Doing business in the United Arab Emirates

Transcription

1 Doing business in the United Arab Emirates 2013 / Grant Thornton UAE. All rights reserved. 1

2 Content Introduction 3 UAE Profile 4 Economy 7 Taxation 8 Setting up a business in the UAE 9 Dubai International Finance Centre 12 (DIFC) Immigration and Visa Process 13 UAE Free Zones 14 About Grant Thornton 15 Contact us 19 Appendices 22 UAE Free Zones Grant Thornton UAE. All rights reserved. 2

3 Introduction The United Arab Emirates (UAE) has continued to strengthen its position within the global market. The opportunities which are present, along with the UAEs strong connections with some key financial and international markets, makes this a region of choice for dynamic businesses. Investment in the UAE reflects the continued growth of the region post the recent economic downturn experienced around the world. Economic restructuring has been underpinned by efforts to strengthen the business climate, boost investment and foster the emergence of a more vibrant private sector. The UAE aims to be a regional financial hub and the present market conditions, external market feedback and optimism indicate a positive change in trends. This guide will provide an overview of the financial, business and legal infrastructure, aswell as a key insight into doing business within the UAE. Hisham Farouk, Managing Partner, Grant Thornton UAE 2013 Grant Thornton UAE. All rights reserved. 3

4 UAE Profile Capital: Abu Dhabi Largest city: Dubai Main language: Arabic Main religion: Islam International dialing code: +971 The UAE has continued to grow to become one of the largest economies in the Middle East. The country offers endless investment opportunities to local and international investors and attracts trade due to a number of free zones located throughout the Emirate which offer lucrative incentives attracting investment. Currently there are over 20 free zones in the UAE which offer differing benefits throughout the region allowing investors to chose the favorable option for there needs. Geographical Location The UAE is a federation of seven emirates, the constituent emirates are Abu Dhabi, Dubai, Sharjah, Ajman, Ras al-khaimah, Fujairah, and Umm al-quwain. The capital is Abu Dhabi, which is also the state's center of commercial and cultural activities. Dubai is seen as the most attractive emirate for business. The UAE is located on the Eastern coast of the Arabian peninsula. It is within close proximity to Oman, Saudi Arabia and Qatar. It is located within the northern approach to the Strait of Hormuz, a pivotal point for world crude oil. The total area of the UAE is approximately 77,700 square kilometers, Abu Dhabi being the largest emirate and Ajman being the smallest. Petroleum and natural gas are two of the predominant natural resources which encourage investment and trade. The UAE has close transport links internationally, with airports located in Abu Dhabi, Dubai and Sharjah. Dubai airport serves as one of the major international hubs in the Middle East, which allows it to contribute to the economy with current figures showing that it supports over 250,000 jobs in Dubai and contributes over US$22 billion, which represents around 19% of total employment in Dubai, and 28% of Dubai s GDP. The aviation industry continues to grow, with expected figures in 2020 showing a significant increase to this industry. Population The population of the UAE is 8.1 million according to united nations statistics. The region has a high migration rate and has one of the worlds largest growing populations specifically due to the migration. The region has a large expatriate community who come from the United States, India, Pakistan and the United Kingdom to name a few. This has supported the UAE in ensuring the highest skilled workforce is available to support the local community to continue strengthening the economy Grant Thornton UAE. All rights reserved. 4

5 Language The native language of the UAE is Arabic which is widely spoken by the local community. English is the second language of the UAE, however due to the high levels of migration the region also benefits from a diverse language skill set with the following languages spoken across the UAE; Urdu, Hindi, Persian, Pashto, Malayalam, Bengali, Tamil, Balochi, Russian, Tagalog and Mandarin Chinese. Climate Due to the UAE being mainly located on prior desert land, it lies in the arid tropical zone. The climate is characterized by high temperatures and humidity in summer with the temperature reaching above 50 degrees celsius. During the winter months, the region has irregular rainfall with the annual average rarely exceeding no more than 10 inches. Currency The currency for the UAE is Dirhams, the currency abbreviation is AED. There are a number of international banks located within the region which makes foreign currency exchange easily accessible. Business hours/time zone The working week in the UAE is Sunday to Thursday with Friday and Saturday being the national weekend. The time zone is +4hrs GMT which allows the UAE to continue to respond to international business needs throughout the world, with many seeing the region as the MENA business hub. Public holidays The public holiday dates differ annually in the UAE dependent on the month that Ramadan falls. The government has confirmed the following public holidays for 2013 (dependent upon the moon the date may change): 1 Jan New Year's Day 24 Jan Milad un Nabi (Birth of the Prophet Muhammad) 4 Jun Lailat al Miraj (Night of Ascension) 7 Aug Eid al-fitr (End of Ramadan) 14 Oct Eid al-adha (Feast of Sacrifice) 4 Nov Al-Hijra (Islamic New Year) 2 Dec National Day The following public holidays have been confirmed for 2014 (dependent upon the moon the date may change): 01 Jan New Year's Day 13 Jan Milad un Nabi (Birth of the Prophet Muhammad) 27 May Lailat al Miraj (Night of Ascension) 28 Jul Eid al-fitr (End of Ramadan) 04 Oct Eid al-adha (Feast of Sacrifice) 25 Oct Al-Hijra (Islamic New Year) 02 Dec National Day Government The UAE is a constitutional federation of seven emirates; Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-qaiwain, Ras Al Khaimah and Fujairah. The federation was formally established in December of The term of elected office for the Vice President is five years, with the current Vice President of the UAE being Sheikh Mohammed bin Rashid Al Maktoum. The UAEs political system, which is a unique combination of the traditional and the modern, has underpinned this political success, enabling the country to develop a modern administrative structure, whilst ensuring that traditions are maintained, adapted and preserved Grant Thornton UAE. All rights reserved. 5

6 Investment and business opportunities There are many options open to international companies seeking to establish a business in the UAE. Apart from forming a trading relationship through commercial agencies, for many companies there are distinct advantages in having an on-the-spot presence. This makes it easier to research market prospects, make contacts, liaise with customers and see through the details of any transactions. Having a presence is also important in the context of the commercial culture of the Middle East. Business owners and people in the region prefer to deal with someone they know and trust by building personal relationship. Another regional factor that adds to the importance of having a physical presence is that the buying patterns of some countries served by the UAE are unpredictable, creating a need for first class market intelligence and information. Direct trade International companies wanting to trade directly with the UAE by supplying goods and services from abroad should appoint a commercial agent who is already established in the market. The agent must be a UAE National, or a company solely owned by a UAE National. The foreign principal and the agent in the UAE are required to enter into a commercial agency agreement specifying the products and the territories to be covered by the contract. They should also comply with the relevant provisions of the Federal Commercial Agency Law and the procedures and conditions prescribed therein. It should be noted that a commercial agent can not carry out activities in the UAE unless the name is entered in the Commercial Agency Register maintained at the Ministry of Economy and Commerce Grant Thornton UAE. All rights reserved. 6

