Investment Legislation in the UAE
Investment Legislation in the UAEUpdated on Friday 16th September 2016
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Because of its flourishing economy and non-restrictive taxation matters, the United Arab Emirates attracts a great number of foreign investors who want to set up a business here. Even though the country has not implemented a legislation targeting foreign businesses, each Emirate has its own rules and regulations regarding the rights and investment opportunities for global players.
Our attorneys in Dubai can help you by offering more details on the investment legislation in the UAE so that you can correctly set up an investment company.
Reasons why UAE attracts foreign direct investments
Foreign investors are attracted by the benefits they are granted with when managing a company in UAE such as no corporate taxes for most types of companies, no limitations on the repatriation of profits and no direct income taxes.
The Company Law does not allow full foreign ownership of companies in Dubai, but the Emirate’s free zones do permit setting companies that are 100% owned by international entrepreneurs. Moreover, in order to compensate the lack of legislation on foreign investments, several international agreements were signed:bilateral and multilateral international treaties, double tax agreements, international cooperation treaties etc.
For a complete list of all UAE’s international agreements and further information on legal issues regarding foreign investments in UAE, please contact our law firm in Dubai.
Regulations for foreign investor companies in UAE
Federal Law applies to all seven Emirates replacing the local laws of each emirate. Moreover, within each emirate, there are free zones which have their own laws which might be different from UAE laws (free zones may differ, but they have many common elements). For example, in Dubai International Financial Centre known as the Financial Services Free Zone, English law was adopted as the prevailing law, in order to facilitate business for foreign investors.
When it comes to the permitted type of activities, foreigners must know that, for a free zone company,a trade license is needed for every activity developed, for example consulting or trading etc. Holding shares or participating in ventures is allowed.For offshore companies, many activities are allowed for one company such as business and management consultancy, general trading, holding companies/holding shares in other companies in the UAE or outside etc. Restricted activities for offshore companies are domains like aviation, financial, media, oil, and gas, precious metals.
In order to find out more about both permissions and restrictions regarding investment activities in the UAE, please contact our attorneys in Dubai who will offer complete legal assistance in the matter.