Prominent business entities in UAE
The prominent business entities in the UAE are as follows.
Limited Liability Company (LLC)
Branch & Representative Office
Joint Stock Company (Private/Public)
A foreign investor is entitled to own up to 49% of the company shares when the company is incorporated in the UAE mainland. Whereas, if the company is incorporated in any one of the Free zone jurisdictions, foreign investors are entitled to own 100% of the shares.
Corporate tax in Free Trade Zone
The UAE aims to adhere to its promise to enterprises registered in Free Trade Zones that do not do business with the mainland by taxing them at a zero per cent corporate tax rate in the UAE (or exempting them entirely) until the conclusion of the vacation period. Each free zone is required to submit an annual CT return.
Businesses having operations on both the Mainland UAE and the Free Trade Zones and those operating under the dual licensing system should evaluate the implications for their operating strategy.
Economic Substance Regulations (ESR) effective from 1 January 2019. Under ESR provisions, UAE entities (both Mainland , FreeZone and branches of foreign companies ) carrying out certain specified activities, like distribution, services to foreign affiliates,
earning interest income, Holding companies, Leasing activities, are required to maintain economic substance in respect of each relevant activity in the UAE. The entity has to comply with annual filing of ESR, and non-compliance may results in penalties from AED 20,000 to AED 70,000 per annum. Contact us today for ESR compliance of your entities.