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Incorporation of a limited liability company in Ajman Free Zone. Service offer

Ajman Free Zone was established in 1988 in the administrative center of the emirate of the same name. Ajman is 40 kilometers from Dubai and is one of the cargo transportation centers due to its large port. A developed infrastructure and a great quantity of commercial immovable property available for leasing made AFZ one of the most sought-after zones for the incorporation of trade and production companies.

Main advantages of doing business in the UAE:

  • No profit tax;
  • Stable banking system, high possibility of opening an account with banks of the UAE;
  • Possibility to work with US dollars;
  • Quick company incorporation;
  • Possibility to create substance in the country of incorporation;
  • No requirement to file accounts and conduct audit;
  • Possibility to obtain a resident visa for company’s shareholders and employees

Budget for the creation of business in AFZ:

Service
Cost (USD)
Incorporation of a company in AFZ, including a license for 1 activity, flexi-desk office lease, stamp, company incorporation services*.
The cost of services is stated for the sole shareholder and possibility to obtain 1 resident visa (minimum package).
*The cost of the package may vary depending on the number of shareholders, kind of license and size of the office (the size of the office defines the number of resident visas).
10,200
E-channel deposit (refundable, returned in the case of license revocation)
AED 5,000 / USD 1,370
Obtaining a resident visa (expenses for one visa), including:
- payment of all government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport);
- services for the execution of necessary documents;
- support services and transport costs (meeting at the airport to hand over an Entry Permit, a trip to the clinic and migration service).
4,200
Opening an account with a local bank
2,500
Total:
18,270

COMPANY INCORPORATION

The procedure of incorporation of a company in AFZ:

1) The following has to be determined:

  • name of the company to be checked for uniqueness (at least two options): it must not be identical or similar to the name of an existing company; characters of the Latin alphabet may be used; the name of the company must not contravene the public order of the UAE;
  • structure of the company (directors, members);
  • kind of license.

A company may obtain licenses of the following categories – Business Invest, Commercial, E-Commerce, Educational, Professional, Industrial, Media and Services.

Some licenses require consent of the relevant regulator, for instance, a number of production licenses require consent of the environmental service of the UAE or certain ministry.

2) Payment for services

3) The following directors and shareholders’ documents

have to be provided (originals or notarized copies):

  • passport;
  • document confirming the address (if it is not stated in the passport);
  • resume;
  • scanned copy of a 3.5 х 4.5 photo with a white background;

The following has to be provided for shareholders:

  • copy of a passport page containing a stamp showing entry into the UAE;
  • personal data in the form of a letter: phone number, e-mail address, residential address, country of residence, mother’s name, marital status, religion, citizenship.
IMPORTANT: shareholders’ prior visit to the UAE is required to incorporate a company. The time that has passed since the UAE entry stamp was received is not taken into account. If the shareholders have never visited the UAE, they need to enter the UAE at least for one day

A business plan may also be required; it shall be provided if the client has decided to incorporate a company with a service, industrial or e-commerce license.

The shareholders will have to sign a client’s questionnaire form in order to undergo the compliance procedure as well as a service contract.

4) Preparation and submission of a set of documents for the incorporation of a company

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

  • company incorporation application (signed by shareholder);
  • specimen signature card (signed by shareholder and director);
  • security approval form (filled in and signed by each director and shareholder).

Before the incorporation of a company the administration of the free zone checks the company’s shareholders and directors based on the provided security approval form; additional documents may be requested at this stage, for example, a no criminal record certificate. Such a check takes 2 to 4 workdays.

After the check is done, company incorporation takes place, which takes 2 to 3 workdays. Upon completion of the incorporation the administration of the free zone issues the following documents:

  • Certificate of incorporation containing the registration number and date, kind of license, information on the shareholder and share capital of the company;
  • License for the proposed activity of the company (license is issued for 1 year);
  • Office lease contract (for 1 year).

The company seal is also handed over.

