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Best UAE Company Formation Services 101: Answering Your Top FAQs

Posted on 11/02/2024

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    UAE Company Formation Services – FREQUENTLY ASKED QUESTIONS \ FAQ

    Why should I consider establishing my business in the UAE?

    The United Arab Emirates (UAE) offers numerous advantages for businesses, including strategic location, political stability, world-class infrastructure, tax benefits, a diverse and growing economy, access to a global market, and a favorable business environment. The UAE is a federation of seven emirates, including Abu Dhabi, Dubai, Sharjah, Ajman, Fujairah, Ras Al Khaimah, and Umm Al Quwain.

    The Leading Link is one of the best UAE Company Formation Services Providers in Dubai and the UAE, in this video we are explaining why Dubai is the best place for your business.

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    What are the types of companies that can be formed in the UAE?

    Within the landscape of UAE company formation services, various company structures are available, ranging from mainland companies to free zone companies and offshore companies. Mainland companies enable business operations throughout the entirety of the UAE, while free zone and offshore companies provide unique advantages and limitations.

    What is a mainland company?

    A mainland company refers to a company registered and licensed to operate anywhere within the UAE. A mainland company formation in the UAE allows you to conduct business within the local market and also engage in government contracts.

    What are free zone companies?

    Free zone companies are ideal for businesses focused on international trade and services. They have limitations on conducting business within the local UAE market. Free zones in the UAE are designated areas that offer various incentives to businesses, such as 100% foreign ownership, tax exemptions, simplified regulations, and customs benefits.

    What are offshore companies?

    Offshore companies in the UAE are non-resident entities established for the purpose of asset protection, wealth management, and international investment. They provide privacy, tax optimization, and ease of international business operations. Offshore companies cannot conduct business within the UAE market.

    How do I choose the right company structure in the UAE?

    Choosing the appropriate company structure depends on your business objectives, target market, industry, and the nature of your operations. It is recommended to consult with experts in UAE company formation services like TheLeadingLink who can assess your specific requirements and guide you through the decision-making process.

    What are the general steps to register a company in the UAE?

    As UAE Company Formation Services provider we always say that the registration process can vary depending on the chosen company structure and the emirate in which you plan to establish your business.

    However, the general steps include:

    1) Get a free initial consultation with The Best UAE Company Formation Services Provider: TheLeadingLink
    uae company formation services

    Once you have decided on your business activities, book a consultation with us – Best UAE Company Formation Services Provider in the UAE – for full guidance and discussion about your business structure, jurisdiction, and document requirements.

    2) Receive your trade license
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    After receiving the necessary requirements from you, we will take care of the full process of getting your business license, so you can use your valuable time in the more important aspects of your business.

    3) Get establishment card and entry visa as investor
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    Upon issuance of your business license, we will process your immigration documents including the company establishment card and your visa/s as investor/s.

    4) Go for your medical fitness test and Emirates ID biometrics
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    Once your visa is issued, you will have to go for a medical fitness test and biometrics for your Emirates ID. Your Emirates ID is very important as this would be required in any official transactions in the UAE.

    5) Open your business bank account
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    As a UAE Company Formation Services Provider, we always recommend opening a corporate bank account as a business bank account is mandatory for all businesses. We will guide and help you in opening a corporate bank account so you can operate your business seamlessly.

    6) You’re all set!

    Start your journey in one of the most promising economic hubs in the world!

    How long does it take to register a company in the UAE?

    The timeframe for company registration can vary depending on the type of company and the emirate. As a UAE Company Formation Services provider, we can tell that Mainland company registration generally takes between 7 to 14 days, while free zone company registration can range from 1 to 4 weeks. Offshore company registration typically takes 1 to 2 weeks. These timelines are approximate and can be subject to specific requirements and processing times.

    Do I need a local sponsor to establish a company in the Mainland?

    Previously, it was mandated for all mainland companies to have local UAE nationals as a partner or sponsor. However, in recent years, the UAE has introduced several initiatives and regulations that allow for 100% foreign ownership in certain sectors and activities. The specific activities where you can have 100% ownership may vary depending on the emirate and the regulations in place. It is advisable to consult with trusted UAE Company Formation Services provider who is familiar with the regulations in your chosen emirate to determine the current options for 100% foreign ownership in your desired activity.

    What is an LSA and do I need it to establish a company in the Mainland?

    A local service agent (LSA) is a requirement for certain types of businesses, particularly in mainland company formations. An LSA is a UAE national or a company wholly owned by UAE nationals who acts as a representative or sponsor for the company. The LSA does not have any ownership or financial involvement in the business but serves as a point of contact between the company and government authorities. An LSA does not have the authority to interfere in the day-to-day operations or decision-making of the company. Their involvement is primarily limited to the legal and administrative requirements associated with doing business in the UAE.

    Can I choose any business activity for my company in the UAE?

