DOING BUSINESS IN AJMAN IN 2021
Since 2003, Healy Consultants Group PLC has been efficiently and effectively assisting our Clients with i) Ajman business registration ii) business licensing iii) Ajman business banking solutions iv) visa options and staff recruitment strategies and v) workspace rental solutions.
|Compare different Ajman entities||Limited Liability Company||Free zone LLC||International Business Company||Joint venture||Commercial Agency||Branch office|
|Also known as||Onshore LLC||Free zone company||Offshore company||JV||Local agent/distributor||BO|
|Best use of company?||Professional services||All products and services||Trading with Global businesses||Manufacturing and trading||Manufacturing and export trading||Specific projects|
|How soon can you invoice Clients\sign sales contracts with local customers?||2 months||2 months||Cannot trade locally||2 months||1 month||3 months|
|How soon can you invoice Clients\sign sales contracts with international customers?||2 months||2 months||2 weeks||2 months||1 month||3 months|
|How soon can you hire staff?||2 months||2 months||2 weeks||2 months||1 month||3 months|
|How soon can you sign a lease agreement?||1 month||1 month||Cannot rent office premises||1 month||1 month||2 months|
|How long to supply corporate bank account numbers?||2 months||2 months||2 months||2 months||2 months||2 months|
|How long to supply company registration \ tax numbers?||2 months||2 months||2 weeks||2 months||1 month||3 months|
|Limited liability entity?||Yes||Yes||Yes||Yes||No||No|
|Government approval required for foreign owners?||No||No||No||No||No||No|
|Resident director/partner/manager/ legal representative required?||Yes||No||No||Yes||Yes||Yes|
|Minimum paid up share capital?||US$1||US$1||US$1||US$1||US$1||US$1|
|Can bid for Government contracts?||Yes||No||No||Yes||No||Yes|
|Can do business with UAE customers without appointing local agent?||Yes||No||No||Yes||No||Yes|
|Can do business with UAE customers by appointing local agent?||Yes||Yes||No||Yes||Yes||Yes|
|Corporate bank account location?||ADCB||ADIB||Ajman Bank||Emirates NBD||First Abu Dhabi Bank||Union National Bank|
|VAT payable on sales to local customers?||5%||5%||Cannot trade locally||5%||5%||5%|
|Average total business set up engagement costs?||US$28,075||US$23,125||US$11,870||US$28,075||Request a proposal||US$28,075|
|Average total engagement period?||3 months||3 months||2 weeks||3 months||2 months||4 months|
Ajman company registration summary
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Advantages and disadvantages
Advantages of Ajman company registration
- Foreign investors enjoy lower set up costs than equivalent free zones elsewhere in the UAE. For example, Ajman Free Zone Authority levies no business registration fees (although it does levy license fees), making business registration a cost-effective solution for international entrepreneurs. Furthermore, office and land lease rates in Ajman are lower than in the free zones elsewhere in the UAE;
- Goods produced by the companies having national industrial license in the Ajman with 51% shareholding with GCC nationals are eligible for “UAE Certificate of Origin” from the Ministry of Economy and Commerce, UAE, qualifying them for a customs duty exemption in member states of the GCC, provided the value addition in Ajman FZ has been at least 40% of the total final value of the relevant product;
- Companies in Ajman FZ enjoy low energy costs. Consequently, Ajman is popular for energy intensive businesses such as manufacturing. International entrepreneurs choosing to set up a manufacturing business entity in Ajman obtain an industrial license. Healy Consultants will arrange all required licenses without our Client needing to travel;
- A company located in Ajman enjoys 100% legal exemption from all import and export duties;
- Foreign investors obtain a 20-year land lease, renewable for another 20 years and thereby guaranteeing 40 years’ legitimate tax-exempt operations;
- 100% foreign ownership is permitted. A free zone enterprise (FZE) requires a minimum of one shareholder. Furthermore, there are no restrictions on the repatriation of capital or profits from the UAE for any entity in Ajman;
- Registering an Ajman business is easier and cheaper than incorporating a regular LLC. For example, it is possible to set up a ‘hot desk’ facility in an office, a fully equipped space with desk, internet connection etc. which is available for rent by the hour or day subject to availability. This shared facility removes the cost of renting a fixed office, and is especially attractive to new business startups;
- International entrepreneurs obtain one of 4 different license types for their Ajman business: i) trading license ii) industrial license iii) professional services license and iv) national industrial license. A trading license is issued to foreign/UAE companies/free zone business entities who wish to carry out activities in Ajman;
- As part of the UAE, a respected international trading jurisdiction, an Ajman business is not perceived as an offshore company in an international tax haven. The UAE is positively ranked as the 23st least corrupt country in the 2018 Corruption Perceptions Index by Transparency International, a global measure of corruption amongst public officials and politicians;
- Healy Consultants can open global corporate bank account to support Ajman company. Healy Consultants works with internationally recognised banks such as HSBC, Standard Chartered and Citibank to provide corporate bank account services;
- Following business registration, our Clients obtain UAE residence and employment visas. For more information, visit our migration and relocation services page;
- The repatriation of capital and profits is very easy given that there are no taxes levied on personal and corporate income;
- The unemployment rate of the economy is as low as 2.46% of the workforce, making Ajman a preferred destination for workers from round the world;
- Ajman Free Zone Authority offers an affordable type of business license, the Pioneer License especially oriented to support young entrepreneurs, freelancers, and investors from ages 20 to 30 years old;
- Benefits of the Pioneer License include i) 100% foreign ownership, ii) 100% repatriation of profits, iii) UAE residency visa for investors and their families;
- The Ajman Free Zone Authority has simplified business set up with online registration and WhatsApp, email and live chat functions.
