A Country Designed for Business - N R Doshi · N R Doshi & Partners UAE : A Country Designed for Business | 04 ... Foreign Company Branch or Representative Ofﬁce ... RAK FTZ Offshore

UAEA Country Designed for Business

UAEA Country Designed for Business

September 2014

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UAE : A Country Designed for Business | 04N R Doshi & Partners

Jebel Ali Free Zone........................................................................

Dubai Multi Commodity Centre.......................................................

Dubai Internet City.........................................................................

Dubai Media City...........................................................................

Dubai Knowledge Village...............................................................

Dubai International Academic City..................................................

Dubai International Financial Centre...............................................

Dubai Airport Free Zone.................................................................

Dubai World Central......................................................................

Dubai Gold and Diamond Park........................................................

Dubai Health Care City...................................................................

Dubai Silicon Oasis.......................................................................

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55

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61

62

63

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65

Free Zones in UAE.....................................................................51

CONTENTS

Political System.................................................................................

Geography.........................................................................................

Demographics................................................................................

Trade and Infrastructure.....................................................................

Legal Structures of Business Entities.......................................

Commercial Companies.................................................................

Civil Companies............................................................................

Free Zone Entities.........................................................................

Sole Proprietorship........................................................................

General Partnership... . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Limited Liability Companies...........................................................

Foreign Company Branch or Representative Office..........................

Public Joint Stock Company...........................................................

Private Shareholding Company......................................................

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40

41

41

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43

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44

16

17

17

19

Taxation in UAE.................................................................................

UAE Employment Landscape.............................................................

Economic Overview.................................................................

A Country Designed for Business.................................................

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21

26

32

Foreword..................................................................................

N R Doshi and Partners ............................................................

DFK International.....................................................................

UAE : A passport to a world with fewer boundaries...................

07

11

13

15

38

CONTENTS

Offshore Companies in UAE

JAFZA Offshore....................................................................................

RAK FTZ Offshore...............................................................................

RAKIA Offshore....................................................................................

Industries in UAE

Finance.........................................................................................

Oil and Gas.....................................................................................

Tourism...........................................................................................

Manufacturing.................................................................................

Retail..............................................................................................

TwoFour54....................................................................................

Khalifa Industrial Zone Abu Dhabi...................................................

Sharjah International Airport Free Zone..........................................

Hamriyah Free Zone.............................................................................

Ras Al Khaimah Free Zone...................................................................

RAKIA Free Zone.................................................................................

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For many years, our Publication on Doing

Business in UAE is well received by foreign

investors and business associations. It

gives readers a quick overview of what is

needed to do business in United Arab

Emirates. Our batteries of specialists in

their respective fields, have abetted to

accumulate this converging on what matters

to businesses, makes it a worthwhile

reference.

Our 30 years experience as a leading

accounting and consulting group with over

100 professionals and 7 offices across UAE,

N R Doshi and Partners is well-positioned to

provide foreign investors with one-stop convenience and dedicated expertise

to set up operations in the region. This, together with our strong regional and

international association with DFK International, makes us the ideal choice for

businesses looking to use UAE as a launch pad to setting up business in

Middle East.

We provide consultancy and the "tools" of setting up and doing business in

UAE to almost 3,500 businesses. Our support ranges from the formation of

companies to international tax advisory, tax compliance, accounting and

payroll support, financial audit, governance, as well as other needs like IT,

corporate finance, valuation, M&A and transaction support services. You can

count on us for specialist advice, personal attention, and trust from a global

brand name.

Rahul Doshi

Partner CPA (USA), ACCA (UK)

[email protected]

FOREWORD




N R DOSHI AND PARTNERS




1. Abu Dhabi

2. Dubai

3. Jebel Ali Free Trade Zone

4. Sharjah

N R Doshi & Partners is established in the UAE for 30 years and currently has

over 100 professionals and 9 client service partners. Our offices are located

at

N R Doshi & Partners is led by a team of multifaceted professionals enthused

with an asset of domestic and international experience in the domains of

audit, human resource management, software development and deployment,

banking and financial services. Our employees' credentials include highly

efficient Chartered Accountants (CA), Certified Information Systems Auditor

(CISA), Cert ified Publ ic Accountants (CPAs) and master minded

Administration specialists with extensive, hands-on experience in a wide

variety of industries.

With more than 3500 clientele that includes many Fortune 500 companies, we

have established our presence among market leaders in the region, providing

clients with

Audit and Assurance

International Taxation

Advisory

Internal Audit

Corporate Finance

Company Incorporation

Over the years we have had the opportunity to work with leading industry

players in the region and play a pivotal role in helping them make their

success stories. At various stages of their growth, our clients look to us for

timely and independent advice in helping them in their decision making.

N R DOSHI & PARTNERS

5. Hamriyah Free Zone

6. SAIF Zone

7. RAKIA

Accounting Outsourcing

HR and Payroll

IT Consulting

System Designing and Implementation

System Audit

IT Audit


Our industry-focused network is designed to anticipate and address your

business needs.

Asset Management

Banking

Communication

Engineering & Construction

Financial Service

Healthcare

Metals

Real Estate

Technology

Automotive

Chemical

Energy & Utility

Entertainment & Media

Gold & Jewelry

Hospitality and Leisure

Pharmaceuticals

Retail Consumer

Transportation & Logistics


DFK International is a worldwide association of independent accounting

firms and business advisers. N. R. Doshi & Partners has considerable international knowledge and

experience and is well placed to advice on the complexities that cross-

border transactions and movements can bring. Through our membership of

DFK international, our clients also have access to a broad range of account-

ing, advisory and other business specialties in over 82 countries worldwide.

DFK International is an international association of independent accounting

firms and business advisors that has been meeting the needs of clients with

388 offices across the world for over 45 years.

DFK INTERNATIONAL

DFK International World Statistics 2013

212

Member firms

388 Member offices

82

Countries

$1.09bn

Members fee income




A PASSPORT TO A WORLD

WITH

FEWER BOUNDARIES

UNITED ARAB EMIRATES


UAE : A PASSPORT TO A WORLD WITH FEWER BOUNDARIES

POLITICAL SYSTEM


The United Arab Emirates is situated in the south-west of Asia. It overlooks

the Gulf of Oman to the East and the Arabian Gulf to the North. The Arabian

Gulf and Gulf of Oman are linked by the Straits of Hormuz. The UAE shares

its land boundaries with Oman and Saudi Arabia. The UAE covers an area of

approximately 83,600 square kilometers (32,654 square miles), including

numerous islands. The coastal area consists primarily of salt marshes.

Inland, the topography is predominantly desert, sand dunes and gravel

plains with isolated oases, the largest of which are located at Al Ain and

Liwa. The Hajar Mountains lie close to the sea on the East Coast. The

largest of the Emirates is Abu Dhabi, with an area of approximately 67,300

square kilometers (26,290 square miles), followed by Dubai with an area of

approximately 3,900 square kilometers (1,520 square miles), and Sharjah

with an area of approximately 2,600 square kilometers (1,015 square

miles). The areas of the other Emirates range from 260 to 1,700 square

kilometers (102 to 664 square miles).

GEOGRAPHY

The UAE has earned a world-wide reputation for its exemplary and harmoni-

ous multicultural society, which is undoubtedly the envy of every civil

society in the world today.

UAE is a popular migration destination accommodating 7.3 million migrants

making up 88% of the total UAE population of 8.26 million (approximately).

Emiratis have a rich tradition in welcoming all other nationalities since the

early 1900's.The largest group of non-UAE nationals are South Asian

(58%), followed by other Asians (17%) and Western expatriates (8.5%).

Dubai is the largest city with a population of 1.78 million.

DEMOGRAPHICS


Tolerance, security, job opportunities, attractive environment for invest-

ment, advanced infrastructure and tax-free income are the main factors

attracting more than 200 nationalities to live and work in the UAE.

The native values, heritage and culture which have evolved over centuries,

continue to thrive notwithstanding the modern look, infrastructure, facilities

and the moderately liberal lifestyle of the Emiratis. Islam being the predomi-

nant religion with-in mean that UAE local customs and traditions are influ-

enced to a great extent by this religion. However it does not make the UAE a

closed society. It seeks to promote the best in its traditions and customs so

that the nation becomes vibrant and attractive to all people.

The Emirati population having virtues of being polite and courteous follow

Islam and are tolerant to other religious communities. As part of the local UAE custom the men wear the dishdasha or khandura, a

white full-length shirt-dress. Women in UAE wear the black abaya, a long

black robe that covers their normal clothes and they also wear a headscarf

in public.


TRADE AND INFRASTRUCTURE

UAE has the second-largest economy in the Arab world (after Saudi Arabia)

with a gross domestic product (GDP) of $390 billion in 2012. A third of the

GDP is from oil revenues. The economy was expected to grow between 4%

and 4.5% in 2014.

Since its establishment in 1971, UAE's economy has grown by nearly 231

times to $390 billion. in 2013. The non-oil trade has grown to $326 billion, a

growth of around 28 times from 1981 to 2012.

