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Dubai South free zone company. UAE
Limited Liability Company Registration in Dubai South Free Zone (DWC), Dubai.
Dubai South free zone company

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

The Emirate of Dubai is located on the Arabian Peninsula, in the south of the Persian Gulf. Among the seven emirates that make up the UAE, it is the most populated one and second largest after Abu Dhabi. Dubai has more than 20 free zones. Dubai South Free Zone offers the possibility of registering onshore (free zone) companies in the Emirate of Dubai, which can operate both within and outside the UAE. Such companies are granted a licence (special authorization from the Emirate’s Authority) according to the type of activity that they will be engaged in. Establishing a free zone company implies the possibility of obtaining residence visas for shareholders/employees, as well as their families, which is an indisputable advantage.

Major advantages of doing business in the UAE:

No corporate tax;
Stable banking system;
Ability to work with US dollars;
Quick company registration;
Ability to create substance in the country of registration;
Ability to obtain a residence visa for the company’s shareholders and employees.

Budget for setting up business in DWC Free Zone

Services
Fees (USD)
Company registration in DWC Free Zone, including licence, rent of smart desk office – 5 hours per week, company formation services, and E-channel registration [1]. This fee is applicable in the case of: company with a single shareholder; type of licence – service; smart desk office, 5 hours per week. Other options – upon request
15 800
E-channel deposit (refundable, returned in the case of licence revocation)
AED 5000 / USD 1370
Obtaining a residence visa (cost of one visa – investor visa), including: - payment of all government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport); - preparing necessary documentation; - accompanying the applicant and transport costs (trip to the hospital and migration authority)
4200
Assistance with bank account opening (irrespective of the outcome of application). Corporate account (for legal entity)
2500
Total:
23 870

COMPANY REGISTRATION

Company registration in DWC includes the following steps

1) Selecting

company name to be checked for availability (at least two names), which name:
  • must not be identical or similar to the name of an existing company
    • can use Latin characters
      company structure (director, shareholders, and manager);
      type of licence:

      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.

      2) Paying fees

      3) Providing documents for directors / shareholders / attorneys

      (either originals or notarized copies):

      internal and international passports;
      proof of address (unless the internal passport contains an address stamp);
      CV;
      copy of the passport page with a UAE entry stamp.

      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.

      IMPORTANT: company officers’ prior visit to the UAE is mandatory for company registration. It is irrelevant how old the UAE entry stamp is. If they have never visited the UAE before, they will need to enter the country at least for one day

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

      Preparation and Submission of Documents for Company Registration

      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).
                Before registering a company, the Free Zone authority must check the shareholders and directors of the company (Security Check). At this stage they may request additional documents, for example, a police clearance certificate. The check normally takes 2 to 4 business days

                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.

                          IMPORTANT: Since the UAE is not party to the Hague Convention of 5 October 1961, which abolishes the requirement for legalization of foreign official documents, it is necessary to submit the documents of a local company for legalization to the consulate of a country where they will be used

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

                          VISA APPLICATION

                          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.

                              An investor visa is normally issued for 3 years, a work visa – for 2 years. Upon expiration, a visa can be renewed

                              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) – 5-10 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.

                                  IMPORTANT: One is not required to reside in the UAE permanently, but a residence visa will be cancelled if one stays outside the UAE for more than 6 months

                                  The fees for obtaining a residence visa in DWC Free Zone start from USD 4200. Please contact your consultant for more details on the application.

                                  COMPANY STRUCTURE

                                  Directors

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

                                  The minimum number of directors is 1, the maximum is 7.
                                  Details of directors are not accessible to public.

                                  General Manager

                                  The manager can be an individual, a UAE resident.

                                  The maximum number of managers is 1; can be the same person as director.
                                  Details of the manager are not accessible to public.

                                  Members

                                  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.

                                  DWC does not require a company to necessarily have a local shareholder in its structure.
                                  Details of shareholders are not accessible to public.

                                  Share Capital

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

                                  The capital can be denominated in UAE Dirhams (AED) only. The minimum capital is AED 300 000.
                                  There is no requirement to provide a bank letter confirming the payment of share capital, in order to register a company in DWC.

                                  Registered Office

                                  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.

                                  SUBSEQUENT ADMINISTRATION OF THE COMPANY

                                  Corporate Tax

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

                                  VAT

                                  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.
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                                        Financial Statements and Audit

                                        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.
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                                        Renewal

                                        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.

                                        Fees[2]

                                        Services
                                        Fees (USD)
                                        Company registration in DWC, including licence, rent of smart desk office (5 hours per week), and company formation services. The cost of package may vary depending on the number of shareholders, type of licence, and size of office (the office size dictates how many residence visas a company can have). This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package). Other options – upon request
                                        15800
                                        E-channel deposit (refundable, returned in the case of licence revocation)
                                        AED 5000 / USD 1370
                                        Annual renewal of the company, including licence, rent of smart desk office, P.O. Box, and company renewal services. This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package). Other options – upon request
                                        14800
                                        Obtaining a residence visa (cost of one visa – investor visa), including: - payment of all government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport); - preparing necessary documentation; - accompanying the applicant and transport costs (trip to the hospital and migration authority)
                                        4200
                                        Renewal of a residence visa (cost of one visa – investor visa). Renewal of a residence visa (investor visa is issued for 3 years) requires taking the same actions and paying the same fees as upon initial application
                                        4200
                                        Assistance with bank account opening (irrespective of the outcome of application). Corporate account (for legal entity)/Personal account (for individual)
                                        2500/2500
                                        Compliance fee
                                        250
                                        Keeping company’s accounting records. Maintaining a systematic archive of company documents and providing them to the client upon request
                                        200 / hour[3]
                                        Preparing financial statements, conducting audit and submitting financial statements to the Free Zone authorities
                                        400 / hour
                                        Tax advice on VAT and other matters
                                        300 / hour
                                        VAT registration
                                        1200
                                        Preparing and submitting VAT returns
                                        200 / hour

                                        [1] 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).

                                        [2] The fees are valid as at September 2021.

                                        [3] The fees for preparing financial statements and conducting 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 1900 – fees for audited financial statements with a minimum number of transactions.

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