Setting up business in UAE significantly depends on the rules and regulation, business environment and the culture itself. It is important that all related issues or concerns are identified, understood, measured and dealt effectively during the process of setting up the business. With the continuous support from BMS Chartered Accountants, you will get core business advice, qualitative solutions and unique experience that are specifically catered with your business needs
Dubai Free Zone:
Dubai has been divided into various zones for the development of its business prospects and give a boost to the industry and trade here.
Dubai has its various free zones like:
i) Dubai Multi Commodities Center (DMCC)
ii) Dubai Silicon Oasis (DSO)
iii) Dubai World Central
iv) Other Free Zones
Dubai Multi Commodities Center (DMCC)
DMCC is one of the fastest and largest growing free zone in Jumeirah Lake Towers (JLT) in UAE and is the prime selection for new business establishment.
Compliance and Rules and Regulation:
DMCC has developed an effective compliance framework to ensure that DMCC operations are in line with local and international laws, regulations and best practice.
DMCC, with Rated A by Standard & Poor’s Ratings Services, is the first entity in Dubai and the second in the UAE to receive a full interactive rating from the world’s leading provider of independent credit ratings.
The following are four simple steps in starting a business in DMCC:
1. Decide on your license type and business activities
2. Prepare and submit the online application form. (Initial application fee is AED 1,015)
3. Pay, Sign and Submit the required documents
4. Sign and submit the relevant documents for your new office space.
The following are the documents needed before setting up a new business in DMCC:
i) ONLINE PRE-APPROVAL APPLICATION FORM
ii) PROOF OF RESIDENTIAL ADDRESS IN COUNTRY OF RESIDENCE
iii) SUMMARY OF BUSINESS PLAN FOR CERTAIN ACTIVITIES
iv) THIRD-PARTY APPROVALS FOR CERTAIN REGULATED BUSINESS ACTIVITIES
v) COPY OF YOUR PASSPORT
vi) NO OBJECTION CERTIFICATE FROM SPONSOR (Required if holding a valid UAE residence visa.)
vii) COPIES OF PARENT COMPANY DOCUMENTS (Required if setting up a subsidiary.)
viii) DETAILS OF AN OFFICE ADDRESS IN DMCC FREE ZONE (JLT) (Required after your company has been registered.)
Dubai Silicon Oasis
Dubai Silicon Oasis Authority (DSOA), a 100% government-owned free zone, was established following Law no 16 of 2005 of the Government of Dubai, with the Mission to “facilitate and promote modern technology-based industries” thus supporting the region’s demand for business expansion. Dubai Silicon Oasis (DSO) is a technology park and provides both a living and working integrated community.
A full package of incentives and benefits are provided to companies operating within the DSO free zone and these includes:
i) 100% foreign ownership
ii) 100% repatriation of capital
iii) Zero income tax
iv) Zero corporate tax
v) No import or export tax
vi) Low cost of operations
vii) State of the art IT infrastructure and facilities with tier 3 data center
viii) Fast-track business set-up & licensing
ix) Dedicated business support services including integrated online E-Business system offering tenants fast and efficient services at the touch of a button
x) Access to a regional pool of talented technical and engineering professionals
xi) Stable and clear regulation
xii) Access to consumer markets of 5 billion people (Middle East, North Africa and Indian subcontinent).
To establish your company within DSO, you simply need to register it and then obtain a license. To register, you need to select the company and license types from the following:
Any established company, whether in the UAE or abroad, can register its branch in DSO. The stated business activity that will be conducted in DSO must be identical to the activity conducted by the parent company.
2.Free zone Establishment (FZE)
An FZE is a legal entity incorporated/registered by a single shareholder. The shareholder can either be an individual or a non-individual/corporate.
3.Free zone Company (FZCO)
An FZCO is a legal entity incorporated/registered with a minimum of two shareholders. Shareholders can be either individuals or non-individuals/corporate.
The list of licenses available in DSO are:
i) Register on DSOA’s customer portal https://eservices.dso.ae/ to submit your application form and related documents
ii) DSOA will conduct a document review (activity & security check) initial approval and invoices are issued to the client
iii) Payment of related fees and submission of legal documents
iv) Issuance of the lease agreement (Digital agreement to be sent to the client’s registered email)
v) The client is required to sign a lease agreement and return to DSOA along with a bank share capital letter
vi) Issuance of E-Registration and E-License
i) Application Form
ii) Letter of Intent
iii) Passport Copy/Copies
iv) NOC for UAE residents only
v) Bank statement/reference letter or audited financial report
vi) Company business plan
The timeline for application process will be at least seven (7) business days, the registration process will vary depending on the provision of the legal documentation by the applicant while issuance of License & Lease Agreement is within 2 days from receipt of all legal documents and payment.
