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Free trade zone is an area designed to promote the international business in UAE by providing 100% foreign enterprise ownership. Free zones are designed to offer a bunch of attractive incentives such as no requirement for a UAE national as a local partner/shareholder, tax exemptions on duties and taxes and much more.

With the introduction of Vat in UAE, most of the free zones are referred to as designated zone offering Vat exemptions to the businesses located in these zones. Take a look at the list of designated zones in UAE

If you are non-UAE national looking to start a business in UAE, free zones are the best place. While this looks obvious, it isn’t an easy one. Each emirate in UAE has a designated area as a free zone and put together, there are more than 35 free zones spread across the UAE. Each of these free zones is regulated by different authorities and has varying guidelines that need to be adhered by the business.

The differing operational guidelines imply that all free zones are not suitable for all type of business in UAE. If you are starting a business in UAE, you need to look for a zone that best supports the nature of business you would like to start.

With this in focus, we are sharing you the factors that will help you choose the best free zone for your business in UAE

Type of business activity

Each free zone in UAE has different guidelines related to business activities that can be performed within the zone. Dubai Multi Commodities Centre (DMCC), a free zone in Dubai, you can choose from over 600 business activities ranging from over 20 sectors such as energy, commodities, gold and diamonds, technology, constructions, FMCG etc. In Dubai International Financial Centre (DIFC), you can conduct financial and non-financial businesses. While the Dubai Multi Commodities Centre (DMCC) allows only single-family offices

You need to carefully access the nature of your business activities and accordingly choose a free zone that permits you to conduct required business activities.

License requirements

This factor is directly connected with the nature of business activities. Depending on the primary activity of your business, you need to apply for a suitable license. Commercial license, service license, production license, general trading license etc. are some of the common license types.

Depending on the number of business activities, you may have to apply for more than one license and each license comes at a cost.

It is important to note that the number of activities your business will be allowed to perform under the single license differs from zone to zone. Dubai Multi Commodities Centre (DMCC) Free Zone allows to perform six business activities under the same type of license and others may require you to have a separate license for each activity.

Capital requirement

To register a company in UAE, you need to deposit the share capital. The minimum capital requirements for each zone differs. Each zone has a defined threshold for minimum capital that a business needs to deposit. Before registering, you need to know the minimum capital requirements for the zones that you have shortlisted.

Some zone like twofour54 in Abu Dhabi does not have a minimum capital requirement. In Dubai Airport Free Zone, you can form an FZ Co. with a minimum share capital of AED 1000. Each share should be in the denomination of AED 1000. Likewise, other zones too have their guidelines for the minimum capital requirement.

Office space

You can either buy or lease office spaces in free zones. Office requirements depend on the number of employees and type of business activity that your company intends to do.

In DMCC, you can choose from a flexi desk of 20-30 sq. m., 200-265 sq. m., or offices running through multiple floors totalling up to 2,000 sq. m. each.

In Dubai Airport Free Zone, you can choose between different office packages designed by the authority. Hamriyah free zone authority provides over 100 executive offices suites ranging in size from 15 m2 to 42 m2 with conferencing and internet facilities.

Based on number employee and business activities, choose a free zone that best fits you.

UAE residence visas

UAE residence visas are issued by the designated authority to foreign national who wants to work, start a business etc. The number of a residence visas a business can get depends upon the office facility type. Each office facility type comes with a limited number of visas that can be obtained. This again differs from one zone to another.

Type of legal entity

In a free zone, you can set up your business as ‘Free Zone Limited Liability Company (FZ LLC)’ also known as Free Zone Company (FZ Co.) or Free Zone Establishment (FZE).  The type of legal entity you choose will have limitations on the number of shareholders that a company can have. This also depends upon whether a shareholder is a natural person or a legal person.

Each free zone authority has its own guidelines on the type of legal entity that they can register. For example, the Dubai Multi Commodities Centre (DMCC) allows forming a limited liability company, which could be a newly formed entity with single or multiple shareholders or a wholly-owned subsidiary of local or foreign company.