Prior to the unification in 1971, each emirate was responsible for its own

economy. At the time, pearl diving, seafaring and fishing were together the

mainstay of the economy.

H.H. Sheikh Zayed Bin Sultan Al Nahyan is credited with bringing the

country forward into the 20th century and using the revenue from oil exports

to fund all the necessary development. Likewise, H.H. vice-president

Sheikh Rashid Bin Saeed Al Maktoum had a bold vision for the Emirate of

Dubai and foresaw the future in not petroleum alone, but also other indus-

tries.

UNITED ARAB EMIRATES - ECONOMIC OVERVIEW

Ranks

4thTrading Across Border

Global Rank

23rdEase in Doing

Business

Growth Rate

4%GDP $ 390 bn

19thMost Productive

Economy

3rdStrong Public

Trust in Politicians


Service

Manufacturing

Agriculture

0 10 20 30 40 50 60

GDP by Sector

The UAE is richly endowed with oil resources and is home to around 10% of

the world's total proven oil reserves. Abu Dhabi is the largest and most

powerful, oil-based traditional emirate. Dubai, which lacks oil resources,

has a more modern atmosphere and depends on international retail, tourism

and financial services. The other five emirates have always played a minor

role. For almost four decades, oil and global finance have driven the UAE's

economy. The UAE has accumulated substantial wealth, and the country's

per capita GDP is now on a par with those of leading Western European

nations.

With imports totaling to USD 269.6 billion in 2012, UAE surpassed Saudi

Arabia as the largest consumer market in the region while the total exports

of USD 368.9 billion makes UAE the second largest exporter of the region.

UAE and are each other's main trading partners with total trade over India

USD 75 billion. The UAE also has significant economic ties with the USA,

UK and other European countries.

Exports$368.9 bn

Crude Oil, Natural Gas,Re-exports, Dried Fish,

Dates

Imports $269.6bn

Machinery and Transport Equipment, Chemicals and Food

India

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A COUNTRY DESIGNED FOR BUSINESS

For two and a half millennia, the Gulf coast has been a

crossroads of the world. From the Persian Royal Road

to the Han Dynasty's Silk Road, from the trading posts

of the 19th century to the hypermodernity of today's

UAE, people have always converged here.

The UAE enjoys a strategic location on the new

Southern Silk Road between Asia, Europe and Africa, a

situation that provides optimum trading conditions and

means the UAE is poised to take advantage of eco-

nomic activity among the world's fastest growing and

developing economies as part of the 'South-South'

trade trajectory. Thousands of Chinese businesses use

Dubai as a hub for Africa. Indian traders use the

em i ra te t o access t he wo r l d . La t i n Amer i can

'multilatinas' see Dubai as a launch pad into South

Asia. And, of course, Western multi-nationals use

Dubai as a hub for the Middle East. Dubai is both a

unique trans-continental trade hub and a nexus for

innovation in the fields of technology, culture and the

wider knowledge economy.

Dubai Ranks

9thBusiest

Shipping Port

Dubai Ranks

13,300Container Traffic

(in thousand TEUs)

Dubai Ranks

4thBusiest

Passenger Airport

It is strange to imagine that 20 years ago, UAE's cityscape was mostly sand.

It is now one of the world's most modern urban landscapes, linked by multi-

lane highways and a technologically advanced Metro system. Indeed, in

four decades, the country's soft and hard infrastructure has developed to

such an extent that the UAE today might be one of the most hyper-

connected places on the planet, where more than 200 different nationalities

mingle daily.

UAE's business and governance structures play an increasingly pivotal role

in the global economy of a nation that continues to blossom, attracting

foreign investment and creating jobs. Its position as a central hub for trade

and tourism continues to bring people to UAE, allowing it to forge new

partnerships and improve on the strong transport links that it has devel-

oped. The opening of new terminals at both Jebel Ali Port and Dubai World

Central will further strengthen this network.

The Middle East's top trading economy – the UAE is a dynamic hub for

global commerce, with unmatched infrastructure that provides seamless

connectivity for businesses worldwide.


Dubai International Airport stands alongside Paris, London and Hong Kong

as the world's busiest in terms of international passengers. Last year more

than 66 million people passed through its terminals, and it is projected to

have the highest footfall of any international airport by 2015. Dubai's flag-

carrier, Emirates Airline, is also on track to become the biggest in the world,

whi le Dubai ranks s ix th g lobal ly measured by a i r cargo t raffic.

UAE's shipping ports are also among the world's top 10 busiest, with Jebel

Ali ranked as the world's 7th largest port globally.

UAE scored 6.4 out of 7 and ranks 4th for its overall infrastructure. It ranks

1st for its quality of roads, 4th for its Port Infrastructure and 3rd for its

quality of Road Infrastructure.

The UAE economy enjoys a competitive mixture of cost, market and envi-

ronmental advantages that create a supreme and attractive investment

climate for local and expatriate businesses alike. In fact, these advantages

not only rank UAE as the Middle East's leading multi-purpose business

center and regional hub, but they place it at the top of the globes, dynamic

and emerging market economies.

‘In more recent years, UAE has become a major venue for a number of

growing, profitable industries. Business have preferred UAE for its.‘

Manufacturing

Exhibition

Tourism

Corporate HQ

Banking Finance

Insurance

Transport Distribution Logistics

Information Communication

Technology

Business Industrial

Consulting

UAE a Major

Venue for Number

of Rising,

Profitable Industries


1. Strategic Location: UAE is a time zone bridge between the Far East and

Europe on the East-West axis and the CIS and Africa on the north-south

axis. It is a opening to a market that can be described as:

Large - well established trading links exist with the greater than 1.5

billion people in the neighboring region covering the Gulf, Eastern

Mediterranean, Central Asia, Africa and the Asian sub-continent;

Growing - UAE's total international trade has grown on average by

over 11% per year since 1988 and regional economic growth and

liberalization should boost demand further; Prosperous - a buoyant local economy strategically located in the

midst of one of the world's richest regions and well-endowed with

ample supplies of cheap energy and primary aluminum; also adjacent

to major regional suppliers of vital agro-export commodities; Diversified - varied and significant import requirements generate

opportunities for product suppliers and re-exporters;

Accessible - served by over 120 shipping lines and linked via 85

airlines to over 130 global destinations;

Open - no exchange controls, quotas or trade barriers.


No foreign exchange controls,

No trade barriers or quotas,

Competitive import duties

Competitive labor costs – labor force is multi-lingual and skilled,

Competitive energy costs,

Competitive real estate costs,

Competitive financing costs and high levels of liquidity,

No taxes on personal income or on corporate profits

(except for oil companies and branches of foreign banks).



TAXATION IN UAE

The UAE economy is considered throughout the world to be among the most

liberal and most diversified in the region. Of all the countries globally, the

UAE is probably among the very countries where no taxation on corporate

profits is levied with the exception of branches of international banks, hotels

and major oil and gas companies. The UAE does not levy any personal tax,

capital gains tax, value added tax or withholding tax.

No

Capital

Gains Tax

No

Personal

Tax

No

Withholding

Tax

No

Value

Added Tax

No

Corporate Tax

except on limited

industries

While UAE has not legislated any tax laws, each Emirate can enact its own

tax law. The Emirates of Abu Dhabi, Dubai and Sharjah have enacted tax

laws for their respective Emirates. The Governments of these Emirates do

not enforce their tax laws with an exception of the Emirates of Abu Dhabi

and Dubai who levy taxes on oil, gas and petrochemical companies and

branch offices of foreign banks. Service tax is levied on Hotel Services and

Entertainment at a flat rate between 10% and 15%.

Taxation on Oil

and Gas

Companies

Flat rates on

annual profits

of Branches of

Foreign Banks

Flat rates

service tax on

Hotel Services

and

Entertainment

55%Pay up to a maximum

20%Pay

10-15%Pay


Custom Duty

Under the terms of the Gulf Co-operation Council regulations (comprising

the member states of UAE, Saudi Arabia, Qatar, Oman, Kuwait and

Bahrain), a unified customs tariff of 5% of the c.i.f. value applies to the

taxable imports of all of the GCC member states as from 1 January 2003. All

existing taxes and duties on imports within the GCC member states have

been abolished.

Tobacco and tobacco products are subject to a 100% customs duty, and for

alcohol the rate is 50%.

Exemptions from customs duties apply in the UAE and other GCC member

states, to various items including basic foodstuffs, raw materials for manu-

facturing industries, spare parts for civilian airlines, diplomatic and consular

missions' imports, imports for military and internal security forces, personal

effects and charitable organizations' imports.

Special Incentives

An entity manufacturing goods in UAE can export its goods to GCC coun-

tries without duty if its manufacture involves 40% value addition and the

entity is owned 51% by GCC National.

50%

custom tariff on Alcohol

100%

custom tariff on Tobacco

Unified Custom tariff

5%on all other items


Double Taxation Avoidance Agreement

The UAE's double taxation treaties are actually designed to make it an even

more attractive destination and prospect for those individuals and compa-

nies who originate from countries with aggressive taxation policies.

