How to register a company in the UAE

The registration of a company in the UAE remains desirable even today in difficult times. Dubai is an adherent of its own development model, thanks to which the provincial village has become a famous global metropolis. Today, the average salary of a high-class employee is about $ 7000, although prices for housing and food are higher here than in the post-Soviet space.

In 1966, oil was found in Dubai, and the emirate’s revenues increased significantly. The state and the population began to get richer – investors flocked to the country from all over the planet. And after the easing of tax conditions, the climate for doing business has improved. The war in the Persian Gulf in the early 90s of the twentieth century made it possible to actively sell petroleum products to the conflicting parties, and the economic forward movement of Dubai turned the God-forsaken place into an oasis of prosperity.

However, the trade in hydrocarbons has not been a priority for the Emirates for a long time. The bet is placed on corporations whose financial portfolios are estimated at billions of dollars. There are several positive reasons for foreign businesses to enter this market.

1. Availability of tax benefits. In Dubai, it is allowed to register three types of business entrepreneurship:
   • It is possible to open an offshore company in the UAE. Offshore is exempt from taxes, but within the framework of the state has no right to conduct any activity. Registration is available in several emirates.
   • A company located in a special economic zone with its own corporate legislation and tax policy. There are 30 such zones in Dubai, and only 50 in the UAE. In them, companies are exempt from taxes, but must fulfill a number of conditions.
   • A local company can be opened in accordance with federal law and is allowed to work with both local and foreign businesses. The company is obliged to pay a tax of 5% (VAT similar to Russian). If you do not need to obtain special licenses, certificates and other documentation, then registration is carried out in a few weeks.
2. Demand for foreign investors. The main direction of the UAE’s development is the diversification of the economy, since the oil business today occupies only 5% of the total volume.

The sale of goods abroad takes place without paying taxes. When trading on the local market, VAT is paid in the amount of 5%. But you should know that each type of activity is licensed. Otherwise, a fine is inevitable. It is quite simple to obtain a license for cleaning services, and obtaining a permit for investment will be associated with many difficulties, although this is real.

The larger the business, the shorter the waiting period for obtaining a license. And the amount of payment is tied to the type of activity.

1. In Dubai, the search for highly qualified personnel is not a problem. There is high competition for jobs. Obtaining a work visa is not associated with any difficulties.
2. Lack of IT platforms for small and medium-sized businesses. The Emirates are in dire need of digital services. Local competitors lag behind their Western counterparts in development for decades.
3. Attracting customers through forums and exhibitions. Commercial offers and the organization of tenders is not a priority. In Dubai, business is progressing through personal contacts and communication with authorized representatives of supply and purchase companies. Therefore, in this area, the organization of events with the participation of b2b clients is at the forefront.
4. Fast socialization. The UAE has a developed business community. Platforms for communication and discussion of business programs are open, clubs work in the following directions. Recommendations play a big role, not advertising.
5. The pandemic and military conflicts are not a hindrance. Dubai actively accepts Russian citizens. The UAE is open to our compatriots for exhibitions, conferences, creative meetings, where options for cooperation are discussed and created. A visa will be issued to you free of charge at any airport, and it will be valid for 90 days, starting from the moment of entry.

How to open a business in Dubai

Business loves peace, quiet and security. Not every jurisdiction today can provide decent conditions for an efficient and stable business. Such comfort can be provided to you in Dubai, but many of the legalization procedures here seem complicated and peculiar in terms of understanding. But not everything is so confusing. There is a certain algorithm of actions.

The choice of a free economic zone (hereinafter referred to as the FEZ)

There are about 50 frisons working in the Emirates. To choose a particular zone, you need to consider the following points:

• the list of documents for opening an account with a credit institution is the same in all territories of the FEZ;
• in any frison, you have the right to work with B2B companies (including distributors) around the world, both inside and outside the UAE, as well as with other frisons;
• banks require an actual office lease agreement with the possibility of visiting it by authorized persons.

Based on the above, we can conclude that when registering a company in Dubai, the fact of having an office must be confirmed.

Further:

• the result of registration is the possession of a full package of documents;
• you are obliged to comply with the terms of opening/closing and renewal of companies;
• you must have quotas for visas (for tax residents);
• use a special classifier to designate your own type of activity in order to avoid fines and account blocking;
• you cannot ignore local cultural peculiarities. For example, the sale of alcoholic beverages is prohibited in some zones;
• it is impossible to combine businesses of different directions within the same company. Each type of activity should be singled out separately;
• it is recommended to pay close attention when selecting consultants and contractors. Underestimating the nuances can lead a business to collapse;
• prices for services and additional services, such as changes in the structure of the company, the release of new documentation, etc. are assigned taking into account the realities and local legislation.

