For over a decade, Healy Consultants efficiently and effectively assists our Clients i) determine what type of Dubai entity to use ii) what class of business license to apply for iii) how a UAE national sponsor will help iv) banking and cash flow considerations v) immigration and recruitment strategies and vi) office rental solutions.
If you are a foreign investor contemplating doing business in Dubai, the following information will assist your Firm determine the optimum corporate solution to fulfill your Middle East business objectives:
Foreign entrepreneurs can wholly own a Free Zone limited liability company (LLC) without UAE national shareholder involvement. Dubai free zones are suitable for foreign companies intending to use UAE as a regional manufacturing or distribution centre, with the bulk of their business conducted outside the UAE. Free zones are mainly for import and export oriented companies who only require an office in Dubai.
Foreign investors can incorporate a Dubai LLC to provide professional services without having a UAE national partner. Professional services include legal and accounting, IT and management consultancy, marketing consultancy. However, a UAE national must be appointed as a local service agent to represent the company when communicating with the UAE Government.
A foreign company can register a branch in Dubai to invoice UAE customers, sign local sales contracts and receive income from local customers. However, a UAE national must be appointed as a local service agent to liaise with the UAE Government and sponsor company visas.
A foreign company can register a representative office in Dubai to engage in activities such as i) promoting the business of the parent company and ii) market research. A representative office in Dubai cannot make direct sales within the UAE. Again, a UAE national must be appointed as a local service agent to liaise with the UAE Government and sponsor company visas.
A Dubai offshore company (DOC) is a non-resident "paper" company that allows foreign entrepreneurs serve Africa and the Middle East without administrative obligations. This entity can neither rent premises in the UAE nor hire staff nor conduct business within the UAE.
The Middle East will be wealthy as long as oil is over $100 a barrel and continue its insatiable appetite for international products and services. A Dubai company offers our Clients the following benefits.
Dubai is the best business gateway to the Middle East and Africa (MEA). It boasts the most developed logistics and transportation infrastructure, perfectly suited for import and exporting. Dubai allows duty free exports to 17 countries in the Middle East. Dubai companies enjoy a favorable image in the MEA.
Dubai is the historic import and export hub of the MEA. With a huge number of international trading companies and supporting banks, Dubai is the best source of trade finance. The strength and dependability of its shipping and transportation sector attracts the world's leading freight forwarders, shipping companies and insurance companies.
Dubai is the most business friendly city in the MEA. Simple import and export policies, no trade barriers or quotas. Liberal employment laws attracting the most qualified labour in the MEA. Dubai is the preferred international exhibition and conference venue.
Most cities in the Middle East and Africa (MEA) do not positively view foreign companies. By contrast, Dubai boasts the most favorable laws for foreign entrepreneurs, protecting investors' interests.
Dubai is the perfect tax exempt headquarters for the MEA, extracting funds from regional subsidiary companies in the form of dividends, management fees and royalties.
Without question, Dubai is the most livable city in the MEA, comprising a cosmopolitan, multinational population living and working in Dubai. A developed infrastructure for tourism, banking, entertainment and business. High quality office and residential accommodation. Reliable power and utilities. First class hotels, hospitals, schools, shops etc.
Dubai is a cauldron of international entrepreneurs, where 80% of the population is foreigners, the perfect ingredients for creativity and exchange of skills across industries and cultures, stoked by a liberal, entrepreneurial free market. The East and West blend quite happily, side by side in Dubai's business and social arena.
Dubai is a paradise for high net worth entrepreneurs. With a strategic location in at the heart of one of the world's richest nations. The city is synonymous with luxury and is home to some of the biggest brands in the world.
A Dubai company is an excellent way to book global profits while legally minimizing international tax. There is no company tax, nor personal tax, nor withholding taxes, nor VAT, nor import nor export taxes, nor capital gains tax. A great tax planning vehicle enjoying the benefits of 66 international double tax treaties.
Dubai is the undisputed financial capital of the Middles East and Africa. The Dubai International Financial Centre (DIFC) has hundreds of financial companies, insurance companies, banks and asset management companies. Earning tax free profits within a liberal economy free of exchange controls.
Before investing in Dubai foreign entrepreneurs should be aware of the following challenges:
The cost of setting up a business in Dubai is expensive including i) multiple Government fees ii) compulsory office rentals iii) compulsory hiring of staff and iv) high paid up share capital. For example, a Dubai LLC requires a minimum of US$267,000 paid up share capital.
To sell goods within the UAE, a foreign company must legally appoint a UAE national as a shareholder or as an agent. For example, a Dubai LLC must be 51% owned by a UAE citizen.
Dubai is uniquely susceptible to a terrorist attack due to its largely Western population and cultural orientation. A terrorist attack would have a devastating impact i) on Dubai property prices ii) on the Dubai economy iii) on foreign investment iv) on the personal safety enjoyed by residents and tourists and v) on business confidence in Dubai.
The majority of company visas and licenses are sponsored by UAE nationals, giving the latter indirect control over the business.
Dubai business practices and laws still favor UAE nationals over foreigners in disputes over business and investments. Disputes with UAE shareholders and agents cause serious problems for foreign investors. Dubai Courts can impose precautionary restraint on foreign company assets pending the adjudication of a commercial dispute.
