Telephone Numbers
Telephone Numbers
Middle East Trade - Company Formation - Working Life and Legal Processes
For detailed information +90 542 381 3868 'Call.
What are the Key Advantages of Doing Business in the UAE?
The Choice of English Common Law vs. Local Sharia Law: Abu Dhabi Global Market - ADGM (here), is the first jurisdiction in the Middle East to directly apply English Common Law, similar to Singapore and Hong Kong. This results in a consistent and predictable legal framework guided by principles of equity and enforced by British judges in the United Arab Emirates.
In December 2020, the UAE passed a law eliminating the requirement for an Emirati shareholder for local companies.
Dubai International Airport (DXB) is a major hub for international flights and one of the world's busiest airports by passenger volume. In 2019, it served approximately 88 million passengers.
With its carefree and lavish aesthetic lifestyle, world-class infrastructure, increasingly sophisticated healthcare system, luxury restaurants, and numerous tourist attractions, Dubai continues to be an attractive playground for aspiring and established entrepreneurs - a colorful mix of freelancers, private employees, digital "remote workers," expats, wealthy retirees, and of course, architects and real estate investors: annual rental income in Dubai can be as high as 7%.
Depending on your business activity, one of the following licenses from 3 main categories will be required: Professional, Commercial, or Industrial licenses. Based on the required license type, the type of establishment can be determined, which includes; a Limited Liability Company (LLC), Foreign/Local Branch, Sole Establishment, or Civil Partnership.
There are 7 Emirates that make up the UAE: Abu Dhabi, Dubai, Sharjah, Ras Al Khaimah, Fujairah, Ajman, and Umm Al Quwain. To determine which emirate is best to set up in, you should consider the following:
Depending on your business activities and potential clients, you will go a long way in deciding which DED license is required. Deciphering what your business activities and/or potential clients will be is extremely important for deciding in which emirate to set up. For example, to obtain an ADNOC/SPC approval, an Abu Dhabi Mainland trade license is mandatory.
Mainland Company:
A mainland establishment is an onshore facility licensed by the Department of Economic Development (DED). An onshore entity is permitted to do business in the local market as well as outside the UAE without any restrictions.
Free Zone Company:
A Free Zone business is established within the designated jurisdiction of a specific emirate where the company is only permitted to do business within the same Free Zone or outside of the UAE. For commercial trade licenses and the trading of physical goods, a Free Zone company cannot do business directly in the UAE mainland. For Freezone companies to trade with the UAE mainland, they must do so through a mainland distributor or agent and pay a 5% import duty on local invoices. A Free Zone business cannot legally operate outside its designated jurisdiction.
There are many ways a foreign party can own 100% of a business. The numerous Free Zones across the Emirates allow for 100% ownership of businesses of different sizes and in multiple industry sectors. However, it is important to remember that there are restrictions on who you can contract with when operating from a Free Zone entity. On the UAE Mainland, it is possible for Foreign Nationals or Companies to wholly own businesses that provide professional and consultancy services - this can be done as an individual through a 100% owned Establishment or as a Company through a 100% owned Foreign Branch. Trading of goods is not permitted on the UAE mainland using a 100% Foreign-owned company.
If the work you undertake in a CICPA zone requires vehicles for transport or operations (e.g., earthmovers, cranes, trucks, buses – including boats and marine vessels), then you must obtain a CICPA pass for those vehicles.
A CICPA pass for a vehicle is obtained in the same way as a CICPA pass for a person, with the following key steps:
First, you should check if you meet the right criteria for ADNOC Registration.
You will need the following:
The next step is to consider the necessary documents required to submit to ADNOC for their registration stages and reviews.
ADNOC Vendor Registration Stages:
A Representative Office is a branch established by a parent company and is useful in the promotion of a foreign company and introducing its products to UAE companies. A Representative Office cannot export, import, or sell in the UAE. A Representative Office may only engage in promotional activity for the products and services provided by the parent company. A Branch, on the other hand, can conduct business beyond promotional purposes in the UAE.
Is the general manager of a company in Dubai unlimitedly liable for its activities?
