While we are planning setup a company in UAE there are several options and choices, you need to first understand clearly what you can do or what you cannot do as a company that you going to setup here. Overseas entrepreneurs who want to do business in the UAE can choose from a number of setup options, with the two most commonly explored being free zones and mainland LLCs. Both have their pros and cons. Free zones offer a host of tax benefits and 100% foreign ownership, but business activities and trade with the mainland can be limited. Conversely, a mainland LLC allows a foreign entrepreneur to trade directly with the local UAE market, but must be established with the aid of an Emirati sponsor who holds a 51% share in the business.
Benefits of Establishing a Branch or Representative Office in UAE
Let’s have a quick glance at the benefits that can be derived by setting up a branch or a representative company in UAE:
- 100% ownership option to foreign investors
- Flexibility to own a bank account
- Business privacy is strictly maintained
- 0% corporate tax
- 0% personal tax
- Only 5% is the minimum charge for imports
The Ministry of Economy and the Department of Economic Development must approve the branch office/representative office activities before it is issued a license to operate. This office must then be registered on the Registry of Foreign Companies at the MOE soon after. Depending upon the specific activities, there may be involvement from the Ministry of Finance and/or other federal departments.