A DIVERSIFIED ECONOMY
The United Arab Emirates (UAE) is a federation of seven Emirates overseen by a Federal Government with regulatory powers allocated to the Government of each Emirate pursuant to the Constitution. The UAE was one of the first countries in the region to diversify its economy away from the oil sector, turning itself into a regional and global centre for finance, trade and business. The UAE is an ideal gateway for doing business in the Middle East and attracts investments from all over the world, employing close to 8 million expatriates.
LEGAL AND ACCOUNTING FRAMEWORK
Whilst Shari’ah Law is the main source of law pursuant to the Constitution, its applicability is limited to interpretative use, religious morality and personal matters and transactions that are expressly stated to be Shari’ah compliant. The UAE recognizes and allows freedom of contract for all other transactions, enforceable under the laws of the UAE including the UAE Civil Code. With over 50 double taxation treaties with countries in the E.U., Africa and Asia, the benefits of investing in a mostly zero tax jurisdiction are amplified. The International Financial Reporting Standards are mandated by the Emirates Securities and Commodities Commission and the Central Bank of the UAE and as such generally adopted. It is good corporate governance and best practice to prepare audited statutory financial statements annually even though the requirement to do so varies across the Emirates.
HOW CAN YOU INVEST IN THE UAE?
Aside from entering into a Joint Venture or completing a Merger & Acquisition of an existing UAE company, you may choose to establish your own legal presence in the UAE through: (a) a Limited Liability Company allowing you to conduct a broad range of activities once the necessary trade licenses are acquired, however 51% of the capital must be held by a UAE national and your management rights and revenue flows are documented in the company’s constitutional documents and contractual arrangements; (b) a Branch or Representative Office (no separate legal identity from the parent company), generally limited to providing professional activities, with a UAE national required to act as service agent; (c) a Free Zone Entity in one of the many Free Zones, guaranteeing 100% foreign ownership, full repatriation of profits and providing its owners with a cost effective way of receiving UAE residency; (d) an Offshore Establishment or International Business Company for companies not intending to engage in any business within the UAE but whose intention it is to use such entities as holding companies for overseas assets, or (e) the appointment of a Commercial Agent to handle all aspects of the foreign business in the UAE without the creation of a physical entity, such as the appointment of a distributor.
WANT TO KNOW MORE?
Contact us for a no obligation discussion on how the UAE can provide you with the opportunities you need to help your business grow.