The treaties are in place to further reduce any potential taxation burdens

being levied against foreign companies and citizens operating in the UAE

who remit their profits abroad.

Many countries have anti-avoidance provisions which either set minimum

levels of tax from income to benefit from tax treaties or set out lists of low-

tax countries which do not qualify under tax treaties.

The main agreements formed are :

Property Tax

In most Emirates, tax is payable by residential tenants at a rate of 5% of the

annual rent and or commercial tenants at 10% of the annual rent.

In Abu Dhabi a property tax in charged on the renewal and obtaining of a

business license. These taxes are assessed at around 5 to 10% of the

applicant's annual office rent and 5% of the annual rental of the residence of

the manager/license holder.

In Dubai, all residential properties are subject to an annual property tax

payable to the Dubai Municipality. Dependent upon the employment status

of the tenant a tax of between 5-15% will be payable. All professional,

managerial and other senior employees in commercial and industrial

sectors are charged at the rate of 5% of their annual rent, whereas in the

banking sector the rate increases to 15%.

In Sharjah, all leased residential properties are subject to an annual prop-

erty tax payable to the Sharjah Municipality. This tax will be equal to 2% of

the annual rent shown in the tenancy agreement.

Agreements on taxation depending on the income resulting from

air transport

Agreements on avoidance of double taxation on income & profits

resulting from international air transport

Agreements on avoidance of double taxation on income, capital

gains & evasion of taxes


Continent Countries

Africa Algeria, Egypt, Morocco, Sudan, Tunisia

Asia China, India, Indonesia, Japan, Malaysia, Mongolia, Pakistan,

Philippines, Singapore, South Korea, Sri Lanka, Thailand,

Turkmenistan

Europe Belgium, Bosnia, Finland, France, Germany, Italy, Malta,

Netherlands, Poland, Romania, Spain, Switzerland, Greece, Holland,

Belarus, Turkey, Bulgaria

Middle East Jordan, Kuwait, Lebanon, Syria, Yemen

North America Canada

Oceania New Zealand

Prominent countries having double taxation treaties with the UAE are the following:

77DTAA treaties signed by UAE


UAE TAX TREATY STATUS AND RATES

Jurisdiction Status Dividends Interest Royalties Notes

Albania

Algeria

Armenia

Austria

Azerbaijan

Bangladesh

Belarus

Belgium

Benin

Bosnia & Herzegovina

Brunei

Bulgaria

Canada

China

Cyprus

Czech Republic

Egypt

Estonia

Fiji

Finland

France

Georgia

Germany

Greece

Guinea

Hong Kong

Hungary

India

Indonesia

Ireland

Italy

Japan

Jordan

Kazakhstan

Kenya

Korea, South

Latvia

Lebanon

Signed Mar 13, 2014

Eff. Jan 1, 2005

Eff. Jan 1, 2004

Eff. Jan 1, 2005

Signed Nov 20, 2006

Signed Jan 17, 2011

Eff. Jan 1, 2002

Eff. Jan 1, 1995

Signed Mar 11, 2013

Signed Sep 18, 2006

Signed May 21, 2013

Eff. Jan 1, 2010

Eff. Jan 1, 2004

Eff. Jan 1, 1995

Signed Feb 27, 2011

Eff. Jan 1, 1998

Eff. Jan 1, 1996

Eff. Jan 1, 2011

Signed Sep 4, 2012

Eff. Jan 1, 1997

Eff. Jul 1, 1990

Eff. Jan 1, 2012

Eff. Jan 1, 2009

Signed Jan 18, 2010

Signed Nov 13, 2011

Signed Jul 20, 2010

Signed Apr 30, 2013

Eff. Jan 1, 1994

Eff. Jan 1, 1997

Eff. Jan 1, 2011

Eff. Jan 1, 1993

Signed May 2, 2013

Signed Jun 13, 2005

Eff. Jan 1, 2010

Signed Jul 5, 2011

Eff. Jan 1, 2003

Eff. Jan 1, 2014

Eff. May 21, 1999

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Jurisdiction Status Dividends Interest Royalties Notes

Libya

Lithuania

Luxembourg

Malaysia

Malta

Mauritius

Mexico

Mongolia

Morocco

Mozambique

Netherlands

New Zealand

Pakistan

Panama

Philippines

Poland

Portugal

Romania

Montenegro

Seychelles

Singapore

Slovenia

Spain

Sri Lanka

Sudan

Switzerland

Syria

Tajikistan

Thailand

Tunisia

Turkey

Turkmenistan

Ukraine

Uzbekistan

Venezuela

Vietnam

Yemen

Serbia

Palestine

Signed Apr 1, 2013

Signed Jun 30, 2013

Eff. Jan 1, 2010

Eff. Jan 1, 2000

Eff. Jan 1, 2008

Eff. Jan 1, 2008

Signed Nov 20, 2012

Eff. Jan 1, 2001

Eff. Jan 1, 2001

Eff. Apr 15, 2004

Eff. Jan 1, 2011

Eff. Sep 1, 2004

Eff. Jan 1, 1995

Eff. Jan 1, 2014

Eff. Jan 1, 2009

Eff. Jan 1, 1995

Eff. Jun 21, 2012

Eff. Jan 1, 1997

Signed Mar 26, 2012

Eff. Jan 1, 2008

Eff. Jan 1, 1992

Signed Oct 12, 2013

Eff. Apr 2, 2007

Signed Sep 24, 2004

Signed Mar 18, 2001

Eff. Jan 1, 2012

Signed Jan 26, 2000

Eff. Jan 1, 2001

Eff. Feb 1, 2001

Eff. Aug 26, 1997

Eff. Jan 1, 1995

Eff. Jan 1, 1999

Eff. Jan 1, 2005

Signed Oct 26, 2007

Eff. Jan 1, 2012

Signed Feb 16, 2009

Signed Feb 13, 2001

Eff. Aug 1, 2013

Signed Sept 24, 2012

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Notes : The United Arab Emirates does not impose a withholding tax on the payment of dividends, interest or royalties. The effective rate is therefore 0%.

UAE : A Country Designed for Business | 31

UAE EMPLOYMENT LANDSCAPE








LEGAL STRUCTURES

OF

BUSINESS ENTITIES


LEGAL STRUCTURES OF BUSINESS ENTITIES

The Department of Economic Development of each Emirate is the responsi-

ble licenses for corporate entities or individuals who desire to carry out

business in the mainland of that emirate, the territory in Emirate that falls

outside the Emirate's free zones.

There are a great range of Free Zones in the UAE, the majority of which are

in the Emirate of Dubai. Foreign companies are permitted to establish

wholly-owned branches in each of these Free Zones, and such branches

are exempt from the requirement to appoint a local service agent. Each of

the Free Zones has its own set of laws, rules, regulations and requirements

that do not fall within the ambit of the Federal Companies Law and therefore

do not require the involvement of a UAE national shareholder.

The establishment of a Free Zone branch or a corporate entity is dealt with

by the relevant Free Zone Authority and each Free Zone prescribes its own

minimum share capital requirements.

Legal Structures

Commercial Companies

CivilCompanies

Free ZoneEntities


Regardless of the type of business to be set-up, it is necessary to obtain alicense. The 3 types of Licenses available in mainland are

Additionally, rather than setting up a business organization to provide

services or sell goods, it is possible to appoint a local commercial agent for

the purpose of selling directly to importers and traders in the UAE, which is

very commonly used by foreign companies to offer their goods and services

to consumers in the UAE. UAE Federal Law No. 18 of 1981 Concerning

Commercial Agencies, as amended, governs the relationship between

foreign manufacturers and local agents and distributors and grants

protections to the local party subject to the registration of the agency with

the Ministry of Economy. Agency Agreements need to be registered pursu-

ant to the Commercial Agencies Law, while there exist unregistered agents,

which are subject to the Civil Law and the Commercial Law instead of the

Commercial Agencies Law. In order to register, the agent/distributor must

be a UAE national or a company wholly-owned by UAE nationals. The

statutory protections afforded by registration include, inter alia, restrictions

on the foreign party's right to terminate or withhold renewal of the relation-

ship, exclusivity and the right to receive compensation on termination or

non-renewal of the relationship.

Commercial License

Industrial License

ProfessionalLicense

All Types of Trading

Manufacturing OR Industrial

Professions, Services and Craftsmen

Legal Forms of Businesses

Among the following, limited liability companies are the most popular for

foreign companies to operate businesses in the UAE.


1. Commercial Companies

2. Civil Companies

CivilCompanies

ServiceCompanies

SpeculativeVenture

Partnership

MudarabaCompanies

Limited Liability

Companies "LLC”

General Partnership

Simple Limited

Partnership

Joint Participation

Public Joint Stock Companies

Private Joint Stock Companies

Partnership Limited

with Shares

Foreign Companies(Branches,

Rep Offices)

Commercial Companies


3. Free Zone Entities

There are a great range of Free Zones in the UAE, the majority of which are

in the Emirate of Dubai. Foreign companies are permitted to establish

wholly-owned branches in each of these Free Zones, and such branches

are exempt from the requirement to appoint a local service agent. Each of

the Free Zones has its own set of laws, rules, regulations and requirements

that do not fall within the ambit of the Federal Companies Law and therefore

do not require the involvement of a UAE national shareholder. However, a

company set up in a Free Zone directly the Free Zone or internationally.

