MARKET ENTRY GUIDE UNITED ARAB EMIRATES (UAE)

2 3

Introduction

2.1 3.1

Modes of Setting up a Business in the UAE Procedures for Immigration to the UAE, Key Points for Work Permits Renting Property Visa Requirements

Average Time (in days) Required for Setting up a Business

3.2 3.3 3.5 4 3.4 3.6 4.1 5 5.1

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Real Estate/Freehold Property Average Rent for Office Space in Dubai and Abu Dhabi

Average Living Costs for Expatriates Pensions Social Security System in the UAE

20 24 25 25 25 27 22

19

15

11

Free Trade Zones (FTZs) in the UAE Introduction FTZs List of FTZs

5.2 5.3 6

6.1

6.2 6.3 7 7.1

Overview of Retail Banking Major Banks,

Opening a Bank Account in the UAE

Procedures for Starting a Company in a FTZ

30 30 33 31

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Procedures for Opening an Account

Recruitment of Local Staff

7.2 7.3 8

Major Recruitment Agencies and Websites Brief Overview of Labour Laws Average Salary Range Taxation Tax Rates

36 38 41 41 37

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8.1

8.3 9

8.2

Repatriation of Profits Appendix

Double Tax Treaty between the UAE and Luxembourg

46 47 47

Appendix I: Useful Links and Addresses Appendix II: Embassies Disclaimer

47 52

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1 Introduction
The United Arab Emirates (UAE) is a federation of seven emirates that was formed on 2 December 1971. The UAE government has successfully managed to create a business environment that is conducive to economic growth. This has helped promote the UAE as an international centre for trade, finance and services, attracting reputable global companies. According to data from the National Bureau of Statistical data of the UAE, the total GDP (at fixed prices) amounted to EUR (200.84 billion) AED 977.32 billion in 2010, registering a growth of 1.4 percent. The countrys GDP for 2009 was EUR 198.01 billion) AED 963.53 million, where the currency shrunk by 1.6 percent. The percentage contribution of non-oil sectors has decreased to about 68 percent in 2010 as compared with 71 percent in 2009. On the other hand, the percentage contribution of the oil sector in the total GDP increased from about 29 percent in 2009 to 32 percent in 2010, led by the hike of oil revenue as a result of increase of crude oil prices1. It is to be noted that UAE now uses 2007 as its base year. The UAEs currency, the dirham, is secure and freely convertible. There are no restrictions on profit transfer or capital repatriation in the country. Import duties are low (around 5 percent for most of the goods) and, in the case of items imported for use in the free zones, non-existent in the country. Further, the UAE does not levy corporate tax or personal taxes and the country has signed 58 double-taxation avoidance agreements and 32 bilateral investment treaties as of 2011. In addition, the financial risk for the investments is minimal in the UAE (Moodys credit ratingAa2). These factors, combined with a strategic and accessible location for major regional markets, an excellent, reliable infrastructure and an extremely stable and safe working environment, make
1

Source: Ministry of Economy - UAE 3

the UAE an ideal country for investments. The UAE ranks high in the list of the Middle Eastern and GCC (Gulf Cooperation Council) countries and is deemed to be the most attractive to direct foreign investments (FDI), securing FDI inflows worth EUR 2.90 billion (USD 4 billion) during 20102. Various efforts that are being made to foster an enabling regulatory environment include the following: | Amendments to the Company Law are currently being made in order to streamline procedures. | The Federal Commercial Law that requires a 51 percent3 local partner for businesses located outside free zones is under review.

| The Ministry of Economy is in the final stages of drafting a competition law that should provide further assistance in combating cartels. | The government is working on introducing a foreign investment law that will further increase private sector competition and lower inflation. | The Federal Law No. 24 on consumer protection was passed in 20064. | Several rent ceiling initiatives were issued at the emirates level to deal with rent increases.

2 3

Source: The National Source: Government - UAE Conversion Rate: The figures in the document have been converted with the following exchange rate conversion (Source: www.oanda.com) USD to EUR 2010 = 0.7548 AED to EUR 2010 = 0.2055

The UAE has been a contracting party to the General Agreement on Tariffs and Trade (GATT) since 1994 and a member of the World Trade Organisation (WTO) since 1996. It is also a member of the Greater Arab Free-Trade Area (GAFTA) in which all GCC states participate. The UAE is in the process of negotiating free trade agreements with the US, Japan and India and has embarked on negotiations, either individually or with the GCC, on several regional trade agreements. The following report aims to discuss the most important issues pertaining to the administrative, legal and financial aspects of setting up businesses and hiring personnel, as well as the living conditions, in the UAE.