Entities incorporated in the UAE, whether on the mainland or in a free zone, are required to appoint a general manager who is solely responsible for the management and operation of the entity. In the UAE, the powers and authority of the general manager are extensive and are usually contained in the constitutional documents of the entity (e.g., memorandum of association) or a power of attorney from the shareholders. UAE law imposes both civil and criminal liability on the general manager in connection with the business of the entity, including for matters beyond the general manager's control. For example, the general manager can be held personally liable for a bounced check issued by the business and signed by the general manager, and in the event of liquidation, the company's management is scrutinized, and if found wanting, it would expose the general manager to potential personal liability for debts as well as possible criminal prosecution. The UAE Commercial Companies Law No. 2 of 2015 states that a general manager shall be liable to the company, shareholders, and third parties for all acts of fraud, abuse of power, and violation of the provisions of the Commercial Companies Law or the articles of association or for errors in management. It is recommended that general managers take the following measures to minimize the damages they may be exposed to and to defend against claims of liability: a) Ensure they act within the scope of authority and powers contained in the articles of association or power of attorney. b) Ensure there are sufficient funds in the entity's bank account before signing checks. c) Consider director's liability insurance or seek indemnity from the entity for actions taken in the normal course of business. d) Ensure that the business is managed with the required due care and diligence and that good corporate governance records are kept to reflect this.
To import medical products into the UAE, you must obtain a mainland license with the correct activities that will allow you to import the products into the UAE. You must ensure that the equipment you wish to import is registered with the Ministry of Health and Prevention to certify that the product complies with the rules and regulations for import and sale in the UAE. The activities related to the importation of medical equipment require a warehouse and qualified personnel to handle the equipment. It is possible for you to use a registered distributor in the UAE to distribute to end-users, in which case a warehouse or product registration is not required.
What are the requirements to sponsor two maids / two domestic staff in Dubai?
Regarding the hiring of two maids or two domestic staff, such as a maid and a driver, for a household in Dubai, the requirements are as follows:
The hiring of two maids or domestic helpers is subject to approval. The sponsor is also required to provide a letter explaining why they need to hire two maids, and the sponsor may need to show that they have a large family of at least 4 family members to justify the need for additional staff in the home.
Do I need to register unpaid leave and salary reductions for my staff with the Dubai Ministry of Labour (MOHRE), and how can I do this?
If a company wants to reduce an employee's salary, reduce their working hours (temporarily or permanently), or place staff on temporary unpaid leave, this must be mutually agreed upon in writing by the staff and the company. The written agreement must be made voluntarily by the staff.
Initially, there was no mechanism to formally register these changes with the Ministry of Human Resources and Emiratisation (MOHRE) - the Dubai Ministry of Labour - previously this could only be done by submitting the employee's signed letter. However, following the issuance of Ministerial Resolution No. 279 of 2020 to assist companies during the COVID Pandemic, click here for the Resolution pdf dated Thursday, 30 April MOHRE is now accepting the registration of these changes in employment conditions through the MOHRE system using a Temporary Additional Addendum – click here for the ADDENDUM pdf.
Therefore, all mainland companies must submit the Temporary Additional Addendum to MOHRE for each staff member who has agreed to modified employment arrangements to prevent any future blocks or fines from MOHRE, for example, if WPS payments are below the specified monthly threshold required.
PRO Partner Group can provide support and guidance throughout this process to assist with the receipt of the completed Addendum and its upload and registration with MOHRE to ensure compliance.
The Economic Substance Regulations (ESR) were introduced in April 2019 under Cabinet Resolution No. 31 of 2019 to prevent companies from being established in the UAE for the purpose of channeling payments that would otherwise be taxable abroad, and it successfully led to the removal of the UAE from the EU tax haven blacklist. The ESR applies to all entities (including branches and representative offices) based in the UAE (including free zones) and for financial years starting on or after 1 January 2019. The ESR relates to the income-generating activities of entities, and resources such as the flowchart and ESR Relevant Activities Guide produced by the Ministry of Finance are used to determine whether the entity is conducting a "Relevant Activity" as defined in the ESR and the Ministry of Finance's summary of Relevant Activities. The outcome of an analysis of the applicability of the ESR to an entity may need to be communicated through notification to the competent authority responsible for regulating and managing the ESR (such as the Ministry of Economy) and the submission of a report (for most mainland entities and free zone authorities for entities located in UAE free zones).
If you want to set up a company and you will be named as a shareholder or manager on the new LLC's DED Trade License, you will need to obtain a No Objection Certificate (NOC) from your current employer to ensure they have no objection to you doing so. It is not always necessary to transfer your visa from an Employee Visa to an Investor Visa with the new company, and certain variables apply here. For more information and assistance with this query, please contact a member of the PRO Partner Group team.