The establishment of a Free Zone branch or a corporate entity is dealt with

by the relevant Free Zone Authority and each Free Zone prescribes its own

minimum share capital requirements.

Free ZoneEntities

Branch of aForeign

Company

Free Zone Company

(Multiple Shareholders)

Free Zone Establishment

(Sole Shareholder)

1. Sole Proprietorship

A professional business sole proprietorship covers a range of professions

from owning a restaurant to a consultancy firm.

Sole proprietorships providing services require a Local Service Agent (LSA)

if they are owned by a National of a country other than the UAE or GCC

countries.

The local service agent is a UAE National who manages licensing require-

ments and other government-related matters for your business, in

exchange for an annual fee.

Types of Commercial Companies


A sole proprietorship can only be owned by an individual, not a company.

100% ownership of this business, control all of its operations and 100% of

any profits remains with the owner. Likewise in case of any financial

obligation or business debt the 100% onus remains on the owner to fulfil the

same.

A professional type sole proprietorship may be owned by an individual of

any nationality for providing services that are lawfully permitted.

A sole proprietorship that is industrial or commercial can be owned only by

UAE Nationals or GCC Nationals.

2. General Partnership

A general partnership is formed by two or more UAE nationals who are

jointly and severally liable for the partnership's debts. A general partnership can be formed between UAE Nationals and expatri-

ates.

Only the actual names of the partners' are permissible to be included in a

partnership's name. A partnership interest may be transferred only with the

approval of all partners or in accordance with conditions stated in the

partnership agreement. The management of the partnership must be with

one or more managers who must be natural persons and who may or may

not be partners.

A partnership is dissolved on the death, insanity, bankruptcy or withdrawal

of one of its partners, unless the remaining partners decide mutually to

continue the partnership and their decision is registered in the commercial

register.

3. Limited Liability Company

An LLC can have between 2 and 50 shareholders, each of whom is liable

only to the extent of his or her share in the capital of the company. LLCs are authorised to conduct any industrial or commercial business, but

not professional (to practice law, auditing, accountancy or any other type of

consulting service). – except banking, insurance or investment.

An LLC must be 51% owned by UAE Nationals, although the Memorandum

of Association can distribute profits in a different ratio. In the interests of an

open, honest and transparent economy, the LLC must appoint a UAE-


accredited auditor. In case of the death of any partner, his or her shares are

transferred to the heirs mentioned in the will.

Shares of an LLC cannot be offered to the public. The company may not

resort to public subscription to establish or increase its capital, or to secure

loans, and it may not issue any negotiable stocks or shares. Between one and five managers must be appointed for the business. The

managers may be selected from the partners or may be any other parties.

Managers must be appointed by a Memorandum of Association or by a

management contract, for a fixed term or an unlimited term. Managers can

a l so be appo in ted by t he Genera l Assemb ly o f t he pa r tne rs .

Unless the Memorandum of Association states otherwise, the manager has

full powers of administration. Within the scope of his or her powers, the

manager's actions and commitments are binding on the business.

4. Foreign Company Branch or Representative Office (Outside of Free Zone)


5. Public Joint Stock Company

The law requires that companies engaging in banking, insurance, or

financial activities should be run as public shareholding companies. Foreign

banks, insurance and financial companies, have an option to establish a

presence in Dubai by opening a branch or representative office.

Shareholding companies are appropriate primarily for large projects or

operations, since the minimum capital required is AED 10 million for a public

company, AED 40 million for banks and AED 25 million for insurance and

investment companies, and AED 2 million for a private shareholding com-

pany. The chairman and a majority of directors must be UAE nationals and

there is less flexibility of profit distribution than is permissible in the case of

limited liability companies.

A minimum of 25% of the shares of a Public Shareholding Company must be

offered to the general public.

A PJSC must have at least 10 founder members and its management should

be conferred in a board of directors consisting of a minimum of three to a

maximum of fifteen persons whose term of office may not exceed three

years. In addition at least 51% of the shares of the PJSC should be held by

UAE nationals. The founder members may only hold 45% of the share

capital, as 65% is required to be offered to the public.

6. Private Shareholding Company

A Private Joint-Stock Company can be created for any commercial or

industrial type of business. Professional activities are not allowed under

this legal form. A Private Joint-Stock Company is subject to all rules and regulations that

apply to Public Joint Stock Companies, except for the rules and regulations

relating to public share subscription. A Private Joint-Stock Company can be established between three or more

UAE Nationals or GCC Nationals. Nationals of other countries can establish

a private shareholding company with at least one UAE National. If one or

more of the partners is a National of a country outside the GCC, the UAE

National partners must own at least 51% of the business shares.


While the shares of a private shareholding company cannot be offered to

the public, the business can be converted to a public company two years or

more after its creation, if the following conditions are met:

The nominal value of the issued shares is fully paid up.

A period of not less than two financial years has expired.

During the two years preceding the application for conversion, the

company achieved net profits distributable to the shareholders, the

average value of which is not less than 10% of the capital.

A resolution of the extraordinary assembly for the conversion of the

company is adopted by a majority of shareholders representing at

least three quarters of the company's capital.

The company must have an appointed manager.

Free Zone and Offshore Companies are briefly explained later in this

booklet.


Company

Type

Sole

Proprietorship

General

Partnership

Limited

Liability

Company

Branch

Office

Public Joint

Stock

Company

Private

Shareholding

Company

Free Zones Offshore

Companies

Ownership Single

Individual

2 or more

individuals

3 to 50

Shareholders

Parent

CompanyMore than 10 3 up to 50

(including

corporate

shareholders)

Minimum one.

Maximum

varies from

Free Zone to

Free Zone

1 or more

Shareholders

Ownership for

Foreigner

0% for Trading

and up to

100% for

Service

0% for Trading

and up to

100% for

Service

100%Maximum 49%. Maximum 49%. Maximum 49%. 100% 100%

Minimum

Capital

No Minimum

Capital

No Capital

Requirement

AED 300,000

in Dubai

AED 150,000

in Other

Emirates

AED 2 million Varies with

Free Zone

No Minimum

Capital

Requirement

Stipulated

No Minimum

CapitalAED 10 millionAED 40 million

for bankingAED 25 million

for insurance

Activity Services

and Trading

Services

and Trading

Trading Service

or

Manufacturing

Services

and

Representative

offices

Trading,

Service ,

Manufacturing

Trading,Service or

Manufacturing

Trading

Service or

Manufacturing

Any activity

permitted by

law except

Banking and

Insurance

Area of

Operations

In the Emirate

where

registered

In the Emirate

where

registered

In the Emirate

where

registered

In the Emirate

where

registered

In the Emirate

where

registered

In the Emirate

where

registered

Within the

Free ZoneCan transact

with other

than UAE

Companies

Liability Unlimited Depends on

the form of

organization

LimitedUnlimited Limited Unlimited Limited Limited

Audit Not required Depends on

the form of

organization

Required but

not be

submitted to

the authorities

Not required Required Required to

be submitted

to Ministry

of Economy

Required Required

Taxes No Corporate

or personal

tax in UAE

No Taxes

applicable

due to

exemption

No Corporate

or personal

tax in UAE

Taxes for

Banking,

Insurance,

Oil & Gas

Taxes for

Banking,

Insurance,

Oil and Gas

No Corporate

or personal

tax in UAE

No Corporate

or personal

tax in UAE

No Corporate

or personal

tax in UAE

UAE Visas Available

depending

on Activity

and Office

Available

depending

on Activity

and Office

Not Available

unless Office

premises

rented

Available

depending

on Activity

and Office

Available

depending

on Activity

and Office

Available

depending

on Activity

and Office

Available

depending

on Activity

and Office

Available

depending

on Activity

and Office

Repatriation of

Investment /

Profit

No Restriction No RestrictionNo Restriction No Restriction No Restriction No Restriction No Restriction No Restriction

Office

Premises

Required

Rent depends

on location

and size of

premise

Premises

Required

Required

Rent depends

on location

and size of

premise

Required

Rent depends

on location

and size of

premise

Required Required

Rent depends

on location

and size of

premise

Required

Rent depends

on location

and size of

premise

Not Required.Office of the

registered

agent can be

used as

registered

office.


Selected businesses may require special approvals of the Ministries. The following

table enlists those activities and the respective approving authority.

