The United Arab Emirates (UAE) have now risen to become the third-largest economic power in the Arab world.

The post-oil era has long since begun in the seven emirates. With more than 40 free zones, the Sheikhs offer ideal conditions for investors.

Whether the Emirates offer the right environment for your business depends on your goals. The UAE offers you a high degree of rule of law and stability.

Since its founding in 1971, the country has presented itself as reliable and stable. This includes a stable currency pegged to the US dollar.

A big advantage is the possibility to set up a company Quickly and easily.

For doing business, the Emirate has a good International reputation as a reliable business center and is likely to be an important asset.

The country is fully internationally accepted, your clients will especially appreciate it. Emirates invoices are recognized by tax Authorities worldwide. In this, the UAE differs significantly from the tax havens of the Caribbean.

The Emirates are a business location for international business. If you are only looking for a country for tax avoidance, the UAE is probably not for you.

We advise you to find out whether the country on the Arabian Peninsula is right for your project.

Emigration to Dubai is a dream of many. This has been made possible for you by establishing a company in a free zone. First, let's look at the basics.

Why freezones in the United Arab Emirates are interesting

In the Emirates you have to distinguish between the "normal" national territory and the Free Zones. On the national territory, investment conditions for foreigners are not particularly friendly. The Sheikhs set up the free zones to prepare their economies for the post-oil boom period.

So far, it has been about protecting the natural resources from being plundered by foreigners. For this reason, foreign nationals need an Emirat partner to set up a company in the national territory, who owns the majority of the company with at least 51% of the shares.

However, the country wants to become the new technology and service center in the world. This is where the rulers of the desert region see the greatest opportunities to build a prosperous future after the oil boom. So investor-friendly areas had to be created, the free zones.

Here the rulers acted very pragmatically. Legally, these structures are largely independent of the rest of the country in many areas. The laws of the Emirates only apply if the free zone has not issued its own regulations on the subject in question.

Each free zone has its own legislation, which is primarily oriented towards investors, who should find optimal conditions here. The conditions in the free zones differ considerably in some cases. Not only the amount of the license fee plays an important role.

Often, the regulations also stipulate that only certain industries are allowed to locate here. An important aspect for an investment in a UAE free zone is that foreigners are allowed to hold 100 % of the shares of a company here.

In the rest of the country, with the exception of Ras Al Khaimah, UAE nationals must hold the majority of shares. In addition, investors and their families can easily obtain visas in the free zones.

Here it is important to find the most suitable Economic Zone for your Business. Below you will get to know the Ras Al Khaimah economic zone, an area that offers ideal conditions for almost every Industry. Before we deal specifically with founding a company in a free zone, let's take a closer look at the Emirates.

The United Arab Emirates (UAE)

The UAE in numbers (2020):

The United Arab Emirates is a federal state consisting of seven autonomous emirates that decide many legal matters on their own. It is located in the east of the Arabian Peninsula. Neighboring countries are Saudi Arabia and Oman.

The area of the federation corresponds approximately to the common area of North Rhine-Westphalia and Lower Saxony. The country has been independent since 1971 and has been a stabilizing factor on the Arabian Peninsula from the beginning.

The country has a rapidly growing population. Almost ten Million people currently live in the Emirates. Almost 85% of the population live in the Emirates of Abu Dhabi, Dubai and Sharjah. 87% 87% of the population lives in the city.

The region's radiance is shown by the fact that 87.9 % of all residents are migrants. South Asians make up the majority of migrants. 38.2% of the UAE's residents are Indian. Since male migrant workers in particular immigrate, the Emirates have a clear male surplus in the population. 2.56 men for every woman.

Obtaining Citizenship of the Emirates is almost impossible. Naturalization is only possible after 30 years of uninterrupted residence in the Emirates.

Politically, the Emirates are governed by the supreme council of rulers. The seven rulers sit in it and determine the president and the government from among them.

The President is the Sheikh of the largest Emirate, Abu Dhabi. Sheikh Khalifa bin Zayed Al Nahyan has been the country's head of state since November 1, 2004. After suffering a stroke in January 2014, his half-brother, Crown Prince Sheikh Muhammad bin Zayed Al Nahyan, is in charge.

Prime Minister and thus head of government is the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. The individual Emirates are hereditary monarchies.

The country Ranks 35th in the Human Development Index, making it one of the 62 countries in the world with a very high level of human development.

For comparison: Germany is in fourth place on this list published at the end of 2019. China is only ranked 85th with a high level of human development.

The state religion is Islam, although the practice of other religions is tolerated. However, public life is based on the Koran. According to official figures, 76 percent of the population profess Islam, nine percent are Christians.

The country's Islamic character certainly leads to some restrictions on life in the UAE. However, this does not have to be an obstacle to taking up residence in the Emirates.