To obtain a commercial lease and Tawtheeq in Abu Dhabi, the person signing on behalf of the company will need a UAE Residence Visa, an Emirates ID Card (EID), and a Power of Attorney (POA) through the company to sign the Tawtheeq. The Tawtheeq is then registered with the Abu Dhabi Municipality.
If you need assistance with processing a Tawtheeq document in Abu Dhabi or any other related company setup, restructuring, or local partner issues, please contact us in the UAE.
When deciding to change the manager of an LLC, the first step is always to refer to the company's constitutional documents - the details in the LLC's MOA (Memorandum of Association) will determine the path to follow and who has the responsibility to change and appoint a successor GM.
If the foreign party in an LLC is a legal entity, the first step for the overseas Shareholder would be to issue a Resolution that agrees to the removal of the current GM and allows for their replacement. This document should contain, or be submitted along with, the powers of the new GM. This document is also required for Foreign Branches.
Once this document is legalized for use in the UAE, steps must be taken to update the records of the relevant UAE authorities; in the case of an LLC, the Notary Public (usually with an amendment to the MOA) and the DED, and in the case of a Foreign Branch, the DED and MOE.
From time to time, you may need to inform another authority such as the Dubai Municipality, KHDA, HAAD, etc. (this will depend on your company's activities); as well as informing your company bank to update them. To ensure these steps are not overlooked, we recommend consulting a professional firm that can assist with the process.
If you need assistance with document preparation and notarization in Dubai or Abu Dhabi, or any other related company setup, restructuring, local partner, or PRO support matters, and if you need any advice on the procedure for changing the General Manager of an LLC or Foreign Branch in the UAE, then you can contact us.
There are several steps to incorporating a company in the UAE. One of the most important steps is reserving a Trade Name.
Once the activity or multiple activities have been selected and the appropriate business type has been determined, an application for a Trade Name can be made.
There are many considerations to understand when choosing a Trade Name and whether it will be accepted by the DED. Below is a selection of the main points, but for a full list, please contact PRO Partner Group for a complete understanding.
The trade name reservation is valid for 6 months. If the Client cannot issue the trade license after 6 months, the trade name will be automatically canceled at the end of the reservation period.
The company can use the trade name of another company that has franchised it, provided that the franchise agreement is submitted to the DED.
The DED has the right to cancel or change the trade name if it is found to be similar to an existing trade name or if the trade name does not take into account the relevant terms and conditions.
Yes, entities in the UAE, whether on the mainland or in a Free Zone, are required to appoint a General Manager (GM). Under UAE law, the GM is a corporate officer responsible for a range of legal duties and obligations. The GM's role is the highest authority within the company, and the GM is responsible for the day-to-day running of the company and for ensuring that the entity complies with all local laws. The roles and responsibilities of the GM will be listed in the constitutional documents of the legal entity. It is important that someone appointed to the position of General Manager has a clear understanding of the responsibilities of this role and the associated risks.
Until recently, the Dubai Department of Economic Development (DDED) required all companies on the Dubai mainland to lease a physical office space of at least 200 square feet in order to issue a DED Trade License. The DDED would inspect the office space and approve it as part of the license setup.
However, now the DDED has allowed companies to use an Estidama or 'Sustainability' virtual lease option, allowing smaller companies with fewer staff to set up the license without a physical space.
This is in line with Dubai's overall direction of attracting more companies and investors and reducing the setup costs for companies wanting to do business in Dubai. Abu Dhabi has done the same with its expanded Tajer License activities and the new Abu Dhabi Freelancer License.
The Estidama or Sustainability contract is essentially a virtual office. You get a full lease agreement for the company, and this enables you to get your Trade License. This agreement also allows you to obtain up to 4 employment visas/work quotas against this space.
PRO Partner Group can fully assist you to set up the license and obtain the Estidama license. At PRO Partner Group, our team of expert consultants can help you set up the right license, activity, and approvals, and register the Estidama license. What approvals do I need to open a restaurant in Abu Dhabi?
Firstly, it is very important to know the specific location where you want to set up the Restaurant License. If you have found a location on Mainland Dubai, you will need a mainland license. A restaurant in a Freezone area will need a Freezone license.
The most common form of a mainland license is a Limited Liability Company (LLC), which requires a 51% Local UAE Shareholder. If the chosen location is within a Dubai Free Zone, you can set up as an LLC with 100% ownership using a Free Zone license.
For the specific activity of a Restaurant, pre-approvals are required from the Abu Dhabi Food Control Authority or the Dubai Municipality Food Control Department, which will request that the premises meet specific requirements to allow you to open a Restaurant license.