7 Economy The economy in the UAE has continued to grow throughout the years and has overcome the economic downturn rapidly. It has increased by more than six fold over the past 26 years to become the fourth largest economy in the Arab world. Recent years has witnessed the emergence of pioneer industries in view of the advantages and incentives granted to investors along with the simplicity of procedures for practicing businesses in the UAE. The UAE economy rose by 20.8% in 2012 to $360 billion supported by diverse sector strength, ranking it third in the Middle East and 30 th in the world. The UAE offers lucrative investment incentives and opportunities to local and internationals investors which are not as widely accessible internationally. Significant among these are no corporate or income tax, no personal income tax, no foreign exchange controls, 100% repatriation of capital and profits, amongst many other benefits which attract foreign investors to the region. Abu Dhabi Abu Dhabi is the capital of the UAE and is ruled by Khalifa bin Zayed Al Nahyan, who also is the president of the UAE. It has a population of over one million people of whom 80% are expatriates. One of the worlds largest producers of oil, Abu Dhabi has actively attempted to diversify its economy in recent years through investments in financial services and tourism. Abu Dhabi has adopted rapid industrialization as a strategic option with a view to diversify the income. As a result the share of GDP of the non-oil sector, mainly the industrial sector has steadily increased. The Government has continued to increase investments in the emirate, besides steps to attract foreign direct investments. With privatization as the key work in the economic development, the Government and the Abu Dhabi Chamber of Commerce and Industry have been making strenuous efforts to attract private capital. This has increased the tempo of the industrial activity and production in the emirate. Dubai Oil has played a progressively diminishing role in the Emirates. In 1985, the oil sector contributed to just under half of Dubai's GDP, in 1993 that figure had fallen to 24% and by 2007 to less than 6%. It has been predicted that by 2015, oil revenues are expected to account for less than 1% of Dubai's GDP. Investment in the UAE reflects the continued growth of the region post the economic downturn experienced around the world. The UAE GDP per capita is currently third in the world and second in the Middle East after Qatar and Kuwait, the UAE has almost US$ 1 trillion in foreign invested assets. Economic restructuring has been underpinned by efforts to strengthen the business climate, boost investment and foster the emergence of a more vibrant private sector which continues to ensure that Dubai is seen as the emerging leader in re-export, following the likes of Hong Kong and Singapore Grant Thornton UAE. All rights reserved. 7

8 Taxation The UAE has no personal income, corporate or withholding taxes. The country is characterised by an almost complete absence of taxation. Bank and Petroleum Taxes With the exception of banks and oil companies no corporate income tax is payable by businesses in the UAE. Oil companies pay up to 55% tax on UAE sourced taxable income whereas foreign banks pay 20% tax on taxable income generated in the Emirate. The taxable income of banks is as per the audited financial statements whereas that of oil companies is as per the concession agreement. Oil companies also pay royalties on production. Customs Tax Imports into the UAE can only be undertaken by those importers who have the appropriate trade license. Import duties have been largely standardised at 5%, but there are many exemptions, including food, building materials, medical products and any item destined for a free zone. Cigarettes are the exception to the general rule with the federal government approving 100% tax., a 50% tax is levied on alcohol. Free Trade Agreements The UAE is under an agreement with the GCC (Gulf Cooperation Council) and therefore required to levy 10% duty on all luxury goods. By law, approximately 70 goods have been exempted from tariffs, including medicines, agricultural machinery, un-worked silver and gold, iron and steel for use in construction, and raw or partially worked materials for use by local manufacturers. Goods produced within the GCC are also exempt from duties as are goods destined for a Free Zone. Municipality Taxes Municipality service charges are levied on individuals living and working in the UAE. Service charge percentages vary among the emirates. A service charge of five to ten per cent is charged on food purchased in restaurants. Furthermore, hotels charge a ten to fifteen per cent service charge per night on room rates. These charges are usually included in the customer s bill, which the municipality will collect from restaurants and hotels. UAE Free Zone Taxes Free Zones contain financial incentives to establish manufacturing industries in the UAE. These are primarily focused on exemption from all taxes and duties levied on profits or production. The major incentives offered by the UAE Free Trade Zones are: 100% foreign ownership with 100% repatriation of capital and profits. No corporate taxes for 50 years No personal income taxes. Exemptions from customs duties. Absence of currency restrictions Grant Thornton UAE. All rights reserved. 8

9 Setting up a business in the UAE One of the important aspects of doing business in the UAE is the legal structure. In the past, each Emirate followed its own procedures governing the operations of foreign business interests. Since 1984, steps have been taken to introduce a codified companies law applicable throughout the UAE. Federal Law No. 8 of 1984, as amended by Federal Law No.13 of 1988 the "Commercial Companies Law" and its by-laws have been issued. The Commercial Companies Law also defines several categories of legal entities which can be established in the UAE. It sets out the requirements for companies in terms of shareholders, directors, minimum capital levels and incorporation procedures. It further lays down provisions governing conversions, merger and dissolution of companies. Licenses The basic requirement for all business activity in the UAE is to secure one of the following three categories of licenses: Commercial licenses covering all kinds of trading activity; Industrial licenses for establishing industrial or manufacturing activity. Professional licenses covering professions, services, craftsmen and artisans; These licenses are issued by the Department of Economic Development with the exception of licenses for hotels and other tourism related businesses which are issued by the Department of Tourism and Commerce Marketing. However, licenses for some categories of business require prior approval from certain ministries and other authorities, such as: Banks, financial institutions and financial service providers - from the Central Bank of the UAE; Manufacturing companies - from Ministry of Finance and Industry; Pharmaceutical and medical products - from the Ministry of Health; More detailed procedures apply to businesses engaged in oil or gas production and related industries. In general, all commercial and industrial businesses in the UAE should be registered with the Chamber of Commerce and Industry Grant Thornton UAE. All rights reserved. 9