After the company has been incorporated one can proceed to obtaining visas and opening an account with a bank. A settlement account for the company may be opened with a UAE bank or with a foreign bank – for further information contact your consultant at GSL.

As the UAE is not a signatory to the Hague Convention of 5 October 1961 that abolished the requirement to legalize foreign official documents and does not apostille documents, in order to use documents of a local company in another country it is necessary to submit such documents for legalization to the consulate of that country.

In total, the incorporation of a company in AFZ in average takes 10 days.

Obtaining a visa

In the UAE there is no such thing as residence permit. The migration rules of the UAE imply issue of resident visas, which are practically an analogue to a residence permit.

A resident visa may be obtained on the following grounds:

  • based on the ownership of an onshore company incorporated in the UAE – investor’s visa;
  • by entering into an employment contract with an onshore company incorporated in the UAE – work visa.

The number of resident visas depends on the business package chosen at the incorporation of the company.

Normally an investor’s visa is issued for 3 years, work visa for 2 years.

Upon expiration a visa may be renewed.

The procedure of obtaining resident visas is as follows (one may start obtaining a visa only after the company has been incorporated):

1. Obtaining an Establishment Card (opening the migration file of the company) – 5-10 days.

This document is necessary to enable the company to apply for resident visas in the future.

2. Submission of documents for a resident visa and obtaining an Entry Permit – 5-7 days.

To obtain a resident visa it is necessary to enter the UAE on 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 resident 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 resident visa – in most cases a visa may be obtained within 5 workdays.

The applicant must:

  • undergo medical examinations (blood test and fluorography);
  • give biometric data (retina scan and fingerprints).

Once the passport with a resident visa in it is received the country may be left.

4. Obtaining a resident’s Emirates ID.

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

IMPORTANT: Permanent residency in the UAE is not required; however, a resident visa will be cancelled in the case of absence from the UAE for over 6 months

The cost of obtaining a resident visa in AFZ starts at 4,200 USD. For further information on the procedure of obtaining it contact your consultant.

STRUCTURE

In AFZ companies of two types may be established:

FZE – Free zone establishment, a limited liability company with one shareholder;

FZC – Free zone company, a limited liability company with two (or more) shareholders.

An FZE may be converted into an FZC if the number of shareholders increases.

In Ajman it is also possible to register branches of local and foreign companies as well as subsidiaries (of foreign legal entities).

Directors

Only an individual may be a director (manager); the minimum number of directors is 1. No requirements are imposed regarding directors’ residency. Information on directors is filed with the administration of the free zone but is not available to third persons.

Members

The minimum number of a company’s members/shareholders is 1; individuals and legal entities are allowed; no requirements are imposed regarding residency. In AFZ there is no requirement for a company to have a local shareholder.

If a shareholder is an individual, such individual must be over 21 years of age.

Authorized capital

The minimum authorized capital is AED 185,000 (approximately 50,300 USD), but currently the administration of the free zone does not request proof of its payment at the incorporation of a company.

Normally a company issues 185 shares with the par value of AED 1,000 per 1 share.

Registered office

At incorporation an office lease contract is necessarily entered into between the company and the administration of the free zone. The address of such office is considered the official registered address of the company. The company also has the right to take on lease additional office, production or warehouse premises in the territory of AFZ.

Our specialists are ready to assist in the selection of an office or other premises in the territory of the free zone at your request.

SUBSEQUENT WORK WITH A COMPANY

A company must annually renew its license, by paying the relevant fee, and lease contract.

Profit tax

Companies incorporated in free zones of the UAE are exempt from profit tax, capital gains tax, property tax and other taxes, except VAT.

VAT

Value added tax was introduced in the UAE on 1 January 2018.

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

The standard VAT rate in the UAE is 5%.

There is no obligation to register for VAT purposes while the turnover in the territory of the country is below the registration threshold, which in the UAE is 375,000 AED (~100,000 USD).