You don't have to miss out on the ideal opportunities for setting up a business. More on this below.

The official language is Arabic, with virtually everyone in the Emirates speaking English. In the authorities, however, it is absolutely necessary to write applications in Arabic. Our local partners will support you.

The Emirates finance their state primarily from oil revenues, which are distributed among the Emirates according to a specific formula. In addition, the country levies customs duties, from which, however, the free zones are exempt.

The currency is the Dirham (Dh.), which is firmly pegged to the U.S. dollar. Its economic strength and political stability make it a very stable currency.

There are taxes on some luxury goods and on tobacco. The country has since introduced a sales tax of five percent. However, this only applies to transactions within the customs union of six Gulf States. There are numerous exceptions.

The UAE judicial and legal system

The legal system of the United Arab Emirates is based on secular and Islamic components.

Although the country's constitution declares Sharia law as the basis of jurisprudence, it plays little role in general jurisprudence for non-Muslims.

In many civil law decisions, judges apply secular law based on the British judicial system. Family law is an exception.

A traditional Image of women is firmly anchored in the Emirates. So a Muslim woman has a guardian. The woman may only marry with his consent. Muslim women are not allowed to marry non-Muslims.

Same-sex relationships are prohibited.

The Judiciary of the Emirates is independent and consists of several levels. Judgments can be appealed to the next higher court. The highest authority is the high federal court.

According to the Constitution, each emirate may Set Up its own judicial system or merge with the federation's judicial system.

In Dubai and Ras Al Khaimah there are areas of law in which the judiciary of the federation does not intervene.

The Emirates have practically no legally regulated consumer protection. The principle of "as is" applies to purchases, and subsequent complaints are therefore hardly enforceable. In the event of a dispute, the authorities act as mediators.

The Emirates at a glance

The UAE consists of seven Emirates, all of which have their own characteristics. You should therefore familiarize yourself with the local conditions.

For your company in a free zone, for example, it is important whether the free zone accepts the planned industry. In addition to the costs, you should be interested in the Infrastructure offered and the support provided for the establishment of the company.

In addition, the requirements for the structure of a company are different.

If you want to live in the Emirates or emigrate to Dubai, you should be aware that each Emirate has its own legal framework. You also have to report many official procedures in the emirate where your company is located.

Be it the driver's license or visa issues, the Emirate in which you founded your company is responsible for all official matters.

First, we want to get a quick overview of the individual Emirates.

Abu Dhabi

Abu Dhabi is by far the largest Emirate. It has the most oil reserves and is the political center of the country.

The ruler of the emirate, Khalifa bin Zayid Al Nahyan, is also the President of the Federation. Per capita income is around US$63,000, the third highest in the world after Luxembourg and Norway.

For some time now, the emirate has been making great efforts to reduce its dependence on oil. Part of the diversification is the creation of seven free zones.

The Abu Dhabi Global Market is very popular with financial companies. The reason is a license that almost all international Banks recognize.

However, founders are faced with high demands. They include a high license fee and the obligation to rent an office. 

Dubai

With 2.2 million Inhabitants, Dubai is the most populous emirate. The ruler, Sheikh Muhammad bin Rashid Al Maktoum, is also Prime Minister of the Federation.

The Emirate attracts attention especially with bold construction projects. Artificially created islands or the Burj Khalifa are examples of this. At 828 meters, the Burj Khalifa is the tallest building in the world.

The Dubai Mall is one of the largest shopping malls in the world. Dubai tried early on to reduce its dependency on oil.

In addition to opening up to tourism, the Emirate started early to attract investors. For safe investments, Dubai created over 20 free zones, making the city one of the largest commercial Centers in Asia.

The Dubai Multi Commodities Center is the largest free zone in the Emirate. But the Dubai Airport Free Zone Authority, the Jebel Ali Free zone Authority and the Dubai Internet City are also among the major free zones.

The Emirate covers its state expenditures primarily from oil revenues. Taxes and duties are low, the free zones are largely exempt from this. Companies only have to pay an annual license fee. 

Sharjah

Sharjah is the only Emirate with access to the Persian Gulf and the Gulf of Oman. It is considered to be the most conservative area in the UAE.

Alcohol is strictly forbidden in Sharjah, even for foreigners. In addition, there are dress codes for public spaces that are stricter than in other Emirates.

Violations are punishable by fines, and in repeated cases, the laws even provide for prison sentences.

Many Sharjah residents live here mainly because of the low rents. They often work in neighboring Dubai.

The Emirate has three free zones, but they are not popular with investors.

Sharjah Media City, for example, offers the advantage of very low license fees, but loses this advantage through strict regulations.

Ras Al-Khaimah

Ras Al Khaimah is the youngest member of the United Arab Emirates. Today it is dominated by tourism. In addition to the beautiful beaches, the archaeological site of the ancient city of Julfar is worth seeing.

