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What are the advantages? Business in the UAE thrives due to the state's economic stability, its advantageous geographical location, lenient tax system, market openness and transparent reporting requirements.
What should you pay attention to? Successfully running a business in the UAE is only possible when certain conditions are met. And perhaps the main one is taking into account the traditions of business relationships in the country. The Arab Emirates is an Islamic state, and violations of Muslim canons can have negative consequences.
Entrepreneurs from Russia and elsewhere are actively developing this market, preferring it to other countries. Business in the UAE is more profitable than in other states. The following criteria are decisive when choosing specifically the Emirates for business development:
Disadvantages:
When opening a business in the Emirates, it is necessary to obtain a permit depending on the company's activities and industry.
Types of licenses provided in the UAE:
There are also other types of special licenses, for example, for tourism, e-commerce, freelancing and similar activities.
Companies in the UAE can be divided into three types, depending on the place of registration:
If you have registered a company in the Emirates in this territory, you will not be able to conduct business activities here. These are the specifics of business in the UAE. However, as a resident of this country, you will have tax and benefit advantages.
With this type of company, you will have unlimited opportunities for selling goods and providing services in the UAE, regardless of the region.
Additional bonus — the ability to participate in government tenders. If your company's income exceeds 375,000 dirhams — you will only pay 9% corporate tax with 5% VAT.
In the UAE, according to some data, there are between 26 to 52 SEZs – Special Economic Zones, which are aimed at supporting various types of activities with different rules for conducting commerce. Each of them provides different preferential conditions for business taxes in the UAE, such as exemption from corporate tax and VAT, and permission to have full foreign ownership. For mainland, such an option is not considered because it requires a local sponsor, whose business share will be at least 51%, or an agent.
SEZs can be divided into different directions: healthcare, media, information technology, education. Each free zone provides the necessary resources and creates the infrastructure needed for the specific industry. Below are some of the key SEZs in the UAE.
A free zone in Dubai focused on enterprises related to trade and transportation. It allows you to sell general category goods, tea, coffee, precious metals, precious stones and more.
An important (due to its advantageous location) free zone in the emirate of Dubai, aimed at worldwide trade. JAFZA is located in Jebel Ali — one of the largest ports in the Emirates. Import and storage of goods within this zone are duty-free. JAFZA is the key hub for import and re-export to the Middle East, the Persian Gulf countries, and other routes. Entrepreneurs have the opportunity to develop their business in the UAE in manufacturing and logistics, as the zone has excellent infrastructure and other advantages for this.
Enterprises in insurance and investment, as well as banks, receive all necessary financial and legal support in the ADGM free zone. This is a global financial centre located in the heart of the UAE capital.
The best option for developing business in manufacturing, trade and transportation is the RAK free zone, located in Ras Al Khaimah. Here, such companies receive good resources and ground for further growth.
A free zone distinguished from others by the opportunity to develop companies from the creative sphere. For example, fashion, design, architecture, art, technology and others. Constant generation and exchange of ideas, and interesting collaborations are extremely attractive for such firms. Another characteristic of this free zone is its focus on research, innovation and development.
An optimal free zone in Sharjah for newcomers to the UAE market. It allows launching a small business with minimal financial costs. This zone will be interesting for enterprises in e-commerce, media, marketing, online services provision and others.
This free zone was established in 2016 in Fujairah and is already beloved by entrepreneurs due to certain advantages. Firstly, you can register businesses from different spheres here. Secondly, a foreign citizen is given full company ownership. Thirdly, there is no corporate tax for international companies. Fourthly, company founders and employees can obtain UAE resident visas. Fifthly, confidentiality is maintained at a fairly good level.
These are far from all the free zones available in the UAE. Entrepreneurs are presented with a wide choice of SEZs for different types of activities. Any interested businessman will find exactly what suits their company in terms of jurisdiction with all the necessary infrastructure and benefits.
If you plan to open a business in the UAE, your choice of business forms will mainly be among the following most common options. These are: Limited Liability Company (LLC), Branch Office, and Sole Proprietorship. Each form has its own nuances:
Based on the scale of activities, its type, structure, and owners' preferences, other forms of doing business in the UAE can be chosen: Public Joint Stock Company (PJSC), General Partnership (GP) or Limited Partnership (LP) and so on.
The state can offer companies with an established business in the UAE to open one of three types of bank accounts: investment, current or savings. Each of them is aimed at addressing specific economic needs. A bank account is extremely important for a company as it is responsible for financial planning and asset management.
Which account is optimal for each type of business? Let's look at the details:
Entrepreneurs should choose the necessary type of account based on the company's goals and needs, as each of the options listed above differs in its specifics.
The UAE is largely chosen for business because it has a more favourable fiscal system than the USA, Russia and some European countries.
