The United Arab Emirates is the Middle East's second largest economy, after Saudi Arabia, and one of the wealthiest countries in the region on a per capita basis. Its GDP in 2021 was worth US$ 402.9 billion (UAE Federal Competitiveness and Statistics Centre).
With the beginning of oil exports in the early 1960s, the country's society and economy have been transformed. Today, the UAE's economy is the most diversified in the Gulf Cooperation Council (GCC) and has become an important global landmark, international aviation and maritime trade hub. After diversification efforts from the government, the country is now much less reliant on oil and gas and is economically focusing on tourism and business. According to the latest World Bank report, the UAE was ranked first in the Arab world and 11th globally, making it a hotspot for foreign investors.
Why consider the UAE?
To penetrate the UAE mainland market and accommodate locally-based customers and/or governmental bodies, UAE mainland establishments are the only option. In certain cases, foreign investment into UAE mainland companies require a UAE shareholder or agent (either Emirati individual or fully Emirati owned legal entity).
There are currently around 40 Free Zones operating in the UAE. Some Free Zone are "themed" and designed around one or more commercial categories (catering for specific industries), e.g. Dubai Health Care City, Dubai International Finance Centre (the Dubai financial centre) or the Dubai Gold and Diamond Park only offering licenses to companies within those categories. Other free zones are rather general, e.g. Dubai Multi Commodity Centre, offering a wide range of commercial activities.
Investors can either register a new limited liability company in the form of a Free Zone Establishment (FZE) with one shareholder or a Free Zone Company (FZC) with two or more shareholders or establish a branch or representative office of an existing or parent company based within the UAE or abroad.
The main advantages of setting up in one of the Free Zones are:
• 100% foreign ownership possible
• Corporate taxation incentives
• Freedom to repatriate capital and profits
• Full exemption from import duties (outside the Free Zone it is 5%)
• Reduced bureaucratic red tape
• State of the art infrastructure
• Most procedures are in English