The costs will vary depending on where you choose to establish your license. Setting up your business in a Free Zone offers; 100% foreign ownership, zero personal and corporate tax, and zero import duty, full repatriation of profits, privacy and control of your assets, and more.
According to the law to which Dubai is subject, mainland entities are required to have a local sponsor who will own 51% of the company's shares, with the remaining 49% belonging to the foreign partner. The most common form of a mainland business is a Limited Liability Company (LLC), which requires at least 2 shareholders, with liability limited to the capital of the company shares. Just like Free Zone companies, the cost of setting up a mainland business depends on various factors; business activity, number of employees, and commercial space.
According to UAE law, you will need a local partner if you want to set up on the mainland. World Company Setup can act as a corporate nominee shareholder in the case of an LLC setup, or as a corporate national service agent (NSA) in the case of a Foreign Branch or Establishment. As a corporate partner or agent, we provide the foreign party with full security and effective ownership and management rights.
A commercial lease agreement is a requirement to incorporate and operate a trade license under the Dubai Department of Economic Development (DED) and a municipal tenancy contract, an Ejari (Dubai) or Tawtheeq (Abu Dhabi). This is normally required as part of the company setup process to obtain your DED Trade license (there are some licenses that allow companies to set up without a lease). Specific regulations regarding minimum size, location, and suitability apply - for example, in Dubai, the minimum office size is approximately 200 sq ft for Office Spaces, Business Centres, and Shops, and 500 sq ft for a warehouse, while in Abu Dhabi, there is a 14 sqm requirement. The office must have an external door, and the signage will be checked by the DED for accuracy before the trade license is issued.
An ADGM SPV is a well-recognized corporate entity, often used as a Holding company - it can be used to hold assets, shares, intellectual property, as well as to secure positions and share risk between individuals and companies. The SPV is not an operational company and cannot issue invoices for operational commercial activities.
The ADGM SPV, as such, can own shares in, for example, mainland Dubai LLCs. The Ultimate Beneficial Owner (UBO) of the ADGM SPV will determine the shareholder percentage possible in the mainland LLC.
According to UAE Commercial Companies law, unless there are special circumstances, 51% of the shares in a mainland LLC must be owned by a UAE National or a UAE Company.
If the UBO of the ADGM SPV is a foreign shareholder, a maximum of 49% of the shares in the mainland Dubai can be owned.
The main advantages of using an ADGM SPV are:
Please note that any corporate services within the ADGM will be provided through a third-party Corporate Service Provider (CSP) registered with the ADGM.
Yes - outsourcing your company's legal obligations to a reliable PRO Services Company with experience and extensive knowledge across the UAE is not only cost-effective but also means you save time and avoid any complications or risks that may arise, such as fines for failing to meet deadlines.
You may want to outsource PRO services on a case-by-case basis, or if you have a large number of staff, licenses, and transactions, you might consider a monthly retainer to cover all your requirements.
Outsourced PRO services to consider include:
If you need help and advice on setup and for more information on fees for Outsourcing your PRO Services and any other related company setup, local partner or PRO service matter in the UAE and wider Gulf, email us or fill in the contact form below and we will be delighted to assist you.
Choosing the right Local Sponsor can be difficult, there are certain considerations that need to be checked before you decide which sponsor would be best suited for your business.
The new E-Trader License allows UAE residents to create a License without requiring a Local Sponsor or National Service Agent and at a significantly reduced cost.
This is a new development and is a cost-effective ideal solution for single business owners who are looking to create a license to sell professional services and products via their social media.
The E-Trader License does not require an office space, meaning the business owner can work from home. However, there are some limitations with regards to the trading of physical products/goods (such activity is only applicable for GCC nationals.)
Benefits:
Limitations:
Foreign companies wishing to retain 100% ownership can open a foreign branch or representative office in the UAE. Local companies can also open branches within the UAE, in the same or a different Emirate. Branches can be established on the UAE mainland or in a UAE Free Zone. There are over 50 Free Zones in the UAE, so the options are significant. When deciding where to open the branch, various factors such as your budget and the company's activity should be considered; remember that the activities must reflect those of the parent company. To open a branch on the UAE mainland, you will need a National Service Agent (NSA) or Local Service Agent (LSA). World Company Setup can assist with the formation of your branch and act as the NSA / LSA if required.
World Company Setup is ready to support you through the process of correctly setting up your company or branch in Abu Dhabi, Dubai, and the wider UAE, Oman, and Qatar. If you need assistance with this on any related company setup, restructuring, or local partner matters for the UAE, contact us or fill in the contact form below, and we will be delighted to assist you.
