The United Arab Emirates - Dubai is said to be a tax haven which is true. Often there is 0 percent in tax, but there are some exceptions such as oil and gas companies (55%), import tax/duty (20%) banks (5%) and luxuries (10%). The low or nonexistent taxes that exist is the big reason to why more companies now establish in the region.
Picture: Johanna Nyholm - Event Establish in UAE - Dubai
There are about twenty tax-free zones, each with its special focus. Establishment in one of these zones leads to a tax exemption for 50 years and there are no customs duties, import duties or currency restrictions. There is also no doubt that these zones attract companies from around the world. The tax-free zones offer modern offices, infrastructure and access to a variety of services.
This has resulted in that as much as 9 out of 10 companies in the enterprise list "Fortune 500" are represented in Dubai, and 6 of these 9 companies have headquarters in the region. The Free zones also means that the company's ownership structure remains intact when 100 percent of the share capital may be retained by the current owner.
This is not the case if you choose to establish in the UAE outside one of these free zones. Then the establishment is made through a local partner - sponsor and the rule is that at least 51 percent of the shares will be owned by the local representative who usually is a person who belongs to an influential family.
This partner can be active in the company's activities which can be recommended since these families corporate groups may consist of a couple hundred different companies in a variety of industries, making it possible to set up business quickly if you manage to take advantage of various synergies.
A partner can also be passive, which means that they are not involved at all, but you have access to the various business networks that can lead to the right opportunities for the future.
Typically, the company may pay an annual fee for a partner that can vary in amount, one of the families in Dubai charges a fee of 100.000 U.S. dollars per year. However, there are bargaining possibilities depending on the partner's commitment and what it will include.
There is also a possibility that this share rule of 51 percent owned by local partners may disappear in the establishment of businesses outside of free zone. But in regard to this, they have not made a decision yet.
Cecilia Helland