This article is the first one from the series of articles which we will regularly publish in our monthly newsletters. This and following articles will be devoted to different options of using the UAE companies depending on the type of business or company, preferences and other terms.
The first article is the review which gives general information concerning how and for which approach different types of companies can be used in the UAE. Those companies can be offshore and onshore ones in FTZ or companies registered in the mainland of the UAE.
Let us start from the least expensive and not complicated company type for international business in terms of administration and which can be technically classified as the analogy of a typical international offshore company. Such a company is the best solution for carrying various international businesses. At the same time, it is permitted for this company to set up an account in one of the Dubai banks. In the current conditions, when it has become much more complicated to open up a bank account for offshore companies in most of the countries, such a company is one of the best decisions for solving this objective.
It is necessary to notice that there are 2 subtypes of such offshore companies in the UAE. The first one is a company in Dubai and the second – in Ras Al Khaimah. An offshore company in Dubai is significantly more expensive concerning the registration fee and duties, but you can also register real estate in Dubai on such company. Additional information about all the particulars of using an offshore company in the UAE will be published in our special article devoted specially to this type of legal entity in the UAE.
The second type of companies includes onshore companies established in the free trade economic zone of the UAE. These companies can effectively be used for both purposes - for doing business in the UAE as well as abroad. Using these companies provides an effective and economically advantageous possibility to get residence permit in the UAE for a shareholder and immediate members of his family. These companies can be also very cost-effective for a number of different business activities such as trading, manufacturing, consulting and other services, etc. Moreover, these companies are often used for holding activity or as the main office of international companies group. An important aspect is that these companies can use the advantages accessible by the UAE companies under the double taxation agreements signed by United Arab Emirates and other countries. The companies of such a type can also get, if required, the respective certificate confirming its tax residency in the UAE.
The third type of companies are the ones that are registered on the mainland of the UAE means outside of the territory of Free Trade Economic Zones. Such companies, as well as companies of the second type, can carry on business activities both inside the country as well as abroad. In addition, these companies have no limits, which are applicable to companies registered in FTZ. For some certain types of business activity in the UAE, a company of especially this type the only type which can be used to get the respective license.
In terms of taxation, all three types of companies are effectively very similar when talking about taxation. They have the complete corporate tax exemption - no matter whether the income is received in the UAE or from the sources abroad.