Empower Your Business to Generate More Revenue in UAE

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welcome to UAE free zones explain you know the UAE is becoming a really popular jurisdiction among High net worth individuals to set up companies trusts and Foundations and one of the things that I've learned advising them on setting up trust Foundation companies is that they don't really understand the uae's legal and free zone system listen I get it I was confused by it too when I moved here back in 2015. but understanding the uae's legal and free zone system is key to setting up the right type of entity in the right UAE jurisdiction in this video I'm going to give you a basic overview of the uae's legal and Free Zone systems here we go so here's a little bit of an overview in case you didn't know UAE stands for the United Arab Emirates now the UAE consists of seven different Emirates and each Emirate is kind of like its own state so we start with Abu Dhabi which is the capital Ajman Dubai which of course is the most famous Emirate fujera razakhema Sharjah and umal Quang if you like our content please don't forget to subscribe to our YouTube channel by clicking that subscribe button we'd really appreciate it and for more strategic tips on International tax and wealth planning subscribe to our email list and follow me on LinkedIn links below now the ue's legal system is a little different than it is in many countries that you're probably familiar with we have the UAE federal law that applies emirate-wide right so this applies in all of the Emirates within the UAE then we have the laws of each Emirate much like you would have the laws of a state in the United States for example and then you have the free zone laws So within each Emirate their designated Geographic areas that are known as free zones and they have their own rules and regulations governing the business that is conducted within those free zones so incorporating in the UAE you have your Mainland companies which are your companies that are Incorporated in an Emirate and then you have your free zone companies which are companies that are Incorporated Within one of these free zones that I was just talking about so they're Incorporated in this geographic area of the free zone so first I'm going to talk a little bit about Mainland companies Mainland companies can conduct business anywhere in the Emirate where they are Incorporated so think about stores hotels restaurants stuff like that now a hundred percent Ford ownership of Mainland companies is permitted but a lot of times it's a lot easier to take on a local partner that owns 51 now that doesn't mean they're going to get 51 of the profits you can negotiate that separately so like a lot of times you can get a local partner for a flat fee or a small percentage of Revenue or profit and that oftentimes makes setting up the local or the mainland company much more easy and efficient you can rent real estate anywhere in the Emirate where your Mainland company is incorporated you can sponsor employees you can bring them from abroad and give them employment visas here in the UAE starting next year Mainland companies are going to be subject to a corporate income tax of nine percent that's comes in effect the middle of next year Mainland companies generally qualify to take advantage of tax treaty benefits the UAE has a lot of tax treaties I think there's 117 right now more than Switzerland and they're probably this is the most flexible business entity type in terms of what types of businesses you can do where now let's talk a little bit about free zone companies free zone companies can only conduct business free zone where they're Incorporated so you're generally not going to see a free zone company that is a store a hotel or a restaurant a free zone companies are generally trading companies or Services businesses that are located within the geographic area of the Free Zone they can only rent real estate within that free zone for example they can however sponsor employees so they can provide employment visas to employees that they they bring from abroad they can also conduct business with the main land from within the free zone so think about for example you have an accounting firm that's providing accounting services from within the free zone to companies outside the free zone that would be permitted you can trade with businesses on the mainland so you can sell products to them one of the nice things about free zones compared to Mainland companies is that free zone companies are exempt from the uae's nine percent income tax now there's a catch though if the free zone company has any revenue from doing business with the mainland then it becomes subject to the ue's income tax they you have to be very careful if you have a free zone company when doing business with the mainland because that's going to trigger the free zone company being subject to the uae's corporate income tax free zone companies generally will also qualify for treaty benefits they're a little bit more restrictive than Mainland companies in terms of the type of business that they can conduct and wear because they're you know restricted to doing business within the geographic era of the Free Zone restricted to the lines of business that that free zone offers licenses for within free zones there's also offshore companies now when we talk about free zone offshore companies IBC international business companies right like a Cayman company or a BVI company these offshore companies can't do business with UAE residents or companies they can't rent office space or premises anywhere in the UAE including the free zones where they're Incorporated they can't sponsor employees and they generally don't qualify for treaty benefits basically you can incorporate this company here in the UAE but it can only do business out outside of the UAE or with people outside or businesses outside of the UAE so the UAE has trusts and Foundations laws available both under federal law and under free zone laws not all free zones offer trusts and Foundations but I'm going to get into which ones do so first off let's talk about trust so you can form a trust under UAE federal law which means it's it's basically a Mainland trust and can operate anywhere within the UAE you can also set up trusts in the Dubai International Financial Center difc or in the Abu Dhabi Global markets free zone adgm foundations are available in three different UAE free zones in difc adgm and the Raz al-kama International Corporate Center rack ICC I hope you found this video informational if you have any questions about incorporating in the UAE or which type of company is best for you Mainland free zone offshore we can help you figure this out we've advised a lot of people on setting up companies trusts and Foundations in the UAE if you have any questions feel free to reach out info Esquire group Com or .esquiregroup.com thank you