United Arab Emirates

The United Arab Emirates (UAE) is one of the leading economies in the Arab world. Many have heard of the economic miracle arising from the sands of the Arab Peninsula, but still mistakenly believe that that this success can be exclusively attributed to the rich oil deposits. However, the oil and gas exports account for only 33% of the country’s GDP, while the constant influx of foreign investments is a direct result of the UAE’s economic policy.

There are 36 free economic zones on the territory of the seven emirates, and their number is constantly growing. There are specialized zones among them where it is encouraged to set up companies in such areas as pharmaceutical, research and development or IT sectors. There are also free economic zones with no specialization. However, all of them offer similar conditions for foreign companies and capitals:

• Territorial taxation principle exempts any incomes from foreign source of tax payments

• Tax holidays for 50 years with the possibility of extension: there is no corporate tax, profits tax (as well as no income tax for private individuals), capital gains tax, VAT, or dividends tax
  
• Foreign entrepreneurs can own the companies in free economic zones. There is no foreign exchange control, no trade barriers and quotas, no limitations for capital repatriation, and no imports tax
  
• Non-resident companies do not have to submit accounting reports and hold audits; however they do need to retain reports for the last five years. It is also not required to pay equity capital. Such companies are not authorized to operate on the UAE territory
  
• Resident companies are allowed to operate any business on the territory of the country, but only with the legal entities. Moreover, there is no profits tax. Such companies are obligated to have an actual office, hold annual audits and obtain licenses for licensed types of business. On the other hand, they have the right to receive four resident visas valid for three years for shareholders, directors or employees. Each visa allows obtaining visas for family members
  

It is obvious that under such conditions there are many who wish to incorporate a company in one of the free economic zones of the UAE. The opportunities offered by the country can also be used for assets protection, but only combined with the advantages of other jurisdictions, such as Panama or the British Virgin Islands. Such combinations allow for reliable protection of the information about company’s shareholders.

There are just a few relative disadvantages of the jurisdiction:

• The banking system in the UAE has its own specific features. For example, there are banks in the country that operate based on Sharia regulations: a fixed interest rate is not applied to the funds deposited in those banks, and they do not want to be involved in anything that goes against Islamic principles, such as alcohol or tobacco trade

• Not all banks will agree to open an account with a non-resident custodian. Moreover, personal attendance of the account executive is required – a client should come for at least one day to meet with a bank representative and sign the forms in their presence
  
• The country is located in a politically sensitive area of the world. Nevertheless the UAE is one of the most stable countries in the region
  

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