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Dubai UAE for Business

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  • Dubai, UAE for Business

  • Published byOneworld MidEast ltdCopyright2014 Oneworld MidEast ltd

    All rights are reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, photocopying or otherwise, without prior writen permission of Oneworld MidEast ltd.

    Designgrafica&grafica Simos Simonis

  • Dubai, UAE for Business

  • 5ForewordIn the past 20 years, the UAE has been very successful in diversifying away from dependence on the gas and oil industry and created a solid industrial base together with a strong services sector.

    The UAE offers unrivalled tax planning opportunities to international businesses, zero corporation and income taxes, an impressive network of double tax treaties, no withholding tax on dividends and interest paid and no levy on capital gains.

    It is an acclaimed International Financial Centre!

    The Global Competitiveness Index 2014-2015 published by the World Economic Forum (WEF) ranks UAE as the 12th country in the world in terms of competitiveness.

    Special economic zones, free trade zones, and UAE offshore companies offer 100 percent ownership, repatriation of profit and capital exemption from taxes and a wide network of 80 double tax treaties. Significant incentives are offered to investors and corporate governance provisions ensure transparency and accountability.

    The UAE is a white listed onshore jurisdiction that offers offshore jurisdiction services and other opportunities that exist only in mature industrial and financial hubs.

    A pro-business government encouraging foreign investment has also developed the country into a cosmopolitan centre welcoming a diverse specialist and competitive workforce. Further, Dubai has emerged as a popular jurisdiction for the relocation of high net worth individuals and a strong alternative to UK, Switzerland, Monaco, Singapore and such countries.

    Oneworld MidEast ltd can assist you on every step of the way to set up your new business or expand in Dubai and the UAE. We have teams of specialists advising clients on their corporate and tax planning. We offer clients integrated, one stop, boutique professional services. And we do our work in strict confidence.

    George PhilippidesChairman

    January 2015

  • 71 Introduction 9 - 14

    2 A Business Centre 15 - 19

    3 Legal Entities 21 - 27

    4 Taxation 29 - 32

    5 Free Trade Zones 33 - 37

    6 IBCs 39 - 40

    7 Double Tax Treaties 41 - 45

    8 DIFC and Financial Services 47 - 55

    9 Redomiciliation 57 - 61

    10 Labour 63 - 65

    11 Working and HNWI Living 66 - 75

    12 Oneworld MidEast ltd 77 - 80

    Contents

    Page

  • 91 IntroductionThe UAE comprises of a federation of seven emirates - namely, Dubai, Abu Dhabi, Sharjah, Fujairah, Ras Al Khaimah, Umm Al Quwain and Ajman - which have their own rules and regulations.

    When considering doing business in a foreign country, any investor needs to consider a range of commercial issues that influence the decision of setting up in that country.

    Briefly, the UAE is an attractive hub for investors to locate their business interests for the following reasons:

    nocorporateandincometaxes, no exchange control restrictions and unrestricted repatriation of income and capital

    amongstthemostliberalbusiness regimes in the Gulf region and attracts strong capital flows

    focusedoneconomicdiversification in trade, logistics, banking, tourism, real estate and manufacturing and provides opportunities in all business sectors

    hasawellestablishedinfrastructure, strong banking system and a stable political system

    providesforawindowoffreetrade zones that can allow 100 percent foreign ownership and zero taxation

    providesafavourabletax environment for most industries

    ahighnumberofexpatriateworkers at all levels of the economy accounting for 80 percent of the work force

    cultureisdrivenbyIslamictraditions, however, with over 150 nationalities,

    expatriates are able to practice their own cultures

    providesasafeandsecurefamily environment with one of the lowest crime rates in the world

    Political system

    The Supreme Council, consisting of the rulers of each emirate, is the countrys highest authority. It appoints the federal government and ratifies federal legislation. His Highness Sheikh Khalifa bin Zayed Al Nahayan, ruler of Abu Dhabi, is the president of the federation, while His Highness Sheikh Mohammed bin Rashid Al Maktoum, ruler of Dubai, is the vice president and prime minister of the federation.

    Legislative process

    Federal legislation is initiated and policy decisions are made by the federal cabinet consisting of the council of ministers chaired by the prime minister.

