HOW TO DO BUSINESS IN THE UAE
The UAE is an open environment for doing business. Looking to diversity its economy away from oil exportation, the UAE is especially interested in seeing the development of industries which would reduce its dependence on imported goods as well as developing product lines for export.

Businesses are regulated by the Federal Commercial Companies Law No. 8 which was enacted in 1984 and has been fully enforce since businesses that can be established :

· Private shareholding companies
· Public shareholding companies
· Limited liability companies
· General partnerships
· Limited partnerships
· Partnerships limited by shares
· Shareholding or joint venture companies.

The law also stipulates minimum UAE national equity of 51% in nationally incorporated companies and 100% for public or private shareholidng companies.

Foreign companies or individulas wanting to do business in the UAE must at least have a sponsor or service agent and obtain a trade license. Foreign companies must register with the local Chamber of Commerce and Industry, the Economic Development Departm,ent and with the Ministry and Finance.

Certain businesses require approval from certain governing authorities as listed :

Foreign companies or individuals must seek a local partner or sponsor under 1 or 2 options :

1. Agreement as a sponsor or serice agent
2. Agreement as an active partner with at least 51% equity.

FREE TRADE ZONES

Although the UAE is open for business and investment, the establishment of free zones offers additional incentives for locating here. Advantages for locating within the Free zones are :

· Readymade facilities
· Superb communications
· 100% foreign ownership allowed
· No recruitment / sponsorship problems
· Corporate tax exemption
· Customs duty exemption on imported raw materials and equipment
· No levy on exports or imports

JEBEL ALI FREE ZONE - Dubai

The Free Zone in Jebel Ali was established in 1980 by the Dubai Government, which allows for 100% foreign ownership of companies operating in and from the Free Zone. It consists of the Dubai Port Authority, Jebel Ali Port and the industrial and commercial free zone. It is comprised of 67 berths, over 15 kilometers of quay and an ultramodern container freight station.

PORT AHMED FREE ZONE-Umm Al-Quwain

The Port Ahmed Free Zone was established in 1986. The quay for the Free Zone in 845 meters wide and the area allocated for light industry is 118,000 sq. meters. The Free Zone Authority provides water, power, and telecom services, accommodation for workers, stores, transport, management and logistics.

HAMRIYAH FREE ZONE - Sharhaj

The Hamriyah Free zone is strategically located on the Arabian Gulf between 3 continents, serving a growing market of 1 billion people. It consists of 10 m swaure metres of land, a 14 metre deepwater port. Investors at HFZ can lease land to build their own facilities or lease re-built units in sizes 400 sqm. Or 600 sqm. In addition to the full ownership and exemption from taxes and customs duties. HFZ's facilities include abundant and inexpensive energy and labours, highly developoed infrastructure, on-site accommodation and excellent transportation links via 3 seaports and Sharjah Int'l Airport.

FUJAIRAH FREE ZONE AUTHORITY -Fujairah

Providing Facilities for Warehousing, Trading Offices, Assembling and Manufacturing Units.

Mr. Sharief Habib Al Awadhi
Director General
Tel. : 09 - 228000
Fax : 09 - 228888

FREE ZONE LICENSES

Companies accepted for operation in the Free Zone will be granted on of the following licensed :

· Trade License
· Industrial License
· Services license
· National Industrial License

These licenses are issued by the Free Zone Authority and are renewable annually as long as the lease agreement is in force.

Companies holding Trade or Industrial licenses can only conduct business and sell its products within the Free Zone or abroad. If it wishes to conduct business within the UAE it must use a UAE official agent. Such Companies can, however, obtain products and services from within the UAE without using a go-between.

The most important conditions for obtaining each of these licenses are as follows :

· Trade Licenses are issued for companies within the Free Zone or legally incorporated outside the UAE in the area of products selling, import and export. No license is required from the Economic Department. Ownership may remain 100% foreign.

· Industrial Licenses are issued for companies within the Free Zone or legally incorporated otuside the UAE in the area of industrial production activities such as manfacturing, canning packaging and reassmbly. No license is required from the Economic Department. Ownership may remain 100% foreign.

· Service Licenses are issued to companies holding a valid license form the respective government body in the UAE. Such companies may provide service activities such as banking, insurance contracting, profesional land similar services. Such serices, though provided in the Free Zone must abide by any requyirements of the UAE governing body.

· National Industrial Licenses are issued for companies within the Free zone or legally incorporated either inside or otuside the UAE in the area of industrial production activities such as manufacturing, canning, epackaging and re-assembly. Share capital must be at least 51% AGCC. Value added to products manufactured in the Free Zone must be at least 40% of the sale value. This license provides it sholder with the same status as local or GCC companies inside the UAE.

· Submit a completed questionaire to the Authority. This allows the Authority to assess if the company's need can be met.

· Receive documents form the Authority which include a license application, Performa of information required for planing, a Consumer requiest for electricity supply, and Form B for environmental concerns if required.

· Submit a License application

Successful completion of these steps results in provisional approval at which time the company must submit documents concerning legal status as per the license they wish to obtain. At the same time they will be provided with a specimen lease agreement, personnel secondment agreement and copies of administrative instructions governing operations in the Free Zones. These will be followed by actual documents one the company representative has met with the Authority to discuss and finalize details of the project. This is followed by :

· Signing the agreement.
· Sponsorship of staff.
· Preparation of construction work.
· Building completion and operation fitness certificates.
· Industrial firms registration to be handled by the Authority.