Quite a few inhabitants are engaged in agriculture. On the fertile coastal plain there are several date and orange plantations, which draw their water from the springs of the nearby mountains.

However, the future of the emirate lies in foreign investment. Ras Al Khaimah now offers three free zones for this purpose.

The Ras Al Khaimah Economic Zone (RAKEZ) is not only one of the oldest, but also one of the most popular areas in the entire federation. 14,500 companies from more than 100 countries have found a home here.

Among them are large industrial companies as well as start-ups and freelancers. More than 50 industries are represented.

Apart from a license fee, Entrepreneurs do not have to pay taxes in the RAKEZ. Incidentally, this applies to all free zones in the UAE.

RAKEZ is especially popular because of the easy bookkeeping. In addition, the creation of a company takes less than a week.

As far as an Emirates entry stamp is available, the incorporation can be done from home. Personal presence in Ras Al Khaimah is not required.

Fujairah

Fujairah is located on the Gulf of Oman and only came into being in 1902 when some houses were split off from Sharjah. The emirate has no oil deposits, but thanks to its coastline, it has significant tourism.

In addition, the people live from agriculture and fishing. The state budget is largely dependent on Abu Dhabi.

In addition, Fujairah issues its own postage stamps, which are popular with collectors. An important source of income are the license fees of the companies in the two free zones.

The Fujairah Free Zone (FFZ) has only existed since 2018, but is already one of the most popular locations for international investors.

Interesting for those who do not want to miss the comfort of Dubai is a large office building that the free zone operates there. FFZ was able to secure the services of experienced managers from other free zones, which creates a very professional environment for investors.

It is not even necessary to be present in Fujairah to establish a company. You don't even have to be in Fujairah to set up a company. If the passport has a stamp on entry into the emirate, the company can be conveniently registered from home.

Umm al-Qiwain

The emirate has the smallest Population of 50,000, but is somewhat larger in area than Ajman. Compared to other emirates, the proportion of citizens in the total population is quite high at 30%.

The area has a long settlement history. People lived here 5,000 years ago. Today, tourism is the most important source of income for most residents.

Travelers are attracted by charming landscapes, but also by the world's largest aqua park. In addition, the coast off Umm al-Quwain is considered the best sailing area in the Emirates. There is a free zone in the Emirate.

Ajman

Ajman is the poorest emirate due to a lack of oil reserves. A large part of the government revenue comes from the richer Emirates.

With 148 square kilometers, Ajman is smaller than Liechtenstein. Tourism on the beach of Ajman City is of importance.

Otherwise, the people live from building dhows, the traditional trading vessels of the region. In addition, the cultivation of tobacco, the building materials industry and trade in the city's port play an important role.

Ajman is the only Emirate that has licenses for the sale of alcohol outside of international hotels. The Ajman Free Zone has existed since 1988.

The United Arab Emirates has an excellent reputation in the financial and economic world, which is also due to the very stable political situation.

Individual Emirates created an environment in which a highly diversified economy could develop. The advantage is that the Emirates does not know any direct taxes.

Due to favorable tax legislation, the cost of living is low. This is also noticeable in the costs for personnel, real estate and resources such as energy or water.

However, foreign investors have to deal with a number of handicaps on the "normal National Territory," which have an inhibiting effect on investment. One of the biggest handicaps is the strict ownership rules.

Apart from Ras Al Khaimah, Foreigners outside of the free zones are not allowed to own majority companies.

Outside the free zones, the laws stipulate that every company must be at least 51 percent owned by a UAE national.

Since foreigners have almost no chance of obtaining UAE citizenship, this means that entrepreneurs need a straw man, called a "sponsor" in the Emirates. This person is entitled to an annual salary for his "service".

Land ownership is also usually impossible. Dubai is just starting to open up to foreigners. The country has one of the most modern infrastructures in the world.

The Dirham currency is very stable and linked to the US dollar. It is convertible without restriction.

The Emirates will need new sources of income in the coming years. Oil, which currently finances the state budget, will not bubble up endlessly in the future. Knowing this, the Emirates opened up to foreign investors and created an ideal environment for investors.

The first free zones were established back in the 1980s. For the first time, they gave foreign investors the ability to circumvent strict ownership restrictions. An Emirati citizen is not required to hold a share in a free zone company.

Tax exemption, an excellent infrastructure and low costs for electricity, water and fuel are important arguments for setting up a company.

While some offshore paradises in the Caribbean rely on shell companies, the Emirates are aiming to establish a real physical economy.

This has the advantage of a high reputation in the business world, from which your own company also benefits. Anyone who has their company headquarters in the Emirates is in a country that stands for a powerful innovative economy.

