Frequently Asked Questions
In countries such as Dubai and throughout the Middle East, there is an increasing need to give confidence to local counterparts through a more accurate and constant presence. It is advisable by the companies that would like to export to Middle East an attitude and an approach more pro-active. A series of macro-economic and social data able to witness the excellent export prospects and long-term investment in this region can be provided. First of all, it should be emphasized as the United Arab Emirates (UAE) have been transformed into a giant, with the second GDP in the Arab world after Saudi Arabia. All this in a little more than four decades. The UAE is the fourth country in the world for per capita value of exports in testimony to the value of this nation as economic and commercial hub for the entire Middle East. In addition, the UAE has a GDP equal to more than US$ 570 billion in 2014 which is an outstanding achievement considering the small number of resident population (a little more than 9 million), the high number of persons under the working age as well as a considerable amount of the population with a low income. It should also be noted that the UAE produces more than 3 million barrels per day of oil, holds 8% of world oil reserves and also holds a substantial endowment and production of natural gas. Politically it is also significant to note the diplomatic position and the great reputation that the UAE enjoys within the international community, mainly due to the policy of dialogue and the search for consensus that have always distinguished the “foreign policy” of this country. In the UAE as well as in almost all the countries of the Middle East reigns Islamic religion that affects every type of business and to the traditional Western Business Etiquette has been added an Islamic Etiquette permeated by religious teachings contained in the Quran and applied to every aspect of the life of an individual, even in business. The knowledge of these principles and know how to behave and what to say or do is a prerequisite to be able to conduct any kind of business in the Islamic countries of the Middle East. How many times executives of Western firms without any preparation of the Islamic manners found themselves literally alone during a discussion with a Middle East partner after having said or done something that was seemingly harmless but in light of the principle of the Islamic religion almost a blasphemy and consequently ended in avoiding any contact.
Dubai offers to the foreign companies a wide range of business options, including sales to end users, importers or distributors. Payments usually are made through Letter of Credit or bank transfers. There is the possibility of a local representation through Commercial Agency Agreements with a UAE nationals or UAE based companies. It is allowed to open branch or representative offices with 100% foreign ownership and capital and sponsor/UAE local agent. The license is issued directly by “Dubai Economic Development” or the Economic Department of the Emirate of registration. Is possible to register a Limited Liability Company (LLC) - with 49% foreign-owned and local/UAE 51%. Even in this case, the license is issued directly by “Dubai Economic Development” or the Economic Department of the Emirate of registration. It is allowed to open offices, commercial and industrial activities in the Free Zones with different administrative and operational modes. In general each Free Zone allow the foreign investor to own 100% of the company, a tax exemption granted for 25-50 years and reduced administrative management. Offshore companies can be established too and are a valid legal structure to operate as an holding companies or for property ownership.
The idea of Dubai, the UAE and the Gulf countries in general as a land with thousands of local companies/agents/importers/sponsors ready and eager to acquire the distributorship of new foreign companies, new clients, suppliers, etc. belongs to the past. Over the past 10 years in this market - directly or through agents and sponsors - almost all companies in the world and in all sectors have established themselves, from the strongest brands to the less known. At the same time local companies have been developed to achieve industrial and technical quality equal to if not better than Western companies. As a result, all these local companies are ultra-saturated of customers and foreign companies for which they are undertaking to develop and generate employment opportunities in a very competitive environment. It is clear that in this scenario, the exception and therefore the possibility of capture the interest from potential agents/importers/sponsor/end users, etc. is directly proportional to the name/brand of the company, the international reputation and the characteristics of its products/services in terms of quality, innovation, effectiveness, efficiency, etc..
All of the above does not mean that there is an absence of opportunities or someone should give up hopes on establishing here part of his business but only the need to consider Dubai as a mature market that is now essentially approached with respect and humility. In the UAE business opportunity have to be built through strategies of credit and long-term settlement. An uphill path that passes through the enhancement of the product made with a continuous and constant dialogue, investing a lot in terms of marketing and promotion. The same approach applies for Saudi Arabia and the countries of the Middle East.
I have been asked to invest in marketing in Dubai but such an operation is expensive. What should I do?
The globalization and the drastic increase in competition have changed the way of how business was typical conducted in the past. Importers, distributors and end-users in UAE find themselves with an extremely wide choice of providers, who support them with marketing strategies: advertising, sales tools, promotional activities, etc. Nowadays that everything is an integral part of the negotiation, the terms of the commercial agreement with your partner should offer a complete package to differentiate from competitors and increase the possibility to reach a profitable partnership. Approach and develop a new market in a serious mode means INVEST, there are no alternatives.