10 Setting up a business in the UAE Legal Structure Some of the important legal entities, permitted to be registered under the Commercial Companies Law, are broadly characterized as under: Limited Liability Company A Limited Liability Company can be formed by a minimum of two and a maximum of fifty shareholders whose liability is limited to their shares in the company's capital. At least 51% of the share capital of the company should be owned by UAE National(s). Such companies are recognized as offering a suitable structure for foreign individuals or organisations interested in developing a long term relationship with the local business community. In the UAE, there is no minimum capital required (to be contributed in cash or in kind) for the Limited Liability Company engaged in business activity other than general trading. Although the maximum foreign equity participation in a Limited Liability Company is 49%. Profits can be distributed in different proportions as agreed by the promoters/shareholders of the company. With the approval of the UAE National Shareholder(s), the entire business operations of the company may be entrusted to the foreign shareholder(s). The foreign shareholder(s) can, therefore, claim a higher share of profit in case such shareholder(s) provides exclusive management and/or any special services or facilities to the company. As far as the protection of the minority shareholder(s) interest is concerned, this can be done by way of shareholders resolutions and certain related security documents. In case the UAE national partner is not practical and only acts as the companies local sponsor for annual fee. Supplement agreement will be signed by each parties to ensure and the rights and obligations for both. Although the rules and regulations for establishing Limited Liability Companies are generally similar in all the seven Emirates of UAE. Branches and Representative Offices of Foreign Companies Foreign countries may not practice its main business in the state, and may not establish branches unless licensed to do that by the Ministry of Economy after obtaining the approval of the concerned authorities, which license shall specify the business it is licensed to practice, provided that such license may not be issued unless the company has a national agent. The obligations of the agent towards his company and third parties shall be limited to rendering the services required for the company without holding any responsibility or financial commitment in respect of his company's branch or office business or activity inside the Emirate or abroad Grant Thornton UAE. All rights reserved. 10

11 Setting up a business in the UAE The representatives offices and branches of the foreign companies shall be the headquarters of its business and its business shall be subject to the provisions of the UAE law. The main difference between a branch office and a representative office is that a branch office may exercise freely the activities for which it is licensed whereas a representative office may practice only promotional business for the products and services provided by the parent company. The branch name and activity should be the same of the parent company in the country of origin. The foreign companies and its branches shall have an independent budget, independent profit /loss accounts, and shall have an auditor. If the foreign companies or its branches practiced their business inside the state without carrying out the above mentioned provisions, the persons practicing such business shall be personally and severally responsible for that. Professional Firm Under the local laws of the various Emirates, foreign nationals are permitted to open a Professional firm in their own name or in partnership with UAE Nationals or foreign nationals to practice a vocation or a profession such as legal consultancy, IT services, accountancy, management consultancy and other similar services. Such establishments can, as per current regulations, be 100% foreign owned and do not require a UAE National as a partner. However, it may be noted that for carrying out certain specific professional activities, it is necessary to comply with the related laws and regulations which include obtaining prior approvals from the concerned Government and Local Authorities and appointing a UAE National as a Partner or Service Agent Grant Thornton UAE. All rights reserved. 11

12 Dubai International Finance Centre The Dubai International Finance Centre more commonly known as DIFC houses some of the largest financial services, banking, legal and accountancy firms in the world. It was developed and resembles the financial hubs in New York, London and Hong Kong. Its primary aim is to serve the vast region of the Middle East, North Africa and South East Asia, which allows many to believe that Dubai is soon to become the MENA business hub of the world. The DIFC focuses on several sectors within the financial industry such as banking services, capital markets, asset management and fund registration, insurance and reinsurance, Islamic finance, business processing operations and ancillary services. The Dubai International Finance Centre was established to create a regional capital market, offering investors and issuers of capital world class regulations and standards. The hallmarks are integrity, transparency and efficiency. The DIFC offers organisations that reside there a highly attractive investment environment including: 100% foreign ownership 0% tax rate on income and profits Wide network of double taxation treaties available to UAE incorporated entities No restrictions on foreign exchange or capital/profit repatriation Transparent operating environment with high standards of rules and regulations Strict supervision and enforcement on money laundering laws State of the art infrastructure, data protection/security However, unlike offshore tax havens, DIFC is a fully fledged onshore capital market, comparable to Hong Kong, London and New York. The Dubai Financial Services Authority (DFSA) As the independent regulator of financial and ancillary services undertaken in or from the DIFC, the DFSA licenses, authorises and registers businesses and individuals who wish to conduct these services in the Centre; supervises their activities and will enforce the law where necessary. Grant Thornton UAE is registered by the DFSA as Approved Auditor and Ancillary Service Provider. For further information relating to DIFC, please contact us Grant Thornton UAE. All rights reserved. 12

13 Immigration and Visa Process It is a mandatory requirement that all companies register with the Ministry of Labour and Department of Immigration in order to employ a foreign workforce. Business travellers are allowed to visit and can obtain a visa prior to travel from any reputable and registered agent to attend meetings, training, exhibitions etc. Citizens from the following countries can obtain a visa on arrival which is valid for 30 days and can be extended for another 30 days from the Ministry of Immigration: Andorra, Australia, Austria, Belgium, Brunei, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, New Zealand, Norway, Portugal, San Marino, Singapore, South Korea, Spain, Sweden, Switzerland, The Netherlands, United Kingdom, US and Vatican. GCC Country Residents Residents of the GCC who have a valid residence visa for at least 180 days can obtain a visa on arrival for 30 days which can be extended for a additional 30 days. Applying for a visa due to work All applications for employing foreign nationals must be approved by the Ministry of Labour. Every company is required to register and obtain the Establishment card from the Ministry of Labour. Once the application has gone through clearance the Dubai department of immigration will issue the entry permit. The employee will be required to undergo a medical check and obtain a cleared medical report. Once the cleared medical report has been obtained, the employee will be issued with a two year visa (three year in a free zone) which can be renewed pending approval from the employer. Consequently, the employer will then need to apply for a Labour card after which the employee will be able to commence employment for the respective company. Emirates ID card Once the visa has been obtained, the company will put in a respective application for a Emirates ID card. The employee will be required to go to the relevant office (as mentioned when undergoing their medical test), to have their picture and fingerprinting done. Once this has been done, they will receive their Emirates ID card within 30 working days. Investor Visa A Partner of a Limited Liability Company (LLC) or a professional firm can obtain a investor visa which is issued from the Immigration Department. They require no further approval and this can be obtained without authorization from the Ministry of Labour. However, this must be checked on the intended date Grant Thornton UAE. All rights reserved. 13

