Business Incorporation

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Mainland Company Formation

To establish a Mainland company in the UAE requires adequate information about the workings of the UAE market. Our team will guide you through the process and will help you identify the right location, structure or license required for commencing your business.

 

Mainland company benefits:

 

  • Many licenses offered to meet your business requirements
  • Full repatriation of capital and profits
  • Zero corporate taxes
  • Ideal location for business to flourish, can also conduct business in Dubai
  • Zero currency restrictions
  • Run your company from anywhere in the UAE
  • Agile in renting office anywhere in the emirate
  • Quick and easy process to get employment visas
  • Personal income tax exemption

Offshore

An Offshore Company

 

‘Offshore’ relates to activities of management, registration, conduct or operations in a country other than its own to derive benefits from it, often of finance, legal and tax.

 

An ‘Offshore company’ is a company incorporated thereby to carry out substantial business activities in a country outside of its registration or formation, to legally enhance its wealth by following no tax jurisdiction laws to reduce tax payments and derive other benefits from it.

 

Why do companies prefer going offshore?

 

Going offshore is an interesting strategy for companies, closely related to the reasons why they grow their business, expand it or buy more than one home in their own home countries. They have always believed that they would go towards a market that provided them with more favorable conditions, without forgetting their roots behind.

 

It simply involves a global expansion of its business operations while avoiding unnecessary cumbersome regulations and taxes present in the home country.

 

When companies operate offshore, their primary motive lies in securing confidentiality over their finances and gradually increasing their wealth without inhibitions. Operating in these companies actually reduce plenty of tax payments like property sales, capital gains, VAT etc.

 

Some of the benefits include:

 

  1. Tax saving: The structure of the business is planned in such a way that its profits are realised with minimum tax liabilities.
  2. Privacy: While carrying out operations in the foreign country, the name of the underlying company can be kept out of documentation.
  3. Transfer of property: When the property is usually sold by the owner, a certain proportion is charged by authority. This charge could be avoided if the company itself is sold.
  4. Global Trade: Going Offshore also means going global – global business, global opportunities, and global investments.
  5. Multiple investor advantage: It is usually insisted upon by property developers to maintain the ownership to just one owner. However, in an offshore company, the number of shareholders can be between 1 and 50 and the property is owned by the company.
  6. Bank operations: Local as well as global banks present in the UAE offer offshore corporate bank accounts.

 

Using the offshore company wisely can reduce and sometimes eliminate taxes that would otherwise involve high-tax jurisdiction payments. Although these are reasons to show a sign of relief, the owner will still have to deal with personal taxes in the home country.

 

Some of the common reasons to hold an offshore company include holding trademarks, copyrights and other IPRs, hold interests in companies through various jurisdictions, and also to be a holding company for franchises. Any income that flows into the offshore company through taxable jurisdiction is not taxable.

 

The offshore company has the ability to mitigate taxes to its beneficiaries. If profits are arranged for are attributed to a company that is incorporated elsewhere, residents of high-tax countries can reduce the tax they pay as this attribution prevents them from paying income tax earned outside of the territory.

 

Benefits of going offshore:

 

  • Financial and banking confidentiality
  • Reduce taxes, costs , legal liabilities and operating expenses
  • Enhanced assets, privacy & increased yields and returns
  • Better risk management
  • Security of property rights
  • Free remittance of profits and capital
  • Access to tax treaties, foreign insurance and reinsurance
  • Aid from offshore experts
  • Territory based taxations on foreign income
  • Increase in foreign investments
  • Protection from inflation
  • No international trade tariffs and annual tax returns

 

Offshore companies are used for:

 

  • Trade
  • Investment
  • Holding
  • Financing
  • Patent, royalty and copyright holdings
  • Real property ownership
  • Ship management and yacht owning
  • Personal and corporate tax planning

 

Lawman Consultants provide a comprehensive range of offshore services that have been professionally structured over their 8 years of formation and management experience. A team has been dedicated to help in setting up these offshore companies in local and global jurisdictions. Lawman Consultants helps those clients who are looking for solutions to reduce taxes, protect assets and reduce liabilities.

Branch or Representation Office in UAE

Introduction

 

Foreign companies are now adopting the popular method of opening a branch or a representative office to ensure full ownership. Although these offices aren’t considered a separate legal entity, they are treated as extensions of the foreign company and will still be parented by them.

 

  1. A Branch office (if licensed) in the UAE can earn profits through commercial activities as its license reads, but may only engage in activities similar to those carried on by the foreign company in its home jurisdiction.
  2. A Representative office is not permitted to earn profits within the UAE. It can only promote or market it’s parent company’s products and services.

 

The Branch and Representative offices share common features as they both operate under the authority of commercial registration. They are licensed under the name of the foreign company and are mandated to appoint a UAE based- Local Services Agent (LSA).

 

Recently, HH Sheikh Mohammad bin Rashid Al Maktoum, Vice President and Prime Minister of UAE made a significant move by issuing a new licensing law, to better the licensing process in the Emirate of Dubai. This new law aims to organise the economic activities in the Emirate of Dubai and streamline the licensing process by facilitating coordination amongst various government entities in Dubai, amongst other things.

 

For more details, please view the eighth issue of the local law series.

 

Setting up Branch/Representative Office in UAE

 

Step 1: Get a Local Services Agent

 

The Branch and Representative offices are both required to appoint a local services agent (LSA). The LSA must either be a UAE national or a company wholly owned by UAE nationals.

