Entrepreneurs across the world are attracted to setting up and running their businesses in the UAE – even those who prefer not to relocate to the Gulf.
It’s a perfectly positioned trading gateway: east to west; north to south. The UAE market is moneyed and advanced with smart and switched-on digital and physical infrastructures. UAE introduces at just 5% rate and it will be much lower than most world trading centers.
To register in a free zone or register on the mainland. Your decision will set the path and the limits of your company from day one.
Choosing between Free zone and Main land
Registering in a free zone or offshore certainly provides some short-term advantages. But depending on your company’s activity, the mainland may offer more in the long term.
The registration process for free zones doesn’t require a sponsor and the free zone companies can’t do direct business inside the UAE – they can only trade within their zone or beyond the national border
Mainland-registered companies, on the other hand, can set up their business anywhere in the UAE and also they can conduct business inside and outside the country and they can have access to the high caliber UAE market
Share percentage in a Mainland Company
Foreign investors cannot own more than 49% of a company in the UAE mainland. Mainland companies are required to have a local sponsor which is mandatory and who will have 51% ownership in the company.
And the fact that free zone companies can be 100% foreign-owned is one reason why free zone setup seems appealing.
But the local sponsor doesn’t assume actual ownership. Sponsors are remunerated outside of the share structure so ownership isn’t affected and you retain complete control. Setting up in the mainland is straightforward and highly advantageous for remote entrepreneurs.
If it really isn’t physically possible, you can prepare a Power of Attorney (POA) appointing a person to sign on your behalf. But in this event, if the POA has been prepared outside the UAE, it needs to be translated into Arabic, legally certified by the UAE embassy in your home country and then attested by the Ministry of Foreign Affairs in the UAE.
Depending on the make-up of your board you may also need to provide additional documentation such as a certificate of incorporation, a copy of the board resolution approving the LLC, and copies of other shareholders’ passports and visas. Your sponsor will guide you on the details of these processes.
The cost of Business setup
Getting a business license in the UAE involves much less hassle than in some Middle East and North Africa (MENA) countries. The cost will depend on the registered location of your business: Dubai is more expensive than UAE emirates.
So when your new LLC receives its license, you’re ready to open a corporate bank account and set up anywhere in the UAE mainland. From there, you get immediate access to the UAE market from the comfort of your home.
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