013
0%
0%
0%
Palestine
Signed Sept 24, 2012
0%
0%
0%
Not yet in force.
Not yet in force.
Notes : The United Arab Emirates does not impose a withholding tax on the payment of dividends, interest or royalties. The
effective rate is therefore 0%.
UAE EMPLOYMENT LANDSCAPE
LEGAL STRUCTURES
OF
BUSINESS ENTITIES
LEGAL STRUCTURES OF BUSINESS ENTITIES
The Department of Economic Development of each Emirate is the responsible licenses for corporate entities or individuals who desire to carry out
business in the mainland of that emirate, the territory in Emirate that falls
outside the Emirate's free zones.
There are a great range of Free Zones in the UAE, the majority of which are
in the Emirate of Dubai. Foreign companies are permitted to establish
wholly-owned branches in each of these Free Zones, and such branches
are exempt from the requirement to appoint a local service agent. Each of
the Free Zones has its own set of laws, rules, regulations and requirements
that do not fall within the ambit of the Federal Companies Law and therefore
do not require the involvement of a UAE national shareholder.
The establishment of a Free Zone branch or a corporate entity is dealt with
by the relevant Free Zone Authority and each Free Zone prescribes its own
minimum share capital requirements.
Commercial
Companies
Legal
Structures
Civil
Companies
Free Zone
Entities
Regardless of the type of business to be set-up, it is necessary to obtain a
license. The 3 types of Licenses available in mainland are
Commercial
License
Industrial
License
Professional
License
All Types of Trading
Manufacturing OR Industrial
Professions, Services and Craftsmen
Additionally, rather than setting up a business organization to provide
services or sell goods, it is possible to appoint a local commercial agent for
the purpose of selling directly to importers and traders in the UAE, which is
very commonly used by foreign companies to offer their goods and services
to consumers in the UAE. UAE Federal Law No. 18 of 1981 Concerning
Commercial Agencies, as amended, governs the relationship between
foreign manufacturers and local agents and distributors and grants
protections to the local party subject to the registration of the agency with
the Ministry of Economy. Agency Agreements need to be registered pursuant to the Commercial Agencies Law, while there exist unregistered agents,
which are subject to the Civil Law and the Commercial Law instead of the
Commercial Agencies Law. In order to register, the agent/distributor must
be a UAE national or a company wholly-owned by UAE nationals. The
statutory protections afforded by registration include, inter alia, restrictions
on the foreign party's right to terminate or withhold renewal of the relationship, exclusivity and the right to receive compensation on termination or
non-renewal of the relationship.
Legal Forms of Businesses
Among the following, limited liability companies are the most popular for
foreign companies to operate businesses in the UAE.
1. Commercial Companies
Foreign
Companies
(Branches,
Rep Offices)
Partnership
Limited
with Shares
Limited
Liability
Companies
"LLC”
General
Partnership
Commercial
Companies
Simple
Limited
Partnership
Joint
Participation
Private
Joint Stock
Companies
Public
Joint Stock
Companies
2. Civil Companies
Civil
Companies
Mudaraba
Companies
Service
Companies
Speculative
Venture
Partnership
3. Free Zone Entities
There are a great range of Free Zones in the UAE, the majority of which are
in the Emirate of Dubai. Foreign companies are permitted to establish
wholly-owned branches in each of these Free Zones, and such branches
are exempt from the requirement to appoint a local service agent. Each of
the Free Zones has its own set of laws, rules, regulations and requirements
that do not fall within the ambit of the Federal Companies Law and therefore
do not require the involvement of a UAE national shareholder. However, a
company set up in a Free Zone directly the Free Zone or internationally.
The establishment of a Free Zone branch or a corporate entity is dealt with
by the relevant Free Zone Authority and each Free Zone prescribes its own
minimum share capital requirements.
Branch of a
Foreign
Company
Free Zone
Company
Free Zone
Entities
(Multiple Shareholders)
Free Zone
Establishment
(Sole Shareholder)
Types of Commercial Companies
1. Sole Proprietorship
A professional business sole proprietorship covers a range of professions
from owning a restaurant to a consultancy firm.
Sole proprietorships providing services require a Local Service Agent (LSA)
if they are owned by a National of a country other than the UAE or GCC
countries.
The local service agent is a UAE National who manages licensing requirements and other government-related matters for your business, in
exchange for an annual fee.
A sole proprietorship can only be owned by an individual, not a company.
100% ownership of this business, control all of its operations and 100% of
any profits remains with the owner. Likewise in case of any financial
obligation or business debt the 100% onus remains on the owner to fulfil the
same.
A professional type sole proprietorship may be owned by an individual of
any nationality for providing services that are lawfully permitted.
A sole proprietorship that is industrial or commercial can be owned only by
UAE Nationals or GCC Nationals.
2. General Partnership
A general partnership is formed by two or more UAE nationals who are
jointly and severally liable for the partnership's debts.
A general partnership can be formed between UAE Nationals and expatriates.
Only the actual names of the partners' are permissible to be included in a
partnership's name. A partnership interest may be transferred only with the
approval of all partners or in accordance with conditions stated in the
partnership agreement. The management of the partnership must be with
one or more managers who must be natural persons and who may or may
not be partners.
A partnership is dissolved on the death, insanity, bankruptcy or withdrawal
of one of its partners, unless the remaining partners decide mutually to
continue the partnership and their decision is registered in the commercial
register.
3. Limited Liability Company
An LLC can have between 2 and 50 shareholders, each of whom is liable
only to the extent of his or her share in the capital of the company.
LLCs are authorised to conduct any industrial or commercial business, but
not professional (to practice law, auditing, accountancy or any other type of
consulting service). – except banking, insurance or investment.
An LLC must be 51% owned by UAE Nationals, although the Memorandum
of Association can distribute profits in a different ratio. In the interests of an
open, honest and transparent economy, the LLC must appoint a UAEN R Doshi & Partners
accredited auditor. In case of the death of any partner, his or her shares are
transferred to the heirs mentioned in the will.
Shares of an LLC cannot be offered to the public. The company may not
resort to public subscription to establish or increase its capital, or to secure
loans, and it may not issue any negotiable stocks or shares.
Between one and five managers must be appointed for the business. The
managers may be selected from the partners or may be any other parties.
Managers must be appointed by a Memorandum of Association or by a
management contract, for a fixed term or an unlimited term. Managers can
also be appointed by the General Assembly of the partners.
Unless the Memorandum of Association states otherwise, the manager has
full powers of administration. Within the scope of his or her powers, the
manager's actions and commitments are binding on the business.
4. Foreign Company Branch or Representative Office (Outside of Free Zone)
5. Public Joint Stock Company
The law requires that companies engaging in banking, insurance, or
financial activities should be run as public shareholding companies. Foreign
banks, insurance and financial companies, have an option to establish a
presence in Dubai by opening a branch or representative office.
Shareholding companies are appropriate primarily for large projects or
operations, since the minimum capital required is AED 10 million for a public
company, AED 40 million for banks and AED 25 million for insurance and
investment companies, and AED 2 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.
A minimum of 25% of the shares of a Public Shareholding Company must be
offered to the general public.
A PJSC must have at least 10 founder members and its management should
be conferred in a board of directors consisting of a minimum of three to a
maximum of fifteen persons whose term of office may not exceed three
years. In addition at least 51% of the shares of the PJSC should be held by
UAE nationals. The founder members may only hold 45% of the share
capital, as 65% is required to be offered to the public.
6. Private Shareholding Company
A Private Joint-Stock Company can be created for any commercial or
industrial type of business. Professional activities are not allowed under
this legal form.
A Private Joint-Stock Company is subject to all rules and regulations that
apply to Public Joint Stock Companies, except for the rules and regulations
relating to public share subscription.
A Private Joint-Stock Company can be established between three or more
UAE Nationals or GCC Nationals. Nationals of other countries can establish
a private shareholding company with at least one UAE National. If one or
more of the partners is a National of a country outside the GCC, the UAE
National partners must own at least 51% of the business shares.
While the shares of a private shareholding company cannot be offered to
the public, the business can be converted to a public company two years or
more after its creation, if the following conditions are met:

The nominal value of the issued shares is fully paid up.

A period of not less than two financial years has expired.

During the two years preceding the application for conversion, the
company achieved net profits distributable to the shareholders, the
average value of which is not less than 10% of the capital.

A resolution of the extraordinary assembly for the conversion of the
company is adopted by a majority of shareholders representing at
least three quarters of the company's capital.
The company must have an appointed manager.
Free Zone and Offshore Companies are briefly explained later in this
booklet.
Company
Type
Sole
Proprietorship
General
Partnership
Limited
Liability
Company
Branch
Office
Public Joint
Stock
Company
Private
Shareholding
Company
Free Zones
More than 10
3 up to 50
(including
corporate
shareholders)
Minimum one.
Maximum
varies from
Free Zone to
Free Zone
100%
Maximum 49%.
Maximum 49%.
Parent
Company
Offshore
Companies
Ownership
Single
Individual
2 or more
individuals
3 to 50
Shareholders
Ownership for
Foreigner
0% for Trading
and up to
100% for
Service
0% for Trading
and up to
100% for
Service
Maximum 49%.
Minimum
Capital
No Minimum
Capital
No Minimum
Capital
AED 300,000
in Dubai
AED 150,000
in Other
Emirates
No Capital
Requirement
AED 10 million
AED 40 million
for banking
AED 25 million
for insurance
AED 2 million
Varies with
Free Zone
No Minimum
Capital
Requirement
Stipulated
Activity
Services
and Trading
Services
and Trading
Trading Service
or
Manufacturing
Services
and
Representative
offices
Trading,
Service ,
Manufacturing
Trading,
Service or
Manufacturing
Trading
Service or
Manufacturing
Any activity
permitted by
law except
Banking and
Insurance
Area of
Operations
In the Emirate
where
registered
In the Emirate
where
registered
In the Emirate
where
registered
In the Emirate
where
registered
In the Emirate
where
registered
In the Emirate
where
registered
Within the
Free Zone
Can transact
with other
than UAE
Companies
Liability
Unlimited
Unlimited
Limited
Unlimited
Limited
Limited
Depends on
the form of
organization
Limited
Audit
Not required
Not required
Required
Required to
be submitted
to Ministry
of Economy
Required
Required
Depends on
the form of
organization
Required but
not be
submitted to
the authorities
Taxes
No Corporate
or personal
tax in UAE
No Corporate
or personal
tax in UAE
No Corporate
or personal
tax in UAE
No Corporate
or personal
tax in UAE
Taxes for
Banking,
Insurance,
Oil & Gas
Taxes for
Banking,
Insurance,
Oil and Gas
No Taxes
applicable
due to
exemption
No Corporate
or personal
tax in UAE
UAE Visas
Available
depending
on Activity
and Office
Available
depending
on Activity
and Office
Available
depending
on Activity
and Office
Available
depending
on Activity
and Office
Available
depending
on Activity
and Office
Available
depending
on Activity
and Office
Repatriation of
Investment /
Profit
No Restriction
No Restriction
No Restriction
No Restriction
No Restriction
No Restriction
No Restriction
No Restriction
Office
Premises
Required
Rent depends
on location
and size of
premise
Required
Rent depends
on location
and size of
premise
Required
Rent depends
on location
and size of
premise
Required
Rent depends
on location
and size of
premise
Required
Required
Rent depends
on location
and size of
premise
Premises
Required
Not Required.
Office of the
registered
agent can be
used as
registered
office.
100%
Available
depending
on Activity
and Office
1 or more
Shareholders
100%
Not Available
unless Office
premises
rented
Additional Approvals
Selected businesses may require special approvals of the Ministries. The following
table enlists those activities and the respective approving authority.
Official Authority
Ministry of Education and Youth
Ministry of Higher Education and
Scientific Research
Ministry of Justice and Islamic Affairs
Activity
Private Schools, Nursery Schools, Cultural Institutions,
Sports Cities,
Private Universities, Universities Services
Organising Hajj and Umrah trips, Quran Centres and
Lawyers
Ministry of Awqaf and Islamic Affairs
Ministry of Agriculture
Organising Hajj and Umrah trips, Quran Centres
Plants Nurseries, Farms, Livestock and Birds Trade,
Fish and Aquarium Trade, Seeds and Fertilized Trade
Ministry of Labour and Social Affairs
Ministry of Industry
Ministry of Health
Nursery Schools, Bringing Workforce
All Industrial Licences
Hospitals, Private Clinics, Medical Laboratories,
Laboratories, Medical Centres, Medical Clinics,
Pharmacies, Factories & Medicine Stores,
Eyeglasses and lens, Medicine and Medical Herbs
Trade & import Companies, Massage Centres
Ministry of Economy
Ministry of Culture & Information
Auditing and Foreign Companies Branches
Prints, Video & Cassettes Stores, Bookstores,
Propaganda & Advertisements, Artistic & TV
Production, Cinemas, Organizing Concerts, Journals
& Magazines Distribution ( and all licenses related to
media), Export of Journals & Magazines , Computer
Programs Selling and Production, Theatre
Production, Photography, Videotaping, Press
Services Offices, Satellite Dishes and TV codes
Devices, Internet Cafes, Entertainment Contractors,
Internet Services, Exhibitions Organization, Copying
Centres, Codes Devices & Satellite Dishes Agents in
the States, Companies that broadcast its Satellite
Channels in the State, Hand writing & Free Hand
The Central Bank
Money & Banking, Banking Business, Representation
Offices, Financing Companies, Investment
Companies, Financial & Monitory Intermediation,
Money & Banking Consultation.
Official Authority
Securities Commission
Activity
Stock Trading Companies, Stock Exchange
Ministry of Environment & Water
Farms, Fodder Trade, Saplings roses and micro
fertilizers, Domestic, Vultures and Extinct Animals,
Veterinary Clinics, Imported & Exported Fish Trade
(New Only)
Ministry of Interior - Police Department
Gold Trading, Banks and Exchange Offices, Seals
& Keys Industry, Fixing weapons, Import & Selling
old guns, Explosives & Fireworks, Hotels, Night
Clubs, Medicine Factories, Furnished Apartments,
Private Security Companies, Electronic Games
Centres, Shooting Clubs, Jet ski, Diving Lessens,
Mobiles, Rent a Car
Ministry of Interior - Traffic & Licensing
Department
Ministry of Interior - Civil Defence
Driving Lessons Schools for Men & Women,
Renting Cars - Transportation.
Companies of Extinguishers equipments, tools and
materials, Factories, Bakeries Furniture, Carpentry
and Oil and Diesel Stations, Extinguishing
Consultation Services.
Ministry of Culture, Youth and Social
Development
Sports Training Centres, Sports Services
Companies, Billiards, Fitness Centres for both men
& women (new only).
Ministry of Finance and Industry
All industrial Installations that exceeds 300
thousand AED
Ministry of Labour
Social Affairs
Bringing Workforce and Nursery Schools
Nursery Schools, Marriage Offices, taking Care
and hab-itation of special needs people
Official Postal Authority
Documents transfer, letters post, Transfer of all
kinds of packages, express mail
Department of Civil Aviation
Travelling, Tourism, Internal Tourism, Air Cargo
Companies, Flight Training, Air Survey, Planes
Rental, Travel Agents, Planes Maintenance.
Chamber of Commerce & Industry
Organizing Exhibitions
FREE ZONES IN UAE
FREE ZONES IN UAE
Free Zones (FZ) are a class of special economic zone assigned by the trade
and commerce administration of UAE. The term is used to designate areas
in which companies get tax benefits in order to encourage economic
development. Free Zones are part of the country's territories but considered
to be outside the customs territory and subject to customs control other than
normal customs procedures. This is applicable to Jebel Ali Free Zone,
Dubai Airport Free Zone, DUCAMZ and unfenced Free Zones including
TECOM.
General Provisions

The importer must have obtained a valid importer code from the
Customs.

Goods must be in conformity with the activity of the licensed company.

Goods must arrive in the free zone within 72 hours from the date of
the customs declaration.

The licensee shall not open, alter or dispense of the goods prior to
their arrival in the free zone and customs endorsement.

Goods shall be inspected whilst entering the free zone or transferred to the stores.