The Government tenders favor i) UAE nationals ii) companies with UAE nationals.
If creditors petition winding up of a Dubai company and the court auditors find incomplete accounting records explaining insolvency, then shareholders and directors will personally pay outstanding company liabilities.
Upon his death, the Dubai LLC shares of the UAE partner will be transferred to his family.
A Dubai limited liability company (LLC) is the most common entity used to conduct business within Dubai and is allowed engage in any commercial or industrial activity. A Dubai LLC must appoint i) a minimum of one director and two shareholders and ii) must appoint a 51% UAE national shareholder iii) must supply a minimum paid up share capital of US$267,000 and iv) must rent Dubai office premises and hire staff.
UAE company law allows foreign companies draft flexible, differential profit sharing arrangements, independent of the UAE shareholding percentage. Healy Consultants will draft a legal shareholders agreement outlining terms and conditions, shareholder restrictions, expectations and remuneration.
Through a legal shareholders agreement, the UAE national will be designated a silent partner who will not interfere in daily activities of the Dubai LLC. The foreign investor legally enjoys full power to solely operate the business and bank account.
The shareholder agreement will be signed by both the investor and the UAE local partner and witnessed by two different parties from each side. The shareholders agreement is legally valid in the Dubai courts to arbitrate any dispute between the investor and the local partner.
While foreign companies prefer to establish a Dubai LLC with a silent partner, there are advantages to having an active local Dubai shareholder. Advantages include i) introduction to potential customers and suppliers ii) preference in the allotment of government contracts iii) navigation through Dubai Government bureaucracy iv) assistance with immigration and visa matters.
Each Dubai LLC must apply for one or more licenses including i) a commercial license covering all kinds of trading activity or ii) a professional licence covering professions and services or iii) an industrial license for industrial or manufacturing activities. Each license allows a maximum of 10 business activities.
The majority of company visas and licenses are sponsored by UAE nationals, giving the latter indirect control over the business.
If creditors petition winding up of a Dubai company and the court auditors find incomplete accounting records explaining insolvency, then shareholders and directors will personally pay outstanding company liabilities.
Upon his death, the Dubai LLC shares of the UAE partner will be transferred to his family.
Foreign investors can incorporate a Dubai LLC to provide professional services without having a UAE national partner. Professional services include legal and accounting consultancy, IT and management consultancy, marketing consultancy. This entity is also known as a civil business company.
While the Dubai LLC can be 100% foreign ownership, a UAE national must be appointed as a local service agent under an agency contract authenticated by a notary public.
Healy Consultants will efficiently and effectively project-manage our Clients engagement, providing detailed email status updates every second day:
Prior to Dubai company setup, our client a) settles Healy Consultants' fees, b) signs and returns our Client Engagement Letter and c) provide us all the required due diligence documents.
Healy Consultants drafts a detailed Dubai company setup engagement project plan, mapping out by week each step to engagement completion, optimising transparency and setting Client expectations.
Healy Consultants assists our Clients determine i) what type of Dubai entity is required ii) what class of business license is required iii) how a UAE national sponsor will help iv) banking and cash flow considerations v) employment visa strategies.
Healy Consultants provides our Client detailed due diligence information about the 51% local shareholder. A detailed legal shareholders contract is signed between our Client and the UAE national, clearly defining roles and responsibilities.
The exact Dubai corporate structure is agreed with our Client. Thereafter, Healy Consultants i) reserves company name with the Department of Economic Development and ii) prepares company deeds of establishment and articles of association notarized by a notary public in the Dubai Courts.
Our Client supplies Healy Consultants with a lease agreement for their office premises. If this is not possible, Healy Consultants will supply virtual office services for 6 months until our Client finds their preferred business address.
Healy Consultants assists our client open a corporate bank account with a Dubai bank. Our Client deposits the paid up share capital of US$267,000 and supplies Healy Consultants with a certificate of deposit and bank statement.
Healy Consultants then i) pays the Chamber of Commerce fee ii) notarises all company documents and iii) registers the company with the DNRD and Labor Department.
The license application is submitted to the Dubai Economic Department together with i) the MOA ii) name approval certificate iii) the lease agreement iv) a certificate of paid up share capital. Within three weeks, business license approval is received.
Subsequently, Healy Consultants assists our Client register the UAE LLC with the Company Registry Office and obtain a Company Registration Certificate from the Ministry of Commerce. Thereafter, the company MOA is published in the Ministry of Economy and Commerce's Bulletin.
Following engagement completion, Healy Consultants couriers a full company kit to our client, including original Dubai corporate documents, unopened bank correspondence and a client feedback survey.
The FZ company is a gift for foreign companies using Dubai as a gateway to Africa and the Middle East. A wholly owned foreign company is legally tax exempt, has access to cheap energy and labour and is allowed to receive residence visas for staff and business owners.
Dubai free zones (FZ) are suitable for foreign companies intending to use the UAE as a regional manufacturing or distribution base, with the bulk of their business conducted outside Dubai. Free zones are mainly for import and export oriented companies who only require an office in Dubai.
