A lot of time citizens of the UK have questions regarding, being a United Kingdom citizen and resident, is it possible to incorporate and run a business in Dubai, UAE. Honestly, this is a very valid concern and the answer is Yes, it is possible for UK citizens to incorporate companies in the UAE.
Now another question, which always requires a solution regarding “Can they save all taxes just by setting up a business in Dubai? Answer to this important query is it depends on a couple of factors like personal tax in UAE is 0% but in UK percentage is significantly higher similarly for dividends no tax in UAE.
UAE and UK have a Double Taxation Agreement (DTA) in place which helps individuals and businesses avoid being taxed twice on the same income, if you fulfill certain factors like residency status and income type.
Difference between personal tax residency and corporate tax residency?
When it comes to personal tax residency, if you are personally based in UAE, doing your day-to-day expenses in Dubai across UAE for the majority of the UK nationals it should be at least 275 days. Regarding the company, if it’s based, operated and contorted in UAE. We recommended speaking with our tax advisor to assess how the treaty applies to your situation.
Benefits of Incorporating company in UAE?
Whether you are planning to serve clients or customers based in UAE or abroad, UAE has multiple options available starting from setting up a company in Mainland or in Freezones (designated or undesignated freezones) depending on your business requirement. UAE as a country completely understands the importance of planned infrastructure, best banking solutions and tax benefits etc.
UAE in the last five years had spent heavily on creating an infrastructure of different industries, to provide an ecosystem to companies based abroad and this makes UAE a perfect location. When it comes to product related industries from Industrial to Logistics to trading, governments provide separate benefits, so that multiple industries-based companies can perform their business.
How to set up an entity in the UAE from the United Kingdom?
Company Registration in Dubai for UK Businesses is confusing for mostly all entrepreneurs/investors as it involves multiple steps where you require right guidance from a specialist who can help you at each step from initial consultation till incorporation and even all ongoing regular requirements.
Below are the UK to Dubai Setup & Expansion Guide mentioned regarding Company Registration in Dubai for UK Businesses, but there can be additional steps depending on freezone or mainland jurisdiction, business activity and shareholding structure.
1. Identification of Business Activity
Once the decision of starting a business. Firstly we need to confirm, what are the required business activities, can we combine them under one license. Many times, authorities do not allow business activities from different groups under one business license. Also, does this business activity require approval from external authorities like Dubai Municipality, KHDA, Dubai Civil Aviation Authority etc.
2. Identification of correct business structure
Correct business structure needs to be decided before initiating the process of the company.
- Limited Liability Company (LLC): LLC entity set up in Dubai or anywhere in the UAE is suitable for businesses with local operations in the mainland area.
- Free Zone Company: Ideal for full foreign ownership, tax incentives, and businesses that can directly deal with clients based in that particular freezone and international clients for VAT and corporate tax benefits.
- Branch Office: A very useful legal option if you’re expanding your UK company into Dubai without setting up a new entity.
3. Finalization of Jurisdiction
- Mainland: Mainland allows businesses to trade all products inside the UAE. It’s a best option for companies who want to trade products or sell services inside the UAE. It makes the process very convenient for UK founders to expand locally without a sponsor.
- Free Zones: Currently there are approximately 45 specialized freezones based inside the UAE. Over 50,000 companies are established in Freezone depending on their business requirements. Many of these companies require to trade products abroad, for them it’s always recommended to set up in a designated freezone to get all tax benefits.
- Offshore: Perfect solution for holding of assets like real estate, equity, trademark, IP based inside or outside UAE. These companies enjoy tax benefits. Setup cost of offshore companies is comparatively lower.
4. Office Location
In Dubai, having an Ejari for a Mainland company is mandatory, as to issue all company related documents. Similarly, for a freezone company having a lease agreement is always required. In Mainland, depending on your preference you can choose the areas for your office but in case of freezones, in case physical space is required, then options are limited for a company as compared to a company based in Mainland.
5. Trade License Issuance
Depending on the jurisdiction where the entity is getting incorporated, we need to communicate with authority, as every jurisdiction has different authorities who release business licenses for the company.
If incorporating a company in mainland Dubai, we need to approach the Dubai Department of Economy and Tourism (DET) for issuance of a license. In case companies based in Free Zones and Offshore, depending on freezone, one need to approach specific authority.
FAQs
- Is it very important to adapt to regulatory updates?
Starting business in Dubai and across the UAE is step one, once the company is set up, then every company requires a knowledgeable and experienced consultant who can build on a regular basis and handle all work related to all authorities guidelines related to your business. - Why Choose OneHub Partners, for an entity setup in Dubai?
OneHub Partners understand that every business is different and require high level expertise to ensure the complete process is up-to-date and fully compliant. They focus on company law compliance, board procedures, director responsibilities, shareholder relations, financial compliance and legal requirements. This allows business owners to manage their companies with ease while focusing on their core business operations. - Is it very important to adapt to regulatory updates?
Currently, there are some updates from authorities on a regular basis to keep it in line with international operations standards and economical goals. It gets very complicated and difficult for businesses to follow guidelines from authorities like DET. - Can You Move Your UK Limited Company to Dubai?
The first step for the entrepreneurs who are looking to move their UK limited company to Dubai should first understand the available legal options. These may include setting up a UAE based wholly owned subsidiary, registering a branch of the existing UK company or incorporating a new company in Dubai and across UAE.