The United Arab Emirates encourages new firms and corporations to establish business locally. But in order to be regarded as a real business, a corporation must be registered. In the UAE, companies can register for a wide variety of licenses. A business should be registered with the appropriate license in accordance with the rules to avoid needless limitations on its operations.
100% Foreign Ownership in the UAE
The United Arab Emirates (UAE) has a long history of welcoming foreign investment. In recent years, the government has taken steps to further liberalize the investment climate, including allowing 100% foreign ownership in a wide range of businesses.
The decision to allow 100% foreign ownership was made in 2020, with the passage of Federal Decree-Law No. 26 of 2020. The law repealed the requirement for foreign companies to have a local partner, and opened up a number of sectors to 100% foreign ownership.
Limited Liability Company (LLC)
A Limited Liability Company (LLC) is a business entity that is owned by shareholders. The liability of the shareholders is limited to their investment in the company. This means that if the company goes bankrupt, the shareholders are not personally liable for the company’s debts.
LLCs are the most common type of business entity in the United Arab Emirates (UAE). They are popular because they offer a number of advantages, including:
- Limited liability: As mentioned above, the liability of the shareholders is limited to their investment in the company. This can provide peace of mind for shareholders, knowing that they cannot lose more than they have invested in the company.
- Flexibility: LLCs offer a lot of flexibility in terms of ownership structure and management. The number of shareholders can be as few as one or as many as fifty. The shareholders can also choose to manage the company themselves or appoint a board of directors.
- Tax benefits: LLCs are taxed on their profits, just like individuals. However, there are a number of tax breaks and exemptions available to LLCs.
Establishment
An establishment is a physical location where a business is conducted. In the UAE, establishments can be set up in a number of different ways, including:
- On the mainland: Establishments on the mainland of the UAE are subject to the laws and regulations of the individual emirates. The process of setting up an establishment on the mainland can be complex and time-consuming, and it is important to seek professional advice to ensure that all the necessary requirements are met.
- In a free zone: Free zones are special economic zones that offer a number of benefits to businesses, including 100% foreign ownership, no corporate taxes, and simplified regulations. The process of setting up an establishment in a free zone is generally much simpler and faster than on the mainland, and there are a number of free zones to choose from, each with its own unique advantages.
Free Zones
A free zone company is a type of business entity that is registered in a free zone in the United Arab Emirates (UAE). Free zones are special economic zones that offer a number of benefits to businesses, including 100% foreign ownership, no corporate taxes, and simplified regulations.