The declarant shall pay a deposit of AED 500 against incomplete
documentations if he fails to submit the required documents.
Jebel Ali Free Zone (JAFZA)
JAFZA is one of the fastest growing freezones of the world and houses the Jebel Ali Sea Port.
The Jebel Ali Sea Port connects the world through its 150 shipping lines. The Dubai Logistics
Corridor integrates the free zone with the world's largest airport - Jebel Ali's Al Maktoum
International Airport. The free zone is also connected with neighbouring countries such as Saudi
Arabia, Qatar, Bahrain and Oman through highways.
Established in
Number of companies
1985
Over 6,400 companies including over 120
fortune 500 companies from across the world
Industry focus
Limited liability companies
Suitable for all types of industries
Yes
Minimum number of shareholders required
1
Minimum number of directors required
1
Corporate shareholders allowed
Yes
Corporate directors allowed
No
Public register of shareholders and directors
No
Access to UAE Double Taxation Treaties
Port at freezone
Allowed to import and export goods
Commercial offices
Yes
Jebel Ali Seaport
Yes
Available as commercial offices, food courts
and retail stores.
Industrial premises
Available as leased land or ready factory
buildings
Warehousing facility
Accommodation facility
Prominent companies at the free zone
Available as leased land or ready warehouses
Accommodation facility for labour
DHL, TNT, P&G, GE, JVC, L'Oreal, YSL, Dior,
Estee Lauder, Joutun
Location of Dir. & Shareholders Meeting
Anywhere
Residence or Employment Visa issued
Yes
100% Foreign ownership permitted
Yes
100% Repatriation of Capital and profits
Yes
Corporate, personal & withholding tax
Language
Standard currency of Capital
Nil
English
UAE Dirhams
Dubai Multi-Commodities Center (DMCC)
DMCC is a thriving commodities marketplace that facilitates trade in commodities such as gold,
diamonds, pearls, precious metals and stones, tea and other agro commodities, base metals and
petroleum commodities. It also houses the Dubai Gold and Commodities Exchange, Dubai Pearl
Exchange, Dubai Tea Trading Center, Dubai Diamond Exchange and Shariyah compliant asset
management funds. DMCC has close proximity to the Jebel Ali Port and Al Makhtoum
International Airport. JLT Free Zone is a part of DMCC.
Established in
Number of companies
Industry focus
2002
Over 9,000 companies
Suitable for companies dealing in commodities
and service industry
Yes
1
1
Yes
No
No
Port at freezone
Yes
No. Close proximity to Jebel Ali Free Zone and
Al Maktoum International Airport
Commercial offices
Yes
and retail stores.
Industrial premises
Limited
Limited
Yes
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai Internet City
Dubai Internet City (DIC) provides a knowledge economy ecosystem designed to facilitate the
business development of Internet and Communications Technology (ICT) companies. It is the
Middle East's biggest ICT infrastructure, built inside a free trade zone. The ICT cluster in Dubai
Internet City provides most elements of the value chain for an ICT business and comprises
companies from sectors like software development, business services, e-commerce, consultancy
and sales and marketing.
Established in
2000
Number of companies
1,500
Industry focus
Technology
Yes
1
1
Yes
No
No
Port at freezone
Yes
Commercial offices
Yes
and retail stores.
Industrial premises
No
No
Yes in close proximity
Microsoft, Oracle, HP, Google, IBM
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai Media City
Dubai Media City has become a regional hub for media organizations including news agencies,
publishing, online media, advertising, production, broadcast facilities, and event management
companies. Dubai Media City offers media and advertising companies in Dubai an ecosystem
where they can showcase their products and services.
Established in
Number of companies
Industry focus
2000
Over 1,300
Media and Advertising
Yes
1
1
Yes
No
No
Port at freezone
Yes
Commercial offices
Yes
and retail stores.
Industrial premises
No
No
CNN, Bertelsmann, CNBC, Forbes, Reuters
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai Knowledge Village
Dubai Knowledge Village is dedicated to Human Resource Management and learning
excellence. It aims to develop the region’s talent pool and establish the UAE as a knowledgebased economy. It is a unique hub that offers the best selection of Human Resource
Management, Consultation, Training and Personal Development programmes.
Established in
Number of companies
Industry focus
2003
Over 500
Human Resource Development and Training
Yes
1
1
Yes
No
No
Port at freezone
Yes
Commercial offices
Yes
and retail stores.
Industrial premises
No
No
Institute of Chartered Accountants of India,
Institute of Management Accountants
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai International Academic City
Dubai International Academic City (DIAC) is the world’s largest Free Zone dedicated to Higher
Education. It aims to develop the region’s talent pool and establish the UAE as a knowledgebased economy. DIAC houses several multi-tiered International Branch Campuses on its 18
million sq. ft. campus with state-of-the-art modern facilities. It is a host to a community of over
20,000 students from 125 nationalities and over 400 Higher Education programmes.
Established in
Number of companies
Industry focus
2007
Over 100
Higher Eduction
Yes
1
1
Yes
No
No
Port at freezone
Commercial offices
Yes
No
Yes
and retail stores.
Industrial premises
No
No
Accommodation facility for students
Dubai Aviation College, French Fashion
University, Indian Institute of Management
Indore, S P Jain Center of Management,
Michigan State University
Anywhere
Yes
Yes
Yes
Language
Nil
English
Dubai International Financial Center
DIFC is an offshore financial center with an independent regulation and common law framework.
Dubai Financial Services Authority grants licenses and regulates the activities of financial
institutions operating out of DIFC. DIFC Courts is the entity responsible for the independent
administration and enforcement of justice in DIFC. The Courts have exclusive jurisdiction over all
civil and commercial disputes arising within DIFC and or relating to bodies and companies
registered in DIFC.
Established in
Number of companies
Industry focus
2004
Over 1,000
Financial Services
Yes
1
2
Yes
No
No
Port at freezone
Commercial offices
Yes
No
Yes
and retail stores.
Industrial premises
No
No