Dubai World Central (DWC)
Dubai World Central (DWC), close to the fast-growing areas of “new Dubai”, lies at the heart of an entire airport city. Once completed, this airport will be the world’s largest global gateway with capacity for more than 160 million passengers per year. It will also serve as a multi-modal logistics hub for 12 million tons of freight. DWC comprises eight integrated districts – The Al Maktoum International Airport, Logistics, Aviation, Exhibition, Residential, Commercial, Humanitarian, and Golf districts.
DWC offers 100% tax-free operations and 0% corporate taxation, 100% foreign ownership, cost-effective office solutions, eligibility for 2 residence visas, 100% repatriation of capital and profits, a total exception of all import and export duties and strategic location on Sheikh Zayed Road connecting Abu Dhabi and Dubai
LICENSING AND BUSINESS ACTIVITIES
DWC offers a very wide range of business activities falling under 5 types of licenses: Services, Trading, Logistics, Industrial and Education. A DWC Company can have up to 3 business activities from the same category in one license and allows to carry out services in the UAE and sell products in the UAE market through a local agent.
Getting Started in the DWC Free Zone
All businesses operating in the DWC Free Zone must have a physical presence in the Free Zone. Accordingly, the first step to getting started is to meet with the DWC Sales team and agree on the type, location, and size of the premises to be leased. All businesses must then be registered and licensed to operate within the DWC Free Zone.
There are two registration options: registration as a Branch of an existing entity, or incorporation of a new DWC limited liability company (DWC-LLC).
To establish a new DWC-LLC, the following must be submitted:
i) A completed form – Registration & Licensing Application (Dubai World Central LLC);
ii) Clear and valid passport copies (preferably in colored) of any individual listed as a Shareholder, Director, General Manager and Company Secretary in the application form;
iii) A notarized attested and a legalized copy of a certificate of incorporation, valid certificate of good standing or trade license (for foreign companies, should be notarized, attested and legalized) of any Shareholder that is a corporate entity;
iv) If the person handling the application and signing the declaration at the end of the Registration & Licensing Application form is not named as a Shareholder, Director, General Manager or Company Secretary in the application, then a notarized Power of Attorney or signed Board Resolution (if the Shareholder is a corporate entity) will be required from each Shareholder, confirming that the person handling the application is properly authorized to act on behalf of the Shareholders;
v) Two (2) copies of the Memorandum of Association and the Articles of Association of the DWC-LLC on this site under COMMERCIAL BUSINESS, bearing the name of the company to be incorporated and signed by all Shareholders, noting their names, addresses and respective shareholding; and
vi) The applicable fee.
For branch registration, the following documents are needed:
i) A completed form – Registration & Licensing Application (Branch);
ii) Either a copy of a signed Board Resolution or a notarized Power of Attorney from the existing entity, confirming the intent to establish the Branch and nominating a representative to handle the filing;
iii) Notarized, attested and legalized Memorandum and Articles of Association or similar constitutional documents of the existing entity;
iv) Notarized, attested and legalized certificate of incorporation, certificate of good standing or valid trade license of the existing entity; and
v) The applicable fee
The categories of license available within the DWC Free Zone are as follow:
For the registration and licensing process, it can be completed at least one (1) day provided that security checks have been cleared and all the supporting documentation for the application are complete and correct.
Fees and Charge
The cost of first registration is included in the license fee. The fees for all licenses (except General Trading) are currently AED 10,000 per annum, per license, payable in advance. The fees for a General Trading license are currently AED 20,000 per annum, also payable in advance.
Company Formation in Other Free Zones
BMS is an organization with expert professionals who can help you with the Registration and Formation of your business in any of the Free Zones. Setting up business in the UAE Free zones significantly depends on the rules and regulation and policy guidelines that are specifically set by each Free Zones Authorities.
With BMS Chartered Accountants, we can help you identify the needs of your business by:
i) Providing Guidance & Support in strategizing your business plan and providing business advisory.
ii) Assisting you in making the best decision in favor of the business by assessing the risk along with the management techniques of the same.
iii) Assisting you in preparing the application form to be submitted to the regulatory department
iv) Providing proper guidance while selecting the strategic locations of warehouse/s and/or offices.
v) Providing VAT Compliance and Advisory support for VAT Registration, VAT Implementation, VAT Return Filing
vi) Tax restructuring
vii) Provisions for Accounting & BookKeeping services
viii) Provisions for Accounting & Financial Reporting
ix) Provisions for Audit & Assurance Services
Company Liquidation (also called de-registration) is the process when the company or business completely closes down all of its operations and all the assets and properties of the company distributed to its creditors and shareholders.
