Business Laws & Regulations in Dubai, UAE

With its stellar growth, Dubai has been known for alluring every business opportunists due its efficient licensing rules, infrastructure, and ease of work. In a survey "the World Bank's Ease of Doing Business Survey for 2014," the Emirate has been indicated as the easiest places to do business. If you're an expat and looking to begin a new business, you need to be informed about the business law and regulations. If you aren't aware, you can seek the help of lawyers and legal advisors in Dubai. We have some of the crucial and fundamental rules of business laws in Dubai:

If you're an expatriate and have been think of opening a limited liability in the Emirate, the law states that around 2 or 50 persons. A limited company has the freedom to get involved in any lawful activity, which should not include insurance, banking or investment. For Approval and License, one needs to approve The Economic Department and the business can be registered with Dubai Chamber of Commerce and Industry. The commercial name chosen should be approved by the Licensing Department of the Economic Department.

When it comes to the formation of a joint venture between foreign and a local party in Dubai, the law stipulates that the local party should own 51% equity. It is all right if official contract documents do not exist between the parties. The joint venture is beneficial if you have a specific project or technology. For a strategic partnership, lawyers in Dubai can advise on structuring, drafting and negotiating.

Under the UAE Commercial Company Law (13) of 1988, foreign companies are not allowed to undertake any financial obligations. The representative office should be registered with the UAE Ministry of the Economy, then with the Dubai Department of Economic Development. The business law also mandates the office to engage with UAE National Local Service Agent, either an individual or a UAE National-owned company.

The branch can be 100% owned by the foreign company, but it is mandatory for the company to appoint a local service agent, which should be UAE nationals or companies owned by UAE nationals. The branch or representative offices are prohibited from engaging in any kind of import activity, and can't generate profit.

For opening a branch office in the free zone, it is required for companies to get license approval from Ministry of Commerce and Economy wherein they also note down the activity to be practiced by the authorized brand or office.

In the case of establishing sole proprietorship company by a foreign company. The foreign company has a 100% ownership. A local service agent is elected who should be UAE national. The agent is not associated with the company's business, but he is a part of the amount from the turnover of the enterprise.

Foreign firms can establish a permanent presence in the UAE by launching a limited liability company or a sole proprietorship or set up a branch office in a UAE Free Trade Zone. There are many benefits of opening a branch office in FTZ:
  • No personal income taxes
  • Corporate tax exemption for 15 years, which can be renewed
  • 100% tax exemptions for import and export
  • 100% repatriation of capital and profits
  • Support for sponsorship and housing
  • Support for employee appointment

It is true that Dubai has earned the reputation for enabling foreign companies to do business with ease, but it is necessary to get familiar with business laws for achieving success.

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