No one associates the country primarily with tax havens. The Emirates are much more regarded as an attractive business location.

The United Arab Emirates is white-listed by the OECD and the FATF (Anti-Money Laundering Organization). The country meets all internationally applicable standards.

Although the Emirates is a tax haven with no direct taxes. They are not officially considered a tax haven.

This has one great advantage: the authorities have no access to the owners of a free zone company in Ras Al Khaimah, where shareholders of a company are not listed in public registrations.

However, the income only remains tax-free if you take up your tax residence in the right country. You should therefore choose your tax residence carefully and let us Advise you.

Taxes in Dubai or the United Arab Emirates

Instead of taxes the State collects from citizens and companies lot of administrative fees. Entrepreneurs have to renew their business licenses every year.

The license is issued to a specific industry. Let's say you have started an Internet company. Then you should not suddenly want to do something else. If you want to do business consulting, you have to establish a new company.

Each free zone specializes in one industry, you may even have to establish a company in another free zone. Therefore, it is very important that you think through exactly what area of business your company should operate in.

 We would be happy to Advise you on finding the right free zone for your company!

By choosing the form of your company, you set the course for the future and determine your scope of action.

You should be clear about whether you only want to do international business or also want to be active in the Emirates. In addition, your decision plays an important role if you intend to move your Center of life to the Emirates.

Mainland Company

LLCs are commonly referred to as Mainland Companies. The company requires a corresponding License from the Department of Economic Development.

In the case of mainland companies, a maximum of 49 percent of the company shares may be held by Foreigners. You need a citizen of the Emirates to hold at least 51 percent of the company shares. This "sponsor" expects a remuneration.

Theoretically, an LLC must have only one shareholder, but foreigners need the "sponsor", citizen of the Emirates.

The liability of an LLC is limited to its share capital and is thus similar to the model of a GmbH in Germany. However, there is no mandatory minimum capital in the UAE. The share capital does not have to be paid up or proven.

You can obtain a license for your company for almost any industry. The only exclusions are insurance, banking and investment.

All kinds of trade activities, manufacturing, services and crafts are possible. The company can freely trade in the UAE, including in the free trade zones. Your international business can also be processed.

The company can apply for unlimited visas, which are valid for two years and must then be renewed. The company can also rent or buy office space anywhere in the Emirates.

LLC can obtain a UAE tax residency certificate and thus benefit from UAE and Gulf Cooperation Council (GCC) tax and customs advantages.

A disadvantage is that the authorities may require external approvals. This can be time-consuming and costly. Setting up a company takes significantly longer than in a free zone.

Sole proprietorships are similar to those in Germany. They are based on a business license for one person. The Sole Proprietor is liable with all of his assets.

As a foreigner you are only allowed to perform professional services and need a license for that. Possible fields of activity are consulting activities in management, IT, medicine and Engineering.

Unlike an LLC, as a sole trader, you do not need an Emirati citizen to participate in your business. The downside is entrepreneurial liability with all your private assets. However, you do not need to deposit any capital as collateral.

The licensing authority does not recognize service providers without an office. For example, if you are a freelance programmer, you must have an office so that you can get a business license.

In addition, the law requires the involvement of a registered agent for the establishment of the company, who takes care of the licenses and visas.

The model is suitable for service providers who, for example, want to carry out a particular trade in the Emirates. The services can be performed anywhere, even in the free zones. You can rent or buy office space without any restrictions. It is possible to open a bank account.

We reported about one possibility in RAK here.

Offshore Сompany / IBC

An offshore company (IBC) serves business outside its jurisdiction. Therefore, if you want to conduct domestic business in the Emirates, this type of company is not the right choice.

An exception is the participation in companies in the UAE, which is allowed throughout the national territory. Such a company helps to develop international markets by taking advantage of tax exemption for international business, can be used as a holding company or for asset protection.

The United Arab Emirates do not tax profits and offer you legal security through numerous double taxation agreements, including with Germany and Austria.

In addition, you benefit from a stable, business-friendly legal system with little regulation. You get access to the global financial market. The UAE legal system protects assets such as intellectual property.

If you want to move your Center of life to the Emirates, an offshore company is not a good choice because these companies cannot apply for visas.

Since you have to move the Center of your life outside of your country to enjoy the tax advantages, a free zone company is the better solution here. Bank accounts are very hard to get with Offshore IBC Companies.

Free zone company

A company in the free zone offers the advantage that there are no restrictions on the ownership rights of foreigners. You can have 100 percent of the shares and do not need a co-owner from the Emirates.

Free zones are separate jurisdictions that can issue their own rules and regulations. In most cases, these are deregulations that give foreign entrepreneurs an Ideal environment for their business.

Companies are completely exempt from corporate or other income taxes. Capital and profits remain completely within the company.