Now that you know the key factors to choose the best free zone for your business, next you need to know the VAT treatment on Designated Zone in UAE. In addition to obtaining the license and other legal requirements, you should apply for Vat registration. Once you have registered under Vat, you need to issue a VAT invoice for taxable supplies and periodically file Vat return.

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Entities can recover input taxes if they are not in the blocked category

The Federal Tax Authority (FTA), has confirmed that higher educational institutions making only zero-rated and standard-rated supplies may recover input tax in full, except where recovery is specifically blocked. Blocked input tax includes value-added tax (VAT) incurred on certain entertainment services, and motor vehicles that have been purchased, leased, or rented and made available for personal use, the FTA said yesterday.

The Authority noted that higher education institutions providing exempt supplies are eligible to recover only a portion of the input tax incurred.

Supply of material

The FTA’s Basic Tax Information Bulletin focuses on the tax treatment for the higher education sector in respect of universities and higher education institutions recognized by the competent federal or local government entity regulating the higher education sector where the course is delivered.

Moreover, these higher education institutions may obtain zero-rate educational ser-vices supplied in accordance with a curriculum recognized 10 by the government, provided the institution is either owned by the federal or local government or receives more than 50 per cent of its annual funding directly from the federal or local government (qualifying institution).

 The bulletin said the supply of printed and digital reading material related to an ap-proved curriculum shall be subject to the zero-rate if the supplier is a qualifying institution. The bulletin also noted that the transportation of students from home to the location of the higher education institution, and vice versa, is exempt from tax.

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News courtesy : Gulf News

His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, on Wednesday launched launched an initiative for retirees from around the world to apply for a retirement visa in Dubai.

Applications can be submitted under the “Retirement in Dubai” program, which is the first of its kind in the region and the result of cooperation between Dubai Tourism and the General Administration of Residency and Foreigners Affairs.

Any resident or retiree outside of UAE and over the age of 55 can apply for the retirement visa via the website http://www.retireindubai.com.

There are terms and conditions for obtaining a retirement visa that is renewable every five years.

The conditions state that the retiree must have a monthly income of Dh20,000, which he earns from investments or pension, or has a balance of one million dirhams, or has real estate in Dubai of two million dirhams.

The UAE has made it mandatory for Hawala service providers in the country to register, as the country strengthens its anti-money laundering and counter terrorist financing (AML/CFT) framework, the Central Bank said in a statement on Monday.

The announcement was made following the sixth meeting of the National Committee for Combating Money Laundering and the Financing of Terrorism and Illegal Organizations (NAMLCFTC) in Abu Dhabi on Monday.

Hawala, or hundi, is an unofficial and informal channel to transfer money mainly used among South Asians whereby they give money to agents who then instruct their associates in the country to deliver it to the customer’s house. With UAE being a one of the major markets for remittances, regulating this informal industry will help monitor money-laundering and counter terror funding. 

Chaired by Abdulhamid M. Saeed Alahmadi, governor of the UAE Central Bank and chairman of the committee, the meeting also discussed technology assistance and capacity building both in terms of human and financial resources to further strengthen the country’s ability to implement targeted financial sanctions relating to the prevention and suppression of terrorist financing.

It also discussed proactive cooperation with countries that share commitment in implementing the strategy of combating money laundering and the financing of illegal organizations. In order to create an awareness about financial crimes that threaten the security and stability of the country, a new website has been developed to assist strategic partners and stakeholders in complying with international-standard reporting measures.

In addition, the committee also discussed the recent achievements of the UAE Financial Intelligence Unit (FIU), an independent unit that investigates suspicious transactions that potentially involve money laundering, terrorism financing and similar criminal activities, underpinned by proactive collaboration with relevant national and international authorities and financial services institutions.

The FIU will launch a new brand identity and a dedicated website, reflecting its commitment to further promote anti-money laundering and counter finance terrorism and enhance transparency with international counterparts.

