Here Is The Most Frequently Asked Questions.
We tried to answer most of the common questions which might arise.
The tax will start to apply on the figures of the 1st financial year of your company, which will start after June 1, 2023. If your financial year, provided for in your articles of association, starts on January 1st until December 31st, then your first tax will only concern the profit generated between January 1st, 2024 and December 31, 2024.
When do we have to declare and pay?
Declarations and payments will be due within 9 months of the end of your financial year. In the example above, this would be the end of September 2025.
Who?
1/ Mainland LLC local companies
2/ Free Zone companies. We are awaiting the Cabinet Decision, as these companies being very important for the Emirates and their activities mainly oriented towards international and export, they may not be taxed. The expected clarification concerns the share of income that free zones generate on the local market, and whether this would call into question the income generated for export.
3 / And the RAKICC companies? We are waiting for clarifications on this type of company if they have to register.
How is the tax calculated?
The tax is 9%, on profits over AED 375,000 (approx. USD 100,000). Below this profit threshold, the tax is 0%.
Mainland companies and Free Zone companies are required to register and obtain a registration number.
Regarding the IBCs (International Business companies) of RAKICC, we are still awaiting clarifications from the Cabinet Decision
The corporate income tax, announced last year, came into effect on June 1, 2023.
It had been announced a corporate tax of 9% on the portion of profits above AED 375,000.
The types of income affected are still not final at the time of this writing, we are awaiting the Cabinet Decision which will clarify this.
A business license is required in Dubai to open a business. The most common types of business licenses are three. Offshore, Free Zones, and the Mainland. Each license category has a different application process.
In Dubai, business setup primarily entails the following:
- Initial approval from the competent authority, for initiation of the business.
- After carefully examining the documents, the authority grants their legal and official approval. This comprises the investor’s name, credentials, place of residence, financial stability, and other details.
- The AOA and MOA, the basic organizational structure, the official and commercial space, and other factors will be examined by the authorities to determine the business’ viability.
We advise you and help you identify offices or commercial premises. Some neighborhoods or free zone have rental prices that vary from single or triple. The question of the office and the available budget can also be decisive for the choice of your free zone or the type of company.
For trading, import and export activities, you may need storage solutions, local and international transport, handling of your products and goods. We bring you the logistics solutions you need.
Several types of companies are possible. We listen to you to understand your needs and constraints. We then discuss the possible solutions available to you, and validate together a final solution. We can then proceed with the administrative formalities of the creation of the company
No! International banks such as HSBC, Standard Chartered Bank, Barclays, Citibank, … do not provide bank account opening services in Dubai for offshore companies.
In Dubai, all banks are obliged to see clients in person! Your physical presence is required for the signature of the bank account opening documents and submission of your valid passport.
No! International banks such as HSBC, Standard Chartered Bank, Barclays, Citibank, … do not provide bank account opening services in Dubai for offshore companies.
Yes, JAFZA allows corporate shareholders.
ID Card, UAE Residence visa, utility bills like gas bills etc. (most recent)
Not necessarily; you can only incorporate your business without having any business entity in the UAE
The balance requirements are kept in the form of monthly average balance. Some banks have the minimum monthly average cap as low as AED 10,000 or equivalent amount in any other currency.
Offshore companies are not eligible for letter of credit (LC) or any other credit facilities from the banks.
This depends on your needs, as well as the needs of your business. You could set up your company as a Sole Establishment (this is the same as a Sole Proprietorship), as a Limited Liability Partnership, a Limited Liability Company, a Private Limited Company, or a Professional Services Company.
You also have the option of setting up your company on the mainland, in a free zone (only limited liability company structures are permitted here), or offshore.
- You are 100% owner of your business
- You can repatriate 100% of capital and profits
- No corporate tax
- No income tax
- Infrastructure and facilities for industrial and commercial purposes.
- Simple import and export procedure
- No restrictions on hiring expatriates
- 3 years residence visa for the United Arab Emirates
- You can choose to set up a Free Zone Company (FZC), Free Zone Establishment (FZE), Branch of a foreign company or Branch of a UAE company in Dubai Free Zone for Dubai freezone company setup.
Free Zone companies are exempted from export and import customs duties.
No, you are not need to reside in the UAE in order to start up a business in the Dubai free zone. The company’s general manager should live in the UAE, nevertheless.
Dubai extends a warm welcome to investors. Dubai is one of the most developed cities in the world, and doing business there provides limitless opportunities. The legality, tax laws, and other official standards are created in a way that supports investment. The infrastructure is really well thought out and designed, giving you many opportunities to succeed.
The UAE’s legal framework was created with ease of investment in mind. The process and legal requirements are quickly completed by the authorities. As a result, you won’t have to wait long to start doing business in Dubai or the United Arab Emirates.
Yes. A Free Zone company in Dubai doesn’t require a local sponsor. Therefore, you can own 100% shares in the company.
To establish your LLC Company in Dubai mainland or anywhere else in UAE, you have to reserve a trade name and other necessary preliminary approvals from concerned authorities. You get an MOA from the company and also, submit the lease contract to the licensing authority. Also, find a local partner and rented office space to start your business.
It does not take more than 2 days.
Yes; companies in the UAE can have accounts in different currencies like AED, USD, Euro, GBP, CHF, etc