Liability is limited to the company's capital. Business can be conducted in the free trade zone and around the world. However, such a company is not allowed to operate on the territory of the UAE.

However, the company can obtain a tax residency certificate in the Emirates, which is useful due to the numerous double taxation treaties. Entrepreneurs will find many benefits in the free zone, such as offices and numerous support services. These are already included in the annual license fee.

This option is ideal especially for founders, as they can count on the complete infrastructure, including the address of the company.

Unlike an offshore company (IBC), founders, family members and employees receive residence visas. Opening a bank account is easy.

It is important to note that it is not possible to establish a company without "registered agent". This is quite positive at first, because the agency takes care of most of the paperwork for you.

The most important thing is to find a good agent. This will determine how quickly you can get a visa.

At the end of the visa process, you will receive an identity card, without which you, in principle, will not be able to live in the Emirates. You have to open a bank account, apply for a driver's license, and without an Emirates ID, there's not even electricity or water.

Therefore, it is very important to find a good agency with good references. Ideally, if the agency has good local connections and employees are constantly located in the Emirates.

Our partner in the Emirates has an excellent reputation and fast service. We can help you register a company and also get a Visa. Please arrange a strategic meeting first so that we understand you and your project.

The ruler of the Ras Al Khaimah (RAK) emirate, Sheikh Faisal Bin Saqr Al Qassimi, established the Ras Al Khaimah Free Zone (RAKEZ) in 2000. Today, the Emirate is one of the most popular places to establish offshore companies or a RAK Free Zone company.

Setting up a company takes only a few days and is comparatively inexpensive. In addition, RAK offers framework conditions that clearly set the emirate apart from others.

A major advantage compared to the rest of the country is the regulation of ownership. While a foreign investor is normally not allowed to hold more than 49 percent of the company's shares in the UAE, in RAK he can own 100 percent of the company.

In other Emirates, a local trustee had to be hired and own 51% of the company's shares. As of 2012, the Ras Al Khaimah Emirate no longer requires trustees, even outside the free zone.

The authorities in RAK treat all data as confidential. There is no Requirement to publish lists of shareholders or directors, which provides the highest level of discretion. As a result, it does not matter who the director is.

The owner and director of a RAK offshore company can also be legal entities. The same person may also hold the position of secretary prescribed by RAK.

Good to know: All income from your offshore company is tax-free. There is therefore no corporate or trade tax. It can become problematic if you do not move your place of residence to the Emirates.

If, for example, you are subject to unlimited tax liability in the Federal Republic of Germany, this will also affect the profits in RAK. In this case, the additional taxation often applies if your offshore company has no economic substance in the Emirates.

In 2019 the UAE introduced the Economic Substance Regulation (‘ESR’) for specific activities. These are also implemented by the free zones.
All companies that exercise one or more relevant business areas or are active in these fall under the new rules. These are:

It is less important which license your company has, but which activities are actually carried out.

If a company carries out one or more relevant activities, a so-called "Economic Substance Test" must be carried out.

According to Art. 6(2) of the ISR Decision, the following criteria must be met in relation to the relevant activity in order to pass the Economic Substance Test:

Accordingly, a company must carry out CIGA (Core Income Generating Activities) in the Emirates. This means that a core income must be generated by relevant activities in the Emirates.

In addition, the company must be managed in the UAE and there must be a sufficient number of qualified employees in the Emirates. he amount of operating expenses must be traceable.

The rules also stipulate that there must be an appropriate amount of physical assets.

The substance test must be repeated every year. The competent authority decides independently whether it is passed.

Recommendation: You should find out exactly what the local authorities require before setting up a company. This will save you trouble later.

If a company does not pass the test, the UAE Ministry of Finance receives a notification. According to the OECD requirements, the ministry is then obliged to report these findings to the competent authority at the headquarters of the parent company.

One thing also becomes clear from this: If you set up your company in the UAE and take up your tax residence there at the same time, these rules do not play a role for you.

Especially countries with foreign tax laws, like Germany, should be avoided when choosing your tax residence.

Your personal income, i.e. the withdrawals to cover the cost of living, would otherwise also be taxable if you earn them abroad and also the income of your company due to the Additional Taxation (CFC).

If you take your sole tax residence in the Emirates, dividends and all other private income are tax-free.

You can easily get a long-term residence permit if you set up a company in a free zone. In addition, you should no longer be subject to unlimited tax liability in your home country, such as Germany.

There is no obligation to disclose financial accounts in any way. There is a simple accounting obligation, but no balance sheet obligation.

It is sufficient to keep a business book in which all business transactions are recorded. Nobody expects you to file a tax return. The business law in RAK does not provide for tax consultants and even auditors.

Import and export regulations are very liberal. There are no foreign exchange restrictions or controls. Inflation is low. The UAE financial system offers unlimited access to the global financial market.

