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COMPANY FORMATION

IN THE MIDDLE EAST

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COMPANY FORMATION IN THE MIDDLE EAST

The UAE offers a number of different options to incorporate your company. There are currently over 20 Free Trade Zones. Within each of these zones, there are different types of ‘licences’ and ‘packages’ that are possible. A few of the Free Zones also offer the option to incorporate an ‘International / Offshore Company’.

With all these options, it makes it a bit difficult to tell you exactly which would be the best for you without knowing the details of what exactly you need from your UAE company.

We would like to arrange a phone call to discuss your needs so that our experts can let you know what the best options for you are and how much it will cost you. Use the contact form, or send us an email to formations@incobusinessgroup.com.

In the meantime, you’ll find below a brief summary of the different options available and the requirements for each one.

If you are looking to establish a business that has a physical branch in Dubai and offers products/services to the local population, you will need to incorporate a Local LLC (Limited Liability Company).

A Local LLC requires a minimum of two shareholders whose liability will be limited to their shares in the business capital. At least one of the shareholders MUST be a local UAE citizen and will have a 51% share of the equity. However, while your equity will be 49%, the profit and loss can be shared at a pre­agreed ratio. In fact, there are options to pay your local sponsor a fixed yearly sum and keep 100% of the profits to yourself. As part of our services, we will arrange for a local partner to fulfill this role.

Incorporating a Local LLC can take 8 to 15 days from the date of filing of all the required documents.

The required fees for setting up a Local LLC will depend on the type of license you will require and the number of visas you’ll need, but in average will be around 20.000 USD for the complete package. INCO has very competitive fees, and can guarantee a smooth formation procedure.

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Offshore companies are the ideal type of company for businesses looking to set up in the UAE but don’t intend to offer local services. For most businesses requiring an offshore company, we recommend the RAK (Ras Al Khaimah) Free Zone.

When compared to the other business incorporation options available in the UAE, they are often the easiest and most cost efficient solution. They are also very flexible in terms of the abilities to make any corporate changes further down the line.

Benefits of RAK Offshore Company:

– There are no capital deposit requirements

– The company can be incorporated remotely, no need for the shareholder to visit

– The companies are tax free

– No notarized signatures are required

– No account filing requirement

– Corporate changes can be done in 1­2 days for relative low fees (because no lawyer/notary is involved)

Limitations of RAK Offshore Company:

– No visa application is possible

– No local activities are allowed, you can only do business with overseas clients

– Tax treaties are not applicable

The basic costs to register an offshore company in RAK are around 3.000­ 5.000 USD depending on the exact services required.

Apart from RAK, you also have an option for setting up an Offshore Company in Jebel Ali (Dubai) Free Zone or in Ajman Free Zone.

The Jebel Ali option is a bit more prestigious as it is located in Dubai but it costs nearly twice as much and is not as flexible as the RAK option. An offshore company in Jebel Ali requires at least 2 directors, the shareholder to visit in person to sign the required documents and for accounting records to be filed for a period of 10 years! The only advantage (other than being in Dubai) is that a Jebel Ali offshore company is permitted to own real estate in Dubai.

The other option, Ajman, is very similar to RAK and in fact the only real difference is that Ajman is a fairly new Free Trade zone and does not have the same recognition as RAK.

For many businesses, a Free Zone company provides the perfect balance between the two options mentioned in the first two tabs.

Unlike an Offshore Company, you will be able to get a visa to travel and stay in the UAE for you and your employees. Unlike the Local LLC, there is no requirement for a local UAE citizen as a 51% shareholder in the company. Additionally, depending on the Free Zone you choose, there is a degree of flexibility to be able to provide your services locally through an agent.

As we’ve already mentioned, there are over 20 Free Zones. Many of them have specific requirements in terms of the types of businesses that can operate in them. Different Free Zones also have different costs and capital requirements. In order to inform you of your best option, we’d need to know a little bit more about your budget, time­frame and what your business goals are.

We would however like to bring to your attention to a popular option, which is the Fujairah Free Zone: For many of our clients who are first­time companies in the UAE, the Fujairah Free Zone is particularly suitable due to its flexibility and affordable costs.

Unlike most of the other Free Zones, Fujairah offers a company solution that allows you to set up initially as just a legal entity and then easily scale up to a fully fledged office with visas at your convenience.

Specific Benefits of a Fujairah over other Free Zones:

– No capital deposit required. Almost all other Free Zones require a substantial capital deposit. For example in RAK (one of the more affordable Free Zones) the minimum share capital is €40.000

– No need for shareholder to visit the Free Zone in order to sign the application forms. If you provide us with a Power of Attorney we can incorporate on your behalf

– The complete process can be finished in 10 days once all correct documents have
been received

– The fees for setting up a Free Zone Company will depend on the free zone you choose, the business licence you need and the number of visas you will require. In addition there are a number of other services that you may need such as Opening a Local Bank Account which will again depend on what exactly your specific banking requirements.