2 Modes of Setting up a Business in the UAE

The UAE offers an investment environment that is among the most liberal and attractive in the Gulf region. Economic activities in the country are regulated by the federal government as well as by individual emirates. All business activities are primarily covered by three categories of licences: 1 Commercial licence covering all kinds of trading activities 2 Professional licence covering professional services, other services, craftsmen and artisans 3 Industrial licence to establish an industrial or manufacturing activity This section elaborates on the common investment vehicles available to foreign investors, the procedures to be followed in order to establish them and the related regulations for each investment mode. Table 1 lists the most common modes of setting up businesses by foreign investors and the related legal particularities involved in the process, as laid down in Article 5 of the Companies Law of the UAE.
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Table 1: Different Modes of Setting up a Business in the UAE MODES OF SETTING PARTICULARITIES UP A BUSINESS
General Partnership Partnership in Commendam and Share Partnership Company Joint Venture (JV)
The establishment of General Partnership companies is limited to UAE nationals only. The Dubai government does not at present encourage the establishment of these companies.

The local equity participation in the joint venture must be at least 51 percent but the profit and loss distribution can be prescribed otherwise. The JV is not required to be licensed or the agreement required to be published. In practice, JVs are seen as offering a suitable structure for companies collaborating on specific projects. Public and private joint-stock company structure is suitable for large-scale projects or operations. The Commercial Companies Law stipulates that companies engaging in banking, insurance or financial activities should be run as public shareholding companies. On the other hand, foreign banks, and insurance and financial companies can establish a presence in Dubai by opening a branch or representative office. The minimum capital required is EUR 2 million (AED 10 million) for a public company, and EUR 0.40 million (AED 2 million) for a private shareholding company. The chairman and majority of directors must be UAE nationals. There is less flexibility of profit distribution than is permissible in the case of limited liability companies. A limited liability company is suitable for organisations interested in developing a long-term relationship in the local market. This type of structure can be formed by a minimum of 2 and a maximum of 50 people whose liability is limited to their share in the companys capital. The minimum capital required is EUR 2 million (AED 10 million) for a public company, and EUR 0.40 million (AED 2 million) for a private shareholding company. The foreign equity participation in the company may not exceed 49 percent but the profit and loss distribution can be prescribed otherwise. Responsibility for the management of a limited liability company can be vested either with a foreign or a national partner, or a third party.

Public and Private Joint-Stock Companies

Limited Liability Companies

2.1 Average Time (in days) Required for Setting up a Business In order to start a business, the legal and bureaucratic hurdles that companies/entrepreneurs must overcome need to be identified. Registration is highly important to access a range of market infrastructure, including finance, physical infrastructure (electricity, water) and contract enforcement. The greater the number of procedures, the wider is the scope for enforcing them in uneven ways. According to a World Bank report, the average time taken to start a business in the UAE is high in comparison to that in Jordan, Oman and Iran. Figure 1 illustrates the obstacles inherent in starting business ventures in various countries.
Figure 1: Obstacles in Starting Businesses in Various Countries

Source: The World Bank Group - Document: Doing Business 2011

3 Procedures for Immigration to the UAE

The UAE has simple steps and procedures for immigration. Citizens of 37 countries (i.e. GCC nationals and nationals of listed countries) do not require visas prior to arrival at a UAE airport. A person coming to work in the UAE requires a visa that can only be obtained on the persons behalf by the employer or sponsor. The kind of visa required for entry into the UAE depends on several factors such as nationality, the purpose of the planned visit and its expected duration. The following categories of visitors may receive their visit visa at the airport, upon arrival 1 AGCC (Arab Gulf Countries Council) residents who are not GCC nationals but who have a high professional status such as company managers, business people, auditors, accountants, doctors, engineers, pharmacists, or employees working in the public sector, their families, drivers and personal staff sponsored by them, are eligible for a non-renewable 30-day visa upon arrival at the approved ports of entry. 2 National citizens of the following countries: the UK (with the right of abode in the UK), France, Italy, Germany, the Netherlands, Belgium, Luxembourg, Switzerland, Austria, Sweden, Norway, Denmark, Portugal, Ireland, Greece, Finland, Spain, Monaco, Vatican City, Iceland, Andorra, San Marino, Liechtenstein, the United States, Australia, New Zealand, Japan, Brunei, Singapore, Malaysia, South Korea and holders of Hong Kong SAR passports are granted a free of charge visa for a single visit upon arrival in the UAE. It should be noted that this list is subject to change and it is therefore best to check with the local UAE embassy or the airline that will be used to fly to the UAE. 3 A person who does not fall into one of the previous categories requires a visa and a sponsor or an employer for the visit. The employer or sponsor normally applies for the visa on the persons behalf.
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Valid sponsors may be: | Hotels and Tourist Companies - can apply for a tourist visa (valid for 30 days); a service visa (valid for 14 days); or a Visit Visa (valid for 30 days and extendable to up to 60 days) | Airlines and Airlines Handlers - can apply for a 96-hour transit visa on behalf of their crew members. | Other Organizations based in the UAE - may only apply for visit visas and service visas. | Individuals (relatives or friends) already resident in the UAE - can apply, subject to guidelines, for a visit visa.
Table 2: Visas Issued by the UAE Government type of visa
Visit Visa