There is no minimum capital requirement either at the time of incorporation or later. The company's liability is limited. There is no obligation to have a permanent establishment in the Emirate.

This means that you do not incur any rental and ancillary costs. Your company does not have to employ any staff. However, the offshore company in RAK may have addresses in Dubai or Abu Dhabi.

This could be interesting if you expect a better reputation. If you set up a company in the free zone, a business location is automatically included in the license.

          The establishment of an offshore company (IBC) in

     Ras Al Khaimah

A company can be set up in RAK by one person. This person does not have to be present at registration.

A certified copy of a passport and a utility bill are sufficient as proof of identity for natural persons. The founder does not need to reside in the Emirates but must provide proof of address and a resume. Reference letters are also an advantage.

For comparison: the Jebel Ali Freezone in Dubai requires two directors, who must also be present in person at the time of incorporation. The company must be incorporated through the "registered agent".

The company must have a registered Office. The start-up costs include the registered agent and the license for one year. You have to renew the license for your company annually.

Costs depend on the industry and the size of your company. A company is founded as an international business company (IBC). The company name can be freely selected, but must include the appendix "Limited".

This has great advantages, because with the addition of "Limited" the company is considered an internationally renowned limited liability company. This also has great advantages for your customers, who would like to claim their transactions with you as costs in their home country for tax purposes.

Incorporation usually takes between four and seven days from the time of application. A company in the UAE must be licensed every year. A license fee is due for this, which is particularly cheap in RAK.

Furthermore, an offshore company is not allowed to rent office space in the UAE, but must provide a registered address, which is provided by the "registered agent". Your company in RAK can buy and own real estate in the Emirates and establish any number of subsidiaries.

These do not have to be located exclusively in free zones. Your offshore company may establish subsidiaries in the Emirates. For example, you can open a branch or establish a subsidiary in Dubai.

It is important to note that an IBC is not allowed to do business within the UAE. Opening business accounts with an IBC is usually very difficult or impossible. Visas are not granted to offshore (IBC) company owners. Therefore, we usually do not advise setting up an IBC in the UAE.

If you do not want to do business in the UAE, you are not interested in asset protection or a holding company and you want to apply for a residence visa, you should rather Set Up a company in the free zone.

Advantages of a RAK free zone company in Ras Al Khaimah economic zone (RAKEZ)

With the license in the free zone, the company has its own operating facility. In addition, there are very low license fees. They are well below the prices of the large free zones in Dubai and Abu Dhabi, but offer the same high quality service.

While most free zones in the UAE are reserved for certain industries, in the RAKEZ you can establish companies of almost any industry. Financial services and adult entertainment are excluded.

The company also benefits as the UAE has signed double tax treaties, including with Germany and Austria and other countries.

Entrepreneurs can apply for residence or investor visas for themselves and family members to move their Center of life to the Emirates. Foreign employees are also granted visas depending on the scope of business activity.

Easy access to visas as well as the ability to open a business account is the main advantage of the RAK Free Zone. Visas are valid throughout the Emirates.

Of course, you can open bank accounts throughout the Emirates and enjoy the full service of international banks. You must be present in person to open a bank account.

To open a business account, you may need additional documents, such as a resume and a business plan.

Make sure you have a multi-currency account. In addition to the dirham, the euro and the US dollar make sense. The reason is to keep exchange fees low.

Bankers in the Emirates are skeptical about some business areas. These include marketing and consulting, which are on an index. Here it is better to use other terms, for example advertising. Our agents will help you with this.

The disadvantage of a RAK free zone company is that you cannot do business with it inside the UAE.

What is the cost of incorporation in RAK?

There are the following costs if you decide to establish a free zone company in Ras Al Khaimah Economic Zone with our help:
Foundation costs one-time: from AED 11.500 ,-
Average founding time: Around one month
Running costs: Depends on your own setup and if visas are needed. 

How to live in Dubai

In order to legally take advantage of the tax benefits of an offshore company in Ras Al Khaimah or any other free zone, you must also relocate your residence outside of your country.

In most cases, it makes sense to move to the UAE. Get your residency and tax residence. With a proper setup, you circumvent most problems with CFC Rules, substance requirements, and other taxation pitfalls of high taxation countries. We have to look into your case to give proper recommendations.

But you don't have to live in Ras Al Khaimah. If you have a company in RAKEZ, you will receive a residence permit and be able to move to any other Emirate. Your residence permit is also valid in Dubai and you could also live there. This applies not only to you, but also to your entire family and potential employees.

If you want to move to the UAE, you need a residence and work permit.

Entrepreneurs and employees in the RAKEZ can easily obtain a visa. But also as a perpetual traveler or digital nomad a residence in the UAE can be advantageous.