– Average total costs for setting up a Fujairah Free Zone Company (does not include visas or Legal Secretary (which includes bank account setup) fees) are about 10.000 USD (including our Local Representative and Lifestyle Management services ofcourse!

Starting a Ajman (Free Zone company)

Location and business environment

Ajman Free Zone is located in half-an-hour drive from Dubai and only 10 minutes drive from Sharjah. The Ajman Free Zone company is a very flexible and easy to incorporate. It allows a wide variety of activities. In contrast to the Fujairah free zone company the Ajman Free Zone company also allows trading activities and the possibility to rent a warehouse for manufacturing or storage.

Moreover, their annual license fees are amongst the cheapest in the UAE (not taken the ‘International Companies’ in consideration).

Filing requirements and compliance

Ajman Free Zone also has no annual audit requirement, but the shareholders/managers of the company need to be present at least 1 day in order to sign the application forms documents of the licensing authority.

The following steps are required to establish an Free Zone Company in Ajman:
– The feasibility study of the project and the anticipated schedule for it’s completion together with relevant plans and drawings (for industrial project).
– The memorandum and/or Articles of Association of the Corporate entity.
– Incorporation or Registration Certificate from the competent authority in the country where the Corporate entity is formed.
– Decision or Board resolution of the competent authority of the corporate entity authorising a representative or manager with Power of Attorney duly notarised and legalised.
– Passport copy of the representative or manager.
– The above documents should be certified by the Chamber of Commerce and the UAE Embassy in the Country of origin.

After we get the Establishment card we will apply for your visa. The visa validity is 3 years. You can be a sponsor for your family after you get visa stamp. The whole visa process should take around 7-10 days.

INCO Business Dubai can take care of the full procedure remotely, and in average within 2 weeks. This makes the Ajman Free Zone Company one of the most popular option for foreign companies seeking to establish a presence in the UAE. But please consider that a personal visit is required. If you cannot come personally, we can register a company on your behalf. They only thing we need from you in Power of Attorney.

YOUR BUSINESS COACH

raymond

Raymond Faber
T +97 15 08 40 36 32
E dubai@incobusinessgroup.com

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Starting a Ajman Offshore Company

Location and business environment

Ajman Free Zone is located in half-an-hour drive from Dubai and only 10 minutes drive from Sharjah.

The Ajman FTZ Offshore Company is a very flexible and easy to incorporate. It allows a wide variety of activities. Ajman Offshore is controlled by Ajman Free Zone Offshore Companies Regulation authority in 2014, and since then it’s becoming more popular.

Advantages of the Ajman Offshore Company

– Same day formation
– No need to rent an office or industrial places.
– The Ajman offshore company is permitted to purchase, sale and take ownership of property in UAE (subject to earlier approval of the Emirate and its particular land department).
– The Ajman Offshore Company is not eligible to obtain a UAE residence visa for their directors, shareholders and secretary.
– 100% tax free
– 100% foreign ownership allowed

Filing requirements and compliance

Although all UAE companies follow UAE law, the Ajman FTZ permits a Ajman – International Company to decide which law it wants to be applied for inheritance, disputes, and any other legal matter. The preferred law must be cited in the Memorandum and Articles of Association.

YOUR BUSINESS COACH

raymond

Raymond Faber
T +97 15 08 40 36 32
E dubai@incobusinessgroup.com

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Starting a DMCC Company

Location and business environment

The freezone of choice in Dubai is the Jumeirah Lakes Towers Freezone, also known as DMCC. DMCC (Dubai Multi Commodities Center) was established in 2002 as a strategic initiative of the Government of Dubai with a mandate to
to set up and operate a thriving commodities marketplace. It is located in Jumeirah Lakes Towers district – one of the most prestigious locations in Dubai. Today DMCC is officially recognized as the largest Free Zone in the United Arab Emirates with over 9.700 registered companies.

