Limited Liability Company Registration in Dubai South Free Zone (DWC), Dubai Service offer

[1] VAT of 5% is applied.

[2] The cost of package may vary depending on the number of shareholders, type of licence, and size of office (office size dictates how many residence visas a company can have).

[3] The description of the account opening stages and the conditions for charging an additional success fee can be found below, in the Fees section.

Company registration in DWC includes the following steps

• must not be identical or similar to the name of an existing company
• can use Latin characters

DWC Free Zone has four types of licence:

Service licence – allows the holder to provide the type of services specified in the licence.

Examples of service licences: business consulting, marketing consulting, project consulting, IT consulting, etc.

Commercial licence – allows the holder to import, export, sell, distribute and store goods specified in the licence.

Examples of commercial licences: general trading, e-commerce, trading in certain types of goods: 3 to 5 types.

Industrial licence – allows the holder to import raw materials for production, processing and/or assembly of specified products. Finished products can be exported outside the UAE.

Examples of industrial licences: processing licence, assembly licence, packaging licence, production licence.

Educational licence – allows the holder to provide educational services, organize / conduct trainings.

Some licences require approval from the relevant regulator: for example, a number of production licences require approval by the UAE Environment and Protected Areas Authority or a specific ministry.

(either originals or notarized copies):

The shareholders need to additionally provide personal data in the form of a letter: phone, email, residential address, country of residence, mother's name, marital status, religion, and citizenship.

The shareholders will need to sign a Client Questionnaire Form for completing compliance procedure, and a Contract for administration.

The following documents are prepared for submission to the registration authority:

• Application for company registration (signed by the shareholder);
• Summary of project (business plan);
• No Objection Letter (from the sponsor) – where there is a valid UAE visa issued by another company;
• Memorandum & Articles of Association;
• Power of attorney (if registration is performed remotely).

Once the check is done, the company is registered. Upon registration, the Free Zone authority issues the following documents:

• Certificate of Incorporation indicating the registration number and date, type of licence, details of shareholder and share capital of the company;
• Licence for the declared type of business (valid for 1 year);
• Office lease agreement (for 1 year);
• Share Certificate;
• Memorandum & Articles of Association.

A company seal is also issued.

The total time to register a company in DWC is 14 days, on average.

Upon registration of the company, you can proceed with visas and bank account opening. A company can open a bank account both at a UAE bank and at a foreign bank – please contact your GSL consultant for details.

The fees for translation, notarization, legalization and apostille are charged additionally.

The UAE does not have such concept as a residence permit. UAE migration rules require the issuance of residence visas, which in practice are similar to a residence permit.

A residence visa can be obtained on the following grounds:

• based on owning a UAE onshore company – investor visa;
• by making an employment contract with a UAE onshore company – work visa.

The number of residence visas depends on the business package chosen during registration of the company.

Application for residence visas includes the following steps (a visa can only be applied for after registration of the company):

1. Opening an Establishment Card (the migration file of the company) – 3-5 days. This document is necessary for the company to be able to apply for residence visas in the future.

2. Submitting documents for a residence visa and obtaining an Entry Permit (permission to enter the country) – 5-7 days.

To obtain a residence visa, an individual must enter the UAE with an Entry Permit.

If at the time of issuing of Entry Permit the applicant is already in the UAE, then in order to complete the issuance of a residence visa without leaving and re-entering the country, it is necessary to change the status of the visa. The service of changing the status of a visa is provided upon request and is subject to additional charges.

3. Visiting the UAE to obtain a residence visa – in most cases, a visa can be obtained within 5 working days.

The applicant needs to:

• undergo a medical examination (blood test and chest X-ray);
• submit biometric data (retina and fingerprints scan).

After receiving a passport with a residence visa inserted into it, one can leave the country.

4. Obtaining a resident ID card - ID Emirates

The card is issued a few days after the issuance of a visa. Personal presence is not required to receive it.

The fees for obtaining a residence visa in DWC Free Zone start from USD 4 200. Please contact your consultant for more details on the application.

The director can be an individual. There are no requirements as to the residence of director.

The manager can be an individual, a UAE resident.

The minimum number of members/shareholders in a company is 1, the maximum is 6. Both individuals and legal entities can be shareholders. There are no residence requirements.

