Transcript 1. UAE - NuMOV

UAE & KSA – Incorporation Procedures
© Berlin 2016
Content
1. UAE
1. Setting up your business in the UAE (Mainland)
2. Mainland vs. Freezone
3. LLC vs. Branch
4. Distributorship
2. KSA
1. The “new” push for foreign investment
2. Setting up your business in the KSA
1.UAE
Setting up your business (Mainland)
• Step 1 - Select your business activity/ activities
• Step 2 - Select the legal form (LLC, Branch, etc.)
• Step 3 - Select a Trade Name
• Step 4 - Initial Approval Certificate
• Step 5 - Prepare MoA + Local Service Agent (LSA) Agreement
• Step 6 - Establish business location
• Step 7 - Get all necessary approvals
• Step 8 - Collect your Business License
1.UAE
Mainland vs. Free zone
• Mainland
• Advantage 1: Can do business in the entire country (mainland + freezone)
• Advantage 2: Better business partners
• Disadvantage 1: Majority participation (51% at least) of a local partner
• Disadvantage 2: For Branch and representative office - a local service
agent is required. There is possibly a lengthy process to establish the
company.
• Freezone
• Advantage 1: 100% ownership by foreigners allowed
• Advantage 2: Usually a guaranteed tax exemption for 50 years. Also,
usually faster in processing administrative issue.
• Disadvantage 1: Not all activities are allowed in all free zones
• Disadvantage 2: In general, the rule is that you can do business ONLY in
the free zone (and internationally) but NOT with mainland companies.
1.UAE
LLC Vs. Branch
• LLC
• Stands for Limited Liability Company (comparable with a GmbH)
• Creation of a one-man company is possible
• A local partner is required (at 51% share ownership)
• • Liability is limited to share capital
• Branch
• Not an independent company
• Activity is limited to the activity of the parent
• Local service agent (LSA) is required
• Unlimited liability of the foreign company
• No possibility of using Tax incentives (profit is attributed to the parent company)
1.UAE
Distributorship in Dubai
• Every foreign company needs a distributor in and from the UAE!
• Advice 1: Choose your partners very carefully
• Advice 2: Exclusive jurisdiction in the UAE
• Only UAE courts can decide about distributorship-related legal
disputes
• Only UAE law is applicable
• Even arbitrational proceedings are NOT allowed (not even DIFC
proceedings!)
• Other country’s arbitration awards will NOT be enforced by UAE
courts!
2.KSA
The “new” push for foreign investment
 Low oil prices a major problem for KSA
• They are also main accelerator towards a transformed less oil-dependent economy
• Value-added tax, income tax, profit tax.
• Vision 2030: Balance Fiscal Budget, End Oil Dependence, Create more jobs
• Saudi Arabian General Investment Authority
(SAGIA)
• Priority for: energy, transport & logistics, ICT, (information, communication& technology),
health, life sciences, human capital.
• A taste of the upcoming:
 Four “economic” cities to be BUILT (Medina, Hael, Jazan and Rabigh)
• 150 billion USD to GDP, 1.3 million jobs
• King Abdullah Economic City (KAEC) [NEXT SLIDE]
2.KSA
King Abdullah Economic City (KAEC)
• In Rabigh, located along the Red Sea coast
• Comprises six main areas: Industrial Zone, Sea port, Residential area,
Educational zone, Resorts, Financial Island
• By completion (mid 2030s), 100 billion USD invested, 1 million jobs created
• This megaproject is about the size of Washington, DC
• Sea Port: Was opened in December 2013. By September 2015, more than
100 local and multinational companies were operating in the industrial zone
(Mars, Sanofi, Pfizer, Danone). The port has also signed with two of the
world’s biggest ship lines - Denmark’s Maersk and Geneva-based MSC. This
port will be a direct competitor to Dubai’s Jebel Ali Port!
• In 2018, the “Haramain” High Speed Rail line from Medina to Mekka will link
the KAEC to the new international airport in KSA.
2.KSA
Setting up your business (through SAGIA)
Foreign Investor
(Industrial, Commercial and Service Sectors)
1.Commercial Name Reservation
2.Issue SAGIA License (online gate)
3.Obtain Commercial Registration (MoA
Membership with Saudi Chamber of
Commerce)
(Special Activity - Healthcare, Transportation,
Insurance Media)
1.Approval from Authorized Government
Entities
2.Commercial Name Reservation
3.Issue SAGIA License (online gate)
4.Obtain Commercial Registration (MoA +
Membership with Saudi Chamber of
Commerce)
Government Contract
(Industrial, Commercial and Service Sectors)
1. Sign Government Contract
2. Ministry of Commerce and Industry
3.General Organization for Social
Insurance
4. Ministry of Labor
Thank you!
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UAE
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