Market analysis or participation in a trade fair (with the necessary follow-up later) represent the most rational and cost-effective tools to begin to assess if your company can develop an activity in this area. Market analysis or participation in a trade fair are especially useful to understand how you can integrate into the existing commercial market.
Your business belongs to a very dominant sector in the Dubai market. There is the certainty of facing a market crowded with competitors that comes from all over the world, consolidated and competitive. Even if we talk to the companies from your home country already present, the same need to subcontract the MEP works to local companies that carry a local license, personnel, equipment, experience and capability and are able in a very short time to bid and to mobilize. Have you thought about how to work around these things? How to make an offering? (you should offer a price based on local currency otherwise you are out of the market) Are you aware of local regulations? Do you know that in most of the projects consultants/designers are British, American or Australian? Do you have any idea how these companies operate and what are the implications of technical/operational activities typical of a construction site with these features? Do you have an idea of the costs associated with workers, transport, accommodation/food, machinery/equipment, rent, etc.? If you are really interested and willing to consider this market, AL BASTAKI BUSINESS SERVICES allows you to recommend to come to Dubai to realize first-hand the local market and begin to understand which are the first steps that should be taken.
My catalogs are only available in my home country language, is it necessary to translate them into English or Arabic?
It is essential to prepare promotional material adequately: catalogs, company profiles, lists of references must be in English. It should be borne in mind that Dubai and the UAE are generally very advanced in terms of marketing and communication. The companies and local operators expect adequate levels of presentation by Western companies. Any translation into Arabic will be a plus point in your favor.
The experience in these markets teaches that all payments should be made through Letter of Credit. Delayed payments agreed with goods already shipped are quite risky, even by upon a long lasting working relationships and personal relationships. In the presence of an overdue and not yet received, it is advisable to rely on the assistance of a law firm in Dubai. AL BASTAKI BUSINESS SERVICES can support and follow your issue through its network of law firms. Contact us for more details. In case the shipment has not yet departed we strongly advice to contact us as we can perform a CREDIT REPORT on that company as well as advice on draw up a Trade Credit Insurance.
In Dubai and in general in UAE there is a wide choice of legal structure in order to establish a company. Onshore, Free Zone and Offshore incorporation are allowed. It is important to remark that there is no an ideal structure for all the uses. We are always suggesting the best choice as for company requirements. A one to one professional assessment of the real need of the customer is a duty that has permitted us to assist more than one hundred satisfied customers.
Professional license allows professionally qualified individuals (like Doctors, Consultants, Engineers etc..) to perform their area of expertise in Dubai. A commercial license permits the Companies to carry out commercial activities such as trading, construction, renting etc. in UAE. The contribution of foreign investment in such companies should be limited to 49%.
Only UAE nationals or companies 100% owned by UAE nationals may be appointed as local service agents.
Is it possible to open a branch office of a UAE local company in any other Emirate or has to be in the same Emirate of registration?
Companies can open branch in the same Emirate of registration or in another Emirate conserving the same type of activities specified in the license. The activities in the license are subject to the approval from the Department of Economic Development. Applying for establishing a branch would require the incorporation documents of the parent company.
Yes, We can help you with any changes you may require to add activities, shareholders etc.. (subject to approval).
The term offshore refers to jurisdictions that offer financial confidentiality and are typically characterized having bank secrecy laws, no tax on profits, revenues, interest, inheritance, capital gains and income. For more details please contact us.
No, is not allowed for offshore companies either having an office or obtaining visas.
Free Zone is a jurisdiction where a person of any nationality may own 100% of a Company. The company is also exempted from import and export duties and is possible to repatriate 100% of capital and profits. For more details please contact us.
A Free Zone Company is not allowed to trade directly with UAE local market. The Free Zone Company is allowed to participate in local business only through the locally appointed distributors. The custom duty of 5% would be levied for the local business.
The number of visas/work permits allowed depends generally on the free zone jurisdiction where the Company is registered and the dimension of the office space that has been leased by the company.
Yes, AL BASTAKI BUSINESS SERVICES can support you on this issue but only for corporate accounts of companies incorporated by us.
Yes, we can support you on all the simple and complex amendments, merge or dissolution regarding your company.
Yes, we can support you in that.