Official Authority

Ministry of Education and Youth Private Schools, Nursery Schools, Cultural Institutions,

Sports Cities,

Ministry of Higher Education and

Scientific Research

Private Universities, Universities Services

Ministry of Culture & Information Prints, Video & Cassettes Stores, Bookstores,

Propaganda & Advertisements, Artistic & TV

Production, Cinemas, Organizing Concerts, Journals

& Magazines Distribution ( and all licenses related to

media), Export of Journals & Magazines , Computer

Programs Selling and Production, Theatre

Production, Photography, Videotaping, Press

Services Offices, Satellite Dishes and TV codes

Devices, Internet Cafes, Entertainment Contractors,

Internet Services, Exhibitions Organization, Copying

Centres, Codes Devices & Satellite Dishes Agents in

the States, Companies that broadcast its Satellite

Channels in the State, Hand writing & Free Hand

Ministry of Labour and Social Affairs Nursery Schools, Bringing Workforce

Ministry of Industry All Industrial Licences

Ministry of Awqaf and Islamic Affairs Organising Hajj and Umrah trips, Quran Centres

Ministry of Justice and Islamic Affairs Organising Hajj and Umrah trips, Quran Centres and

Lawyers

The Central Bank Money & Banking, Banking Business, Representation

Offices, Financing Companies, Investment

Companies, Financial & Monitory Intermediation,

Money & Banking Consultation.

Activity

Ministry of Agriculture Plants Nurseries, Farms, Livestock and Birds Trade,

Fish and Aquarium Trade, Seeds and Fertilized Trade

Additional Approvals

Ministry of Health Hospitals, Private Clinics, Medical Laboratories,

Laboratories, Medical Centres, Medical Clinics,

Pharmacies, Factories & Medicine Stores,

Eyeglasses and lens, Medicine and Medical Herbs

Trade & import Companies, Massage Centres

Ministry of Economy Auditing and Foreign Companies Branches


Securities Commission Stock Trading Companies, Stock Exchange

Official Authority

Ministry of Environment & Water Farms, Fodder Trade, Saplings roses and micro

fertilizers, Domestic, Vultures and Extinct Animals,

Veterinary Clinics, Imported & Exported Fish Trade

(New Only)

Ministry of Interior - Police Department Gold Trading, Banks and Exchange Offices, Seals

& Keys Industry, Fixing weapons, Import & Selling

old guns, Explosives & Fireworks, Hotels, Night

Clubs, Medicine Factories, Furnished Apartments,

Private Security Companies, Electronic Games

Centres, Shooting Clubs, Jet ski, Diving Lessens,

Mobiles, Rent a Car

Ministry of Interior - Civil Defence Companies of Extinguishers equipments, tools and

materials, Factories, Bakeries Furniture, Carpentry

and Oil and Diesel Stations, Extinguishing

Consultation Services.

Ministry of Culture, Youth and Social

Development

Sports Training Centres, Sports Services

Companies, Billiards, Fitness Centres for both men

& women (new only).

Ministry of Finance and Industry All industrial Installations that exceeds 300

thousand AED

Activity

Ministry of Interior - Traffic & Licensing

Department

Driving Lessons Schools for Men & Women,

Renting Cars - Transportation.

Ministry of Labour Bringing Workforce and Nursery Schools

Social Affairs Nursery Schools, Marriage Offices, taking Care

and hab-itation of special needs people

Official Postal Authority Documents transfer, letters post, Transfer of all

kinds of packages, express mail

Department of Civil Aviation Travelling, Tourism, Internal Tourism, Air Cargo

Companies, Flight Training, Air Survey, Planes

Rental, Travel Agents, Planes Maintenance.

Chamber of Commerce & Industry Organizing Exhibitions






FREE ZONES IN UAE


FREE ZONES IN UAE

Free Zones (FZ) are a class of special economic zone assigned by the trade

and commerce administration of UAE. The term is used to designate areas

in which companies get tax benefits in order to encourage economic

development. Free Zones are part of the country's territories but considered

to be outside the customs territory and subject to customs control other than

normal customs procedures. This is applicable to Jebel Ali Free Zone,

Dubai Airport Free Zone, DUCAMZ and unfenced Free Zones including

TECOM.

General Provisions

The importer must have obtained a valid importer code from the

Customs.

Goods must be in conformity with the activity of the licensed com-

pany.

Goods must arrive in the free zone within 72 hours from the date of

the customs declaration.

The licensee shall not open, alter or dispense of the goods prior to

their arrival in the free zone and customs endorsement.

Goods shall be inspected whilst entering the free zone or trans-

ferred to the stores.

The declarant shall pay a deposit of AED 500 against incomplete

documentations if he fails to submit the required documents.



Residence or Employment Visa issued Yes

100% Foreign ownership permitted Yes

100% Repatriation of Capital and profits Yes

Corporate, personal & withholding tax Nil

Language English

Standard currency of Capital UAE Dirhams

Jebel Ali Free Zone (JAFZA)

Established in

JAFZA is one of the fastest growing freezones of the world and houses the Jebel Ali Sea Port.

The Jebel Ali Sea Port connects the world through its 150 shipping lines. The Dubai Logistics

Corridor integrates the free zone with the world's largest airport - Jebel Ali's Al Maktoum

International Airport. The free zone is also connected with neighbouring countries such as Saudi

Arabia, Qatar, Bahrain and Oman through highways.

1985

Number of companies Over 6,400 companies including over 120

fortune 500 companies from across the world

Industry focus

Limited liability companies

Minimum number of shareholders required

Minimum number of directors required

Corporate shareholders allowed

Corporate directors allowed

Public register of shareholders and directors

Access to UAE Double Taxation Treaties

Suitable for all types of industries

Yes

1

1

Yes

No

No

Yes

Port at freezone Jebel Ali Seaport

Allowed to import and export goods Yes

Commercial offices Available as commercial offices, food courts

and retail stores.

Industrial premises Available as leased land or ready factory

buildings

Warehousing facility Available as leased land or ready warehouses

Accommodation facility Accommodation facility for labour

Prominent companies at the free zone DHL, TNT, P&G, GE, JVC, L'Oreal, YSL, Dior,

Estee Lauder, Joutun

Location of Dir. & Shareholders Meeting Anywhere


Dubai Multi-Commodities Center (DMCC)

Established in

DMCC is a thriving commodities marketplace that facilitates trade in commodities such as gold,

diamonds, pearls, precious metals and stones, tea and other agro commodities, base metals and

petroleum commodities. It also houses the Dubai Gold and Commodities Exchange, Dubai Pearl

Exchange, Dubai Tea Trading Center, Dubai Diamond Exchange and Shariyah compliant asset

management funds. DMCC has close proximity to the Jebel Ali Port and Al Makhtoum

International Airport. JLT Free Zone is a part of DMCC.

2002

Number of companies Over 9,000 companies








Yes

1

1

Yes

No

No

Yes

Port at freezone No. Close proximity to Jebel Ali Free Zone and

Al Maktoum International Airport



and retail stores.

Industrial premises Limited

Warehousing facility Limited

Accommodation facility Yes


Industry focus Suitable for companies dealing in commodities

and service industry





Language English



Dubai Internet City

Established in

Dubai Internet City (DIC) provides a knowledge economy ecosystem designed to facilitate the

business development of Internet and Communications Technology (ICT) companies. It is the

Middle East's biggest ICT infrastructure, built inside a free trade zone. The ICT cluster in Dubai

Internet City provides most elements of the value chain for an ICT business and comprises

companies from sectors like software development, business services, e-commerce, consultancy

and sales and marketing.

2000

Number of companies








Yes

1

1

Yes

No

No

Yes





and retail stores.

Industrial premises No

Warehousing facility No

Accommodation facility Yes in close proximity

Industry focus Technology

Prominent companies at the free zone Microsoft, Oracle, HP, Google, IBM






Language English


1,500


Dubai Media City

Established in

Dubai Media City has become a regional hub for media organizations including news agencies,

publishing, online media, advertising, production, broadcast facilities, and event management

companies. Dubai Media City offers media and advertising companies in Dubai an ecosystem

where they can showcase their products and services.

2000

Number of companies








Yes

1

1

Yes

No

No

Yes





and retail stores.




Industry focus Media and Advertising

Prominent companies at the free zone CNN, Bertelsmann, CNBC, Forbes, Reuters


Over 1,300





Language English



Dubai Knowledge Village

Established in

Dubai Knowledge Village is dedicated to Human Resource Management and learning

excellence. It aims to develop the region’s talent pool and establish the UAE as a knowledge-

based economy. It is a unique hub that offers the best selection of Human Resource

Management, Consultation, Training and Personal Development programmes.

2003

Number of companies








Yes

1

1

Yes

No

No

Yes





and retail stores.




Industry focus Human Resource Development and Training

Prominent companies at the free zone Institute of Chartered Accountants of India,

Institute of Management Accountants


Over 500





Language English



Dubai International Academic City (DIAC) is the world’s largest Free Zone dedicated to Higher

Education. It aims to develop the region’s talent pool and establish the UAE as a knowledge-

based economy. DIAC houses several multi-tiered International Branch Campuses on its 18

million sq. ft. campus with state-of-the-art modern facilities. It is a host to a community of over

20,000 students from 125 nationalities and over 400 Higher Education programmes.

