Procedures for establishing companies in the UAE
A free zone company is a company formed within a special jurisdiction regulated by a particular Emirate. As of the date of writing, 45 Free Zones have been established and function in the UAE.
Mostafa Hosni - • Information about Legal advice and incorporation work
A free zone company
Copyis a company formed within a special jurisdiction regulated by a particular Emirate.
As of the date of writing, 45 Free Zones have been established and function in the UAE.
Free zone jurisdictions have their own regulations and have a government regulatory body called the Free Zone Authority.
are geographically demarcated areas within the UAE in which 100% foreign ownership is permitted.
1-A Mainland
CopyUAE company is also called an onshore company. It is permitted to do business in the local market as well as outside the UAE without restrictions.
2- legislation permitted the establishment of companies with 100% foreign ownership Since 1st of June 2021.
company forms
Copy1- Limited liability company
2- One person company
3- LLC Two or more partners
Public joint stock company
Copy1- Private joint stock company
2- General partnership
3- Limited partnership
1- Corporate tax:A corporate tax is levied on the profits of businesses, but only on oil companies and foreign banks at the moment. From July 1, 2023, the corporate tax will be levied on all businesses in the UAE.
2- Excise tax:An excise tax is levied on specific goods that are typically harmful to human health or the environment, such as tobacco, alcohol, and sugary drinks.
3- Value-added tax:A VAT is levied on a majority of goods and services in the UAE at a rate of 5%.
Type
Copy- One person company Limited liability
- LLC Two or more partners
- General partnership
- Private Joint stock company
- Public Joint stock company
Benefits
Copy- Limited liability of the sole proprietor. Easy incorporation procedure.
- Limited liability for shareholders. Larger investments can be attracted.
- Unlimited liability of partners. Low incorporation costs.
- Stability and strong business reputation. Ability to raise huge investments.
- Stability and strong business reputation. Ability to raise huge investments.
Number of Shareholders
Copy- One owner
- At least 2 partners
- At least 2 partners
- At least 3 shareholders and maximum 200
- At least 5 shareholders
Capital amount
Copy- At least 5000 AED
- At least 50,000AED
- No minimum
- At least 5 million AED
- At least 30 million AED
Types of companies in UAE
Copyfreezone
Copy·A Mainland UAE company is also called an onshore company. It is permitted to do business in the local market as well as outside the UAE without restrictions.
legislation permitted the establishment of companies with 100% foreign ownership Since 1st of June 2021.
Mainland
CopyA free zone company is a company formed within a special jurisdiction regulated by a particular Emirate.
As of the date of writing, 45 Free Zones have been established and function in the UAE.
Free zone jurisdictions have their own regulations and have a government regulatory body called the Free Zone Authority.
are geographically demarcated areas within the UAE in which 100% foreign ownership is permitted.
Forms of companies
Copy1- AJoint Liability Company
Copyis a company consisting of two or more partners liable for the company’s obligations.
2- ALimited Partnership Company
Copyis a company consisting of one or more joint partners, having the capacity of traders, who are liable, severally and jointly, for the partnership’s obligations, and one or more silent partners who shall not be liable for the partnership’s obligations except to the extent of any contribution made by that partner to the partnership’s capital. Silent partners do not have the capacity of a trader.
3- ALimited Liability Company
Copy· is a company consisting of a number of partners that is not less than (2) two and not more than (50) fifty, and each of them shall be liable only to the extent of his share in the capital.
· One natural or legal person may establish and own a limited liability company, and the owner of the company’s capital is not liable for its obligations except to the extent of the capital stated in its articles of incorporation, and the provisions of the limited liability company contained in this decree law apply to it insofar as it does not conflict with its nature.
4- APublic Joint Stock Company
Copyis a Company whose capital is divided into equal and negotiable shares. The founders shall subscribe to part of such shares while the remaining shares shall be offered for Public Subscription. The shareholder shall be liable only to the extent of his share in the capital of the Company.
5- APrivate Joint Stock Company
Copyis a company with the number of shareholders not less than two and with capital divided into shares of equal nominal value, to be paid in full without offering any shares for Public Subscription, and conducted by signing the Company’s Memorandum of Association and complying with the provisions of this Decree-Law in terms of its registration and incorporation. A shareholder shall be liable only to the extent of his share in the capital of the Company.
Types of tax in the UAE
Copy1- Corporate tax:A corporate tax is levied on the profits of businesses, but only on oil companies and foreign banks at the moment. From July 1, 2023, the corporate tax will be levied on all businesses in the UAE.
2- Excise tax:An excise tax is levied on specific goods that are typically harmful to human health or the environment, such as tobacco, alcohol, and sugary drinks.
3- Value-added tax:A VAT is levied on a majority of goods and services in the UAE at a rate of 5%.