14 UAE Free Zones The introduction of Free Zones has transformed the economic market of the UAE within the last 20 years, bringing about tremendous change in the industrial scene of this young nation. The pioneer in the Free Zone Empire in the UAE is Jebel Ali Free Zone, which was started in Dubai on 9th February, Jebel Ali Free Zone being the first Free Zone in the country has created the benchmark for regulations and incentives. Its rapid growth has also provided a powerful economic inspiration to the other Emirates, which have set up their own Free Zones to attract investment. Success of any viable Free Zone largely depends on quality of service and facilities it offers and the UAE is a brilliant example of this hypothesis. With the number of Free Zones increasing, their impact on the UAE economy has deepened. The primary UAE Free Zones are listed hereunder and each provide differing incentives which can be found in the appendices: 1. Jebel Ali Free Zone, Dubai (JAFZA) 2. Dubai Airport Free Zone (DAFZA) 3. Dubai Multi Commodities Centre & Jumerah Lake Towers (DMCC & JLT) 4. Dubai Internet City (DIC) 5. Dubai Media City (DMC) 6. Dubai Healthcare City 7. Dubai Studio City (DSC) 8. Dubai International Academic City (DIAC) 9. Dubai knowledge village (DKV) 10. International Media Production Zone (DMPZ) 11. Dubai Biotechnology & Research Park ( DuBiotech) 12. Dubai Outsourcing Zone (DOZ) 13. Dubai World Central (Dubai Logistics City) 14. Dubai Gold & Diamond Park,(DGDP) 15. Sharjah Airport International Free Zone (SAIF Zone) 16. Hamriyah Free Zone, Sharjah (HFZ) 17. Ras Al Khaimah Free Zone (RAK) 18. Saadiyat Free Trade Zone 19. Abu Dhabi Airport FZ 20. Twofour54 Abu Dhabi 21. MASDAR City Abu Dhabi 22. Khalifa Industrial Zone (Kizad) - Abu Dhabi 2013 Grant Thornton UAE. All rights reserved. 14

15 About Grant Thornton 2013 Grant Thornton UAE. All rights reserved. 15

16 About Grant Thornton UAE Grant Thornton UAE Grant Thornton UAE is a member firm within Grant Thornton International Ltd We have been providing assurance and advisory services to growth oriented, entrepreneurial companies which are based in all markets and industries since The extensive local and regional knowledge gained through the years has supported the development of the firm s reputation for providing a distinctive client service to its local, national and international client base. Our Middle East Reach Grant Thornton combines the international reach, depth and expertise of the larger firms with the personal attention, value for money and relationship approach of the smaller firms. This service focus has made us the leading firm in each of our chosen markets, and the business advisers of choice to dynamic businesses. Our extensive Middle East reach provides us with access to over 600 professional employees, spread across 18 offices. The firm adopts best in class international tools, methodologies and independence/ risk management standards across all service lines in order to ensure the service provided is to the highest technical, professional and ethical standards for the benefit of all our clients. Grant Thornton offices in the UAE Grant Thornton Dubai PO Box 1620 Dubai, UAE T +971 (4) E [email protected] Grant Thornton Abu Dhabi Al Sifa Tower 1, Al Maryah Island 24 th Floor, Office no 2462 PO Box T +971 (2) E: [email protected] Grant Thornton DIFC Office Office No.5, Level 3 Gate Village 4, DIFC, Dubai, UAE T +971 (4) E [email protected] 2013 Grant Thornton UAE. All rights reserved. 16

17 About Grant Thornton International 35,000 people, in over 120 countries with a combined revenue of over $4bn Grant Thornton is one of the world's leading organisations of independent assurance, tax and advisory firms. The combined network revenues equated to $4.2 billion in 2012, which represented a10.4% global growth, the highest growth rate in our sector. In 2012 regional growth increased to over 18% in the Middle East. These firms help dynamic organisations unlock their potential for growth by providing meaningful, actionable advice through a broad range of services. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to solve complex issues for privately owned, publicly listed and public sector clients. Our member firms are well versed with delivering a consistent and distinctive client service across borders, which ensures a seamless service for multi-national organisations. Over 35,000 Grant Thornton people, across 120 countries in over 600 offices are focused on making a difference to clients, colleagues and the communities in which we live and work Grant Thornton UAE. All rights reserved. 17

18 Dynamic services for dynamic clients We offer a comprehensive suite of services for dynamic organisations of all sizes. Whether you are an SME that has just set up or a large business wishing to expand our tailored services will support your growth. To find out more visit Grant Thornton UAE. All rights reserved. 18

19 Contact us 2013 Grant Thornton UAE. All rights reserved. 19

20 To find out more contact us Hisham Farouk is the Managing Partner at Grant Thornton. Hisham began his career in assurance services and has worked with a number of large family owned businesses in the region. He further went on to develop advisory capabilities for the firm. He has wide exposure in assurance and management consulting services and has advised multinational, regional and local businesses on a wide range of issues including compliance and regulatory matters, as well as conducting numerous valuation exercises, due diligence and feasibility studies. Hisham has completed the professional leadership programme at Harvard Business School. He is the Client Relations Partner and point of contact for all DIFC related services and sits on the board of a regional investment house. E: [email protected] Mohamed Abu Shaara is the Legal Manager at Grant Thornton. Mohamed has over 12 years of legal experience gained within the professional service sector in both Egypt and the UAE. Mohamed provides client focused and tailored legal advisory services. He has a broad and thorough knowledge of the UAE s commercial and labour rules and regulations. Throughout his career, he has developed key stakeholder relationships and often liaises with governmental authorities to ensure clients needs are supported. Mohamed has experience of working across all sectors and industries. E: [email protected] 2013 Grant Thornton UAE. All rights reserved. 20

21 Unlock your potential for growth with Grant Thornton UAE 2013 Grant Thornton UAE. All rights reserved. 21

22 Appendices 2013 Grant Thornton UAE. All rights reserved. 22

23 UAE Free Zones 1. Jebel Ali Free Zone, Dubai JAFZA is Economic Zones World s flagship operation. One of the world s largest and the fastest growing free zones. Established in 1985, Jafza today is spread over an area of 48 sq. kms and is home to over 6400 companies, including over 120 of the Fortune Global 500 enterprises, from across the world. It is a leading driver of the burgeoning UAE economy. With its impeccable track record, Jafza stands for innovation, customer centricity, transparent operations and entrepreneurial dynamism. The value proposition consists of the integration of products and services offered. The basics of the value proposition include services and incentives, such as 100% foreign ownership, no customs duty, 0% income and corporate tax, no labor restrictions, no currency restriction, and one-stop shopping for services. JAFZA issues various types of company licenses: General Trading License allows the holder to import, distribute and store all items as per Jafza rules and regulations. Trading License allows the holder to import, export, distribute and store items specified on the license. Industrial License allows the holder to import raw materials, carry out the manufacture of specified products and export the finished product to any country. Service License allows the holder to carry out the services specified in the license within the Free Zone. The type of service must conform to the parent company s license, issued by the Economic Department or Municipality of the relevant Emirate in the UAE. National Industrial License is designed for manufacturing companies with an ownership or shareholding of at least 51% with AGCC (Arabian Gulf Co-operation Council) nationals / citizens. The value added to the product in the Free Zone must amount to a minimum of 40%. This company license allows the holder the same status as a local or AGCC inside the UAE. Jebel Ali free zone companies may be formed within Jafza as the following types of companies: Free Zone Establishment (FZE) and Free Zone Company (FZCO): FZE and FZCO applicants can avail of Jafza s unique offer of forming a company as a separate legal entity. A FZE formation can be with a single shareholder with a minimum capital of AED 1 million. An FZCO can be formed with 2 to 5 shareholders with a minimum capital of AED 500,000. Branch Company: Companies having valid registration and license outside Jafza can apply for the formation of a branch Company in Jafza. Special Status Non-Resident Offshore Companies: Jafza, under Jebel Ali Free Zone Offshore Companies Regulations 2003, allows the formation of an offshore Company by individuals or corporate bodies, as a nonresident company, having a corporate legal entity. Grant Thornton UAE are registered as one of the approved offshore agents that can support Grant Thornton UAE. All rights reserved. 23