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News Courtesy : https://www.khaleejtimes.com/business/uae-makes-it-mandatory-for-hawala-service-providers-to-register-

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai, Vice President and Prime Minister of the UAE on Wednesday issued Law No. (9) of 2020 regulating family-owned businesses in Dubai.

By providing a clear legal framework for family ownership in the emirate, the new Law seeks to protect families’ wealth, enhance the contribution of family businesses to economic and social development and foster the growth of family businesses.

The Law is optionally applicable to existing and new family ownerships, including corporate equity securities and proprietorship. Family ownership in public joint stock companies and movable and immovable property are excluded from this law.

For the family ownership contract to become legally binding, all parties of the contract must be members of the same family and have a single common interest. Furthermore, the contract must clearly define the share of each member, and parties of the contract must own all the legal rights of the monies and assets that are under the purview of the contract. The family ownership contract must also be duly attested by the notary public according to the rules and regulations stipulated in Law No. (4) of 2013 concerning Notaries Public in the Emirate of Dubai.

According to the new Law, the validity of a family ownership contract can extend up to 15 years. It can be renewed for a similar term following the agreement of all concerned parties. The Law also regulates the articles of the family ownership contract, the business’s structure and management, the formation of the board, the authorities and responsibilities delegated to the board and management as well as the management’s powers and limitations.

The Law also defines the responsibilities and authorities of government entities with regard to facilitating the formation of family-owned businesses.

This Law annuls any other legislation that contradicts of challenges its articles. The Law is valid from the date of its publication in the Official Gazette.

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News Courtesy : Gulf News

The UAE, with its glitzy malls, gold souqs and luxury outlets, is a shoppers’ paradise that offers the best brands from around the world. Tourists clearly want to take advantage of the shopping opportunities while visiting the country.

The country’s decision to refund Value Added Tax (VAT) paid by tourists on their purchases is a sweetener for the travel, tourism and retail sectors.

The UAE introduced VAT on January 1, 2018. Keeping with the global practice of exempting tourist purchases from VAT, the Federal Tax Authority (FTA) implemented the VAT refund scheme for tourists starting November 18, 2018.

Why VAT Refund?

The UAE along with its GCC neighbor Saudi Arabia has one of the lowest VAT rates of 5 per cent among the countries that have implemented VAT or any equivalent consumption tax.

Across the world, VAT-implementing countries follow tax refund schemes for goods purchased by tourists from approved tax-exempted stores that are registered with the tax authorities.

Tourist purchase of goods are considered deemed exports that will be consumed outside the country and thus they qualify for VAT exceptions. However, most countries including the UAE do not offer VAT refund on services purchased and consumed within the UAE such as hotel stays, restaurant bills, healthcare services that may be subject to VAT.

Who and what are eligible?

As a thumb rule globally, VAT refunds are available only to tourists and non-residents of the country/jurisdiction. The UAE too applies the same rule and makes it clear that resident expatriates are not eligible to claim VAT refund on their purchases.

In the UAE, VAT refund is available only to goods purchased within the country through approved stores. In keeping with global practice, services purchased and consumed by tourists and visitors do not qualify for VAT refund. Thus visitors need to know that VAT charged on their hotel bills, hospital bills or restaurant bills are not eligible for VAT refund.

Are GCC tourists eligible?

All GCC tourists, both nationals and residents, except those from countries that have a VAT regime can claim VAT refund on goods purchased during their visit to the UAE under the refund scheme.

Conditions for VAT refund

The FTA has clearly defined the conditions for VAT refund for tourists.

As long as tourists buy items through registered stores across the country, they will be able to claim the VAT refund.

How to spot a tax-exempt shop

Shops who participate in the FTA’s tax refund scheme for tourists usually display a board indicating goods purchased there are eligible for VAT refund. But to be on the safer side, tourists should check if the shops are registered for VAT refund scheme.