The UAE boasts 30 Free Trade Zones catering for every industry sector. The most popular free zones include Dubai Internet City, Dubai Airport Free Zone, Dubai Media City, Dubai International Financial Centre and Jebel Ali Free Zone. A full list of Dubai free zones is found in this web link.
FZ companies do not require a UAE national shareholder. While it is mandatory to rent a free zone office at a low rent, it is not necessary to hire staff.
Free zone companies are exempt of all types of taxation while benefiting from Dubai's 66 double tax treaties, minimizing withholding tax in international countries.
No duties are imposed on goods imported and exported from the free zone.
A free zone company must confine business activities to within that zone and cannot cater to customers in Dubai and within the UAE. An entrepreneur violating the provisions of this law can be fined up to US$35,000.
The paid up share capital of a free zone company ranges from US$14.000 to US$300,000 depending on i) the free zone chosen and ii) the FZ company structure. After FZ company incorporation, the paid up share capital can be used to fund daily business activities.
Company licenses are renewable annually after FZ laws are complied with including submitting annual audited financial statements to the FZ Authority.
A free zone company must rent an office within its free zone, and cannot rent an office in Dubai city centre.
A FZ company can conduct business in Dubai and within the UAE:
If a UAE 51% local partner is appointed and The Department of Economic Development issues a specific license to the FZ company to trade within the Emirate; or
If a branch of the FZ company is established in Dubai city and the goods and services are distributed through a UAE agent, in the name of the FZ company; or
The free zone company appoints a service agent to sell and distribute goods and services within the emirate of Dubai, in the name of the agent;
Custom duty of 5% would be levied on free zone company sales within the UAE;
Dubai Free zones enjoy excellent infrastructure and business environment including warehouse facilities, onsite immigration department and onsite customs clearance department.
Each free zone Interior Design Department finalizes with the foreign entrepreneur the optimum layout and interior design of your office. The office includes i) furnished and semi-enclosed workstations ii) high speed internet network iii) dedicated phone number iv) residence visas and work permits v) parking facilities.
Free zone activities allowed include i) import of raw materials ii) manufacturing iii) processing and assembling and packaging iv) exporting finished products v) storage or warehousing of products.
A service license allows the investor to carry out the services specified in the license within the Free Zone. Consulting services include management, finance, investment, legal issues, labour relations, industrial development, marketing.
Other services include logistical support such as: restaurants or food outlets, catering services, travel agencies, leisure and social activities, insurance, cargo & freight forwarding, accounting, and audition services.
DAFZA is within the boundaries of Dubai International Airport and a popular business location for electronics, engineering, logistics and cargo, aviation, and pharmaceutical firms.
DAFZA is popular because of i) the proximity of Dubai Cargo Village and the FLC Air Cargo Terminal ii) an on-site customs inspection iii) operates 24 hours a day.
Dubai's Free Zone Logistics Centre (FLC) is a dedicated freighter terminal for both scheduled and charter operators and is located in the Dubai Airport Free zone. FLC offers flexible, cost-effective handling between tenants' warehouses, the main cargo terminal and the cargo planes.
The FLC is located on a 26,000 sqm site, which includes a docking area capable of handling up to 50 trucks. Some 200 sqm in the FLC is dedicated to specialized storage facilities including cooler, freezer, vulnerable and valuable storage rooms.
Dubai airport currently services over 150 airlines serving more than 200 destinations worldwide, and is considered the Middle East's premier airport.
RAK is perfectly placed within the UAE, just a 45 minute drive from Dubai city centre, and close to RAK airport and to three separate ports, including Saqr Port. RAK is the closest emirate to the Strait of Hormuz's main lane for shipping.
RAK comprises a Business Park, Industrial Park, and Technology Park & Al Ghail Park. The parks include offices, equipped warehouses and land facilities.
Located next to Jebel Ali Port, the largest port in the Middle East and 30 minutes drive from the Dubai International Airport. With a six lane highway, Jebel Ali Free Zone will facilitate the transportation of goods from sea to air in just 20 minutes.
JAFZ has Light Industrial Units (LIU) as storage warehouses for distribution and storage, and as factories for light-production and assembly. Sizes of LIU's range from 313 square meters to 619 square meters. Power supply ranging from 10 to 50 KVA for warehouses and 100 to 125 KVA for factories.
JAFZA boasts showroom and warehouse facilities structured into eight blocks comprising 68 Showroom-cum-Warehouse units. Each unit contains a warehouse at the rear with a glass façade showroom frontage. The showroom features a mezzanine floor, which is used as office space. The units are designed for the product display as well as storage and distribution.
Determine whether the company qualifies for inclusion in a free trade zone (FTZ). A Free Trade Zone (FTZ) is typically a foreign company that does not conduct business inside the UAE. Industries such as manufacturing, trading, services, and holding companies can benefit from the tax free zones. Healy Consultants will efficiently and effectively project-manage our Clients engagement, providing detailed email status updates every second day:
Prior to Dubai free zone company setup, our client a) settles Healy Consultants' fees, b) signs and returns our Client Engagement Letter and c) provide us all the required due diligence documents.
Healy Consultants drafts a detailed Dubai free zone company setup engagement project plan, mapping out by week each step to engagement completion, optimising transparency and setting Client expectations.