Can you help me with Chamber of Commerce registration and Import Export code approval for my company?
Yes, we generally do it for most of the companies we incorporate.
Yes, we can do it following the rules and regulations of the Emirate or Free Zone of incorporation.
A Limited Liability Company (LLC) is a company registered at the Department of Economic Development of an Emirate. One of the requirement is that 51% of the shareholding structure has to be owned by a local UAE citizen and any foreign citizen(s)/foreign company(s) can own the balance 49% of the issued share capital.
The Memorandum of Association can be drafted in such a manner that only the foreign owner can open, operate and close the bank account(s).
No they are not involved in the day-to-day business operations of the company; they only help in Government related authorization as for example activity approval, visa and immigration processing for the company.
Yes, you are required to have a local office in the Emirate you want to open an LLC.
Shareholders are permitted to receive investor visa from the Department of Immigration directly without approval from Ministry of Labour. A shareholder can qualify to obtain a residence visa only if reaches a minum amount of capital inversted in the company.
The number of employment visas is based upon the size of the office space, the turnover and the real requirements of the company.
A free zone company is registered within a Free Zone Authority and does not require as shareholder a local UAE citizen. Foreign citizen(s), company (s) can own 100% shares in the company.
It normally depends on the Free Zone where you register the company and the office space you lease from the respective Free Zone. For companies with a shared office space is related to the packages chosen at the time of the incorporation.
Which kinds of facilities are available in the Free Zone? Is possible to open an industrial manufacture in Free Zone?
Most of the Free Zones have offices, warehouses and open land for light industrial units. Some Free Zone allows on open land the construction of factory for heavy industrial use.
100% foreign ownership, 100% tax exemptions, and exclusive facilities in the Free Zone area.
Every free zone has its own set of approved activities.
This decision is mostly based on the business activity chosen, the distance from other Emirates, the incorporation cost, the cost of the premise, the logistic advantage to be in a Free Zone within an airport or a port, the maximum number of visas allowed, and finally personal choice.
Yes it can fully trade internationally and also locally through a registered dealer or agent under the rules and regulations of the respective Free Zones and Emirates.
If I register a company in Sharjah, can I use Jebel Ali port for importing and exporting goods? or shall I do only from/to Sharjah port?
It is possible to take a Customs code from any of the ports or aiports in UAE and use it to import goods in any of the ports or airports in UAE.
In order to setup a company is the minimum office space required 550 sq ft? Does this apply to Free Zone as well?
The minimum office space required for a local company is 200 sq ft. For the Free Zones there is not a standard on the minimal office space required and the basic solution is the flexi desk space.
A company incorporated in a jurisdiction that allows to operate worldwide without any tax liability at the incorporated jurisdiction. An offshore company is a very valuable structure to operate and control wealth management.
No, for that you need to incorporate in Mainland UAE (any Emirate) or in a Free Zone area.
Yes, is possible within rules and regulations of the UAE Central Bank.
Yes an offshore company can hold shares in an LLC or a Free Zone company.
No the Offshore Companies are not allowed to conduct business in UAE.
Yes. Contact AL BASTAKI BUSINESS SERVICES to have the details of eligible projects and areas.
Generally offshore companies are opened for the purpose of holding company, holding investments, real estate protection, tax savings and own intellectual property.
Yes, Investors with a minimum capital investment in the business can apply for their family visas.
Yes, employees with particular professions and a salary above the minimum requirements are allowed to apply for their family visa.
If my resident visa has been established in the Emirate of Dubai, can I move in any of the other Emirates?
Yes, you can live in any Emirate and freely move to other Emirates. Some restrictions apply only for Government related positions.
You cannot stay for a continuous period of more than 180 days.
Yes, we can assist you.
I am on a visit visa and holding a valid international driving car license issued in my country, can I drive in UAE?
Yes visitors holding valid international driving licenses can drive in UAE when they are on visit visa.
Being on a UAE residence visa can I drive in UAE with the driving license issued in my home country?
No, you should have a valid UAE driving license to drive in UAE. Citizens of certain countries are eligible to change their driving license with the UAE driving license.
Yes. You should have a valid UAE residence visa and your country has to be included in the list of authorised countries.
No, all the employees get tax free salary in UAE and their income is not taxable in UAE.
Yes, we support on this issue all the investors and employees of the companies we incorporate.
Yes, we assist all the investors and employees of the companies we incorporate.
Yes, we provide this service for all the investors and employees of the companies we incorporate.