The UAE – Open for Business
The United Arab Emirates, with its rapidly developing infrastructure, investor-friendly policies and political stability, is undoubtedly one of the most attractive business destination in the region.
The UAE follows global best practices and creates a conducive environment for businesses to operate, and presents ample opportunities for both investors from the region and around the world. The country lies at the heart of a strategic, geographic crossroads where trade, commerce and diverse cultures have co-existed and interacted for hundreds of years.
Foreign investors looking to set up a business in any of the industrial cities, special economic zones or free trade zones established in different emirates have access to single window licensing services that promise quick turnaround in terms of registration and visa processing. Specialised zones for technology, media, education, healthcare, finance and others gives an added dimension to the trade and commercial environment.
The Government encourages the private sector in a free trade regime with low tariff barriers and minimum legal hurdles. Many multinational companies (MNCs) have established branches in the country, many are engaged in manufacturing products or assembling them and many others have set up distribution centres for the region.
The UAE’s transformation was made possible by its major natural resource. The economy still relies on oil revenues but the years have seen a progressive shift away from a fossil fuel base to highly diversified all-round growth in manufacturing and trade, with service industries also seeing exponential development in sectors such as finance, tourism, real estate and information and communication technology. Great strides have also been made in education, healthcare and the general welfare of the people.
Today, the UAE has one of the most open and dynamic economies in the world. The UAE’s tax-free status, world-class infrastructure, low tariffs and 100 per cent ownership for foreign investors in selected zones, make it the ideal location for setting up new business. Today, the UAE stands as a strong nation built on the foundations of security, hope and economic strength, its modern outlook and progressive society bringing it into the front ranks of the Arab world.
Other clear advantages to doing business in the UAE include:
- No restrictions on profit transfer or repatriation of capital .
- No corporate or income taxes.
- A currency, the Dirham, that is stable, secure and pegged to the US dollar.
- Very low, or non-existent, import duties.
- Competitive labor costs.
Sectors with strongest demand and opportunity include:
- Construction services
- Materials and supplies
- Defense – Aerospace
- Energy – Alternative Energy
- Professional services
- Select tourism products/services including high-end hotel brands
- Healthcare and education services and products
- Creative arts and media.
A member of the (WTO) since 1996, the UAE supports open trade and has stable trade relations with countries throughout the world. Thanks to its open economy, attractive business environment and continued economic growth, the UAE has emerged as a key international trading hub between East and West.
The WTO has named it the leading Arab economy in terms of global trade and one of the top 30 nations in the world. The UAE Government’s free-market policy and flexible economic and commercial laws are the prime factors in the country’s rise as a regional and global leader.
Establishing a Business
The benefits of establishing a business in the country include corporate tax holidays for most sectors, no personal taxes, no currency restrictions and freedom to repatriate capital and profits. These relationships are sometimes conducted through general trading activities and specific joint ventures.
A foreign company wanting to do business in the UAE can choose to set up operations as a branch, representative office or registered company within one or more of the emirates, or it can appoint a commercial agent to sell its products in the UAE market or export them. It has to interact with authorities at the federal and emirate level and observe federal and local laws and regulations. While federal laws gain precedence over local laws, emirates individually have discretionary policies and procedures that affect the way business is conducted.
New companies can also choose to conduct their activities from a Free Zone, which is a designated, self-regulated area set up to catalyse economic activity within an emirate and is governed by its own set of rules and regulations (see below the Free Zone section for more information).
Ownership regulations: Under the law, all companies established in the UAE must have 51% ownership by UAE nationals or a company wholly owned by UAE nationals, except in the following cases:
- 100% foreign ownership permitted in Free Zones
- Activities allowing 100% Gulf Co-operation Council (GCC) ownership
- Wholly owned GCC companies entering into partnerships with UAE nationals
- 100% ownership for professional companies
- Instances where the law requires 100% local ownership.
However, even with 51 per cent UAE ownership, companies cannot pursue those activities which are allowed only for UAE nationals or companies wholly owned by UAE nationals.
Licensing Categories and Procedures
Companies have to notarize their Memorandum of Association, which should be written in Arabic, and the Commercial Companies Law (CCL) requires them to also enter their names into the Commercial Register maintained by the local licensing authorities. A company cannot commence business if its name is not registered and its Memorandum of Association is considered void.
All businesses, whether industrial, professional, trading or services, must also obtain a trade licence from the emirate concerned before it can begin business in the emirate. Licensing procedures may vary from emirate to emirate.
There are three categories of licences for all business activity in the UAE:
- Commercial licences: covering trading activities.