21 of the world's top 25 banks

11 of the world's top 20 largest money managers

6 of the world's 10 largest insurance companies
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai Airport Free Zone
DAFZA is located in the heart of Dubai and next to the Dubai International Airport. DAFZA has
an infrastructure of established offices, thermally insulated and purpose-built units, conference
rooms, a lecture hall, a business lounge and telecommunication services. Companies in DAFZA
cover a vast number of key industry sectors including electronic and electrical, IT and
telecommunications, pharmaceutical and cosmetics, engineering and building materials,
aerospace and aviation, logistics and freight, food and beverage, jewelry and precious stones as
well as luxury items.
Established in
Number of companies
Industry focus
1996
Over 1,600
Suitable for all types of companies more
specifically Aviation
Yes
1
1
Yes
No
No
Port at freezone
Commercial offices
Yes
Dubai International Airport
Yes
and retail stores.
Industrial premises
Available as light industrial units
Available as light industrial units
Location of Dir. & Shareholders meeting
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai World Central
The integrated master plan of Dubai World Central is comprised of eight districts: logistics,
aviation, Al Maktoum International Airport, humanitarian, residential, commercial, leisure,
exhibition and commercial. The centerpiece of the master plan is the Al Maktoum International
Airport, which has the first of five planned runways completed and in operation. The logistics,
humanitarian and aviation districts enjoy the added benefits of airside access while the exhibition
district offers efficiency and cost savings due to its close proximity to the airport. Residential,
commercial and leisure districts provide accommodation, office and entertainment options for
people working at DWC and businesses that require frequent travel. It would be the venue for
Dubai EXPO 2020.
Established in
Number of companies
Industry focus
2006
Over 1,000
Aviation and Logistics
Yes
1
1
Yes
No
No
Port at freezone
Yes
Al Makhtoum International Airport. Jebel Ali sea
port in the vicinity.
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Yes
Aramex, Kuehne + Nagel, Panalpina, INL, RSA
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai Gold and Diamond Park
The Dubai Gold and Diamond Park is a specialty mall has the unrivalled selection of 90 retail,
118 manufacturing units and commercial space for over 350 offices. The licensing is managed by
JAFZA whil the facilities are managed by Emaar.
Established in
Number of companies
Industry focus
2001
Over 100
Jewellery and precious metals and stones
Yes
1
1
Yes
No
No
Port at freezone
Yes
Al Makhtoum International Airport. Jebel Ali sea
port in the vicinity.
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai Healthcare City
DHCC provides a wide range of services in healthcare, medical education and research,
pharmaceuticals, medical equipment, wellness and allied support. Situated in DHCC are two
hospitals, over 120 outpatient medical centers and diagnostic laboratories with over 4,000
licensed professionals located within 4.1 million square feet in the heart of Dubai.
Established in
Number of companies
Industry focus
2002
Over 120
Healthcare
Yes
1
1
Yes
No
No
Yes
Port at freezone
No
No
Commercial offices
Yes
Industrial premises
No
No
Available in near vicinity
Johnson & Johnson, Merck Serono, Sanofi
Aventis, Novo Nordisk
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Dubai Silicon Oasis
Dubai Silicon Oasis is a technology park that focuses to facilitate and promote modern
technology based industries. It provides both a living and working integrated community.
Located at the Dubai Silicon Oasis is the Rochester Institute of Technology that offers
technology based bachelors and masters degree programs that support business and industry
needs.
Established in
Number of companies
Industry focus
2005
Over 320
Technology
Yes
1
1
Yes
No
No
Port at freezone
Yes
No
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Western Digital, AMD Technologies, Philips,
Schneider Electric, Porsche
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Twofour54
Twofour54 is a tax-free media and entertainment free zone based in Abu Dhabi, United Arab
Emirates that facilitates the development of Arabic media and entertainment content in the
region. It provides studio production, postproduction facilities, and vocational media training.
Established in
Number of companies
Industry focus
2008
Over 200
Media
Yes
1
2
Yes
No
No
Port at freezone
Yes
No
Yes
Commercial offices
Yes
Industrial premises
No
No
CNN, Cartoon Network
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Khalifa Industrial Zone Abu Dhabi (KIZAD)
KIZAD is located at Tameelah, midway between the cities of Abu Dhabi and Dubai. Khalifa Port The first semi-automated deep water port is also located next to KIZAD. KIZAD has created
vertically integrated clusters in the industries of aluminum, steel, engineered metal products,
petrochemicals and chemicals, pharmaceuticals and healthcare equipment, food, paper, print
and packaging, and trade and logistics.
Established in
Number of companies
Industry focus
2010
Over 50
Yes
1
1
Yes
No
No
Port at freezone
Yes
Khalifa Seaport
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Yes
Emirates Aluminum, Bauer, KSB, Al Braik
Investments, Palletco
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Sharjah International Airport Free Zone
SAIF Zone prides itself to be a business friendly free zone by providing prompt services at low
costs without red tape. Located at the door step of Sharjah International Airport, the free zone
provides business with superior infrastructure along and connectivity.
Established in
Number of companies
Industry focus
1995
Over 4,100 Companies
Yes
1
1
Yes
No
No
Port at freezone
Yes
Sharjah International Airport
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Yes
Zenith Infotech, WS Atkins & Partners, WIPRO,
Wartsila Hamworthy
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Hamriyah Free Zone
Hamriyah Free Zone focuses to provide competitive incentives and unique opportunities to
establish a business in UAE. It is located between the deep water Hamriyah Seaport and a major
national highway. The free zone comprises of 7 zones namely Oil and gas zone, Construction
world, Petrochemical zone, Maritime city, Timber land, Perfume world and Steel city.
Established in
Number of companies
Industry focus
1995
Yes
1
1
Yes
No
No
Port at freezone
Yes
Hamriyah Sea Port
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Yes
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
Ras Al Khaimah Free Zone
The Ras Al Khaimah Free Trade Zone positions itself to be a low cost free trade zone. The free
zone comprises of a Business Park for office clients, an Industrial Park for heavy manufacturing,