The following details as mentioned below are the requirements that are needed to accomplish before a business or company in the UAE will successfully liquidate or terminated.
Free Zone Company Liquidation Requirements:
i) The company must not have any liabilities
ii) All existing active visas must be canceled
iii) All existing corporate Bank Accounts must be closed
iv) Any assets at a time of liquidation must be transferred to the shareholders or a third party
v) All fees and charges concerning the free zone authority must be cleared
vi) Immigration clearance must be obtained from the Free Zone Authority
vii) The company must prepare a resolution to liquidate and appoint a licensed liquidator to carry out the procedure
viii) The liquidator must approve the order of action of the company’s liquidation and send confirmation that the company has no assets or obligations/liabilities by preparing a final Audit Report/Liquidation Letter
1.Clearance certificate from relevant free zone authority
2.Clearance certificate from the business unit and all utilities
3.Clearance certificate from any related authorities as per the regulated activity
4.Clearance for customs
(Note: Requirements may vary from free zone to free zone but most of them will remain the same in each free zone.)
In all cases, you will need to cancel the employees’ visas and their work permits. Dubai portal explains that this requires coordination with both the Department of Naturalisation and Residency and the Ministry of Human Resources and Emiratisation.
As per the UAE’s Labour Law, employers are required to give their employees a two-month, paid notice period before terminating their contracts. In many cases, employees can keep their residency visas until the company’s trade license runs out. Then, the company needs to cancel utilities and telecommunication services. Collect a NOC from the utilities providing company for processing the closure.
Normally, there are three general stages for every liquidation process. These are:
i) Analysis Stage
In this stage, certain procedures are needed to be performed such as Due Diligence compliance, review of the company’s liabilities and commitments, asset disinvestment process and liquidation cost and plotting a liquidation timetable
ii) Liquidation Stage
In this stage, the liquidation process now begins. This includes preparing the required documents and the accounts to be liquidated, asset disinvestment process, Debt recovery, and creditors payments and Liaison with Notary and Government authorities
iii) Closure Stage
For the final step, this process includes termination of the contract, payments for final settlement, informing the public and deregistration.
Closing a business: DMCC free zone
According to the website of DMCC, there are three types of closures. They are:
i) Summary winding up – this can be done in cases where a company has either no liabilities or is able to discharge its liabilities within 6 months and commences with a statement of solvency
ii) Creditors winding up – this can be done when the company passes a resolution for winding up and is followed by a meeting with the company’s creditors
iii) Bankruptcy – this can be done by the court under UAE Commercial Transactions Law No. 18 of 1993.
In DMCC, you need to apply for closing the business through the member portal. The authorities, duties, and responsibilities of the Directors of the company will be terminated as an effect of the submission of the company termination application. The application will be reviewed and processed. This will be followed by an announcement in a local Arabic newspaper. DMCC authorities will then file the final termination of the company and issue termination letters.
Closing a business: DSO free zone
Steps to liquidate a company in Dubai Silicon Oasis:
i) The Company should submit a notice to the DSO free zone authority mentioning, the reason behind the closure of the entity, and three months prior to the liquidation. Otherwise, there will be some charges for canceling the lease agreement.
ii) A board resolution (or Shareholders resolution in case of FZE/FZCO) for De-registration must be attested in front of free zone executives. If the shareholders are outside the country/the owner of the company is a foreign company then the resolution has to be notarized and attested from the UAE embassy of that country and the same has to be legalized from Ministry of Foreign Affairs, UAE.
iii) A company must return all office keys and transponders (It is not applicable for the companies in Leasehold or Freehold)
iv) The company post box must be closed and return the keys.
v) Company Original license, Certificate of formation & Share certificates, Lease agreement and the Original Department of Economic Development License (if it is issued through DSO)
vi) The following clearances are mandatory from different authorities
1.DEWA clearance, if applicable
2.Clearance from Dubai Customs Department
3.Clearance from DSOA Finance Department
4.Clearance from DSOA Government Services Department
5.Clearance from DSOA IT Section
7.Facilities Management Clearance
vii) Liquidation report* (only prepared by a Dubai Auditor)
*BMS can support you in the preparation of liquidation report and also assist you in providing PRO services for liquidation.
BMS AUDITING & CONSULTING CO. Suite No.1001, 10th floor, Smart Height, Dubai, United Arab Emirates PH: +971 45516399 | MOB : +971 555569829 firstname.lastname@example.org | email@example.com