The UAE – Open for Business
The United Arab Emirates, with its rapidly developing infrastructure, investor-friendly policies and political stability, is undoubtedly one of the most attractive business destination in the region.
The UAE follows global best practices and creates a conducive environment for businesses to operate, and presents ample opportunities for both investors from the region and around the world. The country lies at the heart of a strategic, geographic crossroads where trade, commerce and diverse cultures have co-existed and interacted for hundreds of years.
Foreign investors looking to set up a business in any of the industrial cities, special economic zones or free trade zones established in different emirates have access to single window licensing services that promise quick turnaround in terms of registration and visa processing. Specialised zones for technology, media, education, healthcare, finance and others gives an added dimension to the trade and commercial environment.
The Government encourages the private sector in a free trade regime with low tariff barriers and minimum legal hurdles. Many multinational companies (MNCs) have established branches in the country, many are engaged in manufacturing products or assembling them and many others have set up distribution centres for the region.
The UAE’s transformation was made possible by its major natural resource. The economy still relies on oil revenues but the years have seen a progressive shift away from a fossil fuel base to highly diversified all-round growth in manufacturing and trade, with service industries also seeing exponential development in sectors such as finance, tourism, real estate and information and communication technology. Great strides have also been made in education, healthcare and the general welfare of the people.
Today, the UAE has one of the most open and dynamic economies in the world. The UAE’s tax-free status, world-class infrastructure, low tariffs and 100 per cent ownership for foreign investors in selected zones, make it the ideal location for setting up new business. Today, the UAE stands as a strong nation built on the foundations of security, hope and economic strength, its modern outlook and progressive society bringing it into the front ranks of the Arab world.
Other clear advantages to doing business in the UAE include:
- No restrictions on profit transfer or repatriation of capital
- No corporate or income taxes
- A currency, the Dirham, that is stable, secure and pegged to the US dollar
- Very low, or non-existent, import duties
Sectors with strongest demand and opportunity include:
- Energy – Alternative Energy
- Select tourism products/services including high-end hotel brands
- Healthcare and education services and products
A member of the World Trade Organization since 1996, the UAE supports open trade and has stable trade relations with countries throughout the world. Thanks to its open economy, attractive business environment and continued economic growth, the UAE has emerged as a key international trading hub between East and West. The WTO has named it the leading Arab economy in terms of global trade and one of the top 30 nations in the world. The UAE Government’s free-market policy and flexible economic and commercial laws are the prime factors in the country’s rise as a regional and global leader.
General Business Information
The official weekend in the UAE is on Friday and Saturday. Some smaller private companies only close on Friday.
Government offices open at 7.30 a.m. and close at 3.00 p.m. Private offices tend to keep longer hours, adopting either “straight shift” or “split shift.” The former normally requires eight working hours beginning between 7:30am and 9:00am with a lunch break lasting 30 minutes to an hour. The latter involves commencing between 9:00am and 10:00am and ending between 8:00pm and 9:00pm, with a three- to four-hour break in between.
During Ramadan, working hours shorten by two to three hours, with most of the work accomplished in the early hours of the morning or much later in the evening after the day’s fast is broken at sunset.
Although Arabic is the official language, English is widely used in business transactions in the UAE. Print business cards in English and Arabic and make sure that all brochures and presentation material are full-color and well produced.
The UAE does not have any enforced federal income tax legislation for general business. Each emirate has enacted income tax decrees, but in practice, the enforcement is restricted to foreign banks and oil companies. Personal incomes, including all forms of salary and capital gains, are not subject to taxation in any emirates.
Other Local Taxes
Municipal taxes are levied in most Emirates on annual rental paid at 5 per cent for residential premises and 10 per cent for commercial premises. Other local taxes include a 5 per cent tax on hotel services and entertainment.
For detailed information on visa requirements in the UAE, please visit the Visas section of this website.
Labour Rules and Regulations
The rules and procedures for obtaining licences to recruit foreign labour to work in the UAE are applicable to all emirates. Application forms and other information are available at the Ministry of Labour’s website www.mol.gov.ae
Foreign companies are required to appoint a commercial agent in the UAE to import and sell its products in the UAE. The agent can only be a UAE national or a commercial entity wholly owned by UAE nationals. The agent has to register with the Ministry of Economy to engage in commercial activity and benefit from exclusive import and distribution rights. An exclusive agent provides a foreign company with in-depth knowledge of local customs and markets as well as a network of contacts and outlets to distribute its products.
Imports and Exports
The UAE has a liberal trade regime with tariffs based on the GCC tariff structure. Customs procedures are simple and largely computerized to facilitate trade, which in the case of several emirates includes a large re-export industry. It takes just six documents, three signatures and 18 days to move imported goods from the UAE ports to a warehouse. The cost of obtaining a licence is also the lowest in the world. An importer/exporter obtains a licence from the economic department of the relevant emirate.
Prohibitions and Restrictions
The GCC Common Customs Law distinguishes absolute import prohibitions from restricted imports. In the UAE, absolute import prohibitions are maintained for various reasons, including international conventions, environmental protection, health and safety, and religious and moral considerations.
They cover all kind of drugs; asbestos; used pneumatic tyres; industrial waste; forged and duplicate currency; Houbara falcons; ivory and rhinoceros horn; live camels; any printed material that does not adhere to religion or morals or that is aimed at causing corruption and disorder; or materials prohibited under any law in force in the country. All imports from Israel are prohibited.
The UAE maintains export controls on certain products for safety, security and environmental reasons, and to ensure compliance with international obligations under treaties and conventions (Basel Convention, CITES, Convention on Chemical Weapons, NPT) to which it is a signatory. Each emirate is responsible for its own export promotional activities, which are coordinated by the relevant departments of economy or tourism.
Each emirate has its own customs authority but customs procedures are the same throughout the UAE, and customs requirements are kept to a minimum so as not to impair the country’s active transshipment and re-export business. Since the establishment of the GCC customs union in January 2003, items imported into the UAE (or any other GCC State), and destined for another GCC market, are subject to customs duty only at the first point of entry into the GCC.
Certificate of Origin
A certificate of origin is required to clear imports to the UAE. Full information regarding UAE certificates of origin (including fees) can be downloaded from the Ministry of Economy website: www.economy.ae.
Arbitration is currently governed by the UAE Civil Procedure Code, Federal Law 11 of 1992. Two arbitration services are available in the country and both have strong connections to the Chambers of Commerce in their respective emirates:
Abu Dhabi Commercial Conciliation & Arbitration Centre (ADCCAC) offers legal consultation and settles local and international trade disputes. The centre provides lists of arbitrators, conciliators, experts and certified translators. For further information please visit www.adcci.gov.ae.
Dubai International Arbitration Centre (DIAC)
is an autonomous, non-profit institution that offers a high calibre of arbitration services and facilities on an international scale. For further information please visit www.diac.ae.
Intellectual Property Rights
Recognition of the close link between protection of intellectual property rights and foreign investment has acted as an incentive for vigorous action against intellectual property violations in the emirates. The UAE has three intellectual property laws, which provide for registration procedures, enforcement procedures and penalties. At present there is no unified federal customs authority and each emirate’s customs authority is responsible for enforcement.
Registering a Trademark
All application forms and further information regarding trademark protection can be downloaded from the Ministry of Economy website www.economy.ae
, which also provides instructions for submitting applications for trademark registration.