For example, in this case, you can get a residence address by renting an apartment in the UAE. This will give you a consumption bill, which is often useful for opening bank accounts and other services.

Investors and shareholders get the UAE investor visa, which is also issued to several shareholders of a company. To do this, each investor in the offshore company must hold shares of at least 50,000 dirhams (almost 11,500 euros).

To obtain an investor visa in the UAE, it is also enough to invest in real estate. With an investor visa, you can open a private bank account.

The visa is initially valid for three years and is then easily converted by the authorities into a UAE residency visa.

However, it is a condition that you have stayed in the Emirates at least once within six months. In order to maintain your right of residence and thus your tax exemption, it is sufficient that you visit the Emirates every 183 days.

This is brilliant for digital nomad or perpetual traveler, as it gives you extreme spatial freedom. The only thing you have to be careful of is that you don't become taxable anywhere else. In the meantime you can travel around the world.

Cyprus with its 60 days regulation or Georgia with its HNWI status and zero days attendance requirement has comparable possibilities for you.

If you fail to visit the UAE within 183 days, you will forfeit your right of residence.

Employees of a company from the RAKEZ receive a UAE employment visa, which should be applied for before entering the Emirates.

Appropriate qualifications and an age between 20 and 60 are required. The authorities also check whether the number of visas corresponds to the business volume of the company.

With this visa, too, the visa holder may not stay outside the Emirates for more than six months at a time. If this is the case, the visa expires. Family visas are available for family members of investors and employees.

How to get a visa as a free zone entrepreneur

Applying for a free zone visa is easy and this residence permit will allow you to live in Dubai.

For your safety, you can use the help of the free zone Authorities. They will accompany you together with us every step of the way. It makes sense to complete the process during your stay in the UAE.

The visa can be easily applied online. First of all, you must tell your agent that you want to not only register a company, but also get a visa.

Of course you can also go through this process with GoodbyeMatrix and our partner free zone IFZA at the Dubai Silicon Oasis. Please note that service prices are subject to change.

For this you have to pay the registration fee of 2,500 Dh. (about 610 euros) and a deposit of 5,000 Dh. (620 euros) transfer. Our partner agent will then take care of the registration.

Once the registration is done, you need an entry permit, which you can apply for online. The work visa is valid for 60 days and costs 1.000 Dh. (244 Euro). The processing of the paper takes about 15 days and can be reduced to five to seven days with an express service.

If you are in the Emirates, you should not leave the country after applying for an entry permit, otherwise there may be delays in processing.

You will receive the entry permit by e-mail. You activate it online, which works best if you are already in the country. The process is called a status change and varies depending on where you are when you activate.

It is easiest if you are already in the country. This is not a problem because you can stay in the country visa-free for up to 90 days.

You send the passport to the immigration office, which stamps the work visa and activates it. You need to budget 750 Dh. (183 euros) for this. The processing takes about three to five days. If you are outside the Emirates, the visa can be activated by entering the country.

For this you present a printed work visa to the official at the airport. He stamps it and activates your residence status. The procedure is similar when entering the country by land.

For the final residence visa you have to undergo a medical test, which includes a blood test for infectious diseases. In addition, your chest will be x-rayed.

With the result, which you will receive after three working days, you apply for a UAE ID card. This is an identity card. It allows you to open a bank account, sign a rental contract or a mobile phone contract.

To apply for the card, you need to go to the Identity Card Authority. They will collect biometric data during the initial treatment: Eye scan and fingerprints.

The card is valid for three years and costs Dh 370. (90 euros). Now the residence visa has to be stamped or glued into the passport. To do this, you have to submit the passport to the immigration office, which then take about 15 days.

Spouse and dependent family visas can be apply after your process is complete. For this you need a certificate of income from your Free Zone company. For this you will need an income certificate from your free zone company.

UAE expects you to sponsor your dependents. In order to sponsor your spouse or a child, you will need to prove an income of Dh. 10,000. This can be done through an employment contract with your own company in the free zone.

A deposit of Dh. 3,000 to 5,000 (730 to 1,220 euros) is also required. Women can only take over the sponsorship in a few exceptional cases. They must either be legally divorced or be able to present a death certificate of the spouse.

The procedure for obtaining a visa is not complicated in many respects. We will assist you every step of the way. Feel free to contact us if you would like us to help You with emigrating to Dubai or the UAE.

Life in Dubai, RAK and UAE

The Emirates are an Islamic country with a cosmopolitan character. The judiciary uses secular jurisprudence, with a few exceptions in family law.

Public life is characterized by the many residents from over 100 different countries. Thus Dubai, RAK and the entire UAE is a multicultural very open place.

At the same time, the country is one of the safest in the world. The good social conditions in the Emirates ensure that crime hardly plays a role.