A FEW BASIC CONDITIONS LAID OUT BY THE FTA

1. The goods purchased by tourists need to be supplied within the UAE’s borders.
2.  The tourist must have the explicit intention to leave the country within 90 days from the date of supply, along with the purchased supplies.
   
   
3. The goods must be exported out of the UAE by the tourist within three months from the date of supply.
   
   
4. The claim for refund must be made within 90 days of purchase.
   
   
5. The tourist must purchase the goods from a retailer that is registered in the system.
6.  The minimum spend for VAT refund by a tourist is Dh250.
   
   
7. The maximum limit for cash refund is Dh7,000.
   
   
8.  In the refund, tourists will receive 85 per cent of the total VAT amount paid, minus an administration fee of Dh4.8 per tax-free form.

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News Courtesy : https://gulfnews.com/your-money/taxation/how-tourists-can-claim-their-vat-refund-in-the-uae–everything-you-need-to-know-1.1582635274208

What is e-channel?

E-channel UAE is still quite a new concept in this country. It was introduced in 2018. In a nutshell, it is a system that connects a free zone with the immigration authority in respective Emirate. The system was launched in order to streamline visa procedures and make all visas electronic. 

Before the e-channel, when you applied for a resident visa, it used to be a hard copy and was supposed to be collected from the free zone personally. It made visa formalities very inconvenient and tied up your business and travel plans. 

Benefits of e-channel

Before 2018, when new residents were coming to the UAE under entry visas, someone had to deposit the entry visa to the terminal of arrival or the applicant. The person had to collect his visa at a special counter and cross the border. 

It created lots of hassle, especially if the visa was deposited to a wrong terminal or was not deposited on time. 

Now each visa has become electronic and when it’s issued, it is sent to your email by the visa department of the free zone where your company is incorporated. Now you can just print it out and come to UAE using the printout rather than the original visa paper. 

Downsides of e-channel

Apart from the benefits, e-channel introduction in 2018 created lots of complaints from business owners. Complaints were about the high fees. 

No wonder. In addition to the fees of business incorporation, each company eligible for resident visas had to pay a 5,000 AED deposit to the immigration authority plus the e-channel registration fees of about 2,100-2,400 AED. 

The deposit of 5,000 AED is refunded only in case of business liquidation. Usually, it takes 2-3 months to get a refund cheque from the immigration. 

In total, the extra expenses amounted up to 7,400 AED, which is quite a lot for small businesses. For example, you can find a business setup in UAE  package eligible for 1 visa for 11,000 AED, which is a great bargain. But have to pay more than 50% of the package for the e-channel formality. 

E-channel in UAE free zones VS in Dubai

E-channel was the system introduced by the capital of UAE – Abu Dhabi. It was implemented with the introduction of additional fees by all the emirates, with the exception of Dubai. 

Dubai has never had e-channel deposits or registration fees. The reason is that this Emirate has its own independent immigration system, which is not governed by Abu Dhabi. 

All the other Emirates who greatly depend on Abu Dhabi and comply with Abu Dhabi’s immigration rules had to start the e-channel system. It made a total of 6 Emirates including Abu Dhabi itself. 

All this made business setup services in Dubai more demanded. No surprise – e-channel fees make the prices of business setup in other Emirates not much different from Dubai fees, which naturally used to be a bit higher. 

If you are seeking to get Dubai permanent residency through a freelance permit setup, you will also not be overcharged – e-channel does not apply to Dubai freelancers either. 

E-channel updates 2020

Since 2019 many free zones in a competition to provide a better price to the clients started to make offers of e-channel deposit waivers. 

Some free zones used to do monthly offers, others removed e-channel deposit fees for certain packages completely. 

Looking behind it, the immigration authority is actually still charging the free zones e-channel deposits. But now they have chosen to pay those on behalf of the clients to lessen the burden on their pockets. 
 
Indeed, a discount of 5,000 AED looks like a great offer. Now, as a client, you just need to pay the e-channel registration fee of 2,100 AED, which is a tolerable amount. 