a Technology Park for trading and light manufacturing, and an Academic Zone for educational
institutions.
Established in
Number of companies
Industry focus
2000
Yes
1
1
Yes
No
No
Port at freezone
Yes
No
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Yes
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
RAKIA Free Zone
Ras Al Khaimah Investment Authority Free Zone places easy of doing business as a priority
while imparting the benefits of low costs to its clients. It has developed industrial parks at Al
Hamra and Al Ghail areas of Ras Al Khaimah while providing commerical office spaces of varied
sizes at Al Hamra, Ras Al Khaimah.
Established in
Number of companies
Industry focus
2005
Yes
1
1
Yes
No
No
Port at freezone
Yes
No
Yes
Commercial offices
Yes
Industrial premises
Yes
Yes
Yes
POSCO Steel, Ashok Leyland, Dabur India,
ARC International, Becker Paints
Anywhere
Yes
Yes
Yes
Language
Nil
English
UAE Dirhams
OFFSHORE COMPANIES IN UAE
JAFZA Offshore
Established in 2003
Industry focus International Trade and Investments
Limited liability companies Yes
Minimum number of shareholders required 1
Minimum number of directors required 2
Corporate shareholders allowed Yes
Corporate directors allowed No
Public register of shareholders and directors No
Access to UAE Double Taxation Treaties No
Can carryout international trade Yes
Trade with UAE Company No
Can lease an office No
Can obtain visas for investor or employees No
Industrial premises No
Warehousing facility No
Accommodation facility No
Can use to invest in properties in Dubai Yes
Location of directors and shareholders Anywhere
meeting
Residence or Employment Visa issued No
100% Foreign ownership permitted Yes
100% Repatriation of Capital and profits Yes
permitted
Corporate, personal & withholding tax Nil
Language English
Standard currency of Capital UAE Dirhams
Other permitted currencies Any
RAK FTZ Offshore
Established in 2000
Can use to invest in properties in Dubai No
meeting
permitted
Language English
RAKIA Offshore
Established in 2005
Can use to invest in properties in Dubai No
meeting
permitted
Language English
INDUSTRIES
FINANCE
Banking Sector
Aug 2014
UAE Bank Assets
Amount
in USD
618.367
Combined Deposits
386.93
Loan and Advances
366.91
Personal Loans
82.01
Provisioning of Non-Performing Loans
26.82
Shareholders equity, covering capital and reserves
76.95
Combined Profits
8.59
Source: UAE Central Bank report
The UAE's banking sector is sufficiently resourced to deal with global and
domestic stress scenarios and has handled recent global financial turmoil
comparatively well. Banks' significant capital adequacy levels, together with
robust provisioning policies and reasonable profitability, boosted its capability to cope with major challenges. Looking to the future the UAE banking
system would continue to show a high level of resilience due to its conventional, traditional banking model, which has a strong focus on the UAE;
sound financial indicators; low dependency on overseas funding; a capped
real estate exposure; and a high loss absorbent capability as validated by
stress testing.
In order to mitigate the concentration of risk due to the high share of
Government-related entities (GREs) in the economy, the Central Bank
requires banks to hold capital in excess of the Basel Committee recommendation. At the end of 2012, the capital adequacy ratio of UAE banks (Tier 1 +
Tier 2) was 21 per cent, of which Tier 1 was 17.6 per cent. This buffer introduces a significant level of comfort to UAE-based banks, especially national
banks. As issues with major corporate entities are being resolved through
either the rescheduling or restructuring of part of their loans, having a
sizeable capital buffer in place, the Central Bank believes, will help to reduce
the impact of any adverse outcome.
UAE banking system has been able to maintain sound levels of profit even
during periods of stress. Banks earned a total profit of Dh8.59 billion during
2013.
Stock Markets
Abu Dhabi Securities Exchange (www.adx.ae)
Established in 2000, ADX is a focal point for UAE-listed companies, investment funds and debt instruments, providing investors with an opportunity to
invest capital for the benefit of the national economy. ADX has opened
impressive new offices in Sowwah Square on Al Maryah Island, Abu Dhabi
and also has branches in Fujairah, Ra’s al-Khaimah, Sharjah and Zayed City.
Dubai Financial Market (www.dfm.ae)
Also established in 2000, DFM is operating as a secondary market for
trading of securities issued by public joint-stock companies, bonds issued by
the Federal Government or any of the Local Governments and public institutions in the country, units of investment funds and any other financial
instruments, local or foreign, which are accepted by the Market.
NASDAQ Dubai (www.nasdaqdubai.com)
Opened in 2005, Nasdaq Dubai is an international stock exchange operating
between Western Europe and East Asia offering trading in equities, derivatives, Dubai gold securities, Islamic securities, debt, funds, REITs, ETFs and
structured products.
FTSE NASDAQ Dubai (www.nasdaqdubai.com/products/ftse.htm)
The FTSE NASDAQ Dubai UAE 20 index comprises 20 stocks admitted to
trading on NASDAQ Dubai, the Dubai Financial Market (DFM) and the Abu
Dhabi Securities Exchange (ADX). Futures based on the index are admitted
for trading on NASDAQ Dubai and are designed to provide a hedging and
investment mechanism for GCC and international investors.
Dubai Mercantile Exchange (www.dubaimerc.com)
The DME is the premier international energy futures and commodities
exchange in the Middle East. The Exchange has developed and trades the
DME Oman Crude Oil Futures Contract. The DME is a fully electronic
exchange, and its contracts are listed on CME Globex.
Dubai Gold and Commodities Exchange (www.dgcx.ae)
DGCX, an initiative of the Dubai Multi Commodities Centre (DMCC),
Financial Technologies (India) Limited and the Multi Commodity Exchange of
India Limited (MCX). Commenced trading in 2005 as the region’s first
commodity derivatives exchange and has become the leading derivatives
exchange in the Middle East.
OIL AND GAS
Under the UAE's constitution, each Emirate controls its own oil production
and resource development. The lion's share of UAE production comes from
the emirate of Abu Dhabi, which accounts for around 95% of the country's oil
and gas reserves. Minor reserves are also held by Dubai, Sharjah and Ras
al-Khaimah, in that order. More than half of Abu Dhabi's oil production is
generated by state-owned ADNOC. The second main producer is Abu Dhabi
Marine Operating Company (ADMA-OPCO). Dubai Petroleum Company
(DPC) is the main upstream operator in Dubai. The state-owned Dubai
Natural Gas Company (DUGAS) is responsible for processing natural gas
produced in Dubai's offshore oil fields, as well as the gas piped from
Sharjah.
UAE's Oil and Gas sector is DEMONSTRATING ROBUST GROWTH