    The countrys parliament, the federal national council (FNC), assists the council of ministers in a consultative capacity. The formation of the FNC is acknowledged as a positive step towards promoting peoples participation in the running of the country. The FNC consists of 40 members drawn proportionately from each emirate.

    Each emirate has its own institutions of local government which enact laws applicable to each emirate. However, federal law applies to the UAE as a whole and overrides provisions of local legislation.

  • 10

    Introduction

    Political development

    In 1971, the UAE became a member of the Arab League. Since then, the country has also become a member of other international organizations including the United Nations, the International Monetary Fund, the International Labour Organization, Organization of Petroleum Exporting Countries, the Organization of Arab Petroleum Exporting Countries, the World Health Organization and International Organization for Industrial Development. The UAE is a strong supporter of Arab unity.

    Gulf Cooperation Council

    The UAE is also one of the six member countries of the Gulf Cooperation Council (GCC), the other being Kuwait, Saudi Arabia, Bahrain, Qatar and Oman. The GCC aims to promote political stability and economic integration amongst member countries.

    Geography and climate

    The UAE lies on the southern shores of the Arabian Gulf and covers an area of about 77.700 square kilometres (sq km), divided as follows: Abu Dhabi 67.340 sq km, Dubai 3.885 sq km, Sharjah 2.590 sq km, Ajman 259 sq km, with the remaining 3.626 sq km, divided between Ras Al Khaimah, Fujairah and Umm Al Quwain. Abu Dhabi includes a number of islands of which the most important in economic terms are the Abu Dhabi island itself, Das, Sadiyat, Umm Al Nar and Zirku. Dubai, a city state, was founded in 1833. It enjoys approximately 70 km of coastline.

    The UAE is 4 hours ahead of Greenwich Mean Time.

    The country has a sub-tropical climate. It is generally hot and humid throughout the summer (May to September) with temperatures ranging between 35o and 45o Celsius, and humidity levels from 60 to 100 percent. It is pleasant during winter with temperatures ranging between 18o and 25o and low humidity levels.

    Population and language

    The estimated population of the UAE is 9,4mn. The population of Dubai is approximately 2,5 mn and roughly 2,6 mn and 0,7 mn of Abu Dhabi and Sharjah, respectively.

    The UAE has a high standard of living with 100 percent primary school enrolment. It is estimated that nearly three quarters of the population are expatriates mainly from the Asian subcontinent, followed by Iran, Egypt and Europe.

    The official language is Arabic. English is an accepted business language and widely spoken in commercial and governmental organizations.

    Currency

    The official currency is the dirham (AED). Notes are issued in denominations of 1000, 500, 200, 100, 50, 20, 10 and 5.

    The UAE dirham is a convertible currency. Since 1980, the dirham has been pegged to the US$ and is presently set at AED 3,6725 to US$ 1. There are no exchange controls.

  • 11

    In addition to banks, there are ample insurance brokers, financial advisers and other financial services providers. With the emergence of the Dubai International Financial Centre (DIFC) in 2005, Dubai has become a global financial hub

  • 12

    Introduction

    Credit cards are widely accepted and automatic teller machines are located in all the emirates.

    Infrastructure

    The UAE has excellent infrastructure in financial services, communication, transport and pertinent business support services.

    Financial services

    The Central Bank of UAE formally commenced operations in 1980 with its main objectives being to direct monetary, credit and banking policy and supervise the implementation of pertinent policies. There is an abundance of international and domestic banks operating in the UAE that extend a full range of banking facilities to the foreign investors. In addition to banks, there are ample insurance brokers, financial advisers and other financial services providers. With the emergence of the Dubai International Financial Centre (DIFC) in 2005, Dubai has become a global financial hub.

    Telecommunications

    Telephone, telex, facsimile and e-mail facilities are widely available and connections are provided promptly and are reliable. Local telephone calls are free within each emirate. A full range of internet services is available making global information and communication quick and easy.

    Airports

    Work is underway on the worlds largest airport, the Dubai World Central International Airport in Jebel Ali. Six international airports are in operation, in Abu Dhabi, Al Ain, Dubai, Sharjah, Ras Al Khaimah and Fujairah. Major foreign airlines operate from the UAE and connections are available

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