Free zones without e-channel

More and more free zones started to follow the promotions, which created a great number of those who waived the e-channel by now. UAE free zone company setup has become more affordable again!

Let us look at the free zones without an e-channel deposit:

• Ajman Media Free Zone
• Umm Al Quwain Free Zone 
• IFZA
• Creative City Fujairah
• RAKEZ
• SHAMS
• KIZAD
• All Dubai free zones

Note, that in all of them it is waived only for setups without physical offices. If you are renting an executive dedicated office, the e-channel deposit will be charged. It won’t be charged in Dubai at all. 

Free Zones that are still charging the e-channel deposit:

• AFZA
• Hamriyah Free Zone
• SAIF zone

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Do landlords in the UAE have to decrease or postpone rental payments due to COVID-19? And can tenants terminate tenancy contracts immediately without paying penalty?

These are the questions that will be asked a lot more of in the coming days as the COVID-19 situation impacts on the economy and, by extension, its residents.

Article 249 of the Civil Code provides that if exceptional circumstances of a public nature that could not have been foreseen occur — i.e. a force majeure — as a result of which performance of a contract becomes oppressive for a party, but not necessarily impossible, the judge has discretion to reduce the obligation to a reasonable level.

The tenant must go to court if he seeks to obtain relief under Article 249.

If your income has been reduced due to COVID-19 and the landlord does not want to act with fair solidarity, then you can ask the court to find the fair level of rental relief (decrease or postponement) and let it be legally ordered to the landlord.

Other provisos kick in as well

Article 273 (1) stipulates that if a force majeure event makes a contract impossible, all contractual obligations will cease, and the contract will be automatically terminated.

Article 273 (2) stipulates that in cases where the force majeure event makes only part of the obligations impossible to perform, only that part of the contract will be cancelled. The remainder will continue in effect.

It, however, also permits the tenant to cancel the entire contract on giving notice to the landlord.

If a contract is cancelled under Article 273 (1) or 273 (2), the landlord and tenant are to be restored to the position they were in before they entered into the contract. If that is not possible, damages may be awarded by way of compensation to a party that has suffered a loss as a result of the inability to unwind the contract.

The Civil Code does not exactly specify any definition of what “force majeure” is. The court will decide whether the COVID-19 classifies as one in the context of the specific contract.

In general there are two factors the court looks at while making its evaluation — is there a contract in place and whether the extenuating circumstances made it impossible to fulfill the contract.

What’s pertinent

If your income as a tenant dropped to a level that makes it impossible to pay the rent, you may terminate the contract without having have to pay the penalty on giving a notice to the landlord. And you should pay only pro-rata until the day you vacated the property.

In case the landlord disagrees then he may raise the matter to the court, which will decide whether the tenant’s situation qualifies as force majeure. If landlords do apply penalties for terminating contract regardless of being given the notice by tenant referring to the force majeure, the tenant can forward the matter to the court, which will evaluate the situation and decide whether force majeure is applicable or not.

The following rule of thumb can be used: in case the income of the tenant dropped to a level where he is unable to pay the rent due to COVID-19, this will justify the impossibility condition stipulated by the law. And therefore, the tenancy contract can be terminated immediately without any applicable penalty.

1. Do landlords have to decrease or postpone rents due to COVID-19?

No. But upon tenant’s request (whose income is negatively affected by COVID-19) to the court, the rent relief will be ordered by the court under article 249.

2. Can tenants terminate tenancy contracts without paying penalty?

Yes, in case tenants have been impacted to the level that makes it impossible to pay for rent. For instance, if tenant’s income is smaller than costs in a given month and he cannot pay the rent, the rental contract can be terminated without further obligation.

3. What should landlords do?

Negotiate fair rent relief with tenants if they ask for it. If the tenants are affected, they can walk away from the contract on the spot and leave you without rental income or they can ask the court to provide a fair relief.

In both cases the tenants will obtain a relief which you will not control the financial impact of. To control the conditions of the relief, the best approach is to negotiate and come to fair conditions. For example, a fair relief may constitute an agreement that for the months through which the income of the tenant is affected the rent will be decreased proportionally.