About 56 per cent of the world's oil reserves and 36 per cent of the
world's natural gas reserves are in the Middle East.

2011 saw UAE as the world's eighth largest oil producer, churning out an
average production volume of 2.813 million barrels per day.

UAE comes fourth in the top global exporter league, exporting around 81
per cent of its total production. The UAE exports around 2.32 million
barrels of crude oil each day to predominantly Asian markets.

The UAE holds the world's sixth largest proven oil reserves of approximately 98 billion barrels and seventh largest gas reserves of 213 trillion
cubic feet.

Almost one-third of the top 20 largest oil and gas projects in the Middle
East under execution are now taking place in the UAE's booming
upstream sphere.

The Abu Dhabi International Petroleum Investment Company in July
2012 inaugurated a pipeline via Fujairah to a refinery in Pakistan that
completely bypasses the Strait of Hormuz. The 1.8 million-barrel-per-day
crude oil pipeline runs from Habshan in Abu Dhabi to Fujairah and
ensures the security of the UAE's oil production and exports to the world.

The energy investment needs in the Middle East and North Africa region
over the period 2012 through to 2016 is expected to reach US$ 525
billion, with most of the energy investments being in the Arabian Gulf,
according to The Arab Petroleum Investment Corporation.

Around 600,000 barrels per day will be needed over the next decade to
meet the UAE's infrastructure, business and investment needs reiterating UAE's continued reliance on technology, equipment and expertise in
the oil & gas sector, to service its own consumption.

UAE plans to build a liquefied natural gas bunker station in Fujairah to
meet 15% of its increasing demand on gas because of industrial expansion.