- Industrial licences: for establishing an industrial or manufacturing activity.
- Professional licences: covering professional services, craftsmen and artisans.
Official approval is required from the appropriate Government ministry or department to set up a company to engage in certain activities, including:
- Financial institutions
- New industrial projects or expansion
- Medical institutions
- Air transport and services
- Publishing, printing, advertising, filming, photography
- Education and training
- Agriculture and animal welfare
- Customs clearance, freight forwarding, cargo services
- Telecommunications equipment
- Insurance companies and professional firms
- Legal consultancy
- Engineering and contracting
The CCL specifies the regulations governing operations of foreign businesses, defining the following seven categories of business organisation:
- General Partnership Company
- Limited Partnership Company
- Joint Participation (Venture) Company
- Public Joint Stock Company
- Private Joint Stock Company
- Limited Liability Company
- Limited Share Partnership Company
Some of these categories are restricted to UAE nationals, while foreign investors often prefer the Limited Liability Company. However, with increased stress on privatisation of the economy, foreign investors may also prefer Public Joint Stock Companies as an option.
Companies can also be set up under the Civil Transactions Law 5 of 1985 or Civil Code, which has a classification system that differs from the CCL and is closer to Islamic law. According to the Civil Code, the word ‘merchant’ does not apply to ministries, Government departments, public institutions, corporations, public benefit organisations, societies, clubs and professionals who carry out non-commercial activities.
The ‘civil’ companies registered by professionals are regulated by the Civil Code and are not ‘commercial’ entities in the legal sense, which means the person or company has no intention to trade as a profession and the activity carried out is not classified as trade.
General Partnership Company
Two or more UAE nationals can form a partnership in which they are liable to the extent of their total assets for all liabilities of the company. This opportunity is not extended to non-nationals because most of their assets are usually located outside the UAE. There is no minimum capital requirement but the name of the person who will manage the company must be mentioned in the Memorandum of Association, unless the Memorandum specifies otherwise. The UAE Government does not encourage establishment of such partnership companies.
Joint Participation (Venture) Company
Two or more partners can enter into a contract in which one or more partners actively conduct the business with third parties without disclosing the identity of the other partners to the third parties. No licence is required and the contract can be either written or oral, with sharing of profits decided mutually.
The partner who actively conducts the business enters his name into the Commercial Register to obtain a trade licence and is liable to the third party. If the existence of the joint venture is disclosed to the third party, the non-active partners also become liable, in which case the partnership is deemed a general partnership.
Public Joint Stock Company (PJSC)
The minimum capital required is AED10 million (US$2.7 million) and a minimum of 55 per cent of the shares (maximum 80 per cent) of the company must be offered to the general public. There should be at least 10 founding members and management vests with a board of three to 15 directors, majority of whom must be UAE nationals with a UAE national as chairman.
For this reason it is not popular with expatriate investors, although it is gaining in popularity with privatisation, because it is the only business entity to permit public offering of shares to raise capital. Companies engaged in banking, insurance or financial activities must be run as public-shareholding companies.
Private Joint Stock Company
It can be formed by at least three partners who fully subscribe to the company’s capital between themselves, the minimum capital requirement being AED2 million (US$545,000). With the exception of public subscription, all other CCL regulations are the same as applicable to public shareholding companies.
Limited Liability Company (LLC)
An LLC can be formed by a minimum of two and a maximum of 50 persons and managed by the foreign or national partners or a third party. The preferred choice of expatriate investors because it allows them to maintain control of its management, the company can engage in any lawful activity except insurance, banking and investment of money for others.
The liability of partners is limited to the extent of their shares distribution of profit and loss can be mutually agreed by them. Minimum capital required is AED150,000 (US$41,000).
Process to set up an LLC:
Company name and activity must be approved by the relevant office of economic development, municipality and Chamber of Commerce.
Articles of Association must be notarised according to the requirements of each emirate.
Application package must be delivered to the Department of Economic Development or municipality, as appropriate.
Following approval, the new company will be included in the commercial register and the Articles of Association will be published in the bulletin of the Ministry of Economy.
A licence will then be issued by the Department of Economic Development or municipality or Chamber of Commerce of the respective emirates.
Foreign professionals and specialists such as architects, civil engineers, management consultants, economists, healthcare specialists, legal consultants, auditors, accounting firms, educational services, technical services etc can form sole proprietorships with 100 per cent foreign ownership to practise their professional activities.