In the FEZ, where the authorities provide a full package of documents and where the presentation of a passport is sufficient for registration, the whole procedure takes place online. The extension of the company’s activities implies payment.

How to choose the type of company

To answer this question, you need to decide whether you will work inside the UAE or outside it. If you plan to conduct business outside of this country, today you most often choose the “onshore” category in Frizon. The “offshore” type is still in demand, but it is already a thing of the past. If there is a desire to work in the Emirates, then you can work in the service sector with individuals and then your type of activity falls under the category of “Mainland”. If you plan to work with legal entities, then the “onshore” category in the frison is selected. In this case, you need options from several SEZS that are suitable for your needs. In fact, it is not so difficult to open a turnkey company in the UAE.

Tax resident visa

In 2022, it is still possible to open both resident and non-resident accounts in the UAE. When opening a non-resident account, it is required to provide data on tax residence with a tax code. When opening a resident account, you must provide a tax resident visa, an ID card and indicate the place of registration in the UAE.

You need to be prepared for the fact that banks may request confirmation of the relevance of opening an account in the UAE, since a credit institution has the right to ask if you will work in the Persian Gulf countries, whether you intend to do business outside the country, etc.

For greater socialization in the Emirates, we recommend getting a visa when registering a company.

A foreign company with an account in a similar jurisdiction

You can quickly open a bank account, for example, through an electronic service or a payment system. However, this option is quite long, and in addition, there may be problems with the transfer of funds.

It is better to open an account “slowly”. This is the best option, in which compliance is issued before accepting the opening of an account. In accordance with it, the documentation specified in the list should be provided. This option is the most reliable. The duration of the stage in the future will bring the main bonus – you will register a company and an account in the same jurisdiction. UAE banks belong to this privileged category. Prove that you have a business and a good amount in your account and great opportunities will open up before you.

To buy an offshore company with an account in the UAE, businessmen who seek great prosperity in conditions of stability want to

What advantages do UAE banks have

1. UAE banks have never been closed – they are reliable and are in the TOP 100.
2. Regardless of the amount, the transaction cost does not exceed 15 US dollars.
3. There is no limit on the size and number of transactions.
4. All the world’s leading currencies are available.
5. The working conditions of banks do not change.
6. Many UAE banks have representative offices abroad.

The subtleties of starting a business in Dubai

The Emirates are located between Asia and Europe and have well-established air links with leading world powers. Deliveries to any country are carried out easily and freely. They don’t know about bureaucracy here, and there are no restrictions on the movement of capital. Here, business does not face usurping checks, and malefactors are punished by the harsh hand of the law.

How to open a business in the UAE for a Russian in 2022? We recommend considering the option of relocating the business in a neutral country. In the UAE, the rules of the game remained unchanged, despite the sanctions imposed against the Russian Federation:

• there are agreements on the automatic exchange of information;
• the beneficiaries and economic feasibility of the UAE leadership are not in doubt, which means that you are moving not because of the impact of sanctions and not because of the optimization of tax payments.

In the current situation, decisions should be made promptly.

The FEZ has limitations

It is possible to conduct business in the FEZ without the participation of a local co-founder. A company registered in the free zone enjoys significant advantages:

• no customs fees;
• preferential taxation;
• there are no restrictions on the export of capital;
• resident visa;
• developed infrastructure, etc.

But the FEZ does not open the doors wide open to everyone. Without connections and recommendations, you will not be perceived as a full-fledged partner. You can enlist the support of an influential business person through a simple search on the Internet or through a Russian trade representative office. The test delivery will put all the dots over the “I”.

What kind of business can be opened in Dubai today? It’s up to you. We will bring to your attention some popular niches:

• tourism;
• IT technologies;
• online electronics store;
• trade and general trade activities;
• construction.

Attention! Legal entities of the UAE free zone do not have the right to trade in the domestic market of the country. Such activities are carried out only through official local distributors.

In matters of financing, you can only count on yourself

In order to fully use the tools of the UAE banks, you need to work in the zone with accounting profit for three years. This implies a scrupulous calculation of financial injections into the project at the initial stage. You can hire a professional, but in this case you will face considerable costs in the amount of about $ 200 per hour. The total cost of registering a company in the UAE can reach $ 80,000. International institutions will also not be able to help you free of charge.

Get used to the long paperwork process

You are doing well if the person who has the right to sign is in the UAE. If the owner wants to stay in Russia, the legalization process can take from 4 to 6 weeks, since a lot of time is spent on the certification of translations from Russian into English and from English into Arabic, as well as on the confirmation of the Ministry of Foreign Affairs of the Russian Federation and the approval of the consulate. In order not to sit in queues, you can hire a person for a small fee who will visit instances as necessary.

