Interesting facts:
Full versionCurrently, the United Arab Emirates is one of the most attractive places for running and developing existing businesses, including trade at the local market. A developed banking sector; a favorable tax system (0% personal income tax, 9% corporate tax for companies with profits above a certain threshold); an effective system of legal protection; and a high level of security, as well as the absence of restrictions on the movement of financial assets—all this makes business in the Emirates quite profitable.
Companies registered in the UAE mainland previously required a local partner with a 51% stake. Currently, most businesses permit 100% foreign ownership, depending on the type of activity and regulatory requirements. In some cases, it is possible to appoint a Local Service Agent (LSA) or use a partnership structure, but such arrangements must comply with current UAE corporate law.
In practice, the most common form for trading in the UAE local market is a limited liability company (LLC) or a company registered in a free zone, with the option of operating in the local market through a distributor or a branch.
This legal form allows any type of business to operate in the country. A public joint-stock company requires at least 5 founders, but this structure is rarely used for trading on the local market. But if local government participates in a company, the number of shareholders may be smaller than 10.
The Board of directors administers and manages such company whereby chairman shall be citizen of the United Arab Emirates.
For such forms any activity permitted by law on the territory of the country is allowed. There are limitations for investment, insurance and banking sectors. Maximum number of shareholders is 50 and management of the company is carried out by the General Manager / Director who is not required to be a shareholder in the company.
In most cases, several activities can be included in one license if they are permitted by the regulator (DED or Free Zone authority). It is important to note that any business activity at the local market of the Emirates requires obtaining an appropriate license. Furthermore, for each individual type of business it is necessary to register a separate company or, where it is permitted and various activities can be combined under one company, to obtain separate licenses for each activity for the same company. Retail and wholesale trade can often be included in a single trading license, depending on the emirate and regulator chosen.
If you've decided to trade in the local Emirates market, our company provides comprehensive company registration services in the UAE mainland and free trade zones, including obtaining trade licenses, opening bank accounts, and supporting visa procedures. We have extensive experience, and our qualified specialists will assist you with virtually any issues and tasks in the Emirates.
Clarify the cost of opening company, corporate or personal bank account, obtaining a residence visa, or another question regarding business in Dubai, UAE:
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You must apply for Commercial License in order to perform trading operations. Typically, a standard trading license (for one group of goods) or a general trading license, which allows you to trade in a wide range of goods, is required. It’s also worth knowing where the line is between a wholesale license and a retail license (in some cases, both can be included in a single business license).
Companies wishing to import goods may be required to setup with the customs system in the relevant emirate and obtain an Import Code. You must also comply with customs procedures, which include declaring goods and paying import duties. The general customs duty applied is 5% of the goods and its value, but there might be special provisions that apply to some types of products.
Yes, in some cases it is possible to trade in the UAE without owning or renting a warehouse, but it depends on the type of business, the license, and the regulatory requirements of the relevant emirate or free zone.
Yes, certain goods are subject to mandatory registration or certification. For example, food products need to comply with local requirements; cosmetics and medical products must be registered with relevant regulatory authorities; electronics and technical goods — must comply with safety standards and technical regulations.
A single license can encompass various trading activities if they are permitted by the regulator. The list of allowed activities, however, differs according to the emirate where you’re registered, the regulatory body (the Department of Economic Development, for example), and the license type chosen. Thus, the entire scope of a business can only be determined before registering it.
The prevailing legal form for local market trade is a limited liability company (LLC) incorporated in the UAE mainland.
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