applicants
Tourists on family visits and on long-term business visits who wish to spend more than 14 days in the UAE Tourists from Eastern and Western Europe, who are not entitled to a visa issued on arrival, and visitors from Thailand, South Africa and UAE

visa sponsor
Must be self-financed or sponsored by any company or hotel licensed to operate in the UAE

Tourist Visa

Must be sponsored by hotels and tour operators

Entry Service Permit or 14-day Stay

Businessmen and tourists

Must be sponsored by a company or a commercial establishment or a hotel licensed to operate within the UAE Must be sponsored by an airline operating in the UAE and should have a valid ticket for onward journey Visitor to enter the UAE on a visit visa and obtain the multiple entry visa while in the country

Transit Visa

Individuals flying to or from Europe/the US from or to Asia/Africa as well as individuals passing through UAE airports Business visitors who are frequent visitors to the UAE and who have a relationship with a reputable company in the UAE

Multiple Entry Visa

3.1 Visa Requirements UAE issues several visa types depending on the applicant type, duration and the purpose of the visit. Table 2 lists the different types of visas issued by the UAE government.

duration
Valid for 60 days and renewable for a total stay of up to 90 days

fees
EUR 20 (AED 100), with an additional EUR 2.0 (AED 10) for delivery; a fee of EUR 100 (AED 500) charged for renewal

Valid for a 30-day stay, nonrenewable

EUR 20.0 (AED 100), with an additional EUR 2.0 (AED 10) for delivery

Valid for 14 days from the date of issue, exclusive of arrival and departure days, non-renewable

EUR 24.0 (AED 120) with an additional EUR 2.0 (AED 10) for delivery

Valid for 96 hours

Travel documents stamped with an entry seal; no charge for this visa

Valid for six months from the date of issue; each visit not to exceed 30 days in total.

EUR 199.9 (AED 1000)

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3.1.1 Documents Required for Visa Applications Foreign nationals applying for a UAE visa must have the following documents: | Passport | Two recent passport-size photographs | Duplicate application form | Letter or fax from the sponsor in the UAE to the concerned embassy | Letter from the applicants company and a copy of it 3.2 Key Points for Work Permits5 | An employer pays a fee of EUR 40 (AED 200) for each employee brought to the country and EUR 199.9 (AED 1000) for each approved employee. | An establishment can change the work permit during the validity period (the first issue) only once, provided that the permit is changed for someone of the same sex, nationality and occupation approved by the Ministry. It is allowed to interchange any person with an approved nationality with an Arab nationality, but not a person with an Arab nationality with another nationality. | No fees are collected for the work permit change application. | The first permit can be renewed for one month after a period of 60 days following the issue date. If the permit has not been changed during this period, it is considered cancelled (fees are not retrieved) and an application for a new permit has to be filed. All decided feesEUR 40 (AED 200) for work permit application and EUR 199.9 (AED 1000) to approve and issue the work permit and work contractare collected.

