The UAE is one of the major economic centers of the Middle East region and the second biggest economy of the Arab world, following Saudi Arabia.
The political stability, security and ongoing incentives for the diversification of the economy, are some of the reasons why opening a business in the UAE is really convenient. Setting up a company in Dubai, in particular, is a great investment opportunity, as it is leading the national economic development in terms of business.
The UAE has proved the strength of its economy even in situation of global financial crisis or oil price fall.
The wisdom of its leadership led to a diversification of the national economy that is going to reduce the dependency on the oil by the 20% in the next years.
The non-oil sectors are currently making the 69% of the country’s wealth giving the opportunity to many businesses to open a company in the UAE in a variety of sectors.
This context, along with an easy legal framework and a tax free environment, makes the country the ideal destination to setup a business.
There are three main ways to open a company in the UAE:
- In conjunction with a local sponsor in the UAE mainland
- In the UAE free zones, owning 100% the company without a local sponsor
- In an offshore jurisdiction, owning 100% of the offshore company in Dubai, Ajman or Ras Al Khaimah
Opening a company in Dubai or in the UAE mainland can be advantageous in terms of operability, office location and competitive costs, but there are some disadvantages due to the necessity to have local sponsor, who will detain the 51% of the company shares (except in the case of individual establishment company where it is possible to detain the 100% of company capital but still the presence of the local sponsor and his related annual costs are required).
A very good alternative is to open a company in the UAE free zones.
The free zones in the UAE are distinct jurisdictional entities with their own set of regulations and laws. The free zone company enjoys the full ownership of the business and many other advantages. However, it can operate only within the boundaries of the free zone itself and abroad, except for service activities. A manufacture company established in a Dubai free zone, for example, can sell with no limitations its products abroad and within the same free zone, but if it wishes to sell in the local market it must appoint an agent or a commercial distributor.
The third option, that is setting up an offshore company in the UAE, is also convenient, especially for conducting the business in a confidential way.
The UAE offshore company can own an UAE bank account and buy properties in the country, subject to the authorization of the competent authorities.
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