The LSA functions around obtaining licenses, permits, visas etc., in return for a fee. Under no circumstances will the LSA participate in any operations, management or ownership of the office and cannot be held responsible for the same.

 

Once the LSA is identified, a written agreement is created to seal the contract. The agreement requires the signature of the parties involved and notarisation in the relevant Emirate. There is no prescribed form of agreement and it will therefore be a matter for negotiation.

 

Step 2: Trade Name

 

The next step includes making an application to the relevant Department of Economic Development for the reservation of a Trade Name. The company is also required to get the initial approval of the proposed Branch/Representative office registration.

 

Step 3: Make an application to the Ministry of Economy

 

Once the initial approval is received (as per Step 2), an application is to be made to the Ministry of Economy (MOE) (the UAE Commercial Companies Law, article 314).

 

The Application requirements:

 

The application form must comprise of the following:

  1. Full details of the foreign company including share capital, head office, overseas activities, home jurisdiction
  2. The nature of the proposed activities (should be consistent with activities in the home jurisdiction)
  3. The name of the proposed general manager in the UAE

 

The form must be accompanied by the following documents:

 

  1. Trade name reservation certificate and Initial approval
  2. Corporate documents : Certificate of Incorporation (or equivalent), Memorandum and Articles of Association, Certificate of good standing (can be obtained at the home jurisdiction)
  3. iA board resolution to :
    1. Authorise the opening of the Branch or Representative office
    2. Appoint the general manager
    3. Grant a power of attorney in the general manager’s favor
    4. Make the company accept responsibility and liabilities of the offices, once established in the UAE
  4. A power of attorney in the general manager’s favour (authorised by the board resolution) and a copy of the general manager’s passport
  5. Audited accounts of the parent company for the last two years
  6. A statement setting out the company’s main operations and activities – supporting its intended activities in the UAE
  7. The notarised agreement with the LSA, and a copy of the LSA’s identification documents (or corporate documents if it is a corporate entity).

 

Following the successful application submission, the MOE will issue their initial approval. Once approved, hard copies of the following documents must be submitted to them:

 

  •  Application form
  •  Certificate of incorporation of the parent company
  •  Initial approval of the MOE
  •  Local bank deposit certificate

 

After the MOE receives the documents, the Branch/ Representative Office establishment will be approved. However the Business will commence after the following steps have been completed.

 

Step 4: Commercial License

 

The MOE will issue a formal approval to either the Abu Dhabi Department of Economic Development or the Dubai Department of Economic Development, as appropriate (collectively referred to as the DED here).

 

Once the DED has received this approval, the applicant will then need to make an application to the DED and submit similar documents as done to the MOE. Additionally, the applicant will need to include the proposed UAE office address.

 

Documents to be sent along with application:

  •  MOE approval (from Step 3) and other required authorised approvals
  •  Copy of the proposed lease in the UAE along with copies of a few documents submitted to the MOE (under step 3)
  •  An Undertaking from the foreign parent company
  •  A letter from a UAE auditor validating the company and a statement (by the same auditor) summarising the financial statements of the company for the two previous years.

 

A commercial license will then be issued by the DED to the Branch/Representative office, valid for 1 year and renewable annually.

 

Step 5: Entering the Lease

 

Post the commercial license issuance, the foreign company may focus on completing administrative tasks as it enters into the proposed lease for office space. They can focus on opening bank accounts and obtaining visas and labor cards for its employees.

 

Step 6: Register as a Member

 

The final step is for the Branch or Representative office to register as a member with the Abu Dhabi Chamber of Commerce and Industry (or the Dubai Chamber of Commerce and Industry, whichever appropriate). The procedure involves completing an application, providing copies of the commercial license and office lease agreements and passport copies of the authorised signatories of the branch or representative office.

 

Fee Structure

 

The fee payable during the process varies from one Emirate to the other. (MOE fees are standard).

Depending on the activities that need to be undertaken at the UAE, commercial license fees might vary as well.

 

Notarise and translate your documents

 

The foreign company will have to present the documents listed above for authentication at the foreign ministry of the country in which the company is incorporated and subsequently to the UAE consulate. Before they can be presented to the authorities in the UAE, they must also be translated into Arabic by an official translator. If the responsible UAE embassy is not located in the country of incorporation, the process may be delayed.

 

Note:

  1. Each Emirate follows different procedures and formalities- this article gives you a brief overview.
  2. To operate within a relevant industry, the company might need to cater to additional requirements
  3. Applications will be considered based on merits. The relevant government authorities will ask for further requirements, if necessary.
  4. You can now get started with the application process online- all relevant documents can be submitted digitally on the MOE website, for Abu Dhabi applications only.
  5. Upon special request, the Dubai licensing law allows you to obtain a four year license.

Incorporation Packages

Coming Soon!

Mainland Company Formation in:

Abu Dhabi Mainland

Dubai Mainland

Ajman Mainland

Offshore Destinations:

Dubai Offshore

Ras al-Khaimah Offshore

Ajman Offshore

British Virgin Islands

Seychelles

Cyprus

Panama

Bahamas

Mauritius

Singapore

Delaware

Belize

Auguilla

Gibraltar

United Kingdom

Switzerland

Hong Kong

FAQ:

Company related queries

Bank related queries

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