Sole proprietorship is a simple business method whereby an individual practices a profession or provides a service on his own account with a trade licence issued in his own name and collects a fee, although certain activities are reserved for UAE nationals and for companies totally owned by UAE nationals. This form of business entity, which cannot undertake commercial activities, is referred to as a service establishment. The number of staff members is limited and a UAE national must be appointed as a local agent, who has no direct involvement in the business and is paid a lump sum or percentage of profits or turnover.
Branches and Representative Offices
A foreign company can establish a wholly owned branch or a representative office in the UAE to carry out business in the UAE. A branch is not a separate legal entity but is considered part of the parent company, with the parent company being fully liable for its activities in the country. The branch is thus a full-fledged business performing contracts and carrying out activities specified in its licence, which are similar to those of the parent company and include and repair services for the customers of its parent company.
Traditionally, a branch could not engage in ‘trading’ activity – buying and importing products of its parent company for resale in the country, which was a function reserved for local trade agents – UAE nationals or companies with 51 per cent participation of nationals. However, there has been some liberalisation since 2006 and some branches have been able to gain licences to trade goods manufactured by its parent company.
A representative office does not engage in sales, services or any type of commercial activity but only promotes the activities of its parent company, gathering information and soliciting orders and projects to be performed by the head office of the parent company.
To obtain a licence from an emirate to open a branch, the parent company must appoint an agent for the branch who is a UAE national or a company wholly owned by UAE nationals. The agent of sponsor has no equity participation or liability to the business, nor can the person represent the branch office or participate in its management. The agent’s services are limited to liaising with the Government to obtain licences, visas, permits and other authorisations for the branch, and the agent is paid a fixed sum for the sponsorship and cannot claim a share in the profits.
Process to set up a branch/representative office:
A licence application must be submitted to the Ministry of Economy. If approved, the application is sent to the Economic Department of the emirate in which the business is to be undertaken.
Once licensed by the emirate, the company is registered by the Ministry of Economy, fees for first approval being AED10,000 (US$2,700). A bank guarantee of AED50,000 (US$13,600) is also required for registration, which must be renewed annually, subject to payment of AED10,000 (US$2,700). Each branch can have several sub-branches, with the same licensing and registration procedures followed for the branches/sub-branches.
Free Zones & Special Economic Zones
Establishing a business entity in one of the numerous UAE Free Trade Zones (FTZs) can be an attractive option for foreign investors and businesses. All seven Emirates already have, or are developing, such economic zones.
Free zones contribute to and stimulate the economy by attracting foreign direct investment, generating thousands of jobs, stimulating non-oil exports, encouraging the setting up of ancillary industries, and helping in the transfer of knowledge, expertise and technology to the country.
The major advantages in operating in a free zone are:
100 per cent foreign ownership of the enterprise
100 per cent import and export tax exemptions
100 per cent repatriation of capital and profits
No corporate taxes for 15 years, renewable for an additional 15 years
No personal income taxes
Less documentation, mostly in English
Assistance with labour recruitment, and additional support services such as sponsorship and housing.
There are over 20,000 companies in 21 Free Zones around the UAE. The largest Free Zones, by number of companies, are the following:
- (6,000 companies)
- (3,900 companies)
- (1,300 companies)
- (1,200 companies)
- (1,000 companies)
- (7500 companies)
- (14,000 companies)
An independent Free Zone Authority (FZA) governs each free zone and is responsible for issuing FTZ operating licenses and assisting companies with establishing their business in the FTZ. Investors can either register a new company in the form of a Free Zone Establishment (FZE) — a limited liability company governed by the rules and regulations of the Free Zone in which it is established — or simply establish a branch or representative office of their existing company based within the UAE or abroad.
The procedures for establishing a business in a Free Trade Zone are usually very straightforward and can be generally completed quickly, especially if there are no environmental issues involved. Individual Free Zones may have specific requirements, but general steps are:
Questionnaire from the relevant Free Zone Authority which will assist in assessing a company’s requirements.
License application, planning documents, and a consumer request for electricity.
Provisional approval and lease agreement.
Meetings with the authority to finalize details of the project.
Once a legal presence has been established in the Free Zone, the business will need to lease premises or land and acquire an operating license from the FZA. Different types of licenses apply in the different types of free zone, however, it is important to understand that companies with trade and industrial licenses can only conduct business within the Free Zone or abroad. To sell products in the UAE, a UAE official agent is required, and a joint venture needs to be formed.
When not to choose a Free Zone
There are a few scenarios in which a prospective company might not want to choose to do business in a Free Zone, and should instead opt for a regular joint partnership. These are if a company:
Practices a regulated profession.