A company can only issue one class of shares of equal par value. Bearer shares are not permitted.

Upon registration the company and the Free Zone authority sign an office lease agreement; the address of such office is considered the official registered office address of the company.

DWC offers various office packages depending on the needs of clients in terms of type and number of licences, number of visas, the need for substance and placement in the Free Zone: from smart desk and smart office (a separate room or workstation in first-class business centres) to warehouses and land plots.

The company must annually renew the licence, by paying a relevant fee, and the lease agreement.

Companies registered in UAE free zones are exempt from capital gains tax, property tax and other taxes, except corporate tax and VAT.

A federal corporate tax was introduced in the UAE on 1 June 2023. Free zone companies may be subject to both the standard rate of corporate tax (9%) and a zero rate. The application of a particular rate depends on a number of factors such as the company’s income, the types of its activities (whether they are excluded or qualifying, or not), counterparties, whether the company maintains adequate economic substance in the UAE, and other aspects.

From 1 January 2018, the UAE introduced a Value Added Tax.

VAT as a general consumption tax applies to all transactions with goods and services, unless such transaction is exempted or taxed at 0% rate.

The standard VAT rate in the UAE is 5%.

There is no obligation to register for VAT unless sales turnover within the country exceeds the registration threshold, which is AED 375 000 (~ USD 100 000) in the UAE.

Registration as a VAT taxpayer is required in the following cases:

• there is reason to believe that the taxable turnover in the next 30 days will exceed the registration threshold (for example, a contract has been made);
• at the end of the month, the taxable turnover for the previous 12 months actually exceeded the registration threshold;
• the company receives services to be included in the return using the reverse charge method, in excess of the registration threshold.

It is possible to initiate a voluntary registration after exceeding the threshold of taxable transactions in the amount of AED 187 500 (~ USD 50 000).

Registration with the UAE Federal Tax Administration and allocation of the company’s Tax Reference Number (TRN) takes 20 business days, on average.

Upon registration with the Federal Tax Administration and allocation of the VAT number, a company must quarterly (or monthly in the case of annual turnover exceeding AED 150 000 000 (~ USD 40 830 900)) prepare and file a VAT return, and pay the resulting VAT within 28 days of the VAT period end.

Before registering a company, we recommend that you consult a specialist of the non-resident audit department and a tax adviser to assess the company’s tax burden and discuss subsequent administration of the company.

Every company registered Dubai South Free Zone must keep accounting records sufficient to confirm its financial position and reflecting up-to-date information about the assets and liabilities of the company. It is also necessary to prepare annual financial statements of the company and have them audited.

The company’s first accounting period begins on the date of incorporation and lasts not more than 18 months. Every subsequent accounting period lasts exactly 12 months from the end-date of the previous period.

A copy of the signed financial statements, together with auditor’s report, must be submitted to the Free Zone authority within 30 days after approval and signing. Financial statements must be approved by the Board of Directors and signed by at least one director within 3 months of financial year-end.

Thus, the company has no more than 4 months from the end of the period to prepare and submit audited financial statements to the state authorities.

Companies that have subsidiaries (more than 50%-owned) are required to prepare consolidated financial statements for the group.

Before registering a company, we recommend that you consult a specialist of the non-resident audit department and a tax adviser to assess the company’s tax burden and discuss subsequent administration of the company.

The company must annually renew the licence, by paying a relevant fee, and the lease agreement.

The company’s renewal date is the anniversary of the issue of the licence. In the case of late payment, the Free Zone authority reserves the right to charge fines, as well as suspend the licence.

The company renewal costs include renewal of the office lease agreement, of the licence, and the P.O. Box. Upon renewal, an updated licence is issued.

[4] VAT of 5% is applied.

[5] The cost of package may vary depending on the number of shareholders, type of licence, and size of office (office size dictates how many residence visas a company can have).

[6]For more details on how fees for account opening assistance are charged, please contact your GSL consultant.

[7] The fees for preparing financial statements and conducting an audit are charged based on the time spent at hourly rates ranging from USD 100 to 400, depending on the type of work and qualification of a specialist involved, but not less than USD 2 200 – fees for audited financial statements with a minimum number of transactions.