Dubai International Academic City

Established in 2007

Number of companies








Yes

1

1

Yes

No

No

Yes

Port at freezone No



and retail stores.



Accommodation facility Accommodation facility for students

Industry focus Higher Eduction

Prominent companies at the free zone Dubai Aviation College, French Fashion

University, Indian Institute of Management

Indore, S P Jain Center of Management,

Michigan State University

Over 100


Language English






Dubai International Financial Center

Established in

DIFC is an offshore financial center with an independent regulation and common law framework.

Dubai Financial Services Authority grants licenses and regulates the activities of financial

institutions operating out of DIFC. DIFC Courts is the entity responsible for the independent

administration and enforcement of justice in DIFC. The Courts have exclusive jurisdiction over all

civil and commercial disputes arising within DIFC and or relating to bodies and companies

registered in DIFC.

2004

Number of companies Over 1,000

Industry focus








Financial Services

Yes

1

2

Yes

No

No

Yes

Port at freezone No



and retail stores.




Prominent companies at the free zone 21 of the world's top 25 banks

11 of the world's top 20 largest money managers

6 of the world's 10 largest insurance companies






Language English



Established in

DAFZA is located in the heart of Dubai and next to the Dubai International Airport. DAFZA has

an infrastructure of established offices, thermally insulated and purpose-built units, conference

rooms, a lecture hall, a business lounge and telecommunication services. Companies in DAFZA

cover a vast number of key industry sectors including electronic and electrical, IT and

telecommunications, pharmaceutical and cosmetics, engineering and building materials,

aerospace and aviation, logistics and freight, food and beverage, jewelry and precious stones as

well as luxury items.

1996

Number of companies








Yes

1

1

Yes

No

No

Yes

Port at freezone Dubai International Airport



and retail stores.

Industrial premises Available as light industrial units

Warehousing facility Available as light industrial units


Industry focus Suitable for all types of companies more

specifically Aviation

Location of Dir. & Shareholders meeting Anywhere

Over 1,600

Dubai Airport Free Zone





Language English



Established in

The integrated master plan of Dubai World Central is comprised of eight districts: logistics,

aviation, Al Maktoum International Airport, humanitarian, residential, commercial, leisure,

exhibition and commercial. The centerpiece of the master plan is the Al Maktoum International

Airport, which has the first of five planned runways completed and in operation. The logistics,

humanitarian and aviation districts enjoy the added benefits of airside access while the exhibition

district offers efficiency and cost savings due to its close proximity to the airport. Residential,

commercial and leisure districts provide accommodation, office and entertainment options for

people working at DWC and businesses that require frequent travel. It would be the venue for

Dubai EXPO 2020.

2006

Number of companies








Yes

1

1

Yes

No

No

Yes

Port at freezone Al Makhtoum International Airport. Jebel Ali sea

port in the vicinity.


Commercial offices Yes

Industrial premises Yes

Warehousing facility Yes

Industry focus Aviation and Logistics

Over 1,000

Dubai World Central





Language English



Prominent companies at the free zone Aramex, Kuehne + Nagel, Panalpina, INL, RSA



Dubai Gold and Diamond Park

Established in

The Dubai Gold and Diamond Park is a specialty mall has the unrivalled selection of 90 retail,

118 manufacturing units and commercial space for over 350 offices. The licensing is managed by

JAFZA whil the facilities are managed by Emaar.

2001

Number of companies








Yes

1

1

Yes

No

No

Yes

Port at freezone Al Makhtoum International Airport. Jebel Ali sea

port in the vicinity.






Industry focus Jewellery and precious metals and stones


Over 100





Language English



Dubai Healthcare City

Established in

DHCC provides a wide range of services in healthcare, medical education and research,

pharmaceuticals, medical equipment, wellness and allied support. Situated in DHCC are two

hospitals, over 120 outpatient medical centers and diagnostic laboratories with over 4,000

licensed professionals located within 4.1 million square feet in the heart of Dubai.

2002

Number of companies








Yes

1

1

Yes

No

No

Yes

Port at freezone No

Allowed to import and export goods No




Accommodation facility Available in near vicinity

Industry focus Healthcare

Prominent companies at the free zone Johnson & Johnson, Merck Serono, Sanofi

Aventis, Novo Nordisk


Over 120





Language English



Dubai Silicon Oasis

Established in

Dubai Silicon Oasis is a technology park that focuses to facilitate and promote modern

technology based industries. It provides both a living and working integrated community.

Located at the Dubai Silicon Oasis is the Rochester Institute of Technology that offers

technology based bachelors and masters degree programs that support business and industry

needs.

2005

Number of companies Over 320








Yes

1

1

Yes

No

No

Yes

Port at freezone No







Industry focus Technology


Prominent companies at the free zone Western Digital, AMD Technologies, Philips,

Schneider Electric, Porsche




Language English



Twofour54

Twofour54 is a tax-free media and entertainment free zone based in Abu Dhabi, United Arab

Emirates that facilitates the development of Arabic media and entertainment content in the

region. It provides studio production, postproduction facilities, and vocational media training.

Established in

Number of companies








Port at freezone

Allowed to import and export goods

Commercial offices

Industrial premises

Warehousing facility

Accommodation facility

Location of Dir. & Shareholders Meeting

Industry focus

Prominent companies at the free zone

Residence or Employment Visa issued

100% Foreign ownership permitted

100% Repatriation of Capital and profits

Corporate, personal & withholding tax

Language

Standard currency of Capital

2008

Over 200

Yes

1

2

Yes

No

No

Yes

No

Yes

Yes

No

No

Yes in close proximity

Anywhere

Media

CNN, Cartoon Network

Yes

Yes

Yes

Nil

English

UAE Dirhams


Khalifa Industrial Zone Abu Dhabi (KIZAD)

Established in

KIZAD is located at Tameelah, midway between the cities of Abu Dhabi and Dubai. Khalifa Port -

The first semi-automated deep water port is also located next to KIZAD. KIZAD has created

vertically integrated clusters in the industries of aluminum, steel, engineered metal products,

petrochemicals and chemicals, pharmaceuticals and healthcare equipment, food, paper, print

and packaging, and trade and logistics.

2010

Number of companies Over 50








Yes

1

1

Yes

No

No

Yes

Port at freezone Khalifa Seaport






Prominent companies at the free zone Emirates Aluminum, Bauer, KSB, Al Braik

Investments, Palletco

Industry focus Suitable for all types of industries






Language English



Sharjah International Airport Free Zone

Established in

SAIF Zone prides itself to be a business friendly free zone by providing prompt services at low

costs without red tape. Located at the door step of Sharjah International Airport, the free zone

provides business with superior infrastructure along and connectivity.

1995

Number of companies








Yes

1

1

Yes

No

No

Yes

Port at freezone Sharjah International Airport







Prominent companies at the free zone Zenith Infotech, WS Atkins & Partners, WIPRO,

Wartsila Hamworthy


Over 4,100 Companies





Language English



Established in

Hamriyah Free Zone focuses to provide competitive incentives and unique opportunities to

establish a business in UAE. It is located between the deep water Hamriyah Seaport and a major

national highway. The free zone comprises of 7 zones namely Oil and gas zone, Construction

world, Petrochemical zone, Maritime city, Timber land, Perfume world and Steel city.

1995

Hamriyah Free Zone

Number of companies








Yes

1

1

Yes

No

No

Yes

Port at freezone Hamriyah Sea Port








Over 4,900 Companies





Language English



Ras Al Khaimah Free Zone

Established in

The Ras Al Khaimah Free Trade Zone positions itself to be a low cost free trade zone. The free

zone comprises of a Business Park for office clients, an Industrial Park for heavy manufacturing,

a Technology Park for trading and light manufacturing, and an Academic Zone for educational

institutions.

2000

Number of companies Over 7,500 Companies








Yes

1

1

Yes

No

No

Yes

Port at freezone No












Language English



RAKIA Free Zone

Established in

Ras Al Khaimah Investment Authority Free Zone places easy of doing business as a priority

while imparting the benefits of low costs to its clients. It has developed industrial parks at Al

Hamra and Al Ghail areas of Ras Al Khaimah while providing commerical office spaces of varied

sizes at Al Hamra, Ras Al Khaimah.

