The UAE with its strategic position in the Middle East offers an excellent opportunity for foreign companies to setup and tap into the region’s market of approximately 2 billion people. Many successful multinationals have already established themselves here and there is greater potential for development as is witnessed by the recent economic boom in the region. Professing a beneficial zero tax policy, the business culture is multinational and the growth potential is unlike in any other place.
However, to succeed in the UAE market, companies need to carefully consider their initial set up options. As such, in order to setup a physical presence in the UAE, it is necessary that the entity have a registered trade license with the appropriate government body.
There are three jurisdictions in the UAE in which an entity may be set up:
(a) Mainland or “onshore”,
(b) One of the over 40 free zones in the UAE, and
(c) An offshore jurisdiction.
As such, the choice of a legal form is an important consideration while setting up in the UAE as each legal form has its limitations and advantages. Depending on the type of business activity envisaged by our clients, we provide thorough advice on the most suitable solution and accompany our clients step by step through the process of company registration and setup in the UAE.
What we offer
- Formation of Limited Liability Companies, Branch Office, Representative Office and Subsidiary Companies in UAE Free Zones and in Mainland.
- Arranging reliable local sponsors (UAE Nationals) for mainland companies.
- Formation of offshore companies in RAKICC & JAFZA.
- Assistance with residency visas and opening of bank accounts in UAE.
- Virtual office
- Drafting of MOA and other legal agreements
Apart from the above, we also offer the partnership to sustain businesses, along with acquiring the tactical advantages to stay ahead in the competitive global market of today.
Fichte & Co. Legal is the registered agent for RAKICC & JAFZA offshore companies.
Most of the Regulatory Authorities offer the following benefits:
- 100% ownership
- 0% corporate tax
- 0% income tax
- 0% custom duty
- Confidentiality of Business
- Low Operating Costs
- Free Capital Transfer
- 100% repatriation of capital and profits
- Can wind up at discretion
Type of Licenses Issued by Authorities:UAE Free Zone companies can only operate within the free zone boundaries and are generally limited to performing solely those activities listed in their license(s). Normally all free zones issue following Licenses:
- Commercial License
- Service License
- General Trading License
- Industrial License
The UAE is fast emerging as a hub for fintech company setup. In the bid to becoming an international financial powerhouse, the UAE government has pushed for initiatives in the financial technology sector by establishing accelerators and sandboxes to create a supporting environment for innovation to flourish and develope successful fintech companies. Particularly in the country’s renowned financial jurisdictions. Namely: the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Markets (ADGM). This marks the beginning of an exciting chapter in the UAE, as these companies will bring new fintech apps, products and services to the UAE market.
Set out below are the top jurisdictions for building your fintech company in the UAE:
1. DIFC Fintech Hive
Without doubt, the DIFC Fintech Hive is the place to be for budding fintech companies. Fintech companies incorporated in the DIFC will be regulated by the Dubai Financial Services Authority (DFSA) and not the mainland financial regulator, i.e., the Securities and Commodities Authority (SCA). You can read more about the financial regulatory landscape in the UAE here.
The advantage of the DFSA is that all communications can be in English (compared to Arabic in the case of the SCA) and there are already various forward-looking regulations (including the game-changing crowdfunding regulations) in place for fintech companies in the DIFC. What’s more, the license fees in Fintech Hive are reasonable for DIFC standards, and it has a nice co-working space which makes for a great overall environment.
It’s no surprise that the Fintech Hive boasts housing some of the up-and-coming names in the fintech space such as Sarwa (an online investment platform to invest in global markets), Eureeca (an equity crowdfunding platform), SmartCrowd (a real estate crowdfunding platform), and Beehive (a peer-to-peer lending platform.)
2. ADGM Fintech RegLab
If the DIFC is out of reach for you, it may be worth considering the ADGM Fintech RegLab which is a close contender to the DIFC. The ADGM can be more flexible than the DIFC and allows for innovative corporate structures to be worked out from this jurisdiction.
Again, fintech companies in the ADGM will be regulated by the Financial Services Regulatory Authority (FSRA) and not the SCA, which is an advantage. Like the DFSA, the FSRA is progressive and caters to today’s times – for example, the ADGM now has a regulatory framework for crypto assets, which is telling.
As an example of the popularity of the ADGM in the fintech space, BitOasis (the first cryptocurrency exchange in the Middle East) is now seeking to obtain an ADGM license, perhaps because of facing regulatory hurdles while operating onshore.
3. ADGM Tech License under its Entrepreneurship
The ADGM recently introduced the Tech Start-up license which only costs USD 750 a year. The license allows you to have four visas without the requirement of physical office space. That said, you would have to take a virtual office for a nominal annual fee from a law firm (such as ours) or a corporate service provider.
Although this is not a fintech license, this option may make sense for those start-ups who are still in the development phase of their business. Once developed, the start-up could then seek to be regulated by the FSRA and obtain a regular ADGM license.
4. Dubai Silicon Oasis’s Dubai Technology Entrepreneur Campus (Dtec)
Dtec is a good option if you want to be based onshore and in Dubai. It has an accelerator, a co-working space, and a venture capital unit, which is an attractive proposition.
One aspect that you will have to consider if you are setting up onshore is that the SCA would regulate your fintech start-up. This is not a drawback, but you will have to bear in mind that there could be delays or uncertainty regarding how your start-up’s activities will be regulated.
5. AstroLabs, Dubai(Dtec)
Astrolabs is another great onshore option for tech companies looking for a launchpad in Dubai, considering its cost-effectiveness, strategic location in the heart of Dubai, and well-received start-up academy and programs. Astrolabs has a fantastic co-working space and have partnered with Dubai Multi Commodity Centre (DMCC) to allow entrepreneurs to get a DMCC license at reduced costs.
It’s not the first choice for a fintech start-up, but if the DIFC or the ADGM do not work out for you, and you are at the initial development phase of your start-up, Astrolabs is an attractive option and a competitor to the Dtec.
Offshore Company Setup Benefits:Offshore companies enjoy a special legal status and comes with numerous benefits such as:
- No Corporate tax
- 100% foreign ownership
- Limited Liability Company
- No Tax Information Exchange Agreements
- Absolute Privacy and Confidentiality
- Ability to maintain multi-currency Bank accounts in the UAE
- Virtual office facilities available in the UAE.
Suitable Businesses:Offshore companies are the most suitable form for following business:
- International trading
- Property holding
- On-line advertising
- Ship registration
- Stock-market trading
Restricted Businesses:It is important to note that there are some restricted business which are not permitted:
- Financial activities
- Insurance and re-insurance
- Any activity related to media
- Any activity related to aviation
- Any business with UAE “onshore” companies
- Establishing a branch in the UAE
Fichte & Co. Legal is the registered agent for Ras Al Khaimah International Corporate Centre (RAKICC) & Jebel Ali Freezone Authority (JAFZA) offshore companies.
- Commercial License – this license allows a company to trade in all legally tradable goods.
- Industrial License – this license allows a company to engage in manufacturing activity or other types of industrial activities.
- Professional License – this license allows the individuals or groups that would like to offer their expertise as services to the general public.