• Mohamed Abu ShaaraMohamed Abu Shaara
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    #6426 |

    An introduction to setting up a business in the UAE

    The UAE is a constitutional federation of seven emirates; Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Qaiwain, Ras Al Khaimah and Fujairah. The federation was formally established in December of 1971. The term of elected office for the Vice President is five years, with the current Vice President of the UAE being Sheikh Mohammed bin Rashid Al Maktoum. The UAEs political system, which is a unique combination of the traditional and the modern, has underpinned this political success, enabling the country to develop a modern administrative structure, whilst ensuring that traditions are maintained, adapted and preserved.

    The economy in the UAE has continued to grow throughout the years and has overcome the economic downturn rapidly. It has increased by more than six fold over the past 26 years to become the fourth largest economy in the Arab world. Recent years has witnessed the emergence of pioneer industries in view of the advantages and incentives granted to investors along with the simplicity of procedures for practicing businesses in the UAE.

    There are many options open to international companies seeking to establish a business in the UAE. Apart from forming a trading relationship through commercial agencies, for many companies there are distinct advantages in having an on-the-spot presence. This makes it easier to research market prospects, make contacts, liaise with customers and see through the details of any transactions.

    The UAE has no personal income, corporate or withholding taxes. The country is characterized by an almost complete absence of taxation with the exception of banks and oil companies and municipality taxes of 5%-10% on certain services (which a business should seek further advice for).

    There are several options for setting up a business in UAE which depends on the business activities and requirements. Before starting your business in UAE, there are several aspects to be considered to select the right location whether free zone or main land, and legal form of the new entity, such as the following:

    • The proposed nature of business activity for the new entity in UAE.
    • Activities restrictions in UAE (if any).
    • The limits of the geographical scope of the business.
    • Office space required and suitable location.
    • Expected number of require employees.
    • Investment cost.

    The challenges which companies from abroad may face when doing business in the UAE could be a lack of awareness in relation to local government regulations and policies which requires rigorous documentation; possible tax implications in there headquartered country of doing business (if any, as this depends on the type of business which you set up) and resourcing skilled workforce which is much more challenging than some other areas in the world.

    Therefore it is fundamental that the necessary advice is taken before doing business in the UAE to ensure you can cut through the red tape and operate within this fluid market, which continues to provide endless opportunities for those who want to take up the copious diverse opportunities which may not be present elsewhere.

    The United Arab Emirates (UAE) has continued to strengthen its position within the global market. The opportunities which are present, along with the UAEs strong connections with some key financial and international markets with many calling it the MENA business hub of the world, this is becoming the region of choice for dynamic businesses.

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