2005

Number of companies Over 5,700 Companies








Yes

1

1

Yes

No

No

Yes

Port at freezone No












Prominent companies at the free zone POSCO Steel, Ashok Leyland, Dabur India,

ARC International, Becker Paints

Language English



OFFSHORE COMPANIES IN UAE

JAFZA Offshore

Established in

Industry focus








Can carryout international trade

Trade with UAE Company

Can lease an office

Can obtain visas for investor or employees

Industrial premises



Can use to invest in properties in Dubai

Location of directors and shareholders

meeting




permitted


Language


Other permitted currencies

2003

International Trade and Investments

Yes

1

2

Yes

No

No

No

Yes

No

No

No

No

No

No

Yes

Anywhere

No

Yes

Yes

Nil

English

UAE Dirhams

Any


RAK FTZ Offshore

Established in

Industry focus










Can lease an office


Industrial premises





meeting




permitted


Language



2000


Yes

1

1

Yes

No

No

No

Yes

No

No

No

No

No

No

No

Anywhere

No

Yes

Yes

Nil

English

UAE Dirhams

Any


RAKIA Offshore

Established in

Industry focus










Can lease an office


Industrial premises





meeting




permitted


Language



2005


Yes

1

1

Yes

No

No

No

Yes

No

No

No

No

No

No

No

Anywhere

No

Yes

Yes

Nil

English

UAE Dirhams

Any






INDUSTRIES


FINANCE

Banking Sector

The UAE's banking sector is sufficiently resourced to deal with global and

domestic stress scenarios and has handled recent global financial turmoil

comparatively well. Banks' significant capital adequacy levels, together with

robust provisioning policies and reasonable profitability, boosted its capabil-

ity to cope with major challenges. Looking to the future the UAE banking

system would continue to show a high level of resilience due to its conven-

tional, traditional banking model, which has a strong focus on the UAE;

sound financial indicators; low dependency on overseas funding; a capped

real estate exposure; and a high loss absorbent capability as validated by

stress testing.

In order to mitigate the concentration of risk due to the high share of

Government-related entities (GREs) in the economy, the Central Bank

requires banks to hold capital in excess of the Basel Committee recommen-

dation. At the end of 2012, the capital adequacy ratio of UAE banks (Tier 1 +

Tier 2) was 21 per cent, of which Tier 1 was 17.6 per cent. This buffer intro-

duces a significant level of comfort to UAE-based banks, especially national

banks. As issues with major corporate entities are being resolved through

either the rescheduling or restructuring of part of their loans, having a

sizeable capital buffer in place, the Central Bank believes, will help to reduce

the impact of any adverse outcome. UAE banking system has been able to maintain sound levels of profit even

during periods of stress. Banks earned a total profit of Dh8.59 billion during

2013.

UAE Bank Assets

Combined Deposits

Loan and Advances

Personal Loans

Provisioning of Non-Performing Loans

Shareholders equity, covering capital and reserves

Combined Profits

618.367

386.93

366.91

82.01

26.82

76.95

8.59

Aug 2014 Amount in USD

Source: UAE Central Bank report


Stock Markets

Abu Dhabi Securities Exchange (www.adx.ae)Established in 2000, ADX is a focal point for UAE-listed companies, invest-

ment funds and debt instruments, providing investors with an opportunity to

invest capital for the benefit of the national economy. ADX has opened

impressive new offices in Sowwah Square on Al Maryah Island, Abu Dhabi

and also has branches in Fujairah, Ra’s al-Khaimah, Sharjah and Zayed City.

Dubai Financial Market (www.dfm.ae)Also established in 2000, DFM is operating as a secondary market for

trading of securities issued by public joint-stock companies, bonds issued by

the Federal Government or any of the Local Governments and public institu-

tions in the country, units of investment funds and any other financial

instruments, local or foreign, which are accepted by the Market.

NASDAQ Dubai (www.nasdaqdubai.com)Opened in 2005, Nasdaq Dubai is an international stock exchange operating

between Western Europe and East Asia offering trading in equities, deriva-

tives, Dubai gold securities, Islamic securities, debt, funds, REITs, ETFs and

structured products.

FTSE NASDAQ Dubai (www.nasdaqdubai.com/products/ftse.htm)The FTSE NASDAQ Dubai UAE 20 index comprises 20 stocks admitted to

trading on NASDAQ Dubai, the Dubai Financial Market (DFM) and the Abu

Dhabi Securities Exchange (ADX). Futures based on the index are admitted

for trading on NASDAQ Dubai and are designed to provide a hedging and

investment mechanism for GCC and international investors.

Dubai Mercantile Exchange (www.dubaimerc.com)The DME is the premier international energy futures and commodities

exchange in the Middle East. The Exchange has developed and trades the

DME Oman Crude Oil Futures Contract. The DME is a fully electronic

exchange, and its contracts are listed on CME Globex.

Dubai Gold and Commodities Exchange (www.dgcx.ae)DGCX, an initiative of the Dubai Multi Commodities Centre (DMCC),

Financial Technologies (India) Limited and the Multi Commodity Exchange of

India Limited (MCX). Commenced trading in 2005 as the region’s first

commodity derivatives exchange and has become the leading derivatives

exchange in the Middle East.


OIL AND GAS

Under the UAE's constitution, each Emirate controls its own oil production

and resource development. The lion's share of UAE production comes from

the emirate of Abu Dhabi, which accounts for around 95% of the country's oil

and gas reserves. Minor reserves are also held by Dubai, Sharjah and Ras

al-Khaimah, in that order. More than half of Abu Dhabi's oil production is

generated by state-owned ADNOC. The second main producer is Abu Dhabi

Marine Operating Company (ADMA-OPCO). Dubai Petroleum Company

(DPC) is the main upstream operator in Dubai. The state-owned Dubai

Natural Gas Company (DUGAS) is responsible for processing natural gas

produced in Dubai's offshore oil fields, as well as the gas piped from

Sharjah.

UAE's Oil and Gas sector is DEMONSTRATING ROBUST GROWTH

About 56 per cent of the world's oil reserves and 36 per cent of the

world's natural gas reserves are in the Middle East.

2011 saw UAE as the world's eighth largest oil producer, churning out an

average production volume of 2.813 million barrels per day.

UAE comes fourth in the top global exporter league, exporting around 81

per cent of its total production. The UAE exports around 2.32 million

barrels of crude oil each day to predominantly Asian markets.

The UAE holds the world's sixth largest proven oil reserves of approxi-

mately 98 billion barrels and seventh largest gas reserves of 213 trillion

cubic feet.

Almost one-third of the top 20 largest oil and gas projects in the Middle

East under execution are now taking place in the UAE's booming

upstream sphere.

The Abu Dhabi International Petroleum Investment Company in July

2012 inaugurated a pipeline via Fujairah to a refinery in Pakistan that

completely bypasses the Strait of Hormuz. The 1.8 million-barrel-per-day

crude oil pipeline runs from Habshan in Abu Dhabi to Fujairah and

ensures the security of the UAE's oil production and exports to the world.

The energy investment needs in the Middle East and North Africa region

over the period 2012 through to 2016 is expected to reach US$ 525

billion, with most of the energy investments being in the Arabian Gulf,

according to The Arab Petroleum Investment Corporation.


Around 600,000 barrels per day will be needed over the next decade to

meet the UAE's infrastructure, business and investment needs reiterat-

ing UAE's continued reliance on technology, equipment and expertise in

the oil & gas sector, to service its own consumption.

UAE plans to build a liquefied natural gas bunker station in Fujairah to

meet 15% of its increasing demand on gas because of industrial expan-

sion.

The UAE's pricing policy, based on a genuine desire to help stabilize the

oil market, is formulated through co-operation with fellow Organization of

Petroleum Exporting Countries (OPEC) members, the GCC and Arab

countries. Production is limited by quotas agreed within the framework of

OPEC.

Source: World Economic Forum- Competitiveness Index 2013

Oil and Gas Percentage Value in Numbers

Economic

Value Addition

25% of GDP 2014

and growth rate of

4.8%

In 2012, hydrocarbon export revenues were $118

billion according to the International Monetary

Fund (IMF), up from approximately $75 billion in

2010. Overal l , the hydrocarbon economy

accounts for approximately 80% of government

revenues and more than half of the country's

goods exports. UAE holds the seventh-largest

proved reserves of oil in the world at 97.8 billion

barrels, with the majority of reserves located in

Abu Dhabi (approximately 94% of the UAE's

total). The other six Emirates combined account

for just 6% of the UAE's crude oil reserves, led

by Dubai with approximately 4 billion barrels.

The UAE holds approximately 6% of the world's

proved oil reserves. The Economic Value added

for the oil and gas industry for 2012 $154 billion

Employment Approximately 2%

of the total

population of UAE

There is approximately employments of almost

200,000 skilled and un-skilled work force. Total

compensation to employees in the Oil and Gas

Sector is $ 3.1 billion.

Investment 13% of totalInvestments in UAE

Total investments into oil and gas industry for the

year 2012 was $9.25 billion


TOURISM

The UAE has identified tourism as one of the non-traditional products for

export with high value that is aligned well with the country's diversification

strategy away from the hydrocarbon sector. The main challenge is to

achieve sustained growth, which will entail developing new approaches to

the tourism market.

The biggest transformation that the UAE and more specifically Dubai have

witnessed with increased tourism activity are increased consumer spending

and increased investment in real estate and infrastructure. This however is

needed to be carried out with great efficiency to ensure lucrative returns

while maintaining competitiveness.

The UAE is ranked the 28th among 139 countries and 1st in the Middle East

in the World Economic Forum's “Travel & Tourism Competitiveness Report

2013”. Dubai plays a lead role, holding a 66 per cent share of the UAE's

tourism economy, with Abu Dhabi having 16 per cent and Sharjah 10 per

cent.