For instance, if a commercial tenant’s revenues decreased by 50 per cent year-on-year due to COVID-19, agree to a 50 per cent rent reduction for three months and visit the agreement after three months or sooner depending on the situation’s development.

Under such an approach you will not risk losing 100 per cent of your rental income for several months and can agree on terms which are in your control catering to your cash needs

4. What should tenants do?

Negotiate with landlords a fair rental relief if your income dropped temporarily, or terminate your tenancy contract in case the loss of income is permanent due to the pandemic. Present the landlord a fair proposal supported by documents you are willing to share year-on-year comparison of revenues to showcase the percentage drop in sales, seeking a proportional relief on rent from the landlords.

For instance, three months with option to revisit the agreement if the situation gets better or takes longer by both parties. In case you do not reach an agreement, approach the court to obtain the relief from the judge or you can terminate the contract without paying any penalty to the landlord.

Ground reality

If tenants cannot pay their rental obligation due to COVID-19 they can terminate their tenancy contracts without having have to pay a penalty or they can ask for a fair relief from the obligations of the tenancy contract the court.

It is better for landlords to negotiate a fair relief with tenants in order to avoid loss of rent for multiple months or to obtain a court order for relief landlords will not have a control over and which may not fit their cash flow needs.

Source : https://gulfnews.com/business/analysis/uae-negotiating-rental-contracts-in-times-of-covid-19-1.70803440

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Dubai is one of the Middle East’s most affluent and cosmopolitan cities, mixing the characteristics of both the East and the West. It is one of the most attractive business destinations in the world.

LLC Company Formation in Dubai

One way of setting up a business in Dubai is through a Limited Liability Company or LLC. An LLC is the most prevalent company type in UAE. It can be created by a minimum of 2 shareholders and a maximum of 50 shareholders, whose liability is limited to their business capital shares.

Many companies opt for an LLC with foreign partners, because this is the only choice that gives maximum legal ownership to an expatriate for a local business, i.e. 49 percent. Since it is compulsory to have a UAE national as a partner in the LLC (51 percent shareholding), the prospective investor has the option of choosing the one UAE national (sponsor) as a partner in the company.

LLC is versatile and provisions for mutual profit sharing are feasible, too. It gives the international investor a huge edge as a local partner has 51 per cent legal equity.

In case one in interested in LLC setup in Dubai, Shaura business set up Delhi Branch provides all the necessary assistance from document registration to finding investor friendly zone.

Setting up LLC company Dubai

The following steps mentioned below are required to set up LLC in Dubai.-

• Registering the company with the Department of Economic Development.
• Drafting and notarizing the company’s Memorandum and Articles of Association.
• Submitting all the required documents and business license application form with the Department of Economic Development.
• Registering with the Dubai Commercial Register.
• Upon incorporation, registering one’s employees with the Ministry of Labor and General Authority for Pension and Social Security.

Dubai LLC Formation Cost

• Commercial license fees -> AED700

• General trading activity Fees ->AED15000

• Non-Arabic trade name fess ->AED3000

• Market Fees ->AED2500

• Name board fees ->AED350

• Service fees ->AED400

• Partner accommodation fess ->AED1000

• Chamber of commerce fees ->AED1200

• Economy ministry fees ->AED3000

• Local fees->AED200

• Commercial license fees ->AED150

Above are some the most commonly fees to be paid, if anyone wishes to set up a LLC in Dubai. The total approx cost for LLC Company set up in Dubai would come around to be AED 28000.

LLC registration Dubai

Compliance is made with the DED by filing the application form for the trade name and the application form for the warrant. If one or both members are corporations, then the LLC Subscription is approved by a copy of the Certificate of Incorporation along with an Association Memorandum and a Board of Directors resolution. It will also be appropriate to have a Power of Attorney authorizing a person to act on behalf of the shareholders having formed the LLC.