24 UAE Free Zones 2. Dubai Airport Free Zone The Dubai Airport Free Zone is located on more than 1.2 million sq. meters of land that includes apron space of 473,000 sq. meters, on the north side of the Dubai International Airport. The significant advantages of Dubai Airport Free Zone are its location within the boundaries of Dubai International Airport; fast and effective cargo clearance services; on the-spot presence of international freight forwarders and logistics companies; on-line customer service; excellent business facilities and round -the clock services provided online by the Customs Authority. The highpoint of the Airport Free Zone is the attractive business incentives which include 100% foreign ownership, no corporate or personal income taxes, the freedom to repatriate both capital and profits, full exemption of import duties on goods used in re-export trade and for industrial purposes and the waiving of currency restrictions. Investors planning to conduct their business activities within any Dubai free zone are required to establish their legal presence and obtain Dubai Business license for the activities they propose to undertake. Companies looking to incorporate their services in Dubai Airport Free zone can choose from three types of licenses, which can be selected according to your own requirements: Trade License: import, export, distribution, storage of specific products. Service License: the license's activity should conform to the parent company s license, issued by the Economic Department or Municipality of the relevant Emirate in the UAE. Industrial License: light manufacturing, processing, assembling and packaging. Dubai Airport Free zone offers three different types of companies that can be set up at our premises. Each offers you different options and benefits matching your specific business requirements. You can chose either; Free Zone Establishment (FZE) Formed with one shareholder, either individual (a person) or non-individual (a company). A minimum share capital of AED 1 million (USD 272,500) is required. Free Zone Company (FZCO) Formed by a minimum of two and maximum of five shareholders. The shareholders can be individuals (persons) of non-individual (companies) or a combination of both. A minimum share capital of AED 500,000 (USD 136,000) is required. Branch Office of an existing company A foreign company can set up a branch of its existing company in Dubai Airport Free zone. No share capital is required Grant Thornton UAE. All rights reserved. 24

25 UAE Free Zones 3. Dubai Multi Commodities Centre / Jumeirah Lake Tower The Dubai Metals and Commodities Centre (DMCC) has been created as a strategic goal of the Dubai Government to establish a commodity market place in Dubai. DMCC was launched in April 2002 by the decree from the Government of Dubai. DMCC offers a unique opportunity for participants in a wide range of metals and commodities industries. It provides facilities that bring together the gold trade, the diamond trade (housing a Diamond Exchange), and trading in other selected commodities. The Centre aims to attract key players throughout the entire value chain of each of these industry sectors, together with relevant support industries such as finance, logistics and insurance. DMCC is the master developer and licensing authority for the Jumeirah Lakes Tower (JLT) Free Zone, one of the largest free zone developments in Dubai. By offering a fit- for purpose regulatory framework, modern infrastructure, freehold property, innovative product and cost efficient, value added services, JLT successfully attracts key participants throughout the entire value chain of wide range of commodities sector along with range of business from shipping management, IT, project management and more. Companies or individuals interested in setting up and licensing a new or existing company in JLT can choose a trade or services license from a wide range of business activities. The JLT free zone offers two types of business license: DMCC License (activities in commodities and related trade/services) JLT License (other business activities) Within the JLT Free Zone, companies can set up as a: New Company Branch Subsidiary Representative Office 2013 Grant Thornton UAE. All rights reserved. 25

26 UAE Free Zones 4. Dubai Internet City The Dubai Internet City was established under the Dubai Technology, Electronic commerce and Media Free Zone Law which was promulgated by a Decree of H. H. The Ruler of Dubai in January This new Free Zone creates a business and regulatory environment in which Technology, Electronic Commerce, Internet and Media companies can operate globally out of Dubai with significant competitive advantages. Unlike the other Free Zones in Dubai, The Dubai Internet City is industry specific. The business and activities that can be carried out in the Free Zone include the following: Web Based Back Office Consultancy IT Support Software Development Sales and Marketing ASP The companies registered in The Dubai Internet City are permitted to deal in all kinds of products except those goods and services that are in violation of intellectual property laws, products boycotted in the UAE and the goods and services that are generally prohibited under the UAE law. Companies operating in the Free Zone are allowed to be 100% foreign owned. The companies are also able to obtain renewable leases of up to fifty years on ready to operate offices or land and are facilitated by a "single window" clearance for all Government approvals. These companies are permitted to sell their goods and services throughout the UAE and are exempted from any taxes on corporate or personal income. There are also no restrictions on the repatriation and transfer of capital, profits and wages in any currency to any place outside the Free Zone. 5. Dubai Media city In March 2001 many prominent media businesses representing the multifaceted media community, comprising broadcasting, production, music, multimedia, publishing, advertising, research and printing, commenced operations from Dubai Media City. The buildings in the city are interlinked with smart networking that reflects its core philosophy to provide a free and flexible environment where ideas flow with transparency and without any barriers. The aim is to provide the media business community, the creative talent in this City, together with the regional and international cooperation a launch-pad to the future of the global media operations Grant Thornton UAE. All rights reserved. 26