Characteristics of the DMCC Company

– Largest Free Zone in the UAE
– 100% business ownership
– Strategic Location
– Flexible Office Solutions
– World Class Business Hub
– A full range of business activity options
– Networking and Training Events
– Trading Platforms
– Fewer Nationality Restrictions

Filing requirements and compliance

Today DMCC has almost unlimited choice of business activities starting with trading and ending by consultancies and events or exhibition organizing. It follows the activities pattern of Dubai Department of Economic Development. With very few exceptions, you can almost be sure that your business can be licensed in DMCC. A company can have up to 6 business activities from the same category in one license. You need to consider annual fees of approx. € 20.000 and up, including the license fees. Branches are exempt from the capital requirements. The capital needs to be deposited to Company’s bank account within 3 weeks after the license is issued. You need to bring a letter from bank to the Free Zone to prove the capital. After that it can be withdrawn from the account. After company formation you should appoint an auditing company, who will be preparing the report for you in the end of the year.

YOUR BUSINESS COACH

raymond

Raymond Faber
T +97 15 08 40 36 32
E dubai@incobusinessgroup.com

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Starting a Fujairah Freezone Company

For a Consultancy company we can help you setup in the Fujairah Creative City Free Zone. This Free Zone guarantees a hassle free setup, no paid up share capital requirement, no annual audit and allocation of up to 6 residence visa without having to rent a large and costly office space.

The following license packages are available:
– Startup / ‘Baby’ Business
– Freelancer
– Company license only

Based on the exact requirements, and company activities we can inform you on the exact setup and visa costs, procedures and timelines. Please contact us for a quote, or more information.

Location and business environment

Since the establishment of a Free Trade Zone more than a decade ago, commercial activity in the Emirate has flourished. Due to its strategic position with the UAE’s only access to the Indian Ocean, Fujairah has a bustling, important multipurpose port. In fact, Fujairah ranks as one of the top three bunkering locations in the world.

The Fujairah Free Trade Zone (also called Creative City) created an environment for individuals and businesses working in the media, consulting, communication, and design fields. Creative City has a mission to permit, nurture and breed creative geniuses. Its mission is to create an environment conducive to the growth of the artist hidden within. Companies registered with Fujairah Creative City Free Zone, part of Fujairah Media; are permitted to carry out business activities with companies within the Free Zone or with companies within other Free Zones in the UAE or with companies outside the UAE. Should the company wish to conduct business with Government entities or local companies within the UAE they should either establish a local branch office or transact through a local commercial agent.

Filing requirements and compliance

Under your license issued from Fujairah Creative City Free Zone and visa issued from Fujairah Immigration, you will not be able to permanently work from any 3rd party offices or locations. However if your company is engaged in a specific project/contract with a client that requires your regular presence at the clients’ premises e.g. an audit – you will be able to visit and work from your clients’ premises until the project/contract is complete. Please note that in this scenario when you visit your clients’ premises you will need to sign the visitors book, wear a visitor’s badge, and work from a communal area.

YOUR BUSINESS COACH

raymond

Raymond Faber
T +97 15 08 40 36 32
E dubai@incobusinessgroup.com

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Starting a business in Ras Al Khaimah

Location and business environment

Ras Al Khaimah Free Trade Zone, only 1 hour from Dubai by car, is a fast growing and one of the most cost-effective free trade zones in the UAE. The provisions laid down in the International Companies Regulations 2006 allow the incorporation of a “International Company”, the concept of which is very similar to an offshore company.

The objective of the Regulations is to encourage non resident companies to set up their holding companies and avail the tax advantages.

Filing requirements and compliance

Although all UAE companies follow UAE law, the RAKFTZ permits a RAK – International Company to decide which law it wants to be applied for inheritance, disputes, and any other legal matter. The preferred law must be cited in the Memorandum and Articles of Association.

There are no requirements for accounting and audit report. The following steps are required to establish an International Company in RAK:
– Select a name for the company and have it approved by the RAK Free Zone Authority.
– Draw up a proposed memorandum including share capital, share value, power of Directors and object of the company and have it notarised by a Notary Public in the UAE Courts.
– Confirmation whether the share capital has been paid in cash or kind.
– Copies of the Memorandum & Articles of Incorporation and Certificate of Incorporation (if a company) is to be a participant duly notarised & Apostilled and legalised at the UAE Embassy.
– Board Resolution of each corporate shareholder approving the taking up of shares in the new company duly notarised & Apostilled and legalised at the UAE Embassy.
– Details of Company Auditors together with a letter confirming their appointment, if applicable.
– Bank Certificate confirming deposit of the minimum share capital.
– Seek approval from the RAK Free Zone Authority. Once approval is granted, the company will be entered in the Commercial Register and the licence will then be issued by the RAK Free Zone Authority.

INCO Business Dubai can take care of the full procedure remotely, and in average within 2 weeks. This makes the IC (International Company) the most popular option for foreign companies seeking to establish a presence in the UAE.

YOUR BUSINESS COACH

raymond

Raymond Faber
T +97 15 08 40 36 32
E dubai@incobusinessgroup.com

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