Business in the United Arab Emirates
Establishing companies and doing business in the UAE (United Arab Emirates) was, until recently, a distant dream for Israelis. Now, the peace agreements with the UAE are turning the dream into a reality. Our firm has already started assisting Israelis in opening businesses and obtaining licenses in the Emirates, and it is important to us to share information on the subject with Israelis who are interested in doing so. Below, a partner in our firm explains about the many benefits of doing business in the UAE and how you, too, can do so.
The Cohen, Decker, Pex & Brosh law office in Jerusalem and Tel Aviv specializes in commercial law as well as immigration law. The firm provides a variety of legal services for Israeli and international clients, including registration and establishment of companies in the UAE and other places around the world, ongoing legal advice to businesses and companies, representation before tax authorities in Israel and around the world, and more.
New Business Opportunities in the United Arab Emirates
The year 2020 was a particularly complex year in Israel and around the world. It brought with it events that we would rather forget, the greatest of which is the corona crisis. However, it is important to remember that there were also some positives to this year. One of the most significant of these is Israel’s peace agreement with the United Arab Emirates and Bahrain. This agreement is a turning point for the State of Israel, and brings a real message when it comes to new business opportunities.
The agreements led to the abolition of the Israel Boycott Law, thereby allowing the citizens of the UAE to establish companies and do business in Israel, and vice versa. Many Israeli citizens have already become interested in ways to start companies and do business in the UAE. However, it is clear that the information on the subject is still not accessible enough. Below we share with you the information we have already gained from our experience in providing Israelis with legal assistance in obtaining business licenses and registering companies in the Emirates.
Advantages of Starting a Business in the UAE
The benefits of starting a business in the UAE are too numerous to mention. The UAE is known as a place that encourages business and entrepreneurship, and it is one of the leading countries in the World Bank’s ease of doing business rankings and other important rankings. The tax and corporate laws in the UAE are unique and were designed to allow for easily establishing and doing business.
Taxation in the UAE
Most Israelis are still unaware of the UAE’s favorable tax laws. It is surprising to find that, today, in all the emirates, there is no income tax for individuals. Corporate tax applies, as a rule, only to foreign banks and companies in the field of oil and energy. The VAT currently stands at only 5% (compared to 17% in Israel in 2020), and it is sometimes even possible to claim it back at the end of the year.
What is Required for Starting a Business?
There are various types of licenses for setting up a business in the UAE. The policy for obtaining these licenses differs between the emirates (for example, Dubai vs. Abu Dhabi) and even between regions within each emirate. To obtain a business license in UAE Mainland regions, it is necessary to find a local sponsor recognized by the authorities. In these cases, a shareholding in the business with the sponsor is required (usually with a distribution of 49 to 51 percent).
In contrast, in regions called free-trade zones, it is possible to set up businesses in a variety of fields and own 100% of the business shares. However, it is still required to register a local agent in order to obtain a business license. Our firm cooperates with a leading company in the field and with the various authorities in the UAE. We assist, among other things, with license applications for companies and businessmen from Israel, and we also connect between Israeli businessmen and local sponsors and agents in the UAE.
In addition to the regional differences mentioned above, there are various types of licenses by business fields. Thus, for example, in the field of tourism and leisure, and in the field of energy (oil and gas), there are unique requirements for obtaining a business license. This is different from fields such as high-tech or fashion, in which a unique license is not required at all. Obtaining a relevant license for the field of occupation and the regions in which you operate is critical for the proper functioning of the business. To do this, it is highly advisable to seek the help of a professional who can help you choose the right license.
Contact a Lawyer Specializing in Starting a Business as an Immigrant in the United Arab Emirates
This article briefly describes the many benefits of starting a business in the UAE and the requirements for setting up a business in the emirates. For legal advice and assistance, you can contact us, and a lawyer from our firm will be happy to assist you. The Cohen, Decker, Pex & Brosh law firm specializes in immigration and commercial law and assists Israelis interested in establishing and doing business in the UAE and in a variety of countries, in coordination with local partners.