27 UAE Free Zones Dubai Media City brings to the media community an advance infrastructure based upon a global interconnected network, linked by satellites, computers, the internet, television, radio, journalism, cinema and film production. The city also offers the most advance scalable IT network including web hosting. A Customer Care Centre provides all technical and support services. Companies working in Dubai Media City have the unique edge of commercial benefits derived from the Free Zone status including 100% business ownership requiring no sponsorship, no customs duties, and guaranteed 50 years exemption from tax on personal and corporate income. Media trade license will be issued from Dubai Media City. With the assurance of hassle free, single window completion formalities for all its partners be it large corporation or independent entrepreneurs. To pave the way for freelance talent in the rapidly growing arena of media evolution, Dubai Media City also offers total office solutions through the Media Business Centre which provides a modern, supportive, dynamic, and flexible infrastructure inclusive of latest technology and professional administrative services. Assured sponsorship, simplified visa procedures, flexibility in leasing arrangements, a comprehensive business infrastructure, highly skilled business assistance are just some of the facilities the Media Business Centre offers to allow individual and corporate investors to participate in the media industry s promising future. 6. Dubai Healthcare City The Government of Dubai is developing Dubai Healthcare City (DHCC) with the goal of creating a regional center of excellence for medical cervices, medical education, and life science research and development and patients to receive world class health care and enjoy first class medical and wellness services. DHCC is an integrated healthcare community providing a comprehensive medical treatment and prevention portfolio with an optimised process and patient/customer flow. The purpose of DHCC initiative is to provide the highest quality healthcare cervices to medical care and wellness seekers from the region by creating a world class cluster of healthcare professionals and services providers at the heart of Dubai. DHCC aspires to provide state of the art medical care services in selected disciplines that are relevant to the problems facing the patients in the region. DHCC has invited internationally respected institutions in health care delivery, education, services and research and development to collocate on the site to take advantage of the synergies brought about by physical proximity, interconnectivity and professional collaboration. Medical centers in Great Britain, Germany and the United States are participating in the DHCC, with particular interest directed to the academic medical center component. The DHCC tenants will have to meet international building standards and quality standards Grant Thornton UAE. All rights reserved. 27

28 UAE Free Zones Featured below are some of the many features and benefits of Dubai Healthcare City: 100% tax free 100% foreign ownership Low operating costs State-of-the-art facilities Integrated healthcare community providing specialized first-class medical care Business support services (hospitality, events, etc.) Healthcare community Networking and connectivity with global brands/customers Coverage of the entire value chain of healthcare Access to world-class, specialist medical care Highest service quality in a culturally sensitive environment (private rooms, family accommodation, etc.) Access to best quality medical equipment and devices Competitive, world-class working conditions Access to state-of-the-art facilities in day clinics and hospitals Access to doctor network and leverage of medical knowledge and training Attractive investment opportunity and financial return Increased brand exposure 7. Dubai Studio City Dubai is fast emerging as a global entertainment destination with its media-friendly initiatives and cosmopolitan lifestyle. The Dubai Media City free zone has firmly established itself as the media hub of the region. The opportunity to work in such a dynamic networking environment has brought together over 1000 companies, including CNN, BBC and Sony, making it a vibrant mix of talent and resources. As a business partner, you will enjoy benefits like: 100% foreign ownership 100% exemption from personal, income and corporate taxes 100% repatriation of capital and profits with no currency restrictions Opportunity to channel the vast amount of untapped wealth from local investors for project finance and long-term investment Channel development opportunities Dubai Studio City invites companies offering services from the film and broadcast production value chain to set up their facilities here Grant Thornton UAE. All rights reserved. 28

29 UAE Free Zones 8. Dubai International Academic City The Dubai International Academic city is the first and only zone to be dedicated to the educational institutions. It was introduced in 2007 and aims to develop the local talent pool, by becoming known as the regions knowledge centre. It is located on a 18,000 sq. feet campus and hosts academic institutions from 11 different countries. DIAC is able to license Higher Education authorities(such as Universities and Colleges), Online Universities, Management development training centres, Education service providers, Non-academic service providers and freelancers. The benefits of this free zone include but are not limited to the following: 100% foreign ownership Full repatriation of profits and capital are permitted 100% tax free with a guaranteed 50 year exception from income, personal and corporate tax. Exceptions from custom duty of goods and services DIAC is seen as bringing the very best of the international knowledge pool into one strategic location, to continue its vision of being known as the regional knowledge centre. 9. Dubai Knowledge Village Dubai Knowledge Village (DKV) launched in 2003, and is known as the destination for learning excellence. Its picturesque campus sets the right environment for a knowledge-based sector with many professional training centres and learning support entities. This thriving knowledge community was founded as part of a long-term economic strategy to develop the region s talents, in an effort to introduce new skills and the latest learning methods and tools following international standards of upgrading individual skill and professionalism. The benefits include but are not limited to: 100% foreign ownership 100% freedom from taxes 100% repatriation of assets and profits and effortless visa issuance procedures. DKV is a unique hub that offers the best selection of Human Resource Management, Consultation, Training and Personal Development programmes on a picturesque 1km long campus in the heart of Dubai Grant Thornton UAE. All rights reserved. 29

30 UAE Free Zones 10. International Media Production Zone Dubai's International Media Production Zone (IMPZ) seeks to create a environment for media production companies from across the industry value chain, and from across the world, to interact and collaborate effectively. Catering exclusively to companies in the following industries Graphic art, Publishing and Packaging it is an initiative of the Dubai government. It provides an environment of growth by building key facilities, investing in infrastructure, and forming a unique free zone that incorporates industrial, commercial, residential and community service projects under its mantle. The vast complex is housed on over 43 million square feet of land, in the heart of commercial Dubai. The initiative is part of Dubai's vision to develop itself into a global media hub. As such, it will provide a probusiness environment, sophisticated technology and community infrastructure to support and foster the growth of media production. 11. Dubai Biotechnology & Research Park The Dubai Biotechnology and Research Park (DuBiotech), is the region s first business park dedicated entirely to the global life science industry. DuBiotech s aims to create, develop and advance the life sciences sector in Dubai and the region by developing an industry cluster, establishing affiliations with international research centers, educational institutions, regulatory bodies, and providing value-added services. DuBiotech aspires to be the central hub for all life science industries for the Middle East. The park offers drug discovery, R&D, manufacturing companies and industry specific service providers all the support needed to make their presence. This includes suppliers of laboratory equipment and reagents, venture capital firms, CROs, waste management firms, regulatory bodies etc. Licensing and Activities DuBiotech has identified a broad range of licensing categories and activities under which companies are allowed to perform within the Park, which include: ƒtherapeutics ƒdiagnostics and Analysis Agricultural, Forestry, Horticulture, Food Environment Specialty Supplies Equipment Life Science Consultancy Life Science and Biomedical Associations (Non Profit) 2013 Grant Thornton UAE. All rights reserved. 30

31 UAE Free Zones 12. Dubai Outsourcing Zone Dubai Outsource Zone (DOZ) is the perfect environment for companies that provide mid to high-end outsourcing services and captives as well as serving as an offshore centre for disaster recovery facilities. Being at the centre of trade, DOZ is well-positioned to cater to off shoring requirements from Europe, the US, the Middle East, Asia and Africa. Some of the key sectors that can thrive in DOZ are call centers, IT, finance, insurance, healthcare, logistics, tourism, real estate, and energy with knowledge processes, research and development, and business continuity and planning as the primary outsource functions. Dubai Outsource Zone combines all technologies in a custom-made infrastructure that includes next-generation telecom, office space in intelligent buildings and facilities management. The telecom services include: ƒreliable High-Bandwidth Connectivity IP Telephony Automatic Call Distribution Interactive Voice Response Predictive Dialing Systems Satellite Communications Services Technical Support 2013 Grant Thornton UAE. All rights reserved. 31