Requires a lot of visas or warehouse/office space.
Plans a long presence in the UAE and wants to reach a wider portion of the UAE market.
Has a particular UAE company or individual with which to go into partnership.
Special Economic Zones
Besides Free Zones, the UAE has established strategic frameworks for increasing the number of small- and medium-sized businesses in Special Economic Zones (SEZs). Abu Dhabi has set up the Higher Corporation for Specialised Economic Zones, which has since been renamed Zones Corp.
The Industrial City of Abu Dhabi and Khalifa Port and Industrial Zone are part of the Abu Dhabi SEZs, while Dubai Industrial City, Dubai Multi Commodities Centre (DMCC), Dubai International Financial Centre (DIFC) and the various entities under Tecom Investments such as Dubai Internet City, Dubai Media City, Knowledge Village, Dubai Studio City, and Dubai International Academic City can be classified as SEZs. The Emirates Industrial City in Sharjah also falls under the SEZ category.
For more information on individual Free Zones please visit www.uaefreezones.com or contact :
Tel : +97143245630
Fax : +97143245640
Hotline : +971504598686
Chambers of Commerce
The Chambers of Commerce of individual emirates are important ports of call for all those wishing to do business in the country, being primary sources of business services for investors as well as providing information and assistance on local laws regarding the issue of licences, trade names and types of companies that may be established. Companies are required to register with their local chamber after receiving their licence from the relevant authority. and Industry is the umbrella organisation for all the Chambers of Commerce and Industry in the country. For more information please visit each emirates’ Chamber of Commerce by clicking on the links below.
(ADCCI) is a leading voice of the Abu Dhabi business community, advocating policies and connecting businesses that contribute to Abu Dhabi’s sustainable economic development. The ADCCI acts as a liaison between the business community and Government as well as provides services such as company and trade registration, training, information and liaison for UAEand business people from around the world.
ADDCI provides general information on the UAE and Abu Dhabi emirate; information on investment opportunities in Abu Dhabi and how to acquire trade licences; extensive databases on industry and trade in the UAE and abroad; contact details of ministries, Government and non-Government departments; legal references and resources; advice and consultancy; assistance with arranging appointments; meeting rooms and conference facilities; and arbitration services.
(DCCI) mission is to represent, support and protect the interests of the business community in Dubai. The chamber has been entrusted with: researching and disseminating information relating to commerce and industry; providing information on investment opportunities in Dubai; issuing and authenticating certificates of origin and other commercial documentation; overseeing qualities and standards of goods; the settlement of disputes involving Chamber members through arbitration; organising economic and commercial conferences and participation in similar events inside and outside the emirate.
’s provides meeting halls, internet access, translation facilities, telephone, fax and mail services. E-services are offered to DCCI’s 80,000 members, including issuance of certificates of origin, legal and arbitration services, commercial directory information, booking of chamber facilities, viewing and updating membership profiles, library and news and commercial events.
(SCCI) offers technical advice and assistance for companies carrying out viability studies. Its Industrial Development Department provides assistance at the operational stage, conducting market surveys and assessing progress. It also recommends different business options and procedures.
has also introduced a new on-line information service network – Sharjah Information Guide, which gives access to a wide scope of information ranging from trade to tourism, addresses to maps, and banks to bazaars.
Since its incorporation in 1977, Ajman Chamber of Commerce and Industry has been carrying out a leading role enhancing cooperation and coordination between the industrial & commercial sectors in Ajman. The Chamber is committed to cooperating with its partners in supporting the commercial, industrial, and agricultural activities in Ajman emirate, and to create a positive climate for business growth and investment.
Established in 1967, the Ras Al Khaimah Chamber of Commerce and Industry is one of the oldest business organizations in the UAE. Its mission is to provide a range of innovative services to the business community.
Chambers of Commerce in the Northern Emirates:
and are currently working hard to update the services offered by their Chambers of Commerce. Please contact them via the websites.
General Business Information
The official weekend in the UAE is on Friday and Saturday. Some smaller private companies only close on Friday.
Government offices open at 7.30 a.m. and close at 3.00 p.m. Private offices tend to keep longer hours, adopting either “straight shift” or “split shift.” The former normally requires eight working hours beginning between 7:30am and 9:00am with a lunch break lasting 30 minutes to an hour. The latter involves commencing between 9:00am and 10:00am and ending between 8:00pm and 9:00pm, with a three- to four-hour break in between.
During Ramadan, working hours shorten by two to three hours, with most of the work accomplished in the early hours of the morning or much later in the evening after the day’s fast is broken at sunset.