When recruiting staff, you should not rush

In the labor market in the UAE, you can pick up qualified specialists from all countries and continents. But the Europeans are the most respected.

It is better to hire staff after the certification is completed. Since salaries in the Emirates are cosmic, it is necessary to approach the deadline for staffing extremely carefully. No one is interested in extra expenses.

It is more difficult to dismiss an employee in the UAE than in Russia

Here it is impossible to part with an unwanted employee without his consent. You have to go to court or the labor dispute commission. If the contract is urgent, and there are no legal grounds for the dismissal of a valuable employee, then when he is dismissed, he is paid wages for 3 months or for the remaining period until the end of the contract. We recommend carefully selecting frames. Such extravagance can lead your business to collapse.

There are many cultures, nationalities and faiths in Dubai

Although 90% of the population are from other countries, the laws of Islam apply throughout the UAE. It is necessary to look for an approach to a representative of each diaspora. The main layers of society with which it will be necessary to interact are as follows:

Arabs. The fact that their ancestors were poor fishermen has long been forgotten. They are now very rich, selfish and require special treatment – respect, respect, etc. You can’t argue with them if the results of the negotiations are only important to you. Accordingly, you need to behave carefully with them, although not everyone likes that the Arabs flaunt their independence and flaunt it.

Remember: when you become useless to Dubai and cannot pay the bills, you will be deported as unnecessary. Emirates are good for earning money while you are young and rich. Don’t miss the time.

Managers from developing countries. These representatives do not bother themselves with responsibilities for the assigned case. Their main task in life is to keep their place in the company. You can sell them ideas that will bring certain dividends and benefits.

Managers from the USA and Foggy Albion are ambitious highly paid specialists. They prefer to surprise the world with new unique solutions, and the price here is not the most significant category.

For the majority of the population, English is not a native language

The knowledge of English in the UAE is treated loyally – mistakes and accent are forgiven. However, they will still pay attention to your level of knowledge, and the slight regret of the Arabs will not be in your favor. Social hierarchy is not the least important here.

Dubai has laws and religious canons

In the UAE, they take care of the observance of Islamic traditions. Legislation in Dubai is adopted in strict accordance with the main religion and it can be difficult for visiting tourists to deal with the enforcement of individual laws.

The local population is supported at the state level:

• grants;
• financing;
• privileges.

In Dubai, accuracy does not play a big role

There is no hurry in Dubai. They used to live here according to the principle: “If Allah allows, then tomorrow, maybe.” This does not mean that a decision will be made tomorrow, or the day after tomorrow, or later sometime. Meeting the deadline is not the norm. We have to give strong arguments so that the work is done on time or the meeting takes place on time. The European person is slightly annoyed by the constant reminder to partners about the importance of responsible decisions. And although the UAE is developing, and the international practice of doing business is being understood, but at the moment it is better to do business with aborigines in stages. You should expect surprises if you were promised to do something by the appointed time.

Demand for active marketing support

The Arabs have a peculiar mentality – they consider themselves the most intelligent, beautiful, great and famous. It’s worth taking advantage of. Offer a unique product that will allow them to rise to a new level in their own eyes and you will be provided with access to the market.

But there is another kind of marketing support. If you manage to really make friends with a local Arab, then through a social network he will advertise (for example) your new coffee shop in such a way that after a while you will forget about marketing moves. Just don’t lose face – the quality should be on top. Word of mouth has a special power here. And the posts from the account work well.

What you need to come, see Dubai and…stay

There is no residence permit in the UAE. There is a resident visa that gives certain rights. For example, you can arrange your child in an educational institution. Depending on the category of registration of a legal entity, a visa is issued for 2 or 3 years. When concluding an employment contract with an existing company, a work visa is issued. If you do not visit the country within 6 months, the visa will be canceled.

There is a way in which you can actually get a visa in three weeks. Upon receipt of a freelance package of FEZ without the formation of a legal entity, this option will be available. Upon obtaining the actual right of residence in Dubai, you have the right to issue a sponsor visa to your spouses and children, and you issue other relatives as sponsors or employees of the company.

For reference

Registration of a company in the UAE is $ 10,000 per year, which includes a license fee of $ 2,000.

A freelancer license for certain types of activities – from 1 thousand to 2 thousand dollars.

Rent of premises with an area of 100 m2 – from 20 thousand to 30 thousand dollars per year.

The insurance of the owner of the company is $ 3,000.

Renewal of registration – about 8000 dollars.

Getting a visa – 2500 dollars.

Insurance and a permit for each employee – $ 2,000 per year.

The size of the authorized fund depends on the choice of FEZ.