Features of a local company in the United Arab Emirates

Features of a local company in the United Arab Emirates

A large number of businessmen choose a local company in the United Arab Emirates, in this article we will analyze the main features of such companies.

1 - Mandatory presence of a local shareholder;

A foreign owner has the right to a maximum of 49% of the shares of a local company, and a part of the shares, at least 51%, must be owned by a citizen of the United Arab Emirates or a company whose owners are 100% UAE citizens.

To get out of this situation, a contract is concluded with a local citizen, in which a refusal of profit and a refusal to interfere in the management of the company are prescribed. In gratitude, the local partner receives a fixed annual fee. The amount of remuneration is negotiated individually, there is no specific amount.

2 - A local company can have no more than 50 shareholders;

A common form of registration is "Limited Liability Company" or LLC. If we draw analogies, we can compare it to the usual form of LLC (limited liability company).

By registering a company in the form of LLC, shareholders are assigned liability comparable to their share in the company.

3 - For what purposes is the local company used?

Local companies have the full right to operate in the domestic market of the Arab Emirates, in contrast to FEZ companies, which can operate within the FEZ or in the international market.

Also, having a local company, you can take part in government procurement.

Virtual office space is not at all suitable for a local company, but this is not a problem against the background of a large number of rented offices at affordable prices.

Shareholders can obtain a UAE resident visa.

4 - Tax policy for a local company;

There are no taxes on income, dividends and royalties on the territory of the United Arab Emirates. Also, there are no restrictions on the withdrawal of profits and capital from the country.

When carrying out trading activities in the domestic market, you must pay VAT at the rate of 5%.