Until June 2023, many companies did not transfer profit tax payments to the budget for mainland companies. Now, this tax (excluding free zones) is 9% if the company makes more than 375,000 dirhams per year, which is approximately 102,100 dollars. The declaration for this tax is submitted every financial year.
Dividends and capital gains remain untouched by this tax.
If a mainland company's profit is more than 375,000 dirhams (approximately 102,100 dollars) per year, such a company pays VAT (Value Added Tax) of 5%. Its transfer is made once every three months within 28 days after the end of the reporting period. Companies from some free economic zones do not need to pay VAT.
Many companies engage in activities related to excise goods (import, production, storage). In this case they are obliged to pay the corresponding tax. Following goods are considered excise goods in the UAE: soda (50% tax), products with sugar or sugar substitute in composition (50%), tobacco products (100%), energy drinks (100%), electronic cigarettes and other smoking devices (100%). This payment to the budget is made quarterly within 15 days after the end of the reporting period. Such are the specifics in the area of business tax in the UAE.
It is most advantageous to open an enterprise in a free economic zone in the UAE because of the following:
The UAE tax system is maximally conducive for foreign citizens to open and develop their company here.
First of all, determine the type of jurisdiction for your company based on the sphere of activity — free zone or mainland. After this, begin the step-by-step company registration:
Considering the mentality, culture and laws of the country where you are going to open a firm, choose one that will not be offensive or inappropriate in the UAE. It should give people an idea of what the business does. People will form a certain impression of the company based on its name, and this will further influence marketing and branding.
To officially secure the chosen company name, you must submit an application, pay a fee and provide documents that reflect the right to use this name. The entire process takes place in the Department of Economic Development in the specific emirate or in the administration of your chosen free economic zone.
Documents for company registration are provided according to the company type. For example, this includes the charter or partnership agreement. Additionally, other types of documents may be required if they determine the internal order of work and management of an established business in the UAE. You must provide passports of the company's founders and directors, to verify their identity. In the UAE, it is mandatory to have premises for company operation in the first year, meaning documents confirming office rental are required.
What should be the office area? Consider how many people work in the company and what it does. There is an option to register a business with a "flexible" office, virtual or nominal.
Translation of all materials is mandatory if they are in a foreign language. Some documents need signatures, some need to be notarised.
At this stage, there are nuances depending on the jurisdiction as well. If you are opening a mainland company in the UAE, then you need to submit the documents to the Department of Economic Development and Tourism. Business registration in SEZ involves submitting materials to the administration of the respective zone. This stage of starting your business in the UAE will be considered successfully completed when the applicant receives a document confirming registration.
The start of the visa process for business in the UAE for Russians, for example, depends on where you are territorially at the moment. If not in this country, you get an entry permit and arrive in the Emirates with it. When you are in the UAE, you need to obtain resident status. The next step is passing a medical examination according to the country's public health requirements. Next — registration for biometrics to issue a resident document.
If everything goes well, you receive a plastic card called Emirates ID. All subsequent bureaucratic and business processes will go faster as you will have access to local bank services and other opportunities will appear.
If you have previously obtained a visa, this step is skipped.
If the company that is being established relates to healthcare, insurance, or banking, then you must obtain a license for business in the UAE or a permission. These spheres in the Emirates are subject to thorough inspection and stricter regulation.
An application for obtaining the necessary type of license is submitted to the regulatory body. You will need company incorporation documents, copies of founders' identifying passports, business plan, and qualification confirmation for some professional services.
An extremely important stage, as without a bank account you cannot conduct necessary financial operations, such as salary payments, receiving money from clients, fund transfers, or other transactions. Moreover, a bank account is necessary for tax payment and accounting. To open a corporate account in the Emirates, you need to submit an application and attach the necessary materials in the form of a business plan, incorporation documents, a trade license, a Memorandum of Association (MOA), an Emirates ID, an office lease agreement, founders' identifying papers and so on.
The advantageous territorial location of the Emirates allows cooperation with any regions of Europe and Asia. Upon fulfilling the necessary requirements in various UAE departments and obtaining a license, you can engage in air logistics here, provide storage services, ensure catering for flights, transport passengers and so on.
Offshore zones have shifted to a stricter tax regime, so it is easier for programmers and entrepreneurs to start an IT business in the UAE than to relocate to these zones.Russian IT entrepreneurs choose the following directions in Dubai: data management, programming, analytical services, business support in the IT field, cybersecurity, cloud technologies and so forth.
In this industry, there is a wide choice of business formats. You can simply trade in construction materials and/or produce them, act as a customer, general or subcontractor. Don't forget about obtaining a license: contractor’s,consultant’s or specialised. The type of this document depends on the specific activities of the company.
The popularity of this industry is due to the development of transport and logistics system, tourism, housing construction, and energy sector in the UAE.
