Country Trading Profiles United Arab Emirates

Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Sole Proprietorship is an individual company. No minimum capital.	1 person. The individual entrepreneur is responsible for assets of the company over his personal goods.
Public Joint-stock Company Minimum AED 10 million	Shares freely transferable but 51%must be held by UAE nationals. Their responsibility is limited to the amount of contributions.
Private Joint-stock Company Minimum AED 2 million	Minimum 3 partners. Their responsibility is limited to the amount of contributions.
Limited Liability Company Minimum: AED 150,000 - 300,000	Minimum 2 partners. maximum 50 partners. Their responsibility is limited to the amount of contributions.
General Partnership None	Minimum: 2. All the partners have to be UAE nationals. Unlimited
Limited Partnership None	At least, 1 general partner (only UAE nationals) and 1 limited partner. At least one partner must have unlimited liability. Responsibility of other partners is limited to the amount contributed.

Business setup procedures

Setting up a company	United Arab Emirates	Middle East & North Africa
Procedures (number)	8.0	8.1
Time (days)	15.0	20.0

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in United Arab Emirates.
Trade Register
The competent organization: The UAE Chamber of Commerce for establishment and the competent ministry.

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	13,700	4,003	3,948
FDI stock (millions USD)	69,419.8	72,226.5	76,174.8
Performance Index*, ranking on 141 economies	58	90	-
Potential Index**, ranking on 141 economies	7	-	-
Number of Greenfield investments***	486	394	-
FDI inwards (in % of GFCF****)	26.7	15.4	-
FDI stock (in % of GDP)	24.2	29.1	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest the United Arab Emirates

Strong points: The strengths of the country are:
- Not directly taxing corporations (apart from oil, banking and insurance sectors) and individuals;
- absence of exchange control or of any constraint relating to repatriation of funds;
- a solid and profitable banking sector and favourable regulations for foreign investments;
- The geographical situation of the country makes it a potential platform to influence the whole of the Gulf, Iran, Asia and Middle-East;
- Lastly, the country has a cheap foreign labour force, very good transport and production infrastructures (financed by hydrocarbon income) and an access to low cost energy.
Weak points: There are legal obstacles for foreign investments. Effectively, the interdiction (except for free zone) of more than 49% of shareholding of a local company for a foreign investor constitutes a significant hindrance. Moreover, the obligation for recourse to a local service agent for the branches and representative offices of foreign companies represents a limit.
Government measures to motivate or restrict FDI: The government announced a certain number of measures, for example removal of the obligation of the capital holding of 51% by a national or even the opening of banking and insurance sectors for foreign investors. Till now not much progress has been made. However you can notice the flexibility of rules of access to real estate property for foreigners in Emirates of Dubai, Sharjah and Abu Dhabi.
Bilateral investment conventions signed by the United Arab Emirates: UAE has signed 32 bilateral agreements on investment. See the list of countries provided by the UNCTAD.

Procedures relative to foreign investment

Freedom of establishment: It is limited since it is mandatory to have a local agent for creating an establishment in the UAE and that the foreign shareholding in this company cannot exceed 49%.
Acquisition of holdings: The majority capital acquisition of a local company is limited to 49%.
Obligation to declare: There is no special obligation for declaration. Foreign capital in a company can anyway be more than 49% except for free zone.
Competent organization for the declaration: World Association of Investment Promotion Agencies
Requests for specific authorizations: In the sector of banking, insurance, health, maritime transport, education, media, and telecommunications, specific authorisations are required by the concerned Ministries.

Finding assistance for further information

Investment aid agency: Abu Dhabi Investement Authority
Other useful resources: Emirates Free Zone, directory of the free zones with a presentation of UAE.