Source: Ministry of Labour - Procedure Guide for Labour Sector, Gulf News 11

| Under the new work permit rules effective 1 January, 2011, a worker with an expired contract in the UAE can now obtain a new work permit and shift to another employer without seeking his sponsors consent. The parties must fulfill two conditions: The two contracting parties must have ended their work relationship cordially The worker should have worked with his employer for at least two years the duration of the newly inroduced labour card | If an employer delivers the work permit cancellation application and does not complete activities of approval, the permit is cancelled without fees; however, a fine of EUR 199.9 (AED 1000) is deducted from the establishment balance. | The authority of confirming the change is performed by labour offices directors and labour licences directors without referring to the permit committee, provided that the rules and regulations for work permit change are adhered to. | A licence partner cannot change the system since a licence partner is a possessor of the establishment and not an employee in the establishment. | The change is only approved after confirming that the approving fees of EUR 199.9 (AED 1000) were paid for the first permit that needed to be changed. 3.2.1 Requirements for Eligible Applicants | The applicant should be over 18 and under 60 years of age. | Depending on employer needs, the age limit can be extended to 65 years, but only with the approval of the Minister of Labour. | The applicant should hold a professional degree or the relevant skill sets required in the UAE labour market. | The work permit will be cancelled in case of diseases such as AIDS or TB (Tuberculosis). | The applicant must hold a valid passport for at least six months.
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3.2.2 Documents and Fees Individual Work Permit Application from outside the UAE The following documents are required in case of applying for a work permit from outside the UAE: | Work permit application (outside the state) form. | A copy of the passport. | A copy of the scientific qualification attested by the embassy of the UAE in the country in which the scientific certificate was issued and also by the UAE Ministry of Foreign Affairs is to be submitted. (However, no licences are required for simple jobs in the contracting and general maintenance sectors, or for fishermen and drivers.). | A copy of the driving licence is to be enclosed when applying for a driving job. | A letter issued by the Ministry of Health and the relevant scientific certificates are to be enclosed when applying for the post of a doctor, pharmacist, nurse or other technical medical occupations. | A letter from the Ministry of Education is to be enclosed when applying to the position of a teacher in private schools. | In the case of industry licences, an industrial production certificate issued by the Ministry of Finance and Industry is to be enclosed. | A copy of the signatures confirmation card from the Ministry of Labour and Management of Nationality and Residency. | A copy of the effective licence. Fees: | A fee of EUR 239.9 (AED 1200), which includes issuing the work permit, work card and work contract, is to be paid by the employer for the work permit.
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Notes: | A fee of EUR 40 (AED 200) is to be paid by the employer through electronic dirham when applying for an external work permit. | A fee of EUR 199.9 (AED 1000) is to be paid by the employer through electronic dirham when approving the work permit application (including the work card fees and the work contract for three years) | Work validity for 60 days from the date of issue by the Ministry of Labour; can be renewed for a month after a period of two months. Group Work Permit Application from outside the UAE The following documents are required: | A Primary letter of application to obtain the permission for the group work (authorised by the ministrys undersecretary). | A Group Work Permits Application form. | A copy of an effective licence. | The signature confirmation card. | The contracts and projects record with the subcontracts attested by the Ministry of Labour. Fees: | A total of EUR 239.9 (AED 1200) is charged as follows: EUR 40 (AED 200) when applying for the permit, EUR 199.9 (AED 1000) for each employee after the approval from the employer. Notes: | The group work permit is not renewable and is valid for six months from the date of the approval.

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New Work Card and Work Contract of the Work Permit Application outside the UAE The following documents are required: | A New Work Card form. | Three copies of the work contract. | A copy of the entrance permission. | A copy of the passport. | A copy of a 3-month effective medical examination approved by the Ministry of Health or Preventive Medicine Department. | A copy of the signing dependence. | A copy of the effective commercial permit. | A self-addressed envelope for the post office. Fees: | No fees are collected at this stage; they would have been collected previously with the work permit issuance fees. Notes: | If the date of the work permit issue, printed on the new work card, differs from the one recorded in the ministry database, the ministry computer will automatically refuse the transaction, without involving any authorised employee. 3.3 Real Estate/Freehold Property Most expatriates living in the UAE normally rent the apartment, flat or villa they live in. 3.3.1 The Definition of Freehold The UAE currently does not have a federal law defining freehold. The freehold property law is applicable in one emirate, Dubai while it is under development in the other emirates. The law means that the property purchased by a foreigner is put in his/
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her name for life, which allows him/her to register the property with the Lands Department. The owner then has full rights to the property, including the right to sell, lease or rent the property at his/her own discretion. However, the property rights to foreigners are available subject to a few restrictions. The foreigners who own property in Dubai, Ajman or Ras Al Khaimah are eligible to apply for a UAE residence visa valid for three years. 3.3.2 Freehold Property in Dubai Dubai has worked towards the promotion of real estate development. The major property boom in Dubai occurred in May 2002, when Dubais crown prince, General Sheikh Mohammed bin Rashid Al Maktoom, issued a decree to allow foreign nationals to buy and own freehold property in selected areas of the city, now referred to as New Dubai. The same month also witnessed the

announcement of Nakheels man-made island, The Palm Jumeirah, which was followed a year later by the second man-made palm-shaped island, The Palm Jebel Ali. All previously developed leasehold property was automatically transferred to freehold.

