UAE and Dubai - Business, Financial Center and Tax Haven

By pjain      Published June 12, 2021, 5:36 a.m. in blog Geo-Politics   

UAE Current Economy and Politics

Demographics - only 15% native

UAE ia a country where Emirati nationals make up around 15% of the total population.

Oil and Gas based Current Economy

Dependence in $60 oil

However there is a need to transition from oil-based industries over next 30 years.

Real Estate and Visas for Expats

Streamline visa requirements.

Some expat professionals, including investors, will qualify for new 10-year residency visas.

UAE Visas in 2021

Expat Residency Visas to attract FDI

Some expat professionals, including investors, will qualify for new 10-year residency visas expected to come in effect by end 2018. With cost of living rising steeply for expats and Emiratis alike, the new laws will allow for much greater inflows of FDI.

The government is hoping the new laws will encourage many more professionals to remain in, or relocate to, the UAE, a country where Emirati nationals make up around 15% of the total population.

Real Estate is a core part of UAE Economy

When oil was at $100 a barrel for several years there wasn’t that much need to attract foreign investment. Clearly that has changed.

Visas for Property Investors

Now the UAE offer a long-term residence visa to foreigners who own property

Tax Benefits of Real Estate Investing

Investment in domestic real estate assets is also subject to very generous tax conditions.

Perhaps most importantly for investors, there are no national property taxes or stamp duties.

While property taxes may be leveled by the local municipality (ie Emirate), the rates are very affordable and can typically be covered by rental yields.

Potential for Appreciation

Surging real estate valuations USED TO BE the main reason to invest in the UAE.

Investors flock to UAE?

Stock Market

UAE has a long way to go. In Turkey, 64% of shares listed on the Borsa Istanbul are foreign-owned, compared with 12.9% in Dubai, 6.5% in Doha and just 5% in Riyadh.

Financial and Trade Hub of Dubai and UAE

By balancing a mixture of free-market principles and calculated legislative and investment interventions, the UAE is on track to become the premier hub for commerce and investment in the Persian Gulf. Home to a dynamic private sector, a flourishing housing market, and a burgeoning tech sector, investments in the UAE have the potential to yield substantial long and short-term dividends for foreign investors.

Attraction of Dubai and UAE

Dubai and Abu Dhabi are already recognized as two of the most powerful business and financial hubs in the world by international investors who are lured by the incredible possibilities offered in terms of finance, trade and commerce, plus the famous 'can do' attitude and the low tax environment in these destinations.

Dubai and Abu Dhabi are seen as having the edge over rivals in the region for their infrastructure and attractive, foreigner-friendly, setting.

However the UAE needs to keep pace or stay ahead if it doesn’t want to lose its competitive advantage.

Digital UAE

E-Commerce Center

Abu Dhabi as Tech Center of Innovation - A Silicon Desert?

With a growing e-commerce industry and an advanced technology and manufacturing base, the UAE is now a key player in global digital innovation.

Encouraging local Startups by Financing

Since 2019 end the UAE has also focused on developing the country's financial services sector, improving public-private partnerships and encouraging banks to offer more financing options for SMEs.

In May 2018, Abu Dhabi announced a $1 billion plan named "Abu Dhabi Global Market 2.0", which will focus on helping startups scale up their operations and extend their reach globally.

Air Travel Hub and Tourism in UAE

Additionally, the Abu Dhabi Department for Culture and Tourism recently pledged to invest $6 billion toward cultural and creative industries, building atop a previous $13.6 billion stimulus plan to update

Abu Dhabi - core AIR Hub - direct immigration to USA

Al Ain Aerospace Hub

UAE government include building a new aerospace hub in Al Ain

UAE Free Trade Zones

Overview

With foreign-owned companies used to be restricted to the specialised free trade zones.

Free zones or free zones are certain geographical areas defined within the United Arab Emirates that enjoy a special status granted by the UAE government.

There are many different Free Zones and the costs and benefits vary depending on the location and type of business.

Cheaper options are usually outside of the Emirate itself. - Which is the cheapest free zone in the UAE?

Formation and Legalities

Like any other country, you need a license and registration to operate your business in the UAE. You also need licenses, registrations, and special documentation to operate your business under Free Trade Zones.

Benefits

  1. Businessmen in the Free Zone are 100% in business.
  2. No taxes on the corporations to the UAE government
  3. Exempted from all import duties

Dubai Free Trade Zone

Dubai is a separate Emirate with its own authority and regulations.

Sharjah Airport International Free Zone - outside Emirate

RAK Free Trade Zone - outside Emirate

Fujairah Free Zone - outside Emirate

Ajman Free Zone - outside Emirate

Company Formation and Business Law in UAE and Dubai

Remove barriers to FDI - Goal to boost FDI

In Abu Dhabi, the state plans to triple FDI by 2030 in sectors that include technology and innovation, renewable energy, media, transport, logistics, infrastructure development, tourism, and hospitality.

New Commercial Companies Law

Previously, the Commercial Companies Law made it illegal for anyone but a UAE national to possess majority ownership of an onshore company.

This change will allow foreign investors to establish onshore companies with 100 percent foreign ownership. The new legislation will not only boost capital flows and help start-ups attract funding from international investors, but it will also deliver improved convenience to existing foreign investors, providing them with greater freedom and clarity to operate within the UAE's regulatory environment.

The amended Commercial Companies Law aims at boosting the country’s competitive edge and is a part of UAE government’s efforts to facilitate doing business.

Company Formation

Obtaining a license and approval in the UAE is smooth with minimal bureaucratic hurdles.

The cost of setting up a business in Dubai as a mainland company is as little as AED 30,000. The amount includes license fees, registration fees, bank account opening, office space, immigration card, UAE local partner (no longer needed), visa cost, a stamp of the company, owner medical, and Emirates ID.

Trade, Industrial and Professional licenses

The Department of Economic Development in Dubai provides the licenses to operate locally. They ID the business, accountability for commercial activities and helps regulate for public interests.

Licenses can cost between AED 15,000 to 50,000.

Types of licenses are follows. Licenses must be renewed annually or be subject to penalty or freezing activities.

1. Professional License for Service Oriented Business

2. Travel and Tourism Licenses

3. Trading and commercial license

4. Industrial License

Use a Consultant?

Although bureaucratic processes are constantly complicated and complicated in other countries, the same is not true of the United Arab Emirates.

However, there are many complexities and formalities involved. That's why it would be better for you and your company to engage the services of business consultants in the Dubai Free Zone.

UAE as Tax Havens and money laundering

Import-Export Trade businesses in Dubai and UAE

Business Law

There are, for example, separate civil laws for foreigners and Emirati citizens.

100% Foreign ownership allowed from Dec 1, 2020

This is a change from prior current UAE law when foreign shareholders can own a up 49% of a locally registered company, with a local UAE citizen partner holding the 51% majority.

However, several sectors deemed strategic are exempt from the new rules announced today. These include energy and hydrocarbons, telecommunications and transport.

Probably the Covid-19 hurt tourism, real estate and other businesses in UAE which prompted this change.


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