Free Zone Company Registration in Umm Al Quwain, UAE. Service offer

The Umm Al Quwain Free Trade Zone (UAQ FTZ) is a strategic project of the Umm Al Quwain Government, seeking to encourage entrepreneurial initiatives and provide the necessary infrastructure for a successful business community. Just 45 minutes off Dubai International Airport, Umm Al Quwain is an example of a progressive outlook and prosperity in the UAE.

Establishing an onshore company implies the possibility of obtaining residence visas for shareholders/employees, as well as their families, which is an indisputable advantage. Moreover, economic substance for onshore companies is created by renting an office or a workstation at Flexi desk / Flexi office.

Major advantages of doing business in the UAE:

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

 

Budget for setting up business in UAQ FTZ

Services	Fees (USD)
Company registration in UAQ FTZ, including licence, rent of Flexi Desk office, stamp, and company formation services[1]. This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package).	9400
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 and submitting applications and necessary documents; - accompanying the applicant (trip to the hospital and migration authority). *If applying for 2 visas or more, please check the cost with your consultant.	4200
Local bank account opening	2500
Total:	16100

COMPANY REGISTRATION

Company registration in UAQ FTZ includes the following steps:

1.Selecting:  

• company name to be checked for availability (at least three names), which name:
• can be in English or Arabic;
• must not be identical or similar to the name of an existing company;
• must end in a suffix indicating a type of entity (“FZE”/“FZC”);
• company structure (director, manager, secretary, member, and attorney);
• share capital and distribution of shares between the members;
• activity and geography of business;
• type of licence and type of office within UAQ FZT.

 The UAQ FZT can issue the following types of licence to companies:
 

• Industrial licence – enables the holder to carry on business related to manufacturing of goods, which includes importing raw materials, processing, manufacturing, assembling and packaging products, and exporting the finished product.

• General Trading licence – enables the holder to trade in goods, which includes importing, storing, warehousing, supplying and exporting various categories of permitted goods.

• Commercial licence – enables the holder to trade in goods, which includes importing, storing, warehousing, supplying and exporting permitted goods.

• Service licence – enables the holder to provide the type of services specified in the licence (for example, business consulting, marketing consulting, insurance, etc.).

Some licences require approval from the relevant regulator: for example, opening a clinic will require approval from the UAE Ministry of Health.
 
2.Paying fees.


 
3.Providing documents for directors / managers / secretaries / shareholders / attorneys:

• colour copy of internal passport with a page containing an address stamp;
• colour copy of international passport;
• proof of address (unless the internal passport contains an address stamp);
• copy of visa / UAE entry stamp;
• CV.

The shareholders will need to sign a Questionnaire Form for completing compliance procedure, and a Contract for administration.
A business plan may also be required to register a company for certain types of business.

4.Preparing documents for company registration, having documents signed by the company's officers and shareholders.

  5.Submitting company registration application.

Upon registration of the company, the following documents will be issued:

• Certificate of Incorporation;
• Articles;
• Share Certificates;
• Licence for doing business (generally valid for 1 year);
• Registers of directors and shareholders; 
• Lease agreement for office.

A company seal is also issued.
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 total time to register a new company is around 10 days.

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.
 

REQUIREMENTS FOR COMPANY STRUCTURE

DIRECTORS
- minimum number: - individual / legal entity: - residence:	- one - individuals only - no requirements
SHAREHOLDERS
- minimum number: - maximum number: - individual / legal entity: - residence:	- one - 50 - individual / legal entity - no requirements
MANAGER
- number: - individual / legal entity: - residence:	- only one - individual - no requirements
SECRETARY
UAQ FTZ companies must also have a secretary that can be either an individual or a legal entity. One person can simultaneously act as shareholder, director, secretary, manager and authorized representative of the company.
SHARE CAPITAL
- minimum share capital:	-  AED 300,000  May differ for certain business activities.
The share capital cannot be denominated in any currency other than AED. A company is allowed to issue only one class of shares, of AED 1000 or a multiple amount each.

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.
 
UAQ FTZ 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 flexi desk and flexi office (a separate room or cell in the open space of first-class business centres) to warehouses and land plots.

SUBSEQUENT ADMINISTRATION OF THE COMPANY

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

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.

Financial Statements and Audit

Every company registered in UAQ FTZ must keep accounting records sufficient to confirm its financial position and reflecting up-to-date information about the assets and liabilities of the company.
 
At each reporting date, company directors must prepare financial statements of the company, including auditor’s report, and circulate them to the shareholders for the annual general meeting within 4 months of the financial year-end. However, there is no requirement for audit or submission of financial statements to state authorities.
 
The company’s first accounting period begins on the date of incorporation and lasts at least 6 months but not more than 18 months. Every subsequent accounting period lasts exactly 12 months from the end-date of the previous period.

Fees[2]

Services	Fees (USD)
Company registration in UAQ FTZ, including licence, rent of Flexi Desk office, stamp, and company formation services. This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package). 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). Other options – upon request. Constitutive documents legalization costs are not included in the cost of registration and are determined separately, depending on the prices of the consulate of the country where the company documents will be used.	9400
Annual renewal of the company, including licence, rent of Flexi 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.	8200
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 openingn(irrespective of the outcome of application) Corporate account (for legal entity) Personal account (for individual)	2500 2500
Compliance fee Payable in the cases of: -           renewal of a company, -           liquidation of a company, -           transfer out of a company, -           issue of a power of attorney to a new attorney, -           change of director\shareholder\beneficial owner, except the change to a nominee director\shareholder)	250 (standard rate – includes the check of 1 individual) + 50 for each additional individual (director, shareholder, or beneficial owner) or legal entity (director or shareholder) if such legal entity is administered by GSL + 100 for each additional legal entity (director or shareholder) if such legal entity is not administered by GSL 350 (check for High Risk companies, including the check of 1 individual)
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
VAT registration	1200
Preparing and submitting VAT returns	200/hour
Tax advice on VAT and other matters	300/hour