islands, Dubai Marina, Emirates Hills and Al Barsha. Dubai Freehold Property Law

After the initial property boom, various new developers joined the market. Freehold properties in Dubai are currently majorly limited to areas on Jebel Ali, the Palm Island projects, The World

On 14 March 2006, the Dubai government issued a law legalising foreign ownership of properties in designated areas of Dubai. However, the law does not give property owners permanent residence visas or an automatic right to work in Dubai.

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3.3.3 Freehold Property in Rest of the UAE Once Dubai began offering freehold properties to citizens of other countries, other emirates followed suit. The following are the various projects and property developments in the emirates: Ras Al Khaimah Ras Al Khaimah was the first emirate to emulate Dubai, with its 1,300 residential unit development named Al Hamra Village. The second freehold development for Ras Al Khaimah, spread across 50 acres of beachfront land of a five-star resort facility, is The Cove. Another popular RAK property is the 1-million square metre tourist development, Saraya Islands. Ras Al Khaimahs government has set up its own public joint stock property development company, RAK Properties, which received freehold rights for all its properties from the citys ruler in November 2005. RAK Properties has developed a wide range of projects in the city, which includes Julfar Towers, Mina Al Arab, Mangrove Island and Khor Qurum. Ajman Ajman was the second emirate to follow, with the announcement of its 15 freehold residential apartment buildings named

Al Naeemiya Towers. The same company that developed the Al Naeemiya Towers has continued developing its portfolio of Ajman properties with Al Khor Towers, Al Rashidiya Towers and the Al Corniche Tower. Tameer Real Estate announced completion of an EUR 246.60 (AED-1.2-billion) freehold residential and commercial project in Ajman, named Al Ameera Village, which is built on the Emirates Ring Road.

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Sharjah Sharjah has also started offering property for foreign ownership, although the majority of property is presently held by lease. Some of its upcoming towers include ABBCO Tower, Sharjah Gate, the 32-storey Al Taawun Tower, and the 47-storey Al Sandos Tower. Tameer also plans to develop various towers throughout Sharjah, and Al-Hanoo has developed the 60-million square foot Nujoom Islands. Umm Al Quwain Tameer has developed the Emirates Modern Industrial Area that to primarily serve the manufacturing industry, which is built near the famous UAQ Aviation Club. Tameer has also developed the EUR 6 billion (AED 30 billion) Al Salam City, situated along the Emirates Road in Umm Al Quwain. Umm Al Quwains property ownership law states that non-GCC nationals can own property but not the land. Fujairah Fujairahs efforts to enter into the freehold market have been limited to the construction of the 43-storey, 170-metre Al Jabar Tower, which will contain 270 residential apartments, commercial shops and showrooms and is being developed by Al Jabel Contracting. Abu Dhabi Abu Dhabis property law came into effect on 14 August 2005, when the emirates government announced a 99-year land ownership and a renewable 50-year surface ownership to foreign nationals in specified areas in Abu Dhabi. Properties by Aldar Properties and the Al Reef Villas project by Manazel and Hydra Properties have permitted foreign ownership according to the new property law.
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3.4 Renting Property The renting of property is the dominant activity in the property market of the UAE. 3.4.1 Rental Requirements In order to rent property in the UAE, the rent for the entire year of tenancy is normally paid either in cash or by cheque. If the payment is made by cheque, most landlords will limit it to two to four cheque payments. In addition to the tenancy payment, if the property has been rented through an agency, a 5 percent6 commission will have to be paid to them. Most premises will require the payment of a refundable security deposit equal to 5 percent of the annual rent. As utility bills are paid by a tenant, it is normally required that a refundable deposit ranging from EUR 199.9 to 399.9 (AED 1000 to 2000) be paid to the landlord for the use of water, electricity and gas. Some premises also require the payment of a 10 percent municipal tax7 (Sharjah has a 5 percent municipal tax). 3.4.2 Rental Laws Tenancy contracts in the UAE normally last for two years, with the exception of Sharjah, where it is normally for three years. Within that period, landlords are not permitted to increase the rent until it requires renewal. At the time of renewal, a landlord is not permitted to increase the rent by more than that stated in accordance to the rental index set by the Real Estate Regulatory Agency (RERA)8. If a dispute between a tenant and landlord

occurs on the rent increase, the matter should be settled by the Municipalitys Rent Control Committee. Filing a case with the Rent Control Committee will cost EUR 80.0 or 100.0 (AED 400 or 500)9 and it will normally take a few weeks or months before

Source: Rootsland Source: Government UAE - Taxes Source: Global Property Guide 9 Source: KM Rent
6 7 8

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the two parties are summoned to appear before the committee. If the case is won by the plaintiff, the fee paid to file a case will be paid by the landlord. 3.4.3 Landlord Obligations Landlords are normally obligated to take charge of the annual maintenance of their property and they are not permitted to evict a tenant without just cause within the tenancy contract time period. 3.5 Average Rent for Off ice Space in Dubai and Abu Dhabi Office rental rates in the UAE have grown significantly over the past few years, mainly driven by the demand from the high influx of multinational companies setting up operations and the growth of existing businesses. The following are the trends in average office rental expenses in Dubai and Abu Dhabi: Dubai Tokyo, where average office space prices are more than three times the prices in the UAE. Rental rates (per annum) in Dubai have tripled and, on average, have risen to a whopping EUR 1,183.6 (AED 5,920) per square metre in fourth quarter of 2008 from EUR 914.7 (AED 4,575) per square metre in fourth quarter of 200710. According to Astecos rental research, rents on Sheikh Zayed Road have escalated to EUR 7075 (AED 350375) per square foot as compared to EUR 44 48 (AED 220240). The prices at Bur Dubai and Karama are at EUR 52.2 and EUR 56 and 53 (AED 280 and AED 265) per square foot, which have shown a 24 percent and 51 percent increase over Q3 of 2006, respectively. Office rents are expected to stabilise in the long term with the completion of projected commercial units. Dubai is less expensive than London, Hong Kong, New York and

10

Source: Emirates-re 20

Abu Dhabi According to CB Richards Ellis, commercial space in Abu Dhabi is in high demand, with occupancy rates at a saturation level of 100 percent, creating additional pressure on supply and rental levels. The supply shortage has narrowed the rental bands among the prime-, mid- and low-quality office market divisions. Rents on older buildings are on a relative decline, while overall office rents in the CBD area range EUR 449.8 to EUR 499.8 (from AED 2250 to AED 2500) per square meter. The lease for office rentals is generally three years with a three-month deposit. Annual rent is generally paid in advance with service charges of 10-15 percent of the annual rent. However, certain areas of Abu Dhabi, particularly prime areas, have already surpassed the upper threshold with increases observed to be more than 50 percent, and in some cases, doubling year over year, as shown in Table 3.
Table 3: Comparative Prime Off ice Rental Levels (Per Annum)

in Selected Areas of Abu Dhabi

LOCATIOn Al Bateen Al Markaziyah Al Mushrif Corniche West 223.7279.6 (12001500) 242.3307.5 (13001650 )

q2 2006 eur (aed)

q2 2007 eur (aed) 298.2465.9 (16002500) 316.8465.9 (17002500) 37.355.9(200-300) 639.78 (3200) for Q2 2009
Source: Trade Arabia-Abu Dhabi

223.7260.9 (12001400) 223.7279.6 (12001500)

A further rise in the demand for office space is expected with the implementation of diversification strategies, which will broaden the opportunities in different sectors.

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3.6 Average Living Costs for Expatriates For a person living in the same manner as an average western expatriate, the overall cost of living in the UAE will be similar to that in most European countries. The no-taxation policy of the government has a significant impact on the cost of certain items, e.g. cars and electronic products. On the other hand, the cost of accommodation is generally high, as is that of certain food items, particularly imported foods. Internationally recognised branded foods and household goods might be costlier than in the home country; however, there are plenty of cheaper locally and regionally produced alternatives that are of excellent quality. Table 4 shows the average monthly major expenses for a single person, couple and family with two children. (Numbers in brackets relate to the notes following Table 4).
Table 4: Average Monthly Major Expenses for a Single Person,

Couple and Family with Two Children

MOnThLy COSTS (EUR/AED) Item Housing Schooling Utilities Car Rental Telephone Insurance Maximum Total

Couple with Two Children 19,993 23,991/100,000 120,000 7,997.2/40,000 High School 3,998.6 5,598/20,000 28,000 Primary School 199.9 399.9/1,000 2,000 Electricity and water 2,399.2/12,000 Full Time Maid 299.9/1,500 per month 50/250 38/190 for a coverage of 9,996.5/50,000 35,175.2/175,940