Healy Consultants assists our Clients determine i) what type of Dubai free zone entity is required ii) what class of business license is required iii) how a UAE national sponsor will help iv) banking and cash flow considerations v) employment visa strategies.
The exact Dubai corporate structure is agreed with our Client. Thereafter, Healy Consultants i) reserves company name with the freezone authorities ii) prepares company deeds of establishment and articles of association notarised by a UAE embassy.
Our Client supplies Healy Consultants with a lease agreement for their office premises. If this is not possible, Healy Consultants will supply virtual office services for 6 months until our Client finds their preferred business address.
Healy Consultants assists our client open a corporate bank account with a Dubai bank. Our Client deposits the paid up the necessary share capital and supplies Healy Consultants with a certificate of deposit and bank statement.
Healy Consultants then i) notarises all company documents through the UAE embassy and ii) produces the required business plan and iii) registers the company with the specified freezone authority.
The relevant license application is submitted to the specific freezone authorities together with i) the MOA ii) name approval certificate iii) the lease agreement iv) a certificate of paid up share capital and v) business plan. Within three weeks, business license approval and company registration certificate are received.
Following engagement completion, Healy Consultants couriers a full company kit to our client, including original Dubai corporate documents, unopened bank correspondence and a client feedback survey.
A Dubai offshore company (DOC) is a non-resident "paper" company that allows foreign entrepreneurs serve Africa and the Middle East without administrative obligations. A wholly owned limited liability company, legally tax exempt, with no annual accounting and tax obligations. This paper company neither requires office space nor employees nor paid up share capital.
The uses for DOC include i) international trading ii) a holding company iii) a shipping company iv) own real estate v) own copyright and patents vi) international consulting services.
Dubai offshore companies are ruled by the Jebel Ali Free Zone Offshore Companies Regulations 2003. A comparison between our two favorite UAE offshore companies:
The Dubai Financial Services Authority is the sole independent regulator of all financial services conducted through the Dubai International Financial Centre (DIFC), a purpose-built free zone in Dubai.
The DFSA’s regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, an international equities exchange and an international commodities derivatives exchange.
DIFC offers foreign entrepreneurs an attractive investment environment, including i) 100 percent foreign ownership ii) zero percent tax rate on income and profits while enjoying a network of over 60 double taxation treaties iii) no restrictions on foreign exchange or capital/profit repatriation iv) strict supervision and enforcement of money laundering laws and v) ultra-modern office accommodation, state-of-the-art technology, sophisticated infrastructure, data protection/security, operational support and business continuity facilities.
Healy Consultants assists our DFSA Clients with i) selecting the appropriate DFSA Category for Authorisation ii) creation of DFSA systems and controls iii) completion of the DFSA application forms iv) preparation of DFSA Regulatory Business Plan v) advice on corporate governance in accordance with DFSA requirements.
Healy Consultants will assist our Client engineer the optimum Dubai corporate structure. There are several ways of doing business in Dubai, the most common being formation of a limited liability company (LLC) or a free zone company (FZ):
This is the most common entity used to conduct business in Dubai. As always, the company is a separate legal entity or 'person'. In particular, a company is separate from its owners, shareholders and the persons who run it, the directors.
A Dubai LLC must appoint i) a minimum of one director and two shareholders and ii) a minimum issued share capital of US$267,000 iii) a UAE national to be shareholder and/or visa sponsor.
Dubai free zones are suitable for foreign companies intending to use UAE as a regional manufacturing or distribution base, with the bulk of their business conducted outside the UAE. Free zones are mainly for import and export oriented companies who only require an office in Dubai.
Foreign investors can incorporate a Dubai LLC to provide professional services without having a UAE national partner. Professional services include legal and accounting consultancy, IT and management consultancy, marketing consultancy.
While the Dubai LLC can be 100% foreign owned , a UAE national must be appointed as local service agent to sponsor residence visas. The service agent has no direct involvement in the business; his role is limited to obtaining licenses, visas, labour cards. He is paid a lump sum and/or percentage of profits or turnover.
The Dubai Commercial Companies Law regulates foreign company branches and representative offices in the UAE and stipulates they may be 100% foreign owned, provided a local agent or sponsor is appointed.
A Dubai branch of a foreign company is allowed invoice UAE customers, sign local sales contracts and receive income from customers. A local UAE agent or distributor must be appointed to sponsor visas and licenses.
While a Dubai representative office is 100% foreign-owned and controlled, it is not permitted to make direct sales within the UAE. Such an office will only engage in activities such as i) promoting the business of the parent company and ii) market research. A local UAE agent or distributor must be appointed to sell goods and provide services to local companies.
Before the Dubai Government issues a license to a foreign company branch or representative offices, a bank guarantee of US$13,700 must be provided to the Ministry of Commerce.
To register a branch of a foreign company in the UAE the incorporation documents of the mother company must be translated and legalized in i) the UAE embassy in the country of its incorporation and then ii) by the Ministry of Foreign Affairs of the UAE.
Parent company documents to be translated into Arabic include i) two years audited financial statements ii) a Board of Directors' Resolution authorizing opening of the branch in Dubai iii) a power of attorney issued in favor of the general manager of the Dubai branch iii) parent company's Memorandum of Association and certificate of incorporation.
The branch or representative office must i) sign an agency agreement with a UAE national and ii) sign a Dubai premises lease agreement.
Healy Consultants submits a completeD license application to the Ministry of Economy and Commerce comprising i) an agency agreement ii) name reservation certificate issued by the DED iii) lease agreement iv) copy of the passport of the office general manager v) a bank guarantee of US$13,700 in favour of the Ministry of Economy.
The Ministry will forward the application to the Federal Foreign Companies Committee to obtain approval of the specific business activity of the branch or representative office. Thereafter, the Ministry of Economy and Commerce will issue the required Ministerial license specifying the activity to be practiced by the foreign company.
The branch or representative office will be i) entered in the Economic Department's Commercial Register ii) entered in the Foreign Companies Register of the Ministry of Economy and Commerce and iii) registered with the Dubai Chamber of Commerce and Industry.
A joint venture is a contractual agreement between a foreign party and a local party licensed to engage in the desired activity. Joint ventures in UAE are established in the form of an LLC where 51% is owned by a UAE national, but the profit and loss distribution ratio can be mutually agreed.
The foreign company deals with customers under the name of the local partner, the latter bears all liability. In practice, joint ventures are seen as offering a suitable structure for companies working together on specific projects.
Foreigners are allowed to invest in Dubai as sole traders, in their personal name. A sole proprietorship must appoint a UAE national as his service agent. This kind of entity is used by doctors, engineers and lawyers.
This entity is also known as a public joint stock company and suitable for large projects or operations, involving a large investment of funds or raising private or public capital.
If our Client plans to offer shares to the general public to raise capital, we recommend forming a public joint stock company. This entity is similar to a UK Public Limited Company or German Aktiengesellschaft (AG).
A PSC requires i) a minimum share capital of US$2.7m ii) a minimum of 10 founders of which at least 51% owned by UAE nationals iii) a board of directors consisting of a minimum of three to a maximum of fifteen persons. The chairman and a majority of directors must be UAE nationals.
The Law stipulates that companies engaging in banking, insurance, or financial activities should be run as public shareholding companies.
This entity is also known as a private joint stock company and suitable for carrying out any commercial or industrial activity. Examples of businesses include banking ventures and projects involving the exploitation of natural resources. The shares of a Private Joint stock Company cannot be offered to the public.
A PSC requires i) a minimum share capital of US$545,000 ii) a minimum of 3 shareholders of which at least 51% owned by UAE nationals iii) a board of directors consisting of a minimum of three to a maximum of fifteen persons. The chairman and a majority of directors must be UAE nationals.
To minimize business set up costs in Dubai, our Clients sometimes implement the following strategies:
Through a local agent or distributor, a foreign company is allowed sell its goods and services directly to UAE customers.
Foreign companies can also sell their franchise to a Dubai commercial agent or distributor, eliminating the need to hire local staff and incorporate a local company. Examples include Hertz, Baskin Robbins, and Pizza Hut.
Foreign companies find it difficult to function in Dubai without a Dubai partner or agent or sponsor to help handle i) Government bureaucracy including issuing exit and re-entry visas or ii) helping our Client navigate through the upper echelons of a Dubai Ministry. Healy Consultants assists our Clients find a suitable Dubai agent or sponsor.
Before contracting a Dubai agent or distributor, Healy Consultants recommends i) visit Dubai for a face to face meeting with the agent ii) obtained detailed due diligence from the agent including passport copy, resume, professional reference letters etc iii) engage a local lawyer or accountant to critically review legal agreements.
The agency contract clearly stipulates i) the agent will not interfere with the company's management or activities and ii) he will be paid a lump sum and/or a percentage of profits or turnover.
The UAE Commercial Agencies Law regulates the appointment of commercial agents, sales representatives, and distributors within Dubai. A commercial agent is appointed to distribute, sell, offer, or provide goods or services within the UAE for commission or profit.
Commercial agents must be UAE nationals or companies owned entirely by UAE nationals. Commercial agents must be registered with the Ministry of Economy and Commerce to engage in commercial agency activities.
The Ministry of Commerce and Industry has published standard forms of agency and distributorship contracts. An example on an agency agreement can be found on this web link.
Government departments play an important role facilitating business in Dubai. All businesses deal with government departments on a regular basis. Dubai agents help foreign companies with Government bureaucracy.
Whilst English is widely spoken in business and government circles, all correspondence with the government authorities is conducted in Arabic. The agent will be of great help with this matter.
UAE nationals prefer to do business with someone after they are properly introduced and have met face-to-face. A Dubai agent can act as a “go-between” to vouch for the reliability of both parties.
Disputes with Dubai agents and distributors causes serious problems for foreign investors. It is important foreign investors take steps to protect themselves including i) completing thorough due diligence of the proposed Dubai agent ii) retaining legal counsel to review and approve a well-drafted agency agreement.
Commercial agents are entitled to an exclusive territory encompassing at least one Emirate for the specified products. If the agent is not the consignee, he is entitled to prevent company products being imported into the UAE.
Commercial agents are entitled to receive compensation from the principal if the agency is terminated or not renewed without substantial justification. The agent can prevent the foreign company appointing a replacement agent.
