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Insider Secrets to Doing Business in the UAE

The United Arab Emirate (UAE) is an oasis in the Arabian Desert. Not only are the rulers pro-western, but their policies are investor-friendly, and more and more companies are using the country as their regional hub. However, this does not mean that doing business in the UAE is easy. The market is competitive and you must have a clear competitive advantage to succeed. As such, let’s take a look to some of the insider secrets to doing business in the UAE.

First, and possibly foremost, the foreign investors need to choose which path is the right for them. Traditionally companies needed to have a local sponsor. The is an Emirati citizen who will own a majority of the business. However, the establishment of Free Trade Zones (FTZ) in the country has opened the door for 100% foreign ownership. This allows owners to keep full control of their company.

While this option is popular, it is not for everyone. In some cases, having a local shareholder may be an advantage. This is especially true if you are planning to service the local market. Another this to know is that your commercial license is tied to the type and location of your business. So it is important to review this with your legal team before finalizing your registration.

Another thing to know about doing business in the UAE is the legal system. The basic commercial laws are the Commercial Companies Law and the Trade Agencies Law. These are similar in their foundational aspects to the U.K. Companies Act and the Uniform Commercial Code (UCC) in the U.S. Yet the laws are the same as their British and American counterparts.

Rather to say they serve similar purposes.

In addition, companies registered in FTZs will also have to comply with the specific regulations tied to the FTZ. In many case, this will restrict activities outside of the FTZ and this could constrain foreign investors seeking to set up a portfolio company in the country.

If you decide that setting up in a FTZ is the right move, then you will also have to choose the type of company to register. Choices include Free Zone Company (FZC), Free Zone Establishment (FZE), and even branch offices. Both companies are Limited Liability Companies. The difference is the number of shareholders as an FZC has five shareholders, and the FZE has only one.

All in all, company establishment in the UAE is a fairly efficient process, though it does pay to have legal and accounting support to make sure that everything is set up correctly. This means reaching out to a lawyer with an intimate understanding of UAE law – including the specifics of each emirate.

Another thing to know about the UAE is the stability of its political system. This is due to the leadership of the emirs who rule the country. One such emir is Sheikh Saud bin Saqr al Qasimi. During his time as Sheikh he has worked tirelessly to improve the livelihoods of his people and today his emirate, Ras al-Khaimah, fast developing.

A big reason for this is the fact that the emirate is not oil rich. As such, it has had to leverage the creativity of its people and its location to gain a competitive advantage. Today, Ras al Khaimah is has become a hub for education, healthcare, and industry.

While stability and pro-western policies of the UAE’s leaders have helped the country to gain a competitive advantage. The ultimate draw is the country’s location. The UAE is located at a strategic crossroads near where the Persian Gulf and the Straits of Hormuz meets the Indian Ocean. Additionally, nearly half of the world’s population is within a six-hour flight of the country. This has helped the UAE to become an open, cosmopolitan society, making the country the preferred choice of expatriates in the region.

If you seeking a hub with puts you company within close proximity of Asia, Europe, and Africa then the UAE is the best possible choice. Not only is the country strategically located, but the pro-western investment regime has helped to promote foreign investment. In addition, the country is extremely stable. This important in a region increasingly racked by conflict. The credit for this stability is all due to the country’s leadership. So remember to keep the UAE in mind when you are seeking a hub in the Middle East.

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