Types of Companies in the UAE
Companies registered in the United Arab Emirates are regulated by the United Arab Emirates Corporate Law, but every Emirate operates based on its own corporate code.
Jurisdictions and Governing Authorities
The United Arab Emirates have a total of three legal forms for the incorporation of companies:
1. Offshore Company
An offshore company in the United Arab Emirates is surely the most popular and most efficient way of doing business internationally.
The UAE offers three offshore jurisdictions, Ras Al Khaimah, Dubai, and Ajman, for UAE Company Formation, all of which provide similar facilities and vary only slightly in their long-term development goals.
Offshore companies registered in Dubai (Jebel Ali Offshore Company), for example, are the only ones permitted to own real estate in the Emirate of Dubai.
Offshore companies in Ras Al Khaimah are a light-weight and flexible option for foreign entrepreneurs who want to take advantage of the many benefits of a RAK offshore company, without having to establish a physical presence in the Emirates.
Benefits:
- 0% corporate tax
- 0% personal income tax
- 100% foreign ownership
- 100% repatriation of capital and profits
- Bank account and multi-currency accounts at prestigious banks in the UAE
- No TIEA’s (Tax Information Exchange Agreements)
- Possibility to keep a virtual office in the UAE
2. Freezone Company
The United Arab Emirates currently have over 47 free trade zones in place, with even more being under construction. Each freezone is governed by their respective Freezone Authority and was designed to accommodate one or more company types, for which the Freezone Authority will issue an operating license.
Freezone companies are limited to performing the activities relating to their business license and will have to lease an office space in the freezone where they are registered. Freezone companies can obtain residency visas in the UAE for its director, employees or shareholders.
Benefits:
- 100% foreign ownership
- 100% repatriation of capital and profits
- 0% import and export tax
- 0% personal income tax
- corporate tax exemption for up to 50 years
- no currency restrictions
3. Mainland Company
A mainland company in the United Arab Emirates is an onshore company registered in one of the seven Emirates, that is allowed to do business both within the UAE and internationally, without restrictions. These companies are regulated by the Department of Economic Development (DED) of the Emirate where the company is registered. The DED is also the authority which will issue the business license required for the company to start operating.
Six types of license are available:
- Commercial: necessary for any activity related to trading, transportation, contracting, real estate or other similar activities.
- Professional: for individuals who practice their job based on their academic achievements, intellectual abilities and skills, etc., like lawyers, auditors or other consultants.
- Industrial: necessary for manufacturing activities and/or various factory facilities
- Agricultural: for owners of farms, fisheries or farmland
- Craftsmanship: for individuals who practice their craft independently, like blacksmiths, plumbers, carpenters, etc.
- Tourism: for any activities relating to tourism and hospitality
In companies with a commercial or industrial license, foreign shareholders may hold a maximum of 49% of the shares; 51% must be held by a UAE national. Only the professional license allows for 100% of the shares to be held by a foreigner, but a local service agent must be appointed.
