FAQ

The time required to establish a business in the United Arab Emirates (UAE) can vary depending on various factors, including the type of legal structure chosen, the nature of the business, and compliance with regulatory requirements. In general, the process can take anywhere from a few weeks to several months. Here is a general estimate based on common steps:

• Choice of Legal Structure: Selecting the appropriate legal entity for your business, such as a free zone company, LLC (limited liability company), or foreign branch.”
• Company Name: Submitting and obtaining approval for your company name from the relevant authorities.
• Share Capital: Determining and depositing the required share capital, if applicable, in accordance with legal requirements.
• Memorandum of Association: Drafting and signing the Memorandum of Association with details of shareholders, business activities, etc.
• Registration: Submitting the company registration application to the relevant commercial department or regulatory body.
• Business License: Obtaining the appropriate commercial operating license for your business activity.
• Approvals and Visas: Obtaining necessary approvals and visas for foreign executives and employees, if applicable.
• Opening a Bank Account: Opening a professional bank account in the name of the company.

Our support service pricing is customized to align with the specific requirements of each client. The cost is influenced by factors such as the scope of services needed and is adaptable to accommodate the budget considerations of our clients.

Following a 2020 legislative reform applicable since June 1, 2022  , it is now possible for those who open a local company in Dubai called Mainland to no longer be associated with a local sponsor (depending on the sector of activity) and therefore therefore, hold all of the company’s assets.

The same goes for structures offshore and in free zones.

However, it is required to appoint a “local service agent” who must be Emirati.

Its role is only to represent the company to the Register.

The Dubai business club service provides for this type of service.

VAT in the UAE is applied according to the activity and the amount of turnover of the companies.

4 cases are possible:

• Exemption : VAT exemption applies to certain sectors of activity such as real estate, healthcare, education, oil and gas and transport.
• Exception :  applicable for companies which have activities outside the UAE and which do not intend to do so. As the company does not have a VAT number, it will therefore not be able to claim VAT on its purchases.
• Voluntary :  if your company’s turnover over the last 12 months is greater than AED 187,500 and less than AED 375,000: the application of VAT is optional.
• Mandatory :  applicable if your company’s turnover over the last 12 months is greater than AED 375,000.

VAT is set at 5% on the sale of goods and services in the Emirates.

Dubai business club can support you on all aspects related to VAT.

Substance is a concept which was gradually introduced by practice and jurisprudence to combat certain abusive schemes, under which a group of companies placed a company without economic “substance” in a State, with the sole aim of benefiting from the provisions advantages of the tax convention concluded between this State and its State of residence or the provisions of a European Directive.

Thanks to this company without economic or operational reality, the group could, for example, benefit from reduced rates, or even exemptions from withholding taxes for dividend or interest payments…

The Emirates has implemented an economic substance law.

This law is an opportunity for the UAE because it is one of the only OECD jurisdictions that offers zero taxation with the possibility of having economic substance on site.

This also explains why the Emirates were removed from the blacklist of the OECD and the European Union.

A report must be sent indicating what economic substance has been put in place for your company or what subcontracting you have put in place to respond to it (article 8).

According to article 9, the report may be communicated to a foreign tax administration upon simple request and it will be communicated systematically if the economic substance is not fulfilled in the Emirates (article 9). In this case, a fine of up to AED 50,000 in the first year and up to AED 300,000 the following year may be applied (article 10).

Only the following sectors are affected:

• Banking
• Insurance
• Fund management
• Finance and leasing
• Pure equity holding company
• Shipping
• Headquarters
• Intellectual property holding
• Distribution and Service business center

Therefore, if your company in Dubai invoices services or goods to a foreign company with which you are linked, you will have to comply with the regulations in force.

Dubai Business Club will be able to assist you in determining whether your company is affected by this law and to advise you if necessary on setting up subcontracting and on drafting the report to be communicated to the authorities.

Opening a bank account in Dubai is a complex process if you are not helped by professionals. The role of Dubai Business Club will be to support you in presenting you with a file considered to be “low risk”.
For your information, a client will be classified as “high risk” if:

• He is not a resident of the Emirates
• The future activity of the company is unclear or too general
• The client has no professional experience or an unclear source of funds
• The personal bank statements presented show a negative balance, low or inconsistent with the future activity of the company.We will help you put together the best file and avoid additional delays or even refusal.

People applying for a residence and work visa must undergo medical tests.

The medical test consists of a blood test (they do an HIV test) and an x-ray of the rib cage. In the event of pregnancy, you are of course exempt from radio. The visit takes 1 hour and the results are known in 2-3 days, valid for 3 months. You can, therefore, visit as soon as you arrive.

Please note: people who are HIV positive, have hepatitis B, or tuberculosis are refused a residence visa. Medical repatriation insurance is recommended.

Dubai business club will be able to assist you in preparing for this visit and advise you on the most efficient medical practices.

International tax conventions prevent the taxpayer from being taxed twice due to the simultaneous application of the tax legislation of the two contracting states.

The applicable tax rules are essentially determined by the following criteria:

• permanent residential home,
• center of vital interests (personal and economic ties),
• usual place of stay…

France signed a so-called double taxation convention with the UAE in 1989. According to this convention, the following taxes are covered: income tax, corporate tax, solidarity tax applied to individuals, and inheritance tax in France, corporate tax, and income tax in the United Arab Emirates.

The income covered by the agreement may result from the following activities: the sale of real estate, salaries, investments, interests, royalties, liberal professions, pensions, technical and management costs, income from oil exploitation companies, and international traffic by sea or air.

Article 17 of the tax convention provides for the taxation of real estate in the State where it is located: therefore capital gains and property income in Dubai are exempt from tax as in Dubai, but will be taken into account to determine the reference tax income in France, and therefore possibly increase the tax on French income, because it can shift to a higher bracket if necessary.

Concerning the ISF in Dubai, it is important to specify that it is provided for in the agreement between France and the United Arab Emirates that properties located in Dubai are declared and taxed to the ISF in France. Thus, a French taxpayer will have to include the real estate held in Dubai in his ISF tax base and will benefit from a tax credit equal to the tax paid in Dubai (i.e. a zero amount) therefore it is the French rate which will apply and the property will be taxed under the wealth solidarity tax in the same way as property held in France.

For inheritances, there is an inheritance tax treaty between France and the United Emirates. Article 17 of the tax convention provides for the taxation of real estate in the State where it is located.

Dividends and interest from French sources are taxed in the UAE. Concerning movable property, they are taxed in the State where they are located.

This is an official document issued to individuals and companies who have carried out their tax expatriation in the UAE and which allows them to benefit from the double taxation agreement.

In order to be eligible for this document, certain conditions must be met:

For individuals, you must:

• Have resided in the territory for at least 181 days
• You have paid at least 6 months of rent
• Have a Dubai bank account for at least 6 months

For companies, they must have resided in Dubai for at least one year.