UAE Business Options continue to expand for Energy sector companies – an Update by Angela Ewen, Head of UAE Business Registration and Licensing

The UAE continues to power ahead with its positioning as the Middle East regional hub, and the omens for 2012 appear to be excellent. Political stability, a world class infrastructure, 100% ownership allowed in free zones, absence of corporation or personal taxes and a western friendly living environment located in the centre of the world's highest oil reserves continues to drive inward investment.

The options for structuring new businesses entering the country are best segmented into three types:-

  1. "Onshore" Companies and Branches which permit business to operate throughout the UAE (or designated Emirates) but which involve local ownership or sponsorship;
  2. Free Zone Companies and Branches which are more suitable for establishing regional "hubs" but which allow 100% foreign ownership; and
  3. "Offshore Companies" which allow businesses to have a legal entity for conducting international business outside the UAE (but not inside the UAE or its free zones).

The selection of the optimum business structure will usually involve a balancing analysis of the commercial, operational, legal and taxation implications and it is not uncommon for western companies to include all three in "the mix" for the regional and international group structure.

There are now almost 50 free zone operating in the UAE, many of which will not be relevant or suitable but the following are typically considered and selected by the energy sector: Jebel Ali Free Zone (JAFZ), Dubai Airport Free Zone (DAFZ), Hamriyah Free Zone, Ras Al-Kaimah Free Zone, Dubai Maritime City, TECOM (Dubai Internet City, Dubai Media City and Knowledge Village/Academic City), Dubai Multi Commodities Centre (DMCC) and Dubai Silicon Oasis (DSO).

A new Companies Law is due to be introduced in 2012 and this understood to contain concessions on the 51/49 rule which requires "onshore" companies to have at least 51% of their share capital to be officially registered with UAE nationals. However, the extent and nature of these concessions is not clear at this stage and they may be limited to certain industrial and commercial sectors. HFI will be monitoring the content, impact and implementation of the new legislation.

The key issues for getting things right is advance and thorough planning, allowing a realistic timetable for implementation and focus on the critical path issues needed to get the new business registered, licensing and fully established.

Further information can be obtained from:-

Angela Ewen – Head of UAE Business Registration/Licensing - angela.ewen@hfi-international.com