The majority of company visas and licenses are sponsored by UAE nationals, giving the latter indirect control over the business.
Overseas professionals who want to live and work in Dubai must obtain both a residency visa and a work permit (also known as the labour card). A foreign national is entitled to a residency visa in the UAE after i) incorporating a business in the UAE or ii) after becoming a shareholder of a UAE company or iii) after purchasing real estate in the UAE or iv) after employed within the UAE.
Entrepreneurs relocating to the city of Dubai to manage their UAE business need to apply for an investor visa. This three year investor visa requires UAE national sponsorship.
Entrepreneurs can simultaneously apply for residency visas for their spouse and children.
All foreign workers require a residence visa and a "labour card". Expatriate employees must be sponsored by their employer to obtain a three year employment visa. The employee must i) submit to a medical examination ii) show copies of employment contract and iii) provide academic or professional qualifications and iv) provide an employer sponsorship letter.
Employment visas are issued by the Ministry of Labor and residence visas which are issued by the Department of Immigration. The labour card is also an identity card and is to be carried at all times.
Residence visas are granted to dependents of employees. Currently no quota system is imposed on immigration into the UAE.
A citizen of the countries listed below is entitled to an automatic 30 day visa upon arrival at Dubai airport. Those countries include UK, France, Italy, Germany, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Sweden, Norway, Denmark, Portugal, Ireland, Greece, Finland, Malta, Spain, Monaco, Vatican, Iceland, Andorra, San Marino, Liechtenstein, United States, Canada, Australia, New Zealand, Japan, Brunei, Singapore, Malaysia and Hong Kong, GCC countries.
Countries that are not mentioned above will require their nationals to apply for Visa at their country’s UAE embassy. Israel nationals are barred from entering UAE.
The average fee per Dubai engagement is outlined in the table below. These fees include company incorporation, opening corporate bank accounts, and all Government fees:
LLC
Free zone
Branch
Rep office
Offshore
1.
Average engagement costs
US$20,650
US20,000
US$20,650
US$20,650
US$7,950
2.
Draft invoice
The average Dubai engagement period is 8 weeks as outlined below:
Healy Consultants Compliance Department assists our Clients efficiently and completely discharge their Dubai legal and tax obligations.
The Legal Framework of the Emirates is a dual acting system which comprises of mainly Islamic Shariah and aspects of conventional law.
Dubai company directors are appointed, replaced and dismissed by the shareholders. Only the directors have the power to manage the day to day operations of the company. The identities of shareholders and directors are on the public register.
The Memorandum of Association is a contract between the shareholders and comprises i) company activities ii) registered office address iii) shareholder and director details iv) share capital v) profit distribution method.
Each Dubai entity must appoint a manager. The manager is appointed by the memorandum of association or by a separate management contract. Unless otherwise stated in the MOA, the company manager shall enjoy full powers of administration, and his acts shall be binding to the Company, provided that it is supported with stating the capacity he enjoys.
Every company must lodge an annual return confirming relevant details of the company for the public register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings.
All business activities conducted in Dubai receive government approvals and permits and licenses. There is an obligation to register particular products with the Government, including food, medical equipment, cosmetics, medicine.
Foreign countries may only conduct business in Dubai after it is licensed to so by the Department of Economic Development (DED). The DED is the statutory body that regulates and controls the licensing procedures for all Dubai entities. Every Dubai entity must apply for one of the following licenses:
A trade license for buying and selling of goods including wholesale or retail trade enterprises, contractors, hotels, transport and storing establishments etc.
An industrial license to discover natural resources or transform raw materials into manufactured products.
A professional license to practice any profession such as engineering consultancy, auditing and accounting, business set up, medical and educational services.
It is not possible to incorporate company in one Emirates and setup office in another Emirate.
A Dubai LLC is required to transfer 10% of net profits each year to a legal reserve until such reserve reaches a level of 50 percent of the paid-up share capital.
The Department of Economic Development does not permit two different classified business activities under one license e.g. trading and manufacturing.
Where possible, Healy Consultants bank account opening team will liaise with the Dubai banks to prevent our Client having to travel for an account opening interview.
Healy Consultants assists our client open a Dubai corporate bank account. Our Client deposits the paid up share capital of capital of US$267,000 and supplies Healy Consultants with a certificate of deposit and bank statement.
There is no limitation on the inflow or outflow of funds for remittances of profits, debt service, capital, capital gains, and returns on intellectual property or imported inputs. The UAE currency is the Dirham and is fixed to the US dollar. The exchange rate has remained at Dh 3.675 = US$ 1 since 1977.
Dubai banks are willing to provide finance to local companies if the following conditions are met i) good Business-plan ii) availability of security iii) experience of business owners iii) last 3 years audited financial statements iv) realistic feasibility study v) project strength and weaknesses analysis (SWOT).
Trade finance includes i) bank guarantees ii) letters of credit iii) finance against trust receipt iv) document against payment and against acceptance.
Corporate finance in the form of a loan, overdraft or simply preferential credit terms.
Dubai corporate and personal banking products and customer service are of a poor standard.