Data from the Dubai Statistics Office show that in 2012, the restaurants and

hotels sector was the highest-growing sector in the emirate's economy,

registering a 16.9 per cent annual growth rate. It also witnessed an increas-

ing percentage share reaching about 4.5 per cent in 2012.


Source: World Economic Forum's “Travel & Tourism Competitiveness Report 2013”

Tourism Sector Percentage Value in Numbers

Economic

Value Addition

14.3 % of GDP in

2012

UAE, travel and tourism Sector touched about

AED 193.6 billion of total value added. The UAE

t r ave l and t ou r i sm sec to r va l ue -added

percentage share is expected to reach about

16.4 per cent of total GDP and to register an

average annual growth rate of 5 per cent, to

reach Dh325.4 billion by 2023.

Employment 11.3% of total

employments in

2012

In 2013, the estimated total contribution of UAE

travel and tourism to employment was 393,500

jobs Over the next 10 years, the sector is

expected to create 245,000 jobs directly by

2023, registering average annual growth rate of

about 4.1 per cent. This includes employment by

hotels, t ravel agents, a i r l ines and other

passenger transportation services; it also

includes the activities of the restaurant and

leisure industries directly supported by tourists.

Investment Attracted capital investment of about Dh82.8

billion in 2012. This value is expected to rise by

11.7 per cent in 2013 and to grow annually on

average by 4.5 per cent over the next 10 years to

reach Dh143.4 billion in 2023 i.e. 23.2 % of total

investment. by 2023 international tourist arrivals

are forecast to total 25.8 million generating

expenditure of Dh207.1 billion, an increase of

5% per year


MANUFACTURING

The UAE is expected to pursue its diversification program through large-

scale investments in the manufacturing sector.

The potential manufacturing sectors include shipbuilding and vessels, basic

pharmaceuticals products, refined petrochemical products, motor vehicles

parts and accessories and electric power generation, transmission, and

distribution products.

UAE manufacturing sector is expected to continue focusing on its long-term

trade openness policies to ensure sustainability, especially on policies that

promote manufacturing industry for exports to developing markets, while

also urging the country to focus on projects that depend on highly advanced

technologies which provide high value added to the economy to increase

the competitiveness power of this sector in international markets.

At the regional level and in joint efforts with other GCC countries, the

manufacturing sector is expected to either undergo mergers and acquisi-

tions or jointly launch large and efficient projects to limit competition among

the manufacturers as this creates difficulties in exporting manufacturing

product overseas. A recent example is the merger of Emirates Aluminium

company (EMAL) with Dubai Aluminium Company (DUBAL) to form

Emirates Global Aluminium (EGA), the 5th largest global aluminium pro-

ducer by production.

Forty per cent of the manufacturing firms were located in Dubai, 29 per cent

in Sharjah, 15 per cent in Ajman and 7per cent in Abu Dhabi. However,

about 58.8 per cent manufacturing sector investments were in Abu Dhabi,

22 per cent in Dubai, 7 per cent in Fujairah and rest in other emirates.

UAE's main industries include food and beverages, tobacco, chemicals,

mineral products, metal products, equipment, paper products, textiles,

clothing and wood products. The largest individual manufactured products

include aluminum, cabling, petrochemicals, steel, and marine industry

products.


Source: Ministry of Economy, Dubai Statistic Centre.

Manufacturing Percentage Value in Numbers

Economic

Value Addition

14 % of non-oil

GDP

Dubai has targeted services and light industries,

whi le Abu Dhabi bel ieves i ts competi t ive

advantage l ies in heavier manufactur ing

industries, due to the availability of cheap

energy.

UAE manufactured exports increased to about

Dh59.2 billion in 2012 In 2012, about 77per cent

of the UAE manufactured exports went to Asia,

10.4 per cent to Africa, 6.4 per cent to Europe,

and the rest to US and other t ransi t ion

economies.

Employment

2.7% of the total

FDI in UAE. Growth

rate of 6.7%

There were there were 5 ,201 indust r ia l

establishments with total employment of almost

399,794 workers.

Investment Investment in the UAE manufacturing sector has

been spurred by the development of free zones,

with the largest and most high-profile of the free

zones being Dubai’s Jebel Ali Free Zone. 75% of

those are involved in trading, warehousing, and

d is t r ibu t ion , wh i le 20% are invo lved in

manufacturing. The remaining provide services.

FDI Investment amounts to AED 4.48 billion

The bulk of industrial investment in Jafza is

concentrated on light engineering and final-stage

assembly in sectors such as electronics

5% annual growth

rate in employment


RETAIL

A booming construction and infrastructure sector, growing young population

and strong economic growth, coupled with mounting consumer confidence,

and increased spending helped the retail sector to claim its highest position

ever.

With several landmark international and regional events, including the Expo

2020 under way, the UAE has several mega development projects in the

pipeline. The country is also geared up for an exponential growth in tourism

and a sustained surge in per capita consumer spending, key factors

expected to give a big boost to the retail sector

UAE is the most mature retail market in the GCC, with a retail trade size of

US$ 38.1 billion (2010); significantly larger than KSA at US$ 23.7 billion,

Qatar at US$ 8.9 billion, and Oman at US$ 5 billion.

The UAE has retained its position as the 2nd most important international

retail destination globally for 2014, and also ranks 4th most suitable market

for expansion among international retailers,

Source: 2014 Global Retail Development index by A.T. Kearney , CBRE consulting , BMI, Oxford Economics, DIAC

Retail Industry Percentage Value in Numbers

Economic

Value Addition

12% o f non-o i l

GDP

The UAE’s retail sales are forecasted to grow at

an estimated Dh151.36bn by 2015. GDP per

capita is expected to rise 18.7 per cent by the

end of the forecast period, to $74,484. The

average annual retail GDP growth is expected to

be 3.6 per cent between 2011 and 2015.

Employment

7% of the total FDI

in non-oil industries

of UAE.

Dubai’s winning the bid to host the EXPO 2020 is

expected to be a major catalyst for development

across all industry segments. It is estimated that

the win will create more than 76,000 job

opportunities in the UAE between 2013 and 2021

Investment The UAE expects to attract foreign direct

investments worth $14.4 billion in 2014, up

almost 20 per cent from its current FDI levels.

In 2013, the UAE was able to attract three times

more FDIs than expected and is the third most

attractive country in West Asia for FDIs

2.61% CAGR


Retail sub-sectors to show strong growth over the forecast period include

over-the-counter (OTC) pharmaceuticals, with sales expected to increase

by nearly 40 per cent from a forecast $300mn in 2011 to $420mn by 2015. Automotive sales are forecast to rise by 49 per cent, from an expected

403,296 units in 2011 to 600,672 units by 2015, largely as a result of growth

in the luxury car market. Sales of consumer electronics are expected to

increase from a forecast $3.15bn in 2011 to $3.97bn by 2015 – a rise of 26

per cent. The UAE's consumer electronics market is one of the largest in the

Gulf, accounting for close to 40 per cent of regional spending and serving a

potential market of almost 2bn people across Asia and the Middle East.

Retail Apparel Index found that the UAE had the highest fashion clothing

sales per capita per annum in the developing world, at $785. The report

attributed its success to 'high disposable income and immense fashion

consciousness'. Dubai has become a 'hotbed ' for upscale retailers with

global fashion brands developing their retail network across the UAE.

The food sales in the UAE, forecast to be worth $7.73bn in 2011, are

expected to increase by 36.1 per cent to $10.52bn by 2015. The UAE's

mass grocery retail (MGR) sector is one of the Gulf region's largest by

value, with sales forecast at $5.33bn in 2011 and accounting for 69.2 per

cent of the total food and drink market. The value of the UAE's MGR sector

is forecast to rise to $7.55bn by 2015, when it should account for 73.8 per

cent of the overall food and drink market.


We have made every effort to ensure that the information in this book was

correct at the time of publication. We do not assume and hereby disclaim

any liability to any party for any loss, damage, or disruption caused by

errors or omissions, whether such errors or omissions result from negli-

gence, accident, or any other cause.

Please note that (a) this book is not intended as a substitute for the profes-

sional advice, (b) regulations in the UAE can be amended with no prior

public proclamation, and (c) the intricacies of procedure may vary in prac-

tice, as procedure is a realm subject to administrative discretion; therefore,

sole reliance on the report is not advisable when making important deci-

sions. We would advise that interested clients should, through your good

offices, contact us before choosing any particular course of action.

Disclaimer


N R DOSHI & PARTNERS

608, Mankhool Building,

Khalid Bin Walid Street, Bur Dubai,

P.O. Box: 13742 Dubai - United Arab Emirates

T : +971 4 352 8001 | F : +971 4 352 8002 | M : +971 50 3989560

E : | W : [email protected]

Abu Dhabi | Dubai | Jebel Ali Free Trade Zone | Sharjah

Hamriyah Free Zone | SAIF Zone | RAKIA | Mumbai