The UAE's pricing policy, based on a genuine desire to help stabilize the
oil market, is formulated through co-operation with fellow Organization of
Petroleum Exporting Countries (OPEC) members, the GCC and Arab
countries. Production is limited by quotas agreed within the framework of
OPEC.
Oil and Gas
Percentage
Value in Numbers
25% of GDP 2014
and growth rate of
4.8%
In 2012, hydrocarbon export revenues were $118
billion according to the International Monetary
Fund (IMF), up from approximately $75 billion in
2010. Overall, the hydrocarbon economy
accounts for approximately 80% of government
revenues and more than half of the country's
goods exports. UAE holds the seventh-largest
proved reserves of oil in the world at 97.8 billion
barrels, with the majority of reserves located in
Abu Dhabi (approximately 94% of the UAE's
total). The other six Emirates combined account
for just 6% of the UAE's crude oil reserves, led
by Dubai with approximately 4 billion barrels.
The UAE holds approximately 6% of the world's
proved oil reserves. The Economic Value added
for the oil and gas industry for 2012 $154 billion
Employment
Approximately 2%
of the total
population of UAE
There is approximately employments of almost
200,000 skilled and un-skilled work force. Total
compensation to employees in the Oil and Gas
Sector is $ 3.1 billion.
Investment
13% of total
Investments in UAE
Total investments into oil and gas industry for the
year 2012 was $9.25 billion
Economic
Value Addition
Source: World Economic Forum- Competitiveness Index 2013
TOURISM
The UAE has identified tourism as one of the non-traditional products for
export with high value that is aligned well with the country's diversification
strategy away from the hydrocarbon sector. The main challenge is to
achieve sustained growth, which will entail developing new approaches to
the tourism market.
The biggest transformation that the UAE and more specifically Dubai have
witnessed with increased tourism activity are increased consumer spending
and increased investment in real estate and infrastructure. This however is
needed to be carried out with great efficiency to ensure lucrative returns
while maintaining competitiveness.
The UAE is ranked the 28th among 139 countries and 1st in the Middle East
in the World Economic Forum's “Travel & Tourism Competitiveness Report
2013”. Dubai plays a lead role, holding a 66 per cent share of the UAE's
tourism economy, with Abu Dhabi having 16 per cent and Sharjah 10 per
cent.
Data from the Dubai Statistics Office show that in 2012, the restaurants and
hotels sector was the highest-growing sector in the emirate's economy,
registering a 16.9 per cent annual growth rate. It also witnessed an increasing percentage share reaching about 4.5 per cent in 2012.
Tourism Sector
Economic
Value Addition
Employment
Investment
Percentage
Value in Numbers
14.3 % of GDP in
2012
UAE, travel and tourism Sector touched about
AED 193.6 billion of total value added. The UAE
travel and tourism sector value-added
percentage share is expected to reach about
16.4 per cent of total GDP and to register an
average annual growth rate of 5 per cent, to
reach Dh325.4 billion by 2023.
11.3% of total
employments in
2012
In 2013, the estimated total contribution of UAE
travel and tourism to employment was 393,500
jobs Over the next 10 years, the sector is
expected to create 245,000 jobs directly by
2023, registering average annual growth rate of
about 4.1 per cent. This includes employment by
hotels, travel agents, airlines and other
passenger transportation services; it also
includes the activities of the restaurant and
leisure industries directly supported by tourists.
Attracted capital investment of about Dh82.8
billion in 2012. This value is expected to rise by
11.7 per cent in 2013 and to grow annually on
average by 4.5 per cent over the next 10 years to
reach Dh143.4 billion in 2023 i.e. 23.2 % of total
investment. by 2023 international tourist arrivals
are forecast to total 25.8 million generating
expenditure of Dh207.1 billion, an increase of
5% per year
Source: World Economic Forum's “Travel & Tourism Competitiveness Report 2013”
MANUFACTURING
The UAE is expected to pursue its diversification program through largescale investments in the manufacturing sector.
The potential manufacturing sectors include shipbuilding and vessels, basic
pharmaceuticals products, refined petrochemical products, motor vehicles
parts and accessories and electric power generation, transmission, and
distribution products.
UAE manufacturing sector is expected to continue focusing on its long-term
trade openness policies to ensure sustainability, especially on policies that
promote manufacturing industry for exports to developing markets, while
also urging the country to focus on projects that depend on highly advanced
technologies which provide high value added to the economy to increase
the competitiveness power of this sector in international markets.
At the regional level and in joint efforts with other GCC countries, the
manufacturing sector is expected to either undergo mergers and acquisitions or jointly launch large and efficient projects to limit competition among
the manufacturers as this creates difficulties in exporting manufacturing
product overseas. A recent example is the merger of Emirates Aluminium
company (EMAL) with Dubai Aluminium Company (DUBAL) to form
Emirates Global Aluminium (EGA), the 5th largest global aluminium producer by production.
Forty per cent of the manufacturing firms were located in Dubai, 29 per cent
in Sharjah, 15 per cent in Ajman and 7per cent in Abu Dhabi. However,
about 58.8 per cent manufacturing sector investments were in Abu Dhabi,
22 per cent in Dubai, 7 per cent in Fujairah and rest in other emirates.
UAE's main industries include food and beverages, tobacco, chemicals,
mineral products, metal products, equipment, paper products, textiles,
clothing and wood products. The largest individual manufactured products
include aluminum, cabling, petrochemicals, steel, and marine industry
products.
Manufacturing
Percentage
Value in Numbers
Economic
Value Addition
