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T H E P R I M E R U S P A R A D I G M
Incorporation of a Branch of a Foreign Entity in
UAE and its Benefits
Many foreign companies wish to
expand their business to the Middle
East. Dubai serves as a safe haven
for these companies in light of the
many advantages they get in terms of
tax benefits, convenient labor laws
and infrastructure. Dubai is a well-
respected pathway to the East, and since
it became a financial hub, companies
that engage in all types of business
activities are now looking to establish
a presence here. Dubai has free zones,
which provide international investors
with the opportunity to expand into the
Middle East and beyond. Free zones
are basically economic zones created
by the Government of Dubai to provide
investors an opportunity to incorporate
a wholly owned company, as opposed to
obligating them to have a United Arab
Emirates (UAE) national shareholder.
With a wide range of options
available for free zone company
incorporation, you can select one which
reflects the nature of your business.
Whether it is the location, the brand or
the facilities of the free zone which attract
you, you can find the best solutions based
upon your legal and business preferences.
As each free zone is set up to facilitate
certain types of business activity or
transactions, it is important to receive
legal advice about which suits the needs
of your business.
With 100 percent foreign ownership
of a company in the UAE and the ability
to trade or operate within the free zone,
a free zone entity can provide great
benefits to those wishing to expand
their operations to the Middle East. In
addition, with visa facilities available,
you may even opt to move to the UAE
with your business. While expanding
your operations and developing a well-
respected international presence, why not
do this in the most economically efficient
way possible, too? With 0 percent import
and export tax, 100 percent repatriation of
capital and profits, no corporate taxes for
15 years (renewable for an additional 15
years) and no personal income taxes, you
are set up to have even more success and
profitability.
Free zones themselves are also
extremely helpful when it comes to
setting up in the UAE as they provide
excellent assistance with labor
recruitment, sponsorship and housing.
Furthermore, the free zone areas
themselves are well equipped with
amenities, facilities and communication
infrastructures required to set up a
business. The increased number of
free zones operating in the country is
serving to offer a wider range of options
to potential investors, and allow a real
existence in the UAE through offices
or warehouses.
Branch Company vs.
Representative Office
The Commercial Company Law covers
the formation and regulation of branches
and representative offices of foreign
companies in the UAE, and stipulates
that they may be 100 percent foreign
owned, provided that a local service
agent is appointed. Appointment of
a local service agent is an absolute
International ­ Europe, Middle East & Africa
Hassan Mohsen Elhais is senior partner at Al Rowaad Advocates,
where he specializes in the drafting of all statement of claims,
memos and consultation with regard to various kinds of litigation.
Al Rowaad Advocates & Legal Consultants
Monarch Office Tower, 6th floor 602
One Sheikh Zayed Road, PO Box 40073
Dubai, United Arab Emirates
+971 4 325 4000 Phone
+971 4 358 9494 Fax
hassan@professionallawyer.me
awf.ae
Hassan Mohsen Elhais