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

• 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

[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.

The procedure of incorporation of a company in AFZ:

• name of the company to be checked for uniqueness (at least 2 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.

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.

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.

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).

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.

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

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.

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) – 3-5 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.

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.

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.

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.

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.

The minimum authorized capital is AED 185 000 (~ USD 50 300), 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.

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.

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 AED 375 000 (~ USD 100 000).

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.

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 AED 150 000 000 (~ USD 40 830 900), then monthly) prepare and file a VAT return, and pay arising VAT within 28 days after the end of the VAT period.

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.

[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 1 900 – fees for audited financial statements with a minimum number of transactions.