10 09 2020

Business setup in the UAE. Businessman's guide

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Of all the international types of business, perhaps the most attractive for investment is the business in the UAE. This state of affairs is not at all accidental, because legends can be made about the wealth of this country. The oil industry in the country has long been seen in the eyes of novice businessmen as something like a huge gold bar.

The very first step on the way to a successful business in the UAE, as in any other country in the world, is to register a company in accordance with the procedures established in the state. Also, to carry out economic activities in the United Arab Emirates, you will need an appropriate license. In the United Arab Emirates, there are so-called Free Economic Zones, within which it is possible to obtain a business license for foreign citizens. However, such licenses usually have serious limitations.

Business in the UAE can be built in different directions, but there are several of the most popular and promising areas:

- travel business;

- business in the field of real estate;

- organization of public transport;

- oil and gas sphere.

Possible forms of company organization in the UAE.

In the UAE, there are two types of company organization - Limited Liability Company and Civil Company. If you are opening a company whose activities are focused on trade, then you need to choose the type of your company as Limited Liability Company and be sure to include a local citizen in the founders, who, according to the law in the Emirates, must own at least 51% of the shares.

In practice, this moment is bypassed by an additional agreement with the main founder, according to which he gives up his share in the company's profit in favor of a fixed annual amount, which the organizer of the company undertakes to pay. However, his signature will be necessary when resolving any issues in government agencies, therefore, before thinking about how to open a company in the UAE, you need to find a worthy and reliable person for the role of the main founder who will not let you down in the future.

If your projects, which you have conceived to implement, involve carrying out activities on behalf of a legal entity, then you need to choose the Civil Company form for your company.

Registration of a company in Dubai in the form of a Civil Company is allowed only for companies whose services require specific education. The founders and employees of such organizations are required to confirm their profile education in the chosen type of activity before the regulatory authorities. The advantage of this type of organization is the ability to raise only equity capital without looking for a real or fictitious sponsor, as required by the form of the Limited Liability company. However, there are pitfalls here, namely, the obligatory appointment of an administrator from local citizens. The administrator will act as an intermediary between the firm and government authorities if necessary.

In general, in any case, the Arab Emirates will not allow a foreigner to conduct business without the participation of a local resident who has citizenship in the UAE.

Stages of registration of a company in the UAE:

After the form of organization has been chosen, the epic titled "how to open a company in the emirates" continues with the choice of the company's trade name. After you have decided on the choice of a name and have reserved it, you need to obtain a preliminary decision to register your company from the Department of Economy of the Emirate.

After receiving permission, all founders of the company, if there are several of them, sign an agreement with each other and send documents for obtaining a license. The license is issued within a few days required to verify the documents.

One of the advantages that distinguishes business in the UAE from other types of international business is the absence of the need to open an account with a local bank for the authorized capital. The size of the authorized capital is simply indicated in the documents from the words of the founders.

These are the main points that an aspiring entrepreneur who plans to start his own business in the Emirates will need to know. Of course, there are plenty of various subtleties and pitfalls in this type of international business, and it is almost impossible to comprehensively answer the question of how to open a company in the United Arab Emirates within one article. However, to help aspiring entrepreneurs, there are many intermediary firms and consultants who will be happy to share information with you or take over the entire setup of your business.