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Notes 1 These are the rental costs for a one-bedroom apartment in a modern block, probably unfurnished, a two-bedroom apartment in a similar block and a two or three-bedroom apartment or a modest villa. Apartments might have air-conditioning included in the rent. Satellite television is probably provided but is unlikely to include all channels. A swimming pool and/or gym are usually provided. 2 This does not include luxury food items or alcohol. 3 These rates include electricity (and air-conditioning), water (and usually sewage if charged in conjunction with the water) and an allowance for telephone charges. 4 This includes entertainment, dining out, sports, newspapers and magazines but not holidays (air fares are often included in work contract terms). 5 These rates include running costs for an average family car and third-party insurance, petrol, servicing and repairs, but exclude depreciation and credit purchase costs. 6 This includes private healthcare, travel, car and contents insurance. Note that property is rented, therefore, building insurance is usually unnecessary. 7 Excessive clothing is unnecessary as a result of the regions hot climate. Office wear for men comprises a shirt and tie, except on formal occasions.

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4 Social Security System in the UAE

Small populations and high GDP rates allow the UAE government to fund the welfare of its people without needing to impose many financial obligations on them. For example, Dubai does not have obligatory state or employer-contribution insurance schemes. UAE nationals working for private companies are entitled to the same social security and pension benefits as UAE nationals working for the government. The government hopes to attract more nationals to non-governmental jobs by providing benefits in the private sector to speed up the emiratisation of the workforce. Under the national pension and social security scheme, which came into effect in the public sector in May 1999, nationals who have contributed to the scheme will be eligible for retirement and disability benefits; compensation on the death of these nationals will be granted to their dependents. Current end-of-service entitlements for government employees have been transferred to the new programme. The General Authority for Pensions and Social Security (GAPSS), which is an independent entity that invests employer and employee contributions to fund the social security programme, was set up to operate the scheme. The government allocated the required capital of EUR 100 million (AED 500 million) in the 1998 budget for the establishment of the authority, which commenced functioning as an investment body from 15 December 1998. Nationals are automatically provided with extensive help from the state, including medical care, sickness and maternity coverage, child care, pensions, unemployment benefits and, in some instances, housing and disability benefits. Foreign workers have access to medical facilities. In fact, Dubai is pressurising companies to provide medical insurance for their employees to ease expatriate pressure on state healthcare programmes; private medical insurance is recommended for most foreign nationals.
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4.1 Pensions There are no state pension schemes in Dubai for foreign expatriates, although certain state institutions and some international companies have corporate pension schemes. Expatriates can take advantage of their high disposable income in Dubai to avail themselves of a personal pension plan. There are many companies offering a variety of schemes, either based on lump sums or supported by regular savings.

5 Free Trade Zones (FTZs) in the UAE

5.1 Introduction FTZs The UAE has enjoyed substantial economic benefits and significant industrial growth as a result of its flourishing FTZs. Financial incentives to establish manufacturing industries in the UAE are primarily focussed on exemption from all taxes and duties levied on profits or production, with the exception of licensing fees. Further, there are no restrictions on profit transfer or capital repatriation. Customs duty may also be exempted for qualifying projects established in special industrial zones. In addition, nationally produced products are accorded a 10 percent price advantage in government purchases over imported goods. Different types of companies that can be established include the following: | Free Zone Company (FZCO/FZC) | Free Zone Establishment (FZE) | Free Zone Branch

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Different types of licences that can be issued include the following: | Trading Licence | Industrial Licence | Service Licence | National Industrial Licence Exemption It is possible for companies or their branches engaging in a trade or business in the UAE to enter into an agreement with the ruler of a particular emirate whereby it will be exempt from any liability to taxation on its income.

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5.2 List of FTZs Table 5 provides the names, purpose, financial incentives and official websites of major FTZs in the UAE.
ZONE
The Abu Dhabi Free Zone