Registering as a VAT payer is compulsory in the following cases:

  • there is reason to believe that during the following 30 days taxable turnover will exceed the registration threshold (for example, a contract is entered into);
  • at the end of the month taxable turnover for the preceding 12 months actually exceeded the registration threshold;
  • the company receives services that are subject to inclusion in accounts under the reverse charge and that are worth over the registration threshold.

Voluntary registration is also possible after the taxable transactions threshold of 187,500 AED (~ 50,000 USD) has been exceeded.

Registration with the Federal Tax Authority of the UAE and obtaining a Tax Reference Number (TRN) at least take 20 workdays.

After the registration with the Federal Tax Authority and obtaining a VAT payer number, a company must quarterly (and if its annual turnover exceeds 150,000,000 AED ~ 40,830,900 USD, then monthly) prepare and file a VAT return, and pay arising VAT within 28 days after the end of the VAT period.

Before incorporating a company we recommend receiving consultation from a specialist of the non-resident audit department and tax consultant to determine tax burden of the company and discuss issues of further administration of the company.

Audit and accounts

Every company incorporated in AFZ must keep accounting records sufficient to confirm its financial position and containing up-to-date information on the assets and liabilities of the company.

A company’s financial statements must be prepared annually, but there is no requirement to undergo audit and file accounts with state authorities.

In order to determine tax burden of a company we recommend consulting a tax consultant (we can arrange it on request).

Cost of services[1]

Service
Cost (USD)
Incorporation of a company in AFZ, including a license, flexi-desk office lease, stamp, company incorporation services.

The cost of the package may vary depending on the number of shareholders, kind of license and size of the office (the size of the office defines the number of resident visas).

The cost of services is stated for the sole shareholder and possibility to obtain 1 resident visa (minimum package).

Other options are available on request.

10,200
E-channel deposit (refundable, returned in the case of license revocation)
AED 5,000 / USD 1,370
Annual renewal of a company, including a license, flexi-desk office lease, company renewal services.

The cost of services is stated for the sole shareholder and possibility to obtain 1 resident visa (minimum package).

Other options are available on request.

9,800
Obtaining a resident visa (one investor visa expenses*), including:
- payment of all government fees (Entry Permit, Medical & Emirates ID, Visa Stamping);
- services for the execution and submission of applications and necessary documents;
- support services (a trip to the clinic and migration service).
*In the case of obtaining 2 or more visas or obtaining a work visa, please ask your consultant for the exact cost of the visa
4,200
Assistance in opening bank accounts (irrespective of the result).
Corporate account/Personal account
2,500/2,500
Compliance fee.
Paid in case of:
- company’s renewal,
- company’s liquidation,
- transfer to another agent,
- issue of a power of attorney for a new attorney,
- change of director/shareholder/beneficiary, except for a change to a nominee director/shareholder
250 (standard fee – includes check of 1 individual)
+ 50 for each additional individual (director, shareholder or beneficiary) or legal entity (director or shareholder) if legal entity is serviced by GSL;
+ 100 for each additional legal entity (director or shareholder) if legal entity is not serviced by GSL;
350 (check for High Risk companies, including check of 1 individual)
Keeping accounting records of the company’s business. Systematic archiving of the company’s documents and provision thereof to the client on request
200 / hour[2]
Preparation of financial statements, audit of the company’s business and filing of financial statements with the authorities of the free zone
400 / hour
Registration for VAT purposes
1200
Preparation and filing of VAT returns
200 / hour
Tax consultation on VAT and other issues
300 / hour
Other services as agreed with the client
200 / hour

[1] The cost of services is effective as of January 2022.

[2] The cost of preparation of financial statements and audit of the company’s business is determined based on time spent on work at the rate of 100 to 400 USD per hour depending on the type of work and qualification of the specialist involved; it is at least 1,900 USD – the cost of audit of statements with the minimum number of transactions.

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