Although Arabic is the official language, English is widely used in business transactions in the UAE. Print business cards in English and Arabic and make sure that all brochures and presentation material are full-color and well produced.
The UAE does not have any enforced federal income tax legislation for general business. Each emirate has enacted income tax decrees, but in practice, the enforcement is restricted to foreign banks and oil companies. Personal incomes, including all forms of salary and capital gains, are not subject to taxation in any emirates.
Other Local Taxes
Municipal taxes are levied in most Emirates on annual rental paid at 5 per cent for residential premises and 10 per cent for commercial premises. Other local taxes include a 5 per cent tax on hotel services and entertainment.
For detailed information on visa requirements in the UAE, please visit the Visas section of this website.
Labour Rules and Regulations
The rules and procedures for obtaining licences to recruit foreign labour to work in the UAE are applicable to all emirates. Application forms and other information are available at the website.
Foreign companies are required to appoint a commercial agent in the UAE to import and sell its products in the UAE. The agent can only be a UAE national or a commercial entity wholly owned by UAE nationals. The agent has to register with the to engage in commercial activity and benefit from exclusive import and distribution rights. An exclusive agent provides a foreign company with in-depth knowledge of local customs and markets as well as a network of contacts and outlets to distribute its products.
Imports and Exports
The UAE has a liberal trade regime with tariffs based on the GCC tariff structure. Customs procedures are simple and largely computerized to facilitate trade, which in the case of several emirates includes a large re-export industry. It takes just six documents, three signatures and 18 days to move imported goods from the UAE ports to a warehouse. The cost of obtaining a licence is also the lowest in the world. An importer/exporter obtains a licence from the economic department of the relevant emirate.
Prohibitions and Restrictions
The distinguishes absolute import prohibitions from restricted imports. In the , absolute import prohibitions are maintained for various reasons, including international conventions, environmental protection, health and safety, and religious and moral considerations.
They cover all kind of drugs; asbestos; used pneumatic tyres; industrial waste; forged and duplicate currency; Houbara falcons; ivory and rhinoceros horn; live camels; any printed material that does not adhere to religion or morals or that is aimed at causing corruption and disorder; or materials prohibited under any law in force in the country. All imports from Israel are prohibited.
The UAE maintains export controls on certain products for safety, security and environmental reasons, and to ensure compliance with international obligations under treaties and conventions (, , , NPT) to which it is a signatory. Each emirate is responsible for its own export promotional activities, which are coordinated by the relevant departments of economy or tourism.
Each emirate has its own customs authority but customs procedures are the same throughout the UAE, and customs requirements are kept to a minimum so as not to impair the country’s active transshipment and re-export business. Since the establishment of the GCC customs union in January 2003, items imported into the UAE (or any other GCC State), and destined for another GCC market, are subject to customs duty only at the first point of entry into the GCC.
Under the terms of an agreement on customs tariffs with GCC countries, all emirates levy a minimum customs duty of 10 per cent on luxury goods and 4 per cent on the c.i.f. value of all other goods imported, excluding certain items such as alcohol and cigarettes. In practice, exemptions are made for a wide range of goods. In cases where customs duties are charged, it is generally restricted to 1 per cent.
Certificate of Origin
A certificate of origin is required to clear imports to the UAE. Full information regarding UAE certificates of origin (including fees) can be downloaded from the website.
Arbitration is currently governed by the UAE Civil Procedure Code, Federal Law 11 of 1992. Two arbitration services are available in the country and both have strong connections to the Chambers of Commerce in their respective emirates:
(ADCCAC) offers legal consultation and settles local and international trade disputes. The centre provides lists of arbitrators, conciliators, experts and certified translators. For further information please contact:
Abu Dhabi Commercial Conciliation and Arbitration Centre, Abu Dhabi, United Arab Emirates.
P.O. Box : 662
Tel : +9712317599
Fax : +9712311410
(DIAC) is an autonomous, non-profit institution that offers a high calibre of arbitration services and facilities on an international scale. For further information please visit .
Intellectual Property Rights
Recognition of the close link between protection of intellectual property rights and foreign investment has acted as an incentive for vigorous action against intellectual property violations in the emirates. The UAE has three intellectual property laws, which provide for registration procedures, enforcement procedures and penalties. At present there is no unified federal customs authority and each emirate’s customs authority is responsible for enforcement.
Registering a Trademark
All application forms and further information regarding trademark protection can be downloaded from the website, which also provides instructions for submitting applications for trademark registration.