14 % of non-oil
GDP
Dubai has targeted services and light industries,
while Abu Dhabi believes its competitive
advantage lies in heavier manufacturing
industries, due to the availability of cheap
energy.
UAE manufactured exports increased to about
Dh59.2 billion in 2012 In 2012, about 77per cent
of the UAE manufactured exports went to Asia,
10.4 per cent to Africa, 6.4 per cent to Europe,
a n d th e re st to U S a n d o th e r tra n si ti o n
economies.
Employment
5% annual growth
rate in employment
There were there were 5,201 industrial
establishments with total employment of almost
399,794 workers.
Investment
2.7% of the total
FDI in UAE. Growth
rate of 6.7%
Investment in the UAE manufacturing sector has
been spurred by the development of free zones,
with the largest and most high-profile of the free
zones being Dubai’s Jebel Ali Free Zone. 75% of
those are involved in trading, warehousing, and
distribution, while 20% are involved in
manufacturing. The remaining provide services.
FDI Investment amounts to AED 4.48 billion
The bulk of industrial investment in Jafza is
concentrated on light engineering and final-stage
assembly in sectors such as electronics
Source: Ministry of Economy, Dubai Statistic Centre.
RETAIL
A booming construction and infrastructure sector, growing young population
and strong economic growth, coupled with mounting consumer confidence,
and increased spending helped the retail sector to claim its highest position
ever.
With several landmark international and regional events, including the Expo
2020 under way, the UAE has several mega development projects in the
pipeline. The country is also geared up for an exponential growth in tourism
and a sustained surge in per capita consumer spending, key factors
expected to give a big boost to the retail sector
UAE is the most mature retail market in the GCC, with a retail trade size of
US$ 38.1 billion (2010); significantly larger than KSA at US$ 23.7 billion,
Qatar at US$ 8.9 billion, and Oman at US$ 5 billion.
The UAE has retained its position as the 2nd most important international
retail destination globally for 2014, and also ranks 4th most suitable market
for expansion among international retailers,
Retail Industry
Percentage
Value in Numbers
Economic
Value Addition
12% of non-oil
GDP
The UAE’s retail sales are forecasted to grow at
an estimated Dh151.36bn by 2015. GDP per
capita is expected to rise 18.7 per cent by the
end of the forecast period, to $74,484. The
average annual retail GDP growth is expected to
be 3.6 per cent between 2011 and 2015.
Employment
2.61% CAGR
Dubai’s winning the bid to host the EXPO 2020 is
expected to be a major catalyst for development
across all industry segments. It is estimated that
the win will create more than 76,000 job
opportunities in the UAE between 2013 and 2021
Investment
7% of the total FDI
in non-oil industries
of UAE.
The UAE expects to attract foreign direct
investments worth $14.4 billion in 2014, up
almost 20 per cent from its current FDI levels.
In 2013, the UAE was able to attract three times
more FDIs than expected and is the third most
attractive country in West Asia for FDIs
Source: 2014 Global Retail Development index by A.T. Kearney , CBRE consulting , BMI, Oxford Economics, DIAC
Retail sub-sectors to show strong growth over the forecast period include
over-the-counter (OTC) pharmaceuticals, with sales expected to increase
by nearly 40 per cent from a forecast $300mn in 2011 to $420mn by 2015.
Automotive sales are forecast to rise by 49 per cent, from an expected
403,296 units in 2011 to 600,672 units by 2015, largely as a result of growth
in the luxury car market. Sales of consumer electronics are expected to
increase from a forecast $3.15bn in 2011 to $3.97bn by 2015 – a rise of 26
per cent. The UAE's consumer electronics market is one of the largest in the
Gulf, accounting for close to 40 per cent of regional spending and serving a
potential market of almost 2bn people across Asia and the Middle East.
Retail Apparel Index found that the UAE had the highest fashion clothing
sales per capita per annum in the developing world, at $785. The report
attributed its success to 'high disposable income and immense fashion
consciousness'. Dubai has become a 'hotbed ' for upscale retailers with
global fashion brands developing their retail network across the UAE.
The food sales in the UAE, forecast to be worth $7.73bn in 2011, are
expected to increase by 36.1 per cent to $10.52bn by 2015. The UAE's
mass grocery retail (MGR) sector is one of the Gulf region's largest by
value, with sales forecast at $5.33bn in 2011 and accounting for 69.2 per
cent of the total food and drink market. The value of the UAE's MGR sector
is forecast to rise to $7.55bn by 2015, when it should account for 73.8 per
cent of the overall food and drink market.
Disclaimer
We have made every effort to ensure that the information in this book was
correct at the time of publication. We do not assume and hereby disclaim
any liability to any party for any loss, damage, or disruption caused by
errors or omissions, whether such errors or omissions result from negligence, accident, or any other cause.
Please note that (a) this book is not intended as a substitute for the professional advice, (b) regulations in the UAE can be amended with no prior
public proclamation, and (c) the intricacies of procedure may vary in practice, as procedure is a realm subject to administrative discretion; therefore,
sole reliance on the report is not advisable when making important decisions. We would advise that interested clients should, through your good
offices, contact us before choosing any particular course of action.
N R DOSHI & PARTNERS
608, Mankhool Building,
Khalid Bin Walid Street, Bur Dubai,
P.O. Box: 13742 Dubai - United Arab Emirates
T : +971 4 352 8001
|
F : +971 4 352 8002
E : [email protected]
|
|
M : +971 50 3989560
W : www.nrdoshi.ae
Abu Dhabi | Dubai | Jebel Ali Free Trade Zone | Sharjah
Hamriyah Free Zone | SAIF Zone | RAKIA | Mumbai

UAE : A Country Designed for Business

Transcription

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