Because Dubai is not perceived as a tax haven, it is not on the list of black listed destinations. UAE is neither a member of the OECD nor of the EU. The UAE is not on the OECD 'blacklist' of tax havens (nor the FATF blacklist). Consequently, Dubai banks are not obliged to share customer information with international Governments.
UAE banks offer multiple currencies, internet banking and telephone banking, checking accounts, savings accounts, debit and credit cards, fixed term deposits and wealth management.
Healy Consultants Compliance Department assists our Clients efficiently and completely discharge their annual Dubai accounting and auditing obligations. This is what our Clients need to know:
The UAE is exempt of all taxes including i) personal income tax ii) capital gain tax iii) VAT iv) withholding tax v) corporate tax. That said, customs duties of 5% apply to imports.
Annual audited financial statements are submitted to the Ministry of Commerce within 4 months of accounting year end. Healy Consultants will assist our Clients efficiently and effective discharge their annual accounting, auditing and legal obligations.
All goods imported into the UAE require customs clearance which may only be obtained upon payment of the applicable customs duty. If an importer fails to settle the duty, the customs authorities are empowered to sell the goods to recover the due amount.
UAE has Double Taxation Avoidance Agreements (DTAA) with 66 countries including: Austria, Belarus, Belgium, Canada, China, Czech Rep., Egypt, Finland, France, Germany, India, Indonesia, Italy, Lebanon, Malaysia, Malta, Morocco, New Zealand, Pakistan, Poland, Romania, Singapore, Sudan, Thailand, Tunisia, Turkey, Ukraine, China, India, Italy, France and Germany.
Only oil, gas and petrochemical companies and branch offices of foreign banks are required to pay taxes.
Healy Consultants assists our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records iv) preparing forecasts, budgets and sensitivity analysis.
Healy Consultants provides our Clients with i) nominee Dubai shareholders and directors and ii) professional agents and distributors. Detailed due diligence is available for each UAE national.
Before the Government approves company registration, our Client must sign an office premises lease agreement. Some of our Clients require Healy Consultants Dubai virtual office for six months until a full time business office is found.
Alternatively, Healy Consultants will assist our Client find office premises and or warehouse space.
Entrepreneurs completing business formation in Dubai benefit from the UAE numerous Intellectual Property laws. Healy Consultants will assist our Clients with trademark and patent registration. Registering your brand, trademark and designs is particularly important in the Middle East.
Healy Consultants offers a comprehensive range of Dubai research services including i) industrial or business analysis ii) economic and political overview iii) competitor analysis iv) customer analysis v) regulation analysis vi) market entry strategies vii) business partner matching viii) SWOT analysis ix) financial projections x) location and site evaluation xi) business life cycle analysis.
A feasibility study helps our Client determine if they should sell their products and services in the UAE. The feasibility study covers i) business alternatives ii) new opportunities iii) reasons not to proceed iv) what could go wrong. Advantages of a feasibility study include:
Enhancing the probability of business venture success by identifying business risk early
Provides quality information for decision making
Provides documentation that the business venture was thoroughly investigated
Helps secure funding from lending institutions and other sources
If our Clients are satisfied with the outcome of the feasibility study, Healy Consultants will prepare a detailed business plan. A business plan provides a "roadmap" of how the business will be created and developed. The business plan provides the "blueprint" for project implementation.
Our lawyers advise on a wide range of commercial arrangements required by businesses in their day to day operations taking into account the nature of the business and the commercial and legal risks. Our services range from reviewing standard form agreements to drafting and assisting with the negotiation of complex bespoke commercial arrangements.
Regulatory advice, strategy and compliance, corporate licensing and government tendering.
We have extensive experience of providing advice on all types of commercial agency arrangements such as franchise, distribution, agency and commission arrangements and on the impact of local laws on such arrangements, including advising on the effect of these arrangements being registered with the local authorities.
We have advised both local and international partners on a large number of joint ventures in the region which require a detailed knowledge of the local licensing and regulatory environment.
Healy Consultants boasts more cross border transactional and regional experience than any other regional firm. Transactions handled include cross-border transactions, acquisitions or disposals of businesses and companies based in the Arabian Gulf Region, mergers, consolidations, joint ventures and strategic alliances.
Specifically, our services include i) IPO listing or private placements ii) conducting legal due diligence iii) selecting underwriters iv) advising on laws relating to securities offerings v) secondary offerings vi) drafting the prospectus vii) advising on regulatory strategies and compliance viii) assist funding the acquisition.
Designing and implementing and critically evaluating i) management and financial control systems ii) internal controls iii) policies and procedures iv) accounting, inventory, payroll, costing, budgetary control and management information systems.
Our expertise which spans all aspects of corporate structuring and restructuring includes i) due diligence on share and asset acquisitions ii) drafting restructuring agreements iii) changes to corporate ownership iv) company turn-around v) design an exit strategy vi) implement internal control systems, policies and procedures.
The financial management consultancy services offered by Healy Consultants include i) capital budgeting ii) risk analysis of investments iii) financial analysis iv) finance planning v) feasibility studies vi) debt and equity finance vii) working capital management.
To efficiently and rapidly penetrate the local market, some foreign companies buy a local company to use the brand name already created by a local business owner. It also solves the problem of finding a UAE business partner.
Before buying a Dubai business, Healy Consultants will assist our Client i) study the company's products and current infrastructure ii) analyze revenues and profitability iii) ascertain growth plans and iv) evaluate company management.
In addition to estimating the selling price of a business, valuation tools are often used by business appraisers to resolve disputes related to estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes.
Healy Consultants provides debt collection services throughout the Middle East and Africa. The use of a Debt Collection Firm is an excellent way to demonstrate the seriousness of debt default. Customers pay faster when a Debt Collection Firm is employed. On behalf of our Clients, Healy Consultants will communicate with debtors to negotiate repayment plans.
Our recruitment process is accurate, comprehensive, target oriented and quick. Our services include i) advertising ii) sourcing the right candidate and establishing contact iii) candidate screening, evaluation and scrutiny iv) detailed reference check v) candidate orientation vi) negotiations and hiring assistance vii) post joining follow ups.
The word "Dubai" may have evolved from the word "Daba", referring to the creeping pace of the Dubai river flowing inland. Today, the city's rapid growth could be anything but a creep. In 1991 there was one skyscraper taller than 100 meters. Today there are over 400, making it the fastest growing city in the world!
Since 1833 the reigning Al Maktoum family ruled Dubai. Since oil was discovered in 1966, the city has prospered. Today, oil revenue contributes a mere 20% of the economy's income. The majority of the emirates income is from the financial sector, tourism, real estate and ports. Dubai is the world's third-largest import and export hub after Hong Kong and Singapore.
The population of Dubai is two million. Expatriates make up 82% of the population. Arabic is the official language and English is the dominant language in business.
Cigarettes are subject to a 100% customs tax and the alcohol a 50% customs tax.
The UAE became a member of the United Nations and the Arab league in 1971. It is a member of the International Monetary Fund, the Organization of Petroleum Exporting Countries, World Trade Organization and other international and Arab organizations.
The Burj Khalifa is the world's tallest skyscraper at 828 meters, took 6 years to build at a cost of $1.5 billion. Burj Khalifa comprises 163 floors, 900 apartments, 304 hotel rooms, 35 office floors, 9000 parking lots and 57 elevators.
The week commences on Saturday and extends through Thursday, Friday being the day of rest. Government offices are closed on Thursdays and Fridays.
Your joint venture partner or Dubai shareholder must not merely be a nominee for the sake of meeting the rules of foreign company incorporation. You should choose a partner that actually brings a lot to the table, including local knowledge your business would need in Dubai Arabia.
To optimize the success of your new business venture in the UAE, Healy Consultants recommends your Firm i) complete a feasibility study ii) prepare a detailed business plan iii) communicate with the Dubai Chamber of Commerce iv) speak to your local UAE embassy and v) communicate with Healy Consultants Clients who successfully launched their business in Dubai.
Foreign companies should be aware i) Dubai statistics and market data are usually imprecise ii) transactions tend to take longer than expected iii) more frequent and longer market visits are required, at least initially iv) complex business procedures are common.
During business meetings, Arabs spend a lot of time discussing things in general and then once they are comfortable will talk business with you. Expecting them to directly come to the point and discuss business is seen as rude and must be avoided.
If invited to the home of an Arab, you should always accept and take every opportunity to become acquainted with local people. Your Arab host will be generous and interested in you. However, you should avoid debating politics and religion as your opinions might be regarded as ill-informed or even offensive, even if they seem acceptable to you from a western perspective.
Learn enough Arabic to communicate the pleasantries, greetings and responses. You will enjoy peoples' reactions. However it is important to use the Arabic language respectfully because Arabs believe it is designed to carry the word of God.
Arabs are hospitable and place a great deal of emphasis on an outward expression of politeness and quiet demeanor. Arabs rarely say a direct 'no' to a proposition, so you must listen and observe carefully. If the response is 'Leave it with me' or 'I'll think about it', there's a good chance that the project will go nowhere.
Avoid putting an Arab in a position where he might suffer a 'loss of face' in front of other Arabs. He will especially appreciate this, if he notices your action.
While Dubai is considered a cosmopolitan city, it is still an Islamic state and follows the Islamic culture. It is important for foreign companies to respect this and make themselves aware of the Islamic traditions in business.
Foreign entrepreneurs need to be aware of how they must treat women in the workplace. Examples include:
Not all UAE women are comfortable shaking hands with foreign men. You need to wait for the woman to put her hand out first before putting forth your own hand.
Also it is not acceptable to touch a woman even in a friendly manner on the shoulder or other places at any time in the office.
It is common for men and women to sit at different areas of the office. What this means is that you need to designate part of your office where all the men would sit and another part of your office where the women would sit.
An essential factor in starting a business in Dubai is to thoroughly research the business sector you are planning to invest in. Healy Consultants recommends our Client prepare a detailed business plan including an extensive market study and evaluation of competitors.
FEES SCHEDULE
Engagement Costs
US$50,000 to 60,000 *
Local sponsor fee
US$15,500 **
Company de-registration
US$3,450
* Depends on corporate structure and professional services required by our clients.
** Excludes US$3,300 refundable deposit.
FEES SCHEDULE