Furthermore, copies of shareholders ‘ passports and suggested general manager and directors. The DED will then issue an initial approval to this effect. Supplementary approvals may be required depending on the activities proposed by the LLC. The 2011 Licensing Law officially referred to as the “Law of the Organization of Economic Activities Practice in the Dubai Emirate” simplified the licensing process where the DED obtains approvals from the ministries and/or departments needed.

Once the initial approval and approvals are received from the appropriate ministries and/or agencies, the Power of Attorney holder must sign a LLC formation contract before a notary. Once the contract is fully completed the above mentioned documents need to be obtained for LLC registration in Dubai.

Offshore company in Dubai

A Dubai offshore company is one of the popular company types in UAE as well as internationally. It enjoys a white list status, which means that it does not fall under any official FAFT ‘tax haven black lists’. As such an off shore company in Dubai will enjoy an recognized and accepted status at the international level.

Dubai offshore company is a tax free UAE registered company although a non UAE resident company which is set in UAE economic zone. Dubai offshore company can be beneficial to an investor, as it has many advantages like tax free status, security, confidentiality and unique life style advantages.

LLC Company in Sharjah

Sharjah allows seven types of company formation one of them being LLC. Setting up LLC in sharjah is a wise decision as it comes with a number of advantages. Being a transportation hub due to its geographical location, it a cargo hub both for the Middle East and North Africa. As such it holds a strategic trading location in gulf. LLC Company in sharjah is the most common company formation. The rules for registration follow the same process to that of Dubai. Likewise LLC in sharjah must have at least two partners but no more than fifty.

LLC Company in Ajman

Based on its area Ajman is the smallest Emirate. In addition to the oil reserves, economy of the city thrives on its fishing, agriculture, and trade. Ajman provides an environment that is investor friendly. LLC company formation in Ajman is the preferred by investors compared to other business setups. The process for the setup is same requiring 2 partners with local partner who will have 51% share. Ajman also provides investor friendly laws.

LLC Company in Abu Dhabi

LLC Company Formation Abu Dhabi is the most widely adopted company for businesses seeking to enter into business outside the UAE Free Zone. A minimum of 51 percent of a limited liability company’s total shareholding must be purchased by a UAE national or a company wholly owned by UAE nationals. Some other exceptions and rules apply to some industries which differ from Emirates to Emirates. LLC Company establishment in Abu Dhabi has numerous advantages, Investor is shareholder in the company 100% tax-free, No definite minimum capital requirements, and many other benefits.

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The E-trader license in Dubai was introduced by the Department of Economic Development (DED) and is aimed at home entrepreneurs doing business over social media. The E-Trader license will make it easier for individuals or single-owned businesses to sell their services and products on social media. It will also bolster customers’ confidence when they’re shopping online. The announcement of the E-trade license by DED followed in the wake of the efforts to crackdown on counterfeit and fake products being sold on social media platforms like Instagram. The license aims to regulate the sale of products and services conducted through social media in Dubai.

DO YOU NEED THE E-TRADER LICENCE IN DUBAI?

If you are an individual who promotes or sells products and services through your social media accounts or a personal website, then you do need an E-trader license in Dubai. For instance, this home business license would apply to stay-at-home mothers promoting handmade products or photography services and selling on Instagram in Dubai.

Home entrepreneurs who don’t have or require a physical office space are eligible to apply for the E-trade license in Dubai, as it does not require you to submit any Ejari documents. It’s ideal for single-owner home-based businesses that don’t require a local partner and freelancers. UAE and GCC Nationals and expats of certain other nationalities can apply for the E-trader license in Dubai, with the condition that the individual is based in Dubai and is over the age of 21 years.

WHAT CAN YOU DO WITH THE E-TRADER LICENSE IN DUBAI?

With this license, individuals can legally promote and sell products and services through their social media accounts including Instagram, Facebook and more, or on a personal website. You can also feature their products and services on online marketplaces such as Souq.com. With this home business license in Dubai, individuals and single-owned businesses can legally participate in and reach out to customers at exhibitions and conferences. It will also protect your trade name and any other intellectual property. An E-trader license is strictly for a single-owner home-based business in Dubai or freelancer. Individuals with this home business license in Dubai cannot open a physical shop or issue visas.