There are also tough restrictions on migrant workers from South Asia. They are often deported for even minor misconduct.

In addition to living, leisure is also very affordable. It is unlikely that one wish will remain unfulfilled. Modern international airports that exist in Dubai and Abu Dhabi, as well as in Ras Al Khaimah.

In RAK and in all the Emirates you will find excellent infrastructure. Water and electricity supply meet the highest standards. Communication with the digital world is also at a high level.

One of the most important topics in politics in the Emirates is education. The country offers private and state schools. There are also numerous international schools that foreign children can attend. Homeschooling is also allowed in the Emirates. However, returning to a stationary school can bring difficulties.

The United Arab Emirates also have a wide range of universities. The Emirates are a shopper's paradise. Especially in Dubai there are numerous malls, which have a huge offer. All international brands are represented.

There are special bargains at the shopping festival, which takes place in Dubai in January. Prices are very cheap, with dealers expecting you to negotiate the price.

On the other hand, consumer protection is underdeveloped, because a warranty obligation on the part of the dealer is not provided for in the Emirates. Here, the customer has to rely on the dealer's goodwill, because generally "bought as seen" applies.

The shops in the malls, supermarket operators and large department stores fight for every customer and often offer accommodating solutions. Money transactions are not a problem. In addition to the local banks, the most reputable international banks have a location in RAK.

Land ownership is only allowed to foreigners in the Emirates in designated areas. In addition, private individuals from abroad can lease land.

Condominiums can also be leased for 99 years. The legal basis is based on British law for leasing real estate. A three-year residence permit is attached to the lease if the property is valued at least AED 1 million.

However, tenants do not receive a work permit. Buying a condominium is at least possible in Dubai. In other Emirates, the authorities are still struggling with this.

But: If you don't want to live in the UAE, that's no problem. Incorporating a company in RAKEZ does not require residency in the UAE.

The alternative: Fujairah

The Free Zone in Fujairah was established only in 2018 and is already one of the most popular zones for foreign investors.

The main advantage is that the zone was able to secure the cooperation of experienced managers from other free zones. With their experience, it was possible to create an optimal environment for international investors.

Setting up a business in the International Fujairah Free Zone (IFZA) does not require personal presence. A UAE entry stamp in your passport is sufficient.

Only for the application of a residence visa or a bank account you have to be present in person in the Emirates. The incorporation is done through a registered agent and thus follows the regulations that are also common in RAK.

The Company will be registered in a few days. Each year the license must be renewed, for a small administrative fee. Company formation is possible for almost all industries.

As in any free zone, IFZA has no taxes. Foreign investors are allowed to hold 100 percent company shares. Your company does not need an office. Therefore, there are no rental costs.

There is a limitation of liability and no requirements for the amount of share capital. As a company owner, you and your family have the opportunity to obtain visas and live permanently in the Emirates.

Do you want a beautiful office in Dubai for your company? No problem, because IFZA rents offices in Dubai. free zone owns a large office building for this purpose. Conference rooms are also available. Short-term rental is also possible, for example, for one day.

What are the incorporation costs in Fujairah?

There are the following costs if you decide to establish a free zone company in the Fujairah Creative City Free Zone with our help:

Start-up costs one-time: from AED 17.850 
Average founding time: Around one month
Ongoing costs: Depending on own setup and if visas are needed

The Emirates as a base for perpetual travelers and digital nomads

The United Arab Emirates is a modern country with many advantages. A lot of migrants live and work here.

You must like accepting certain customs of an Islamic society. The strict rules of the Koran have less of an impact on everyday life than you might think, but some rules need to be observed.

These include a dress code that requires women not to expose their skin, and not only in Sharjah. You can not drink beer or wine on the street. A soda party might not be for everyone

Women in particular can be sure of the "care" of the legislature, even if they don't like it. As a rule, this does not manifest itself in everyday life, but when visiting authorities or banks.

Here you can feel how patriarchal the society is. Nevertheless, a residence permit and residence in the Emirates can be worthwhile for you.

If your company is located in a free zone, you can easily get a visa. To maintain this right of residence, you must enter the Emirates at least once every half a year. Combine this, for example, with a day of shopping or "moving" from Europe to Asia or Africa and vice versa.

Even as a perpetual traveler or digital nomad, it makes sense to have an address and proper business setup. In the UAE you reside in a tax free country.

Plan Your travels so that you will not be taxed in any other country. Then you have the ideal base for your tax-free life in the Emirates. Here you can do banking and all other things for which you need a residential address.

If you think that Dubai or the Emirates are the right place for you, please book a free initial consultation with us or use our contact form to get in touch with our partners in Dubai:

This was our comprehensive guide about emigrating to Dubai & setting up a free zone!

Do you still have questions? Please leave us a comment!