If you want to sell products in the UAE, it is possible to use a Commercial Agent who allows you to use their license to sell goods. Using an Agent can eliminate the setup procedure of a license, but it has the disadvantage that once you have an agreement with the Agent, they will have control over your product, and it can be difficult to withdraw from the contract. Therefore, to avoid potential disputes and have full control, you may consider setting up a mainland company that will allow you to have full control over the products you want to sell into the UAE. However, if you do not want to set up an entity, World Company Setup can offer a Nominee Commercial Agent to allow the foreign party to have full effective ownership protection over its products in the UAE.
Local Sponsor – 51% Partner
A Local Sponsor is a 51% shareholder in a Limited Liability Company, also known as an LLC. In mainland UAE, a foreign investor can only own 49% of the company shares, and the remaining 51% of the shares must be owned by a local Emirati. The legal structure of an LLC requires the local partner to be named as a shareholder on the Trade license and in the Memorandum of Association (MOA), which is a constitutional document for the LLC and is signed and notarized before a Public Notary. However, to ensure the foreign investor manages and operates the company autonomously, the local partner will waive their rights to the business, including profit under the MOA, in return for an annual fee.
Local Service Agent
A Local Service Agent is required for all Foreign Branch, Representative Office, or Professional licenses in mainland UAE. The Local Service Agent is not a partner in the company, and the ownership of the company is 100% owned by the foreign investor. The role of the Local Agent is to be the representative of the company in Government departments and to facilitate registrations with various municipalities.
To apply for a certificate of origin, the company needs to be registered on the COC portal and have a username and password https://digital.abudhabichamber.ae/portal/#/login, then apply for the certificate of origin by filling out the application form on the portal and confirming the selected currency, product type, shipping type, consignee name, and details, after which the government fees will be 300 AED per application.
There are many options to consider when setting up your business. One of the most important factors is to understand the differences between a Free Zone and Mainland, the limitations and capabilities of each, as well as their advantages and disadvantages.
If you are operating locally, looking to secure Government contracts, or if you need external approvals, the best option is to register onshore under the Department of Economic Development (DED), the main licensing authority in the UAE.
There are over 2,500 activities to choose from in the UAE, divided into six different license categories.
The Department of Economic Development (DED) Abu Dhabi and Dubai recently notified the release of two activities to allow for 100% foreign ownership.
The two activities are:
These two activities were previously required to be 100% UAE-owned companies, but have now been added to the list of activities that are permitted to have 100% foreign ownership in the UAE mainland jurisdictions.
Any company with or operating in these activities that wishes to move to 100% foreign ownership can now do so. New companies can also now be established on the UAE Mainland with these activities under 100% foreign ownership. Approvals and thresholds set by the Ministry of Human Resources and Emiratisation (MOHRE) are still required.
A free zone is a defined and isolated land or environment with a special tax, customs, and import regime, different from a mainland area. The biggest advantage of owning a free zone company is that as an expat, you can own 100% of the business without having to give away any of its shares.
The average fee to create a Freezone license in the UAE using a flexible virtual office with 1 or 2 staff visas is approximately AED 40,000. Costs vary from Freezone to Freezone and depending on where you choose to establish your license, staff, and office requirements. Freezone companies are lower cost to set up in the initial stages than a mainland company, however, the office costs in a Freezone will make this type of license more expensive in the long run as there will be more staff. Setting up your business in a Free Zone offers; 100% foreign ownership, zero personal and corporate tax, and no import duty.
The time taken to incorporate a Company in the UAE depends largely on the complexity of the business to be incorporated. A simple Free Zone Establishment (FZE) can be set up in a few days, whereas an Industrial plant can take several months to obtain all the necessary permits to operate safely and legally. On average, we allow 30 days from start to finish, assuming all documents are ready and signatories are available.
Commercial space requirements vary according to the size, location, and activity of the business. A simple Free Zone Establishment
We recommend that you create a business plan to understand your company's requirements and answer key questions that will guide you in determining the ideal location for your business (e.g. Freezone or Mainland, Abu Dhabi or Dubai) and the best type of business structure. The key questions include: Will your company be trading/selling goods or providing services? Is your activity or product regulated by a government agency? Who is your target market, and where do your customers live? Where will you likely be located? Do you wish to enter into agreements with government or semi-government organisations? How many employees will you need? What is your timeline? All of these questions are necessary for us to understand how we can assist you.
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