In continuing our examination of the United Arab Emirates as an emerging Offshore Tax Free Company Jurisdiction this week’s article looks at the UAE’s latest Company offering the Umm Al Quwain Free Trade Zone Company.
The Umm Al Quwain Free Trade Zone (UAQ FTZ) is located in Umm Al Quwain (one of the UAE’s seven emirates) and is renowned for its modern infrastructure and impressive natural beauty (which is attracting tourists in ever increasing numbers).
Being a relatively new Free Trade Zone in the UAE, Umm Al Quwain offers competitive fees and the privilege of signing documents remotely. This means an Umm Al Quwain FZ company can be set up without the shareholders being present at the time as long as they have visited the UAE in the past.
Some of the key benefits of licensing a company in Umm Al Quwain (UAQ FTZ) include:
• Double tax treaty benefits (the UAE has signed DTAs with 80 other countries)
• 100 per cent foreign ownership
• Zero corporate and personal income taxes
• Allows up to 50 shareholders
• 100 per cent import and export tax exemption within the FTZ
• Fast registration process
• Proximity to two international airports, Dubai and Sharjah, and major sea ports
• No restrictions on hiring foreign employees
Types of licences allowed when registering an Umm Al Quwain Company
1. COMMERCIAL LICENSE (TRADING LICENSE)
There are two types of license, which fall under this category: Commercial License and General Trading License.
Commercial License: This authorizes the import, export, distribution and storing of items specified on the license. A Commercial License can have three different product lines or 10 similar product lines.
General Trading License: This enables the licensee to trade in a wider range of activities and gives the freedom and flexibility to trade in any commodity, which is permitted within the UAE.
Note: Commodities which require special approval or clearance from various UAE authorities e.g. explosives and armaments cannot be traded with a General Trading license.
Usual activities include i.e. Trading with Automobiles, Seeds Trading, Coal & firewood trading, cotton and natural fibers trading, etc.
2. CONSULTANCY LICENSE
This is for entities which offer expert or professional advice and is issued to all manner of professionals including artisans and craftsmen. It allows two similar activities. Activities usually registered include Marketing Consultancy, Management Consultancy and IT Consultancy.
3. FREELANCE PERMIT
This allows an individual to operate as a freelance professional, and conduct business in one’s birth name as opposed to a brand name or company. The Freelance Permit is designed for individuals who operate in technology, media and film sectors, and is issued to talent roles, creative roles and selected administrative roles.Activities usually registered include Actors, Artists, Photographers and Producers.
4. INDUSTRIAL LICENSE
This enables the licensee to import raw materials, then manufacture/ process / assemble / package the specified products, and export the finished product. It allows the holder to import raw materials for the purpose of manufacturing, processing and/or assembly of specified products.
5. SERVICE LICENSE
This license is for service providers. It permits the licensee to carry out the services specified in the license within the Free Zone, such as Logistics; Courier Services; Insurance Service Provider; Travel Agency; Tour Services; Car Rental etc.
Obtaining an Umm Al Quwain tax resident certificate and residence permits
An Umm Al Quwain FZ can issue residence permits and obtain tax residence certificates from the UAE authorities for its foreign owners and executives. A FZ company, must have physical presence in the UAE and, in that respect, it must own or hire premises.
Private accommodation is not necessary for Umm Al Quwain Free Trade Zone Authority when applying for residence but many do this to reinforce their case for substance and legitimacy.
As far as the company is concerned, it must have physical presence in the UAE. In that regard, the most interesting and cost effective options are proposed by free zones situated in a number of emirates including Umm Al Quwain Free Trade Zone (UAQ FTZ). Usually, these options consist of “flexi desks” or “flexi offices”.
Furthermore, and if a local bank account is maintained with movements, the foreign owners and executives can apply to the UAE Ministry of Finance to receive UAE tax residence certificates.
A UAE residence permit and a tax residence certificate can be useful to foreign owners and executives who wish to register their tax residency in the UAE. It is worth noting, that banking institutions in UAE and many outside consider UAE tax residence certificates as sufficient proof of tax residency in the UAE.