    The UAE offers a wide range of business activities across various sectors. However, certain activities may require additional approvals or licenses from relevant authorities. As a UAE Company Formation Services Provider, we recommend that It is crucial to ensure that your chosen business activity is permitted and properly licensed within the chosen company structure and jurisdiction.

    What are the document requirements for company formation in the UAE?

    As a UAE Company Formation Services Provider, there is no quick answer to that question as the specific document requirements may vary depending on the chosen company structure and the emirate.

    However, commonly required documents include:

    • Passport copies of shareholders and directors
    • Memorandum and Articles of Association
    • Lease agreement for office or warehouse space
    • Power of attorney (if applicable)
    • Additional documents specific to certain business activities

    Do I need to have a physical office space for company formation in the UAE?

    Whether or not to have a physical office is a very common question within the context of UAE company formation services. Typically, a physical office space is a requirement for mainland and certain free zone company formations. However, this requirement may vary based on the jurisdiction and the nature of the business. It’s worth noting that as a UAE Company Formation Services provider, we can provide you with flexible office solutions to cater to the diverse needs of your businesses.

    Can I open a corporate bank account in the UAE for my company?

    Yes, once your company is registered, you can open a corporate bank account in the UAE. Each bank has its own requirements and documentation procedures, which may include presenting company documents, shareholder information, and proof of address.

    Can I apply for UAE residence visas for myself, my employees, and my family?

    As a UAE Company Formation Services Provider, once your company is established, we can apply for your residency visas, also known as investor visa and employment visa for your employees. The specific visa requirements and procedures may vary depending on the company structure and the emirate. You can also sponsor your family once you have obtained the necessary visa for yourself.

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    Do I need to renew licenses for my company?

    Yes, company licenses in the UAE typically require annual renewal. The renewal process involves submitting the necessary documents, paying the renewal fees, and complying with any regulatory requirements. It is important to keep track of license expiration dates and initiate the renewal process in a timely manner to avoid any penalties or disruptions to business operations. As a UAE Company Formation Services provider, The Leading Link can help you in the renewal process of your license.

    What is an LLC (Limited Liability Company)?

    An LLC, or Limited Liability Company, is a popular type of business entity in the UAE. It is a legal structure that combines elements of a partnership and a corporation, providing limited liability protection to its owners (known as shareholders) while allowing flexibility in management and operations. In an LLC, the shareholders’ personal assets are protected from the company’s liabilities. An LLC structure is often viewed as more credible and trustworthy, which can be beneficial for attracting partners, investors, and customers.

    Let The Leading Link – the Best UAE Company Formation Services provider in the UAE – handle your LLC

    What is a sole establishment in the UAE?

    A sole establishment, also known as a sole proprietorship, is a type of business entity in the UAE where an individual owns and operates a business without the need for a local sponsor or partner. It allows individuals to have 100% ownership of their business. However, unlike LLC, in a sole establishment, the owner is personally liable for all debts and obligations of the business.

    Let The Leading Link – Best UAE Company Formation Services provider in the UAE – handle your Sole Establishment in the UAE

    What are the taxation policies in the UAE?

    The UAE has a favorable tax environment, with no personal income tax imposed at the federal level. Value-added tax (VAT) was introduced in the UAE in 2018, which currently stands at 5% and recently Corporate Tax (CT) has been introduced from 1 June 2023 at a standard rate of 9%, the lowest corporate income tax rate within the GCC region.

    What is VAT?

    VAT, or Value Added Tax, is a consumption tax levied on the supply of goods and services. It is an indirect tax that is added to the final price of the goods or services provided. The standard VAT rate in the UAE is 5%. This rate applies to most goods and services, unless they are specifically

    Who is required to register for VAT in the UAE?

    Businesses are required to register for VAT if their annual taxable supplies and imports exceed the mandatory registration threshold, which is currently set at AED 375,000. Voluntary registration in UAE VAT is also allowed for businesses with an annual turnover between AED 187,500 and AED 375,000.

    What are the benefits of being VAT-registered?

    VAT registration enhances your business’s credibility and professionalism and it can increase trust among customers, suppliers, and partners.VAT registration ensures that your business complies with the legal requirements set by the Federal Tax Authority (FTA) thus helping you avoid penalties and legal issues associated with non-compliance. You can also recover the VAT you have paid on your purchases (input tax) by offsetting it against the VAT you have collected from your customers (output tax). This helps reduce your overall tax liability and improves your cash flow.

    What is UAE Corporate Tax (CT)?

    Corporate tax (CT) is a form of direct tax levied on the net income or profit of corporations and other entities from their business. Corporate Tax is sometimes also referred to as “Corporate Income Tax (CIT)” or “Business Profits Tax” in other jurisdictions. (CT) has been introduced from 1 June 2023.

    How is Corporate Tax calculated?

    Chapter Two of the UAE Corporate Tax provides that
    If the Taxable Income of the business doesn’t exceed AED 375,000, the Corporate Tax will be 0 %.
    If the Taxable Income of the business exceeds AED 375,000, the Corporate Tax will be 9 %, of such excess amount.

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