With the E-trade license in Dubai, you can sell your products and services within the emirate. Should you want to sell in other emirates, you must approach the respective Department of Economic Development for that emirate and ask for approval. You may have to obtain another E-trader license to sell in that emirate.

It’s important to note there are conditions on what you can sell on social media with an E-trader license in Dubai. UAE and GCC National entrepreneurs with the license can conduct commercial activity (i.e. sell physical products and goods) and professional activity (i.e. sell professional services) on their social media accounts. For all other expats, the conditions for what individuals can sell and promote on social media depends on nationality. On a general note, non-GCC expats can sell professional services through their social media, but not physical products. This could include maintenance, repair, event management and photography services. You can find out more about which nationalities are eligible for the license and what you can sell through social media when you register for the license.

While food products are most often not allowed under this license. The E-trader license Dubai fees currently is AED 1,070 and the license must be renewed every year.

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Opening a bank account in Dubai for the companies who are located outside of Dubai is not a hefty process anymore. The economic and financial stability of United Arab Emirates is due to its highly regulated banking sector. UAE banks are well known for providing a high level of customer support and compliance with modern banking requirements. However, there are certain conditions which have to be met before you can open a bank account in Dubai. Firstly, if an individual is the owner or part of an onshore or an offshore company then he has the option to open a corporate account for banking transactions of his company. If a person is resident or non-resident, then he has the option to open a private bank account.

For offshore banking, there are not many restrictions placed by UAE financial Institutions. There are many advantages for an offshore bank account in Dubai as compared to other countries. These advantages include,

Complete privacy of client’s information. No client information is disclosed by the bank.

Complete tax exemption. Dubai offers zero tax charges for offshore companies. Every client has his own needs to set an offshore account whether be it to attain secrecy or for conducting international business or obtaining access to those facilities given by foreign bank that are not available locally. Tax optimization is one of the benefits.

The main requirements to open an offshore bank account are;

Presence of company shareholder in the application process is required for the creation of an offshore account. If this cannot be possible then there are two ways, either a representative of a bank will meet a client in his native country or the client will visit the bank’s foreign branch in another country for personal identity confirmation.

Following documents will be required by the bank if you want to start offshore banking,

• Shareholder’s passport copy with the stamp of entry in the United Arab Emirates.

• Copy of main pages of MD passport, in case he/she is not a shareholder.

Company License

Some banks may also require additional documents such as CV of a shareholder, existing contracts, reference letter from business partners, business plan, Memorandum and Articles, the disclosure of the source of funds, Company structure tree diagram on Company Letterhead, Certificate of good standing etc. If the account is to be opened in a Shareholder’s Company name, then the shareholding company’s documents notarized by court and MOFA are also required.

For offshore accounts, it should be considered that banks have “know your customer” policy that is to identify individual creating an account and if necessary to identify beneficial owner. The Central bank has directed the banks to perform its client’s due diligence procedures for offshore accounts. This is why banks will further collect information regarding client’s primary business area, a total number of deposits, revenues, main suppliers, customers etc. Banks adhere to strict and international rules and regulations to identify money of criminal origin.

The opening of an offshore account is guaranteed if you have a correctly filled application form and provided all the documents that were required by the bank.

The process of opening an account may take from few days to three weeks usually but for offshore accounts, it may take more time due to bank’s financial compliance and management approval.

The fees will be competitive and interest rates will be high.

Bank account holders have the option to utilize online banking. This is beneficial for those who cannot go to the bank for every single transaction.

The process of opening an offshore bank account in Dubai varies from bank to bank. This is because each bank has its own policies and requirements that you will have to cater to. If you are an entrepreneur looking to set up a new business in Dubai, a process of creation of an offshore account can be complex and time-consuming.