Types of Companies that can be formed in UAE:
Wholly Foreign Owned Business Entities
As per UAE law concerning company formation, the following is a list of business structures that can be 100% owned by foreign investors, and where there is no need for an UAE majority partner to incorporate the business:
- Free Zone company
A Free Zone company can be incorporated by a foreign investor without having to enroll a UAE national intermediary as a shareholder. A free zone company can be established as a Limited Liability Company (LLC). It serves the purpose of an ideal local distribution or holding center and as a representative of an international trading company, which conducts the majority of its business from outside the UAE.
- Professional Services Company
A limited liability company can be established by a foreign entrepreneur without the presence of a UAE national shareholder, for the purpose of delivering professional services in the UAE. However, a UAE national resident must be hired as local service agent.
The services that can be offered by a professional services company include the following:
- IT and management consultancies
- Marketing consultancies
- Legal and accounting firms
- UAE Branch Office
A Branch Office can be incorporated by a foreign corporation for the purpose of billing UAE clients. A branch can engage in billing local customers, signing sales contracts and collecting income from local clients. As in the case above, UAE branch office registration doesn’t require a UAE resident shareholder, but still needs appointment of a local service agent.
- UAE Representative Office
As dictated by UAE corporate law, a Representative Office can be established solely for the use of the parent company’s promotion. It cannot carry out business and thus, there is no need for a local service agent.
- Offshore Company
Offshore companies are also called paper companies. An offshore company is not physically present in the UAE and doesn’t engage in business affairs within the boundaries of UAE. It is an instrument used by foreign companies to conduct business with the African and Middle Eastern markets, while avoiding tax liability.
- UAE Free Zones
These Free Zones include Dubai, Abu Dhabi, Sharjah and Northern Emirates Free Zones. The offer a broad range of incentives and investment opportunities for global investors, such as 100% foreign ownership and tax (import/export) exemptions, minimal incorporation restrictions, a large number of free trading zones (35) and a large variety of free zone activities.
Frequently Asked Questions
- What are the restrictions to ownership that foreign investors face in incorporating a UAE company?
Answer: Some business structures will require appointment of an Emirate citizen shareholder.
- What kind of business entities in the UAE require an Emirati shareholder to be appointed as a shareholder?
- Limited Liability companies
- Joint Ventures
- Private Shareholding companies
- Public Shareholding companies
- To incorporate a Limited Liability company in the UAE, what number of UAE resident shareholders is required?
Answer: At least 51% of shareholding has to be under UAE citizens.
- Is a full audit required for incorporation of UAE small business?
Answer: No, an annual audit is not required in this case.
- What kinds of tax implications will a UAE company pose?
Answer: We can enable our clients to incorporate a tax exempt company.