UAE: A Different concept of international jurisdiction Globalserve Moscow Seminar September 2013 By...
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Transcript of UAE: A Different concept of international jurisdiction Globalserve Moscow Seminar September 2013 By...
UAE: A Different concept of international jurisdiction
Globalserve Moscow SeminarSeptember 2013
By Phani Schiza Antoniou
• UAE OR ‘The Emirates ‘•Situated in the southeast of the Arabian Penisula on Persian Gulf•Federation of seven emirates since 1971•Dubai, Abu Dhabi, Ajman, Fujairah, Ras Al Khaimah, Sarjah, Umm Al Quwain•Legal system is founded jupon civil law principles and Islamic Shari’a law, the latter constituting the guiding principle and source of law8.19 million population out of which 15% only are locals•Non Oil Sector contribbutes 71% to GDP
UAE- SOME FACTS
• Strategic Location -closest proximity to top European and Asian markets: Access to 2.2 Billion Consumers
• World-class free zones -100% foreign ownership of business
• 100 per cent repatriation of capital and profits• Easily accessible raw materials, cheap energy sources• Zero corporate profit taxes and personal income taxes.• No minimum capital requirement to establish a limited liability company.• Advantageous Tax Treaties with 71 Countries • Stable Political Environment • World Bank ranked UAE 23rd for Doing Business in 2013•Offshore location with zero taxation with the exemption of foreign banks and oil exporting cos
WHY UAE?
•There are 3 main options for registration of company in UAE :
•Mainland company registration •Freezone onshore •Offshore company
Types of Company registration
Gives access to the local marketMaximum foreign participation allowed 49%Local partners UAE nationals with minimum 51% participationNeed office space/ warehouseResidence permit is issued Employee VISAs are eligibleNo taxation No foreign exchange restrictions
1. Mainland company registration
100% foreign ownership Could do business with companies within the free-zone or outside the countryCan do business locally only through a local distributor being a company registered in the mainlandThere are free-zones which provide license with and without taking any genuine office space/warehouse Residence permit issuedEmployee VISAs are eligible to applyNo taxation No foreign exchange restrictions
2. Free-Zone onshore company Registration
Do business only outside UAECan have tax free bank account in UAE No employee VISAs are eligible to applyNo restrictions on foreign exchangeNo taxation
3. Offshore company formation
UAE OFFSHORE COMPANIES
Offshore
Jebel Ali Offshore (JAFZA)
Must for Dubai Property
Ownership
Corporate Directors are not
allowed
Ras Al Khaimah Free Trade Zone
(RAK) International Co
Corporate Directors are
allowed
UAE ONSHORE COMPANIES
Onshore
Mainland
Limited Liability Company (LLC)
Foreign Partner cannot own
more than 49%
Professional License
100% Foreign Owned but
Limited Sectors
Branch Setup
100% owned by Parent Co
Free Zones
Over 40 Free Zones to Choose From
100% Foreign Ownership
UAE RESIDENCY
• Fastest and Easiest way to become UAE Resident By obtaining “UAE Investor Visa”
• Setup a free zone company– 100% foreign ownership – No paid up share capital– No corporate tax– Travel to and from the UAE is easier– No personal income tax in the UAE– The UAE is an OECD “white listed” jurisdiction– Renewal Residency Visa every 3 years
COMPARISON
RAK OFFSHORE RAK ONSHORE
Director Legal entities allowed
1Yes
1yes
Secretary compulsory but can be same as director
Yes Yes
Registered agent needed Yes Yes
Shareholder :Minimum shareholdersNo minimum capitalLegal entities allowed
1Yes
Yes
1YesYes
Limited liability companies √ √
ConfidentialityCompany register not available for public inspection
Yes Yes
Time for registration 2 days but 2 days but
Tax No No
COMPARISON RAK OFFSHORE & RAK ONSHORE
COMPARISON
RAK OFFSHORE RAK ONSHORE
Operations Outside UAE only In Freezone and through UAE local distributor in UAE
Establishment No No
Employees No Min 1
Annual accounts Keep records only Yes
Employee VISA No Yes
Ownership property No except Jebel ali offshore ( Jafza) but
corporate directors not allowed
Yes
COMPARISON RAK OFFSHORE & RAK ONSHORE
Ratified 7/6/2013 and is expected to enter into force as of 2014But limited scope of applicationCovers the UAE and 7 emirates governments, the Central Bank of UAE, Investment Authorities of Abu Dhabi and of Emirates, any financial institution or investment entity , establishment, agency or any other body wholly owned by the government of UAE WHT on dividends/interest is zero, is paid to an entity as above describedContains exchange of information clauseLimitation of benefits clause i.e. tax treaty benefits may be denied if proven that the only reason was taxFacilitates inflow of investments into Russia ( note that currently UAE investors in Russia pay 20% tax on repatriated profits, 15% on profits from interest and 20% on Capital gains
Double Tax Treaty with Russia
For trading or for services internationally and in the region For Asset protection being the last shareholder in a structureProperty investment in UAE
USES