Many international companies choose the UAE to have at least some business presence so to take advantage of the geographical location, low and immature tax environment and charges, excellent communications and transportation access, stable government and worldwide modern banking facilities to mention a few.
It is however important to set up with some knowledge and professional assistance to get established as quickly and cost effectively as possible. You want to minimalize your exposure and protect your assets and this can be done with making the right choice for your business.
You need to understand your costs upfront as ultimately these all contribute toward your business plan on establishing a business in the UAE. Consideration of costs of your licence, registration and professional fees. Getting your annual establishment card and trade licence and choosing the right premises for your business operation and set up.
In the UAE there are 3 options to choose from when looking to set up a business - all three offering various business environments and abilities to conduct business.
ON-SHORE formation is for companies that wish to trade within the local UAE market and they typically require a UAE National as a local partner and company shareholder.
FREE-ZONE formation will allow companies to be 100% expatriate owned. There is some restrictions on business trade within the UAE.
OFF-SHORE formation again can be owned 100% by an expatriate but is typically used as asset, property or holding company for other business activities inside and outside the UAE.
New company set ups would need to have a a registered trade license or at the very least an 'initial approval' and 'trade name reservation' from the governing jurisdiction before entering into any commercial property lease and tenancy agreement. If a license already exists and companies want to simply open a new 'branch' in another location, a new branch license would first need to be obtained. Make sure that the BUA and square foot size of your premises are in line with the government regulation and to suit the number of employees you have under your trade license.
As commercial property transactions both sales and leases are subject to 5% VAT you will also need to be taking into consideration your tax position and registration in the UAE. These extra costs also have an impact on your set up expenditure.
Exclusive Links have a Commercial department and are happy to point you in the right decision when making the right commercial decisions for your business. Contact Mohsin Khoda for impartial advice on 050 426 2930 or mohsin@exclusive-links.com.
Written by
Zarah Evans, Managing Partner,
Exclusive Links Real Estate
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