If you are passionate about this topic and are planning to do business in this field, then the UAE is one of the best places to register such business legally. Main advantages: compressed timeframes for opening business for foreigners and provided tax benefits. Obtaining a license in virtual currencies is quite easy and will allow you to engage in exchange operations, investments, develop startups in the crypto sphere and much more.
The UAE is very popular worldwide as a country for leisure, shopping, in a word — for tourism. If you are not a resident of the Emirates, you can organise business in hospitality services by opening a hotel, engage in ticket booking, organise excursions in the Emirates, provide transport rental and concierge services for information requests.
With necessary financial resources, you might be interested in tour operator activities in the Emirates. After obtaining a license, you can organise services for inbound (UAE only) or outbound (worldwide) tourism.
Dubai is known for cultural events such as exhibitions and forums. It is a favourite emirate for business presentations, conferences and other private events. In this field of activity, there are nuances due to the mentality and cultural specifics of business in the UAE, but organisers of such events receive quite high income.
Models in the UAE are in high demand, especially in Dubai. The key factor is that there are completely different selection criteria here than in other countries. Along with typical models, short girls and plus size models are equally popular. You can develop a business in model training, for example.
Another popular business direction in the UAE, where a professional media license is required if you plan to open your marketing agency. If you will be engaged in, for example, indoor advertising, then you choose either the main territory for registration or the free economic zone needed for this sphere.
The official religion of the Emirates is Islam. It is extremely important for Arabs to adhere to religious traditions and canons — this applies to any area, including the business environment. Therefore, when establishing business relationships with potential partners and investors, it is necessary to follow these customs and consider their specifics.
When it comes to business negotiations, Arabs prefer an informal friendly atmosphere and conversation over a cup of coffee. There's no need to prepare large-scale presentations or organise an official event — this is not their style of business communication.
To impress local investors and businessmen, it's better to prepare a competent and clear speech, engaging your oratory skills. Don't emphasise the visual part of negotiations like bright presentations and thousands of slides — they are not interested in this. Be confident, express your ideas clearly, without affectation and grimacing. This way, there is a greater chance of concluding the desired business deal in the UAE. You will be evaluated specifically by your speech, as for Arabs, good oratory skills are a sign of a person's intellectual development. If you listen to them yourself, you'll be convinced of this. Avoid dryness and brevity in conversation so that business communication isn't bland.
It is normal if your negotiations stretch over a long period, as it happens in some cases. Arabs don't like to rush; measured pace is important to them. We don't recommend refusing their delicious favourite drink — local coffee. Trust us, it will only enhance business communication and bring you closer to the desired result.
If you want to make a good first impression on local businessmen, don't be late for negotiations and always arrange meetings in advance. Even if it's just for passing papers. Punctuality is another important quality when developing business in the UAE for Russians.
You should stay positive and can even make jokes, but make sure to take into account propriety and specifics of local religion and mentality, so as not to offend. Arabs like to look at everything with a smile and good attitude, concluding negotiations with a cosy meal. This is an integral part of their hospitality. Therefore, be ready if you receive an invitation to dinner after the meeting. The difference between Arab entrepreneurs and their European counterparts is openness and willingness to communicate. As you've already understood, guests are always honoured by them, as are long conversations, regardless of your nationality and country of origin. But they don't like stingy and tight-fisted people.
When preparing for a meeting with Arab entrepreneurs, stick to Western or European business style in clothing. Consider weather conditions and specifics of Islamic mentality. Don't try to please them by wearing traditional Arab clothes, this will only offend and show disrespect to their culture. If you also belong to the Islamic religion, choose a loose suit that will protect you from the scorching sun and hot weather. Regarding women's clothing: choose business outfits of light cut, non-tight dresses with covered forearms or skirts below knee length. Provocative outfits and clothes with deep necklines are not acceptable. This contradicts Sharia norms.
The mentality and culture of the country's indigenous people are built on principles of honesty, decency, and hospitality, therefore all business projects and business relationships are maintained at a high level here. Respecting these nuances in communication with Arab investors and entrepreneurs will make opening a business in the UAE for a Russian citizen an easy process.
It depends on what assets you already have and what else is needed. If starting from scratch, it may cost approximately 25 thousand dollars for a license, legal issues, obtaining a resident visa and other services. Overall the required funds highly depend on the nuances of the specific type of activity.
It will take about three months to pass all the checks and open a bank account. In total, business in the Emirates can be registered within eight months.
A particularly favourite type of business among local entrepreneurs is the production of various kinds of products — from food to technology. These goods are sold worldwide due to the well-developed cargo transportation system.
If an entrepreneur plans to enter the international market on favourable terms, with good support and developed infrastructure, then opening a business in the UAE will be an excellent solution for a Russian citizen. Investors are attracted by the economic stability, favourable tax regime and a wide choice of spheres for developing their business in the Emirates.
