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Unlike some countries that are currently experiencing political and economic stagnation, the United Arab Emirates, according to experts, is confidently moving on upwards: the country’s GDP is steadily growing. Depending on the sector, the indicators increase by an average of 3-8% annually. At the top of the list, expectedly, is the oil sector, with real estate, transportation and tourism also showing significant growth. According to experts, GDP in the UAE will grow by 19.4% over the next few years.
Over the past few years, there has also been an exceptional inflow of investment and capital into the economy. The main reasons are favorable conditions for business immigration and loyal tax legislation. Entrepreneurs can obtain a residence permit for up to 10 years. To understand the nuances and advantages of opening a company in the UAE, iWorld lawyers’ advice, feedback from clients who have obtained a residence permit, and an overview of economic zones will help. iWorld lawyers and clients will also share feedback and experiences to answer the question of whether the introduction of corporate tax has had an impact on business profitability.
Residency program requirements that will significantly increase profitability
Among the main reasons for opening a business in the UAE, mentioned in the reviews, are the low tax burden, the absence of currency restrictions and the possibility of obtaining a residence permit. Foreign entrepreneurs who have obtained residency status can own 100% of the company’s share and operate on the same terms as local businessmen.
In Mainland and any of the UAE’s more than 50 frezones, you are required to pay a 9% corporate tax if your business income exceeds $102,000 per year. This is the baseline value. To this can be added a further 5% VAT if the goods are sold or the service is provided within the UAE. According to reviews, even this surcharge does not greatly affect the investment attractiveness and does not reduce the number of new companies, since the absence of other taxes still allows you to increase the profitability of the business. All this stimulates the opening of subsidiaries of large international corporations in the UAE.
It is not only the local tax policy that creates a positive financial climate. A robust consumer sector, high levels of talent immigration and exponentially growing demand for various services provide the necessary boost for successful business development.
Tips from experts on obtaining Emirates ID and registering a business
There are different sets of regulations for Mainland and Freezones. Most companies are registered in Freezones because they conduct trading activities outside the UAE. It is important to correctly determine the type of license, as companies are registered for a specific type of activity. A separate license is required for each activity. An Emirates ID is issued to the owner and all employees. You can also open an offshore company, but without the right to conduct business in the UAE.
More information about the details can be found at iworld.com, where you can also read testimonials.
iWorld: feedback on obtaining Emirates ID and the actual benefits for a businessman
Client testimonials about iWorld allow you to understand the procedure itself and the importance of legal support. Each stage of obtaining a residence permit is described in detail below. In general, the assistance of iWorld experts speeds up the process, and most importantly, minimizes the risk of failure and reduces financial costs.
Preparation details
There are two main points to be determined in the preparatory phase:
- Select an ecommerce zone.
The UAE Mainland license allows business activities both in the Emirates and outside the Emirates. When registering a business in a Free Economic Zone (FEZ), activities are only allowed there within the B2B segment and outside the country. - Decide on the type of activity.
For Mainland, more than 2000 options are available. For Frezone, the list is limited and differs from one FEZ to another.
Generally, a license is issued for one year, with annual renewals.
Company incorporation
The company incorporation procedure in Dubai or other Emirates takes 5 to 7 days, provided everything is done correctly. Step-by-step plan:
- Determine the legal form of organization (sole proprietorship, LLC, OJSC, CJSC, branch, etc.). According to lawyers, subsidiaries of holding companies, small businesses and qualified residents of the Free Zone can count on preferential taxation.
- Register a trademark. It is not obligatory, but iWorld lawyers recommend reserving the name, because if someone else does it in the future, the name cannot be used.
- Rent an office – real or virtual. Virtual offices and flexi desks are allowed in some free economic zones. In Mayland, only a real office is allowed, even if you conduct business exclusively online. The office is leased for at least one year so that it covers the license term.
- Obtain initial approval (certificate). Issued by the UAE government based on the type of business the company is engaged in.
- Submit a package of documents to the DED. It should include the certificate of initial approval, copies of statutory documents, a copy of the lease agreement and additional permits if required due to the specific nature of the business.
- Pay the fees. Their amount depends on the type of license and zone. On average, 4-8 thousand dollars.
They often mention in testimonials that it is a difficult task to draw up documents on one’s own. Also, many people encounter problems when trying to open bank accounts. The minimum term is 2 months. iWorld will organize comprehensive legal support at all stages of opening a company and advise on related areas.
Cooperation with lawyers
Legal assistance and support from iWorld can be provided comprehensively or separately for each of these points:
- company registration
- opening bank accounts (personal and corporate);
- Bookkeeping and periodic audit by iWorld experts;
- obtaining Emirates ID (UAE residence permit) for founders, employees and their family members.
Signing a contract with iWorld guarantees the timely fulfillment of legal obligations in full. Anonymity is also guaranteed, as it is part of the business ethics of an international organization. Reviews of iWorld raise no doubts about the competence of its employees.
Getting Emirates ID
After obtaining a license, a businessman has the right to apply for a residence permit. Emirated ID (UAE residence permit) through company registration is issued for a period of 2 years, with the possibility of multiple extensions. Residence permit status is required for various purposes, including opening a bank account, obtaining a driver’s license, renting real estate and health insurance. Judging by the feedback from non-residents, it is extremely difficult to organize all these processes without an ID-card.
Benefits of the Emirates ID
Based on the experience of iWorld lawyers as well as real client testimonials, the pros of residency and business relocation to the Emirates are as follows:
- strategically favorable location of the country;
- developed commercial and social infrastructure;
- 100% repatriation of capital;
- extended rights to foreign property;
- no tax on capital gains, dividends, royalties, real estate income of foreign investors;
- absence of strict currency regulation and exchange control;
- digitalization and transparency of state supervision.
According to a study by Kamco Invest, companies registered in Abu Dhabi and Dubai showed a 50% year-on-year increase in net profit in 2023. The trend holds true for 2024 as well, despite changes in taxation.
The iWorld lawyers also note that despite the overall increase in accounting and tax consulting costs, the positive trend remains. Especially for certain activities and forms of ownership for which fiscal incentives are available. Finding favorable tax opportunities, as iWorld notes, is one of the most frequent requests from their clients after residency. The support of competent lawyers helps to find a favorable solution in 100% of cases.
