What are UAE onshore companies?

Onshore companies in the UAE are businesses that are setup anywhere within the commercialised areas of the country, enabling them to trade with the local market. They can also be registered in one of the UAE’s many free zones, which allow for 100% foreign ownership and a host of other benefits.

What are the different types of onshore companies in the UAE?

When you are setting up an onshore company in the UAE we will guide you to the most suitable company structure. There are four different categories you can choose from:

  • Free zone companies

    These are companies formed within a specific jurisdiction that are under an Emirate. These companies have their own regulations to follow depending what jurisdiction they fall under.

  • Companies

    These are commercial businesses that locate their primary headquarters in the UAE.

  • Branch offices

    These are offshoots of a parent company that is incorporated outside of the UAE.

Partnerships

This is when agreements made between two or more partners where each partner agree to become liable for all the companies assets and liabilities such as debt and obligations in a personal capacity.

Within each of these categories you will find multiple subdivisions from which we can guide you as to the appropriate one for your business.

What are the benefits of setting up an onshore company in the UAE?

One of the main benefits of setting up an onshore company in the UAE are the tax credits and incentives that are on offer.

If you set up a business within a free zone and your business earns its income solely within the zone, it will not be liable to pay any taxes. Any entities with passive incomes such as royalties, dividends and interest from the mainland are also exempt from taxes.

From 2023, profits up to AED 375,000 will not have to pay any corporate tax at all. Profits exceeding AED 375,000 will have to pay a 9% tax rate, which is one of the lowest and most competitive in the world.

Other benefits to set up an onshore company in the UAE include:

  • Unlimited visa access for all shareholders and their direct relatives
  • Easy and fast registration, with an average lead time that’s normally less than 14 days
  • Opportunity for greater financial freedom with a UAE bank account
  • A simple regulatory system that allows businesses to thrive without obstacles

Each form of onshore company offers a number of additional benefits, and Charterhouse Lombard can advise you on which structure would best suit your business. If you would like to learn more about the advantages of registering an onshore company, you can request a call or email us.

How to start setting up an onshore company in the UAE?

If you are thinking about setting up an onshore company in the UAE, you should follow these steps:

  • Identify a Sponsor

    Apart from free zones companies, you are likely to require a local sponsor who will own a 51% share in the company. However, they will have no say in how you run the business and you will be able to keep 100% of the profits. You need only pay an annual fee for their services.

  • Authorisation to Act

    Granting a Power of Attorney will authorise Charterhouse to setup your company on your behalf. This means that a shareholder doesn’t need to be available at each step of the process unless you decide to stay through the process and sign personally. In order to grant Power of Attorney, this needs to be signed at the Notary which we can arrange on your arrival to the UAE.

  • Deciding the Business Activity

    The next part of the process is identifying the appropriate business activity that will appear under the company’s trade license. Using our extensive research, we will select the best suited business activity on your behalf.

  • Trade Name Reservation and Approval

    At this stage, Charterhouse will obtain your trade name reservation and initial approval on your behalf. This part of the process can take some time as there are cases where the name isn’t available as it has been used before which will then require further input from you to obtain another suitable name.

  • Commercial Space

    Having commercial space is a requirement when setting up a business in UAE. We will secure commercial space on your behalf for an office registration.

  • Corporate Documentation

    At this stage, Charterhouse will have prepared and drafted the number of corporate documents that you will require to establish your company. This will include corporate documents such as the Memorandum of Association, the suite of risk mitigation documents and various Power of Attorneys required. The powers granted by the Power of Attorney will allow us to execute the Memorandum of Association on your behalf without any further personal appearance for the shareholders. We will of course provide you with copies of the documents and seek your approval before execution.

  • Obtaining a licence

    Once the official tenancy contract is issued and the memorandum of association agreement is approved and executed at the Notary, Charterhouse will then proceed to obtain your trade licence.

There are significant steps involved in applying for an onshore company in UAE. Charterhouse Lombard can manage the entire process from start to finish, ensuring you have the right documentation in place and that everything is legally in order to give you the best possible chance of your business being given the green light to start operations.

Who is eligible to obtain an onshore company registration?

Investors from all over the world are eligible to obtain an onshore company registration, as long as you follow the legal guidelines and remain compliant whilst in operation.

There are three types of licences available to an onshore company:

  • Trade licence

    This type of licence is needed if you intend to store or transport goods within the UAE.

  • Industrial licence

    Companies that are involved with the manufacturing, packing and distribution of finished goods will need to apply for this licence. Also make sure shareholder structure is in order.

  • Professional licence

    A licence intended for service-based companies, such as financial, medical, consultants and education.

To ensure the registration process goes as smoothly as possible, Charterhouse Lombard can manage your application through every stage, so you can start operating as quickly as possible.

What are the ongoing compliance requirements for onshore companies in the UAE?

Whether your business is located onshore or in a free zone, most companies are required to create a Register of Real Beneficial Owners (UBO) and a Register of Partners (or Shareholders). A UBO is someone that owns or controls at least 25% of the business’ capital.

There are several corporate governance requirements relating to how general meetings are convened and how notices are sent. Certain rules relating to the disqualification of directors must be followed and the Memorandum of Association must include a specifically written dispute resolution.

Economic Substance Regulations require onshore companies to ensure their economic presence remains relevant to their activities in the UAE.

Compliance laws can be complex, especially if you are starting a venture in a new country. Charterhouse Lombard will work with you to help you meet all the compliance requirements before and after you are operational.

What are the common mistakes made when setting up an onshore company in the UAE?

Some of the most common mistake made when setting up an onshore company in UAE include:

  • Using the wrong information

    There is a lot of conflicting information on the internet, and it can be easy to rely on old or misinformed advice, which could lead to your application being rejected.

  • Choosing the incorrect company type and activity

    You need to ensure you select the right licencing zone, company type and business activity for your entity, as not every category is suitable for every type of business.

  • Choosing the incorrect company type and activity

    You need to ensure you select the right licencing zone, company type and business activity for your entity, as not every category is suitable for every type of business.

  • Moving too quickly

    While you will want your company licence as quickly as possible, take time to plan and consider your decisions, as rushing in too fast can lead to more expense and delays.

How can Charterhouse Lombard help?

Thanks to our vast experience in this area, Charterhouse Lombard understand the various processes and complexities involved with setting up an onshore company in the UAE. Our company formation consultants will work closely with you to understand the needs of your business to ensure the application is completed to the required standard and that you have all the relevant documentation in place.

We’ll keep you up to date with the progress of your application and once you are registered, we also offer ongoing administrative management services, so you always have expert support and advice to hand for your business.

If you would like to know how Charterhouse Lombard can assist you with UAE mainland company formation, including the entire Onshore Company registration process, contact our team today.

Contact Charterhouse Lombard

If you would like to know how Charterhouse Lombard can assist you with UAE mainland company formation, including the entire Onshore Company registration process, contact our team today. We will be happy to assist you with the establishment of your new company. Call Us today or browse some of our related articles below: