1. Do I need to maintain books of accounts for my local or Free Zone company in UAE? Do I need an audit by law?
Answer
Normally for almost all categories of licenses for small and medium sized businesses there is no requirement that books of accounts should be maintained. There are no set accounting norms since UAE has no company law or income tax code. Books are however maintained by most businesses since banks ask for them for any credit application assessment.
Some Free Zones do ask for appointment of an auditor when a company is formed. Audited books of account are required to renew the license every year. Normally account books are not scrutinized.
Free Zones do allow renewal in the absence of audited accounts when an undertaking is given by the manager that audited books would be submitted at a later date.
2. Can I trade in Gold in the UAE?
Answer
Yes you can. Trading in precious metals especially in Gold is a common business in the UAE. The trade can be as a retail activity in ornaments, coins and biscuits and also on a commodity trading scale. Trading in gold can be in a local LLC company which will need a special trade license and a local sponsor or in a Free Zone company set up in Dubai Multi Commodity center called DMCC. DMCC companies can be owned 100% by you.
3. Is it necessary for me to have an office in Dubai even if I need only a company?
Answer
Yes. In Dubai or anywhere else in the UAE a company cannot be registered without a physical office space owned or rented by you. A tenancy contract or ownership documents for your office must be submitted before a company is registered and license is issued. If your company is to be set up in one of the UAE free zones then also you will be required to take up an office normally provided by the Free Zone authorities. If you need only a company and no office then you can take minimum available, cheapest space. There are local sponsors who also make office addresses available for you to use to just register your company. Please note that although it is a must to have an office address, you can in some cases be allowed to share an office with another company. Also having an office does not compel you to sit inside the office or keep it staffed and active.
4. Is there a minimum capital requirement for opening a company in UAE?
Answer
In the case of a Dubai local company this requirement does not apply. However in the case of most free zones there is a requirement stipulated. Minimum capital can be prescribed per shareholder or as total for the company. The amounts vary from free zone to free zone. For example Jumeirah Lake Towers Free Zone – JLT free zone – in Dubai needs minimum AED 50,000 per shareholder. Whereas Ajman Free Zone asks minimum AED 185,000 for the company.
Although these requirements are laid out the free zone authorities do not ask you to pay it into your company or show the capital by way of a bank deposit or ask you to lock it up. You can incorporate a company by mentioning the required capital in your application form and sign it. The incorporation can procede ahead without depositing the capital.
5. What documents do I need to open a bank account in Dubai?
Answer
In order to open a bank account in your own name you will need a residence permit for living in the UAE. This can be obtained by forming your own company or by becoming an employee in UAE based company.
Once this is done you can apply for a personal bank account with your passport copy,visa copy, a proof of home address like a utility bill and three months bank statement of your bank account anywhere in the world. You are required to sign the bank application form in the presence of bank officer. Your passport must be shown. The process will then start. The bank may ask for some additional information in case they want to- such as likely remittances and payments.
In order to open a bank account for your company the matters are simple if you have a UAE based company or would like to form one. You can have an offshore company registered in RAK Offshore, RAK FTZ both in Ras Al Khaimah or Jebel Ali Free Zone in Dubai. You can also opt to open a Free Zone company in any of the 27 free zones in the UAE and open an account in its name.
The bank will ask for the incorporation documents of the company, a brief business plan, names of 2 customers, 2 suppliers, likely sales per year and estimated remitance into account and out of the account. If your company has more than 1 shareholder then the bank will also ask for a board resolution signed by all the shareholders clearly defining the authority of the signatories to open and operate the account. Banks do accept copies of the documents. However originals must be sighted by the bank officer.
Finally the bank will ask for KYC of the beneficial owner. These are – A brief CV of the shareholders, the passport copy of the signatories, a 3 month bank statement of the shareholders and a proof of address of the shareholders. Banks may ask more information in case the shareholding structure involves other companies. It is important to note that the ultimate beneficial owner’s identity must be revealed.The signatories to the account must sign the application in person in the presence of the bank officer and show the passport.
If you have a foreign company in the ownership structure then that company’s documents must be authenticated by the UAE embassy in the home country and later attested by the Ministry of Foreign Affairs in Dubai. The attested set is then submitted to the bank along with the local company documents.
6. What are the rents in Dubai?
Answer
The rents in Dubai vary by location. Dubai has several business districts old and new. Rents on Sheikh Zayed Road are higher than rents in areas of Bur Dubai and Deira which are older. Some newly constructed areas such as Dubai International City, Al Barsha, Mirdiff offer lower rents. In the mid range lie the areas – Business Bay, Jumeirah Lake Towers, Garhoud and Qusais.
Normally minimum average office size available is 600 sq.ft. There are some buildings in which 200 sq. ft. size offices are available but these are rare. Your estate agent can guide you better on this.
International city offers spaces of size between 400-600 sq. ft starting from AED 40 (USD 11) to AED 70 ( USD 19) per sq. ft. Al Barsha offers spaces of similar size @ AED 65( USD18) per Sq. ft. Jumeirah Lake Towers (JLT) offers rent between AED 60-85 ( USD 16-24) for office size between 500- 1200 sq. ft. In the area of Deira the rates are between AED 70-80 depending on proximity to main road and markets.
In the case of JLT it is important to find out if the space is ready to occupy or needs flooring and electrical work to be done.
Dubai also offers serviced offices and cubicles and desk spaces. These are available mostly on Sheikh Zayed Road and in Bur Dubai area. The rates vary widely depending on the services available.
7. What do I need to do to take up a place of business in Dubai?
Answer
Once you have made up your mind to register your local Dubai company you need to lease office space. Your place of business can be also your warehouse if you are in the business of stocking and distributing. There are several real estate agencies in Dubai who can provide you with a suitable offer. The terms of payment can be negotiated with the landlord. Normally you will need to pay the whole years rent by way of post dated cheques- 2,3 or 4 cheques spaced apart equally. A standard tenancy contract is signed. This contract must be registered (cost- AED 200) with a government agency called Ejari. The Dubai economic department would issue the business licence only on submission of Ejari registered tenancy contract. In some properties they provide the tenancy contract in Ejari document format ready so that no separate registration is required.
8. After my company is set up do I have to register it with the Tax authorities? Do I have to file a tax return each year?
The company in Free Zone and Local areas are not required to register with any tax department. There is no requirement to assess your tax liability or file any annual tax return. Almost all businesses are exempt from tax.