WEBSITE
www.hcsez.ae

The Sharjah Free Zone

www.saif-zone.com/

Hamriyah Free- Zone

www.hamriyahfz.com

THE DUBAI FREE ZONE

Jebel Ali Free Zone (JAFZ) www.jafza.co.ae

Dubai Airport Free Zone (DAFZ)

www.dafza.gov.ae

Dubai Technology E- Commerce and Media Free Zone

www.dubaimediacity.com

Dubai Cars and Automotive Zone

www.ducamz.co.ae

Dubai Gold and Diamond Park

www.goldanddiamondpark.com 27

Source: UAE Interact - Business Centre - Free Zones

OBJECTIVE
Facilities for warehousing, precious metals and food

FINANCIAL INCENTIVES
100 percent import and export tax exemptions 100 percent repatriation of capital and profits No corporate taxes for 15 years; renewable for an additional 15 years No personal income taxes 100 percent exemption from corporate and personal income taxes for companies, investors and their employees 100 percent import and export tax exemption 100 percent repatriation of capital and profits allowed No corporate profits tax No personal income tax

Not Available

Considered as one of the most advanced free zones in the Middle East providing attractive concessions and investment incentives to foreign investors, including excellent manufacturing and commercial facilities

100 percent foreign ownership; No corporate taxes for at least 15 years; company formation period is 5-20 renewable for an additional 15 years days subject to availability of No restrictions on the repatriation of capital facility requested and submission and profits of necessary legal documents No personal income taxes No currency restrictions Offers similar incentives as JAFZ, No corporate tax up to 15 years; renewable for particularly in view of proximity to a similar period the Dubai airport. Freedom to move capital including dividends and profits Exemption from import duties No personal income tax Full repatriation of both capital and profits No currency restrictions Manufacturing and commercial facilities with attractive concessions and investment incentives to foreign investors No corporate taxes for at least 15 years; renewable for an additional 15 years No restrictions on the repatriation of capital and profits No personal income taxes No currency restrictions

Facilities for the re-export of Governed by JAFZ rules and automotive vehicles to the African, regulations Asian and Middle Eastern markets Not Available Not Available 28

5.3 Procedures for Starting a Company in a FTZ The Free Zone Authority assesses a companys requirements and their feasibility for starting a company in a FTZ through a questionnaire. Licence application, a list of invoice required for planning, consumer request for electricity and Form B for environmental concerns, if applicable, are provided after submitting the questionnaire. Finally, a duly filled in licence application is to be submitted. Provisional approval is given along with a specimen lease agreement; personnel documents for the licence requirement are submitted. After the meeting of the company representative and the concerned authority to finalise the details of the project, actual documents are processed.

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6 Opening a Bank Account in the UAE

6.1 Overview of Retail Banking11 | The aggregated balance sheet of banks operating in the UAE grew by 5.7 percent to reach EUR 329.95 billion (AED 1605.6 billion) at the end of 2010, against EUR 312.15 billion (AED 1519 billion) at the end of 2009. | By the end of 2010, total deposits with banks operating in the UAE amounted to EUR 215.7 billion(AED 1,049.6 billion), from EUR 201.9 billion (AED 982.6 billion) in 2009. | Foreign assets of banks reached EUR 47.98 billion (AED 233.5 billion) at the end of 2010, increasing by 12.2 percent from EUR 42.79 billion (AED 208.2 billion) in 2009. | Capital & Reserves of banks operating in the UAE increased by EUR 5.06 billion (AED 24.6 billion), from EUR 47.55 billion (AED 231.4 billion) at the end of 2009 to EUR 52.61 billion (AED 256 billion) at the end of 2010.

11

Source: Central Bank 30

6.2 Procedures for Opening an Account Opening a bank account in the UAE is a straightforward process, although requirements vary from bank to bank. Only residents can open a current/checking account. However, some banks allow non-UAE residents to open savings accounts. Foreign nationals need to provide the following documents to open a bank account in the UAE: | A valid passport (original and copy) | A valid residence visa | An official identification, such as a labour card or drivers licence | A salary certificate from the employer | A letter of no-objection from the employer/sponsor Note: Some banks set a minimum account/balance limit. 6.2.1 Salary Transfer Account | The requirement to open a salary transfer account is a noobjection letter from the employer addressed to the respective branch. | Dependents on a husbands or fathers visa who want to open accounts need their original passports to verify the sponsorship. | Banks also offer accounts to new entrants whose residence permits are under processing, provided they submit either a letter from the employer certifying their employment or a letter of introduction or verification from a bank which the applicant has an account with in his/her home country.

31

6.2.2 Phone and Internet Banking | Due to security reasons, some banks require a branch visit for even minor changes to account details. Other banks, however, offer phone and Internet banking. | The degree of functions of a phone or Internet banking plan differs from bank to bank. Some banks only allow for bill payment and fund transfer to its different branches or other local banks online or over the phone. 6.2.3 Foreign Currency in the UAE 12 | Most major banks offer customers the option to open accounts in major currencies such as