32 UAE Free Zones 13. Dubai World Central (Dubai Logistics City) Dubai Logistics City is optimally located alongside the apron of Al Maktoum International Airport and is in close proximity to the Jebel Ali Port and Free Zone. DLC is positioned to serve a wide range of transportation, logistics, and value-added operations within a single-bonded free zone environment. Due to its adjacent location and direct connection with the Jebel Ali Port and Free Zone through the Dubai Logistics Corridor (direct infrastructure connection, custom bonded), DLC will facilitate the transportation of goods from air to sea and vice versa. The categories of License available within DLC are as follows: Logistics License: Allows the holder to carry out specified logistics services (e.g. storage, transportation, distribution, sorting, forwarding and clearing activities, order management, inventory management etc.). The license holder will be able to pick up and deliver (but not sell) products within the UAE. Industrial License: Allows the holder to carry out a specified light manufacturing activity (e.g. blending, mixing, purifying, assembling forming, repacking, or wrapping of products) by utilising hand labour or quiet machinery in a manner which does not produce smoke, gas fumes, heat, light or other effects which may cause a disturbance or nuisance to others. Industrial Licenses will not be issued without proof that an Environmental Impact Assessment for the project has been carried out and approved by Dubai Municipality. Trading License: Allows the holder to import, export, sell, distribute and store items specified in the License. However, Free Zone Enterprises holding a Trading License may only sell completed products in the UAE market through a local distributor or a commercial agent which is properly registered in the UAE. Service License: Allows the holder to carry out services specified in the Licence within the DWC Free Zone and elsewhere in the UAE (although additional local licenses may be required in some Emirates). Service Licences are issued to Free Zone Enterprises supporting the logistics industry and will include services such as consulting, software, training, repair, catering, insurance, and human resources services. Education License: Allows the holder to carry out educational and social services, educational, training and educational consultancy services 2013 Grant Thornton UAE. All rights reserved. 32

33 UAE Free Zones 14. Gold and Diamond Park The Gold & Diamond Park is a part of the Jebel Ali Free Zone Area, whereby all tenants can benefit from the facilities offered by the free zone authority. Tenants can form their own companies having 100% ownership and also easy access to obtain visas for owners and employees alike. Other facilities include: Healthy environment through proper ventilation systems, exhaust facilities and provision of acid disposal points. Safety and security through 24-hour security (patrols & video surveillance), fire alarms and fire defense systems. Handy labor accommodation and transport. Hallmarking provided by the Dubai Municipality's regular pickup services for all gold manufactured and sold from the Gold & Diamond Park. Visitors centre attracting tourists and shoppers. 15. Sharjah Airport International Free Zone (SAIF-Zone) Spread over 10 million square meters and equipped with the state of- the-art facilities, SAIFZONE has been designed to cater to both local and international investors and offers the tools to cope with the rapidly changing business environment in the region. Ideally located in the centre between the east and the west, SAIF-ZONE is looking to become a major distribution centre for the European market and the Far East market as well as catering to the growing demand from the CIS and Africa. The various advantages of operating in SAIFZONE include: No corporate or personal income-tax 100 per cent foreign ownership and full repatriation of capital and profits. Access to the Sharjah International Airport which receives all categories of aircraft and handles all types of cargo and has one of the most sophisticated hub stations in the region. Investors can avail different types of licenses in order to do business in the SAIF-Zone. Industrial License - Allows the investor to import raw material, manufacture, process, assemble, package and export the finished product. (Subject to clearance from SAIF-Zone Health & Environment Dept.) Commercial License - Allows the investor to import, export, distribute, consolidate and store items specified in the license. There is a maximum limit of three similar product lines. General Trading License - As the name suggests, a large number of products fall within its ambit. This type of license can be obtained under the commercial license. Service License - Allows the investor to carry out only specified services. (Unless restricted by the federal or local authorities, all types of services are allowed within the SAIF-Zone) Grant Thornton UAE. All rights reserved. 33

34 UAE Free Zones 16. Hamriyah Free Zone Located 15 kilometers north of Sharjah city and based around Hamriyah Port in Sharjah, this new Free Zone derives its strength from its strategic location which not only provides deep water access but also, being on the UAE s highway network, links all the seven Emirates and provides connections to neighboring Gulf States. The Free Zone area consists of approximately ten million square meters of prime industrial and commercial land and a deepwater harbor with enough room for expansion in future. It offers purpose built office accommodation, warehousing and factory units and an international business centre having space for Executive office suites with state-of-the-art conferencing and Internet facilities. Over 1 million sq. meters is being zoned for developing a residential area, an international hotel and recreation and leisure facilities on the beach and the Hamriyah sea water lagoon. In addition to usual investment incentives of 100% foreign ownership, no corporate or personal income taxes, exemption from all commercial levies, full repatriation of capital and profits and land lease up to 25 years renewable for further 25 years, the special advantages offered by Hamriyah Free Zone include: Access to the Arabian Gulf and the Indian Ocean through the two ports of Sharjah situated on east and west coasts linked by modern multilane highway network; Customs privileges for goods destined for Hamriyah Free Zone; Quick and simple procedures for approval of License Applications and unrestricted recruitment and sponsorship of personnel and procurement of visas; Easy access to one of the most important cargo hubs of the region at Sharjah International Airport; Access to Internet, and other secretarial and day-to-day administrative services existing at the Free Zone. With a highly flexible and dynamic management, Hamriyah Free Zone is all set to develop into a leading industrial base of the UAE. Investors can set up a different typesof legal entities in order to do business in the HFZ, Branch of foreign / local company, free Zone Establishment (FZE) is a single share holder limited liability company which can be incorporated in Hamriyah Free Zone. The minimum capital requirement for incorporating a Free zone Establishment (FZE) is Dhs.150, 000 (Applicable for Land / Warehouses) (Approximately US$ 40,000). However Free Zone Company (FZC) will be a similar incorporation with multiple shareholding (maximum 5 shareholders) Grant Thornton UAE. All rights reserved. 34

35 UAE Free Zones 17. Ras Al Khaimah Free Trade Zone Established in 2000, RAKFTZ is one of the fastest growing, most cost-effective free zones of the region. With tax-free environment, customised solutions, hassle-free procedures, value-added services and all the facilities that you expect from a free zone, The advantages: 100% tax exemption 100% foreign ownership Transparent laws and regulations, 100% capital & profit expatriation. Strategic location with access to over 2.2 billion consumers. Simple and fast application procedures. Types of Business License: Commercial License General Trading License Consultancy/Services License Industrial License. A business at RAK FTZ can be registered as one of the following four legal entities: New Establishments (100,000 DHS minimum share capital) Free Zone Establishment - a new business entity with a sole business owner. Free Zone Company - a new business entity owned by 2-5 partners. Branches: Local Branch - A branch of a domestic firm residing in the United Arab Emirates. The parent company should have existed for more than a year (also applicable to a subsidiary company). Foreign Branch - A branch of a foreign firm residing outside the United Arab Emirates. The parent company should have existed for more than a year (also applicable to a subsidiary company). 18. Saadiyat Free Trade Zone The zone covers an area of about 3,500 hectares, and will provide storage facilities for 67 commodities, such as oil, gas, precious metals, food, etc. This feature makes the zone unique and first of its kind in the Gulf. The zone has invited a number of international banks to apply for licenses to operate wholly within the free trade zone as an offshore entity independent of the UAE Central Bank. The trade zone aims to serve 3.5 billion people all around the world. Special benefits include: The zone enables investors to store 67 commodities, such as oil, diamonds, copper, gold, etc. The Saadiyat Island is connected with the mainland by a six kilometer bridge, which makes it convenient to travel from Abu Dhabi Grant Thornton UAE. All rights reserved. 35

36 UAE Free Zones 19. Abu Dhabi Airport FZ Abu Dhabi Airport free zone was incorporated in March 2006 to spearhead the major redevelopment of the Emirates aviation infrastructure. This was launched as a ambitious development from the Abu Dhabi Government aimed at promoting long-term economic and tourism activity and to support in building a more vibrant economy which promotes and attracts private sector investment. The free zone provides it customers with great benefits such as: Congestion free facilities Location within Abu Dhabi International Airport premises Fast and efficient cargo clearance services Easy access to airport apron Access to international freight forwarders and logistics services One stop shop solutions for all investor related services Smart business facilities with advanced IT solutions Onsite customs inspections Online customer service 24 hour access to facility 20. TwoFour54 Named after the geographical co-ordinates of Abu Dhabi, twofour54's vision is to enable the development of world class Arabic media and entertainment content, by Arabs for Arabs, and to position Abu Dhabi as a regional centre of excellence in content creation across all media platforms including film, broadcast, music, digital media, events, gaming and publishing. twofour54's aim is to create a collaborative and supportive campus community; stimulating creative and professional partnerships. There three pillars are supported by a business enabler tawasol, which provides support to organisations and individuals looking to join the twofour54 community. It offers media and entertainment organisations a complete range of services including: Registration and licensing for media businesses at twofour54. Company and personal set-up services for your business and staff. World-class studio production and post-production facilities supported by technical staff. Broadcast services Vocational media training Industry investment and business support for Arab entrepreneurs 2013 Grant Thornton UAE. All rights reserved. 36

37 UAE Free Zones 21. Masdar City Abu Dhabi Masdar is a multi-faceted company advancing the development, commercialisation and deployment of renewable energy solutions and clean technologies. Masdar City, a six-square-kilometre special economic zone, is a place where businesses can thrive and innovation can flourish. A low-carbon, renewable energy-powered development, Masdar City not only embodies Abu Dhabi s commitment to a sustainable future but is also pioneering best practices in sustainable urban planning, design and development. As a special economic zone, Masdar City offers, amongst other benefits, a rapid set-up process, reduced tax footprint and pro-business environment. Economic benefits include: 100% foreign ownership Quick and easy set up No corporate or personal taxes Unrestricted repatriation of both capital and profits No recruitment restrictions No currency restrictions Visa processing and Government services For most companies, whatever their size or stage of development, there are three main ways to benefit from engaging with Masdar City: 1) as a pilot-study partner exploring technology solutions for the city, 2) as a supplier that provides the products and solutions used to develop and operate the city, or 3) as a partner that operates from the city, thereby benefiting from its one-of-a-kind cleantech cluster environment and from providing the city with products and solutions. Business Licensing Services: Masdar City facilitates quick and straightforward incorporation services to businesses, allowing them the legal structure required to establish their businesses. Companies operating in Masdar City do so in accordance with the Masdar City Companies Registration Regulations. It is Masdar City s goal to see that each one of its business partners and tenants enjoys a successful transition into the community. Partners can be licensed in three ways: Limited Liability Company (Limited) Companies incorporated in Masdar City benefit from the unique business environment offered, which includes: 100% foreign ownership, exemption from personal income and corporate taxes. The minimum required paid up capital for incorporation of a LLC in Masdar City is AED 150,000. Branch of Foreign / Offshore Company Companies can register a branch office of a Foreign/Offshore company in Masdar City. Branch of Local UAE Company Companies can register a branch office of a UAE company in Masdar City Grant Thornton UAE. All rights reserved. 37

38 UAE Free Zones 22. Khalifa Industrial Zone (Kizad) - Abu Dhabi World class infrastructure, transportation and logistics options, as well as its low operating cost environment not only promote business efficiency they also make it easier to achieve business goals. Kizad offers local and international investors easy access to local, regional and international markets, within a low operating cost environment and a meticulously designed setting to make doing business easy. Kizad is set to transform the way Industrial zones help businesses become and stay successful. Kizad is an integral part of the Abu Dhabi Economic Vision With industry at the heart of its diversification program, this Vision sets a clear roadmap to achieve sustainable growth of the Emirate s economy and the prosperity of its people. Kizad, with its massive 417sqkm of prime industrial land and worldclass facilities, is a statement of intent by the Government of Abu Dhabi, creating a wealth of opportunities on a global scale. It s strategic location linking the east and the west, and its world-class transport infrastructure via sea, air, roads and rail, gives businesses easy and efficient access to over 4.5 Billion consumers within four time zones. With vertically integrated clusters setting new standards of industrial efficiency, competitive lease prices and some of the lowest utilities costs in the world in a tax-free setting, Kizad provides businesses with unparalleled, long term competitive commercial advantages Grant Thornton UAE. All rights reserved. 38

39 References Dubai international airport - World Bank, updated Jan 17 th &dl=en&hl=en&q=uae%20population Demographics of the UAE - United Arab Emirates Public Holidays UAE Free Zones Grant Thornton UAE. All rights reserved. 39

40 Disclaimer: Whilst every effort has been made to avoid errors or omissions, any mistake or omission is not intended. The information given is liable to change without notice dependent upon new laws and regulations. It should be noted that we will not be responsible for any damage or loss, or any other consequences of any decisions/investment or business set up done based on the contents of this guide. Grant Thornton refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant Thornton UAE is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another s acts or omissions Grant Thornton UAE. All rights reserved. 40