- Ajman is an iconic UAE destination in which to establish industrial businesses. Ajman Free Zone Authority offers special low energy tariffs for companies engaged in industrial and manufacturing operations.
Disadvantages of Ajman company registration
- Effective 1 January 2019, locally-incorporated Ajman entities, foreign entities registered in Ajman and limited partnerships engaging in i) holding company activities ii) banking business iii) distribution and service centre business iv) finance and leasing v) fund management vi) headquarters business vii) insurance viii) intellectual property holding and ix) shipping are required to employ local staff and lease a physical office. For more information on UAE economic substance requirements, click here;
- All companies registered in the UAE must i) create and maintain a register of their ultimate beneficial ownership (UBO) and ii) submit UBO data to the relevant registrar or licensing authority;
- Ajman has a high minimum capital requirement of DHS183,500 (US$50,000), which must be paid up during incorporation;
- Ajman business registration is slow, taking up to five weeks to obtain the business registration certificate and operating license;
- A free zone company (FZC) requires at least two shareholders, who can be of any nationality and need not be resident in Ajman or the UAE;
- Ajman is a small emirate which does not enjoy the global image and reputation of Dubai. Consequently, Ajman is not a good solution for international entrepreneurs for whom corporate image is important;
- While Ajman is strategically located close to major communication and transport links, Ajman only has a limited range of good quality accommodation, services, and schools for expatriate staff. Most expatriate managers choose to live in Dubai or Sharjah, with commuting times from Dubai at peak hours taking up to one hour;
- Because it is under developed, Ajman is experiencing construction work and utilities development which is disruptive to the operations of some companies. Furthermore, because it is under developed, Ajman is not yet an established community of businesses requiring services;
- Ajman’s GDP per-capita in PPP terms is US$68,895 which is one of the highest in the world, well above many developed nations other than Norway and Luxembourg. This implies that the wages of workers would be relatively higher in Ajman;
- In October 2018 the UAE Central Bank devalued Ajman offshore companies, consequently it has become extremely difficult to timely secure UAE corporate bank accounts for this type of entity;
- As an alternative, our Clients may instead consider registering their UAE offshore company in either Jebel Ali Free Zone (JAFZA) or a RAK ICC;
- Owners of an Ajman offshore company are not entitled to a UAE resident visa. If our Client requires a UAE residence visa, we recommend registering a Free Zone company instead;
- Unfortunately there are limited international and local corporate banking options for an Ajman company. To maximise the probability of corporate bank account approval, Healy Consultants Group PLC will approach 3rd tier banks. Alternatively, we recommend our Client registers a company in an alternative zero tax jurisdiction with a better international reputation.
- Ajman Free Zone companies have a high minimum capital requirement of US$50,000 (AED 183,500), which must be paid up during incorporation.
- Ajman Free Zone Authority’s representatives are slow and often unresponsive. The process to obtain the business registration certificate and operating license can take up to six weeks.
Best uses for an Ajman company
Connecting East and West
- Strategically situated at the entrance of the Arabian Gulf, Ajman is well placed to serve the eastern and western markets. Ajman’s proximity to Sharjah and Dubai provides easy accessibility to the two international airports and four ports;
A tax-exempt vehicle in the Middle East
- If properly structured, Ajman FZ business is the perfect way to legitimately book international profits without paying local corporation tax. There is neither any corporate tax nor personal income tax levied. Furthermore, there are no requirements for an Ajman business to prepare annual financial statements or tax returns to any authorities, making Ajman company easy to manage.
Frequently asked questions
Do I have to visit Ajman for business registration?No. Healy Consultants does not require our Clients to travel to Ajman to register a company.
Does an Ajman offshore company entitle me and my family members to a UAE resident visa?No.
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Useful links for Ajman
Government and public authority websites:
- Ajman Free Zone Brochure
- KPMG – Investment in the UAE
- PKF – Free Zones in the UAE
- Investment Reform in the UAE
- Global Free Zones of the Future
- From Free Zones to Special Economic Zones