Question 1

What are Different Entities I can make in UAE?

Accepted Answer

The most commonly adopted legal structures in mainland UAE are a limited liability companies (LLC) and a branch office (Branches). In addition, it is also possible to establish a representative office (also known as a liaison office) which is a legal structure identical to that of a Branch, however its activities are limited to serving as an administrative and marketing center for the parent company (Rep Office).

It is also possible to establish an entity in 1 of the free zones in the UAE. Entities registered in a free zone can be wholly foreign owned and no UAE participation is required. The free zone entity can take the form of a free zone limited liability company (FZ-LLC) or a free zone branch office (FZ-Branch).

Question 2

What is the Minimum Capital Required to Setup in UAE?

Accepted Answer

The UAE Companies Law does not prescribe any minimum share capital but the entity should have adequate capital to achieve the purposes of its incorporation and the capital shall consist of shares equal in value. Until recently, the generally accepted minimum share capital for an LLC registered in Dubai was AED 100,000 but we have now seen lower capitalization. Presently, there is no requirement to deposit the share capital in a UAE registered bank. It will suffice to include details of its share capital in the LLC's memorandum of association and to have the same duly notarized by the UAE notary public. The New Law may also set further capitalization requirements depending on the nature of the activity being carried and whether foreign investment will exceed 49 percent.

Question 3

What are the TAX rates in UAE for Businesses?

Accepted Answer

No personal income tax or corporate taxes payable, save for companies engaged in oil, gas, hospitality and petrochemical activities, among others.. The UAE has long been known as a zero-corporate-tax jurisdiction. This is set to change with the Ministry of Finance’s (MOF) announcement on January 31, 2022 that the UAE will introduce a federal corporate income tax (CIT) effective for financial years starting on or after June 1, 2023. Because the UAE is an Inclusive Framework member of the Organisation for Economic Cooperation and Development’s (OECD) anti-Base Erosion and Profit Shifting initiatives, it has been expected that it would introduce legislation to implement the multinational-focused Global Minimum Corporate Tax (GMCT) of 15% if your Annual Income Exceeds 375,000 AED be payable on the profits of UAE businesses as reported in their financial statements prepared in accordance with internationally acceptable accounting standards. The standard statutory CIT rate will be 9 percent, whereas a 0-percent rate will apply for taxable profits up to AED375,000 to support small businesses and startups. Multinationals earning more than EUR750 million in global revenues will be subject to a 15-percent CIT rate, which constitutes the UAE’s implementation of the GMCT.

Question 4

Do I need a Physical Office to Setup my Business?

Accepted Answer

LLC
Yes, an owned or rented physical office space is required.

Branch
Same as LLC.

FZ-LLC
Generally, a rented physical office (rented/owned) is required in the relevant free zone (possibly including offices from private landlords in the free zone area as approved by the relevant free zone – this depends on the concerned free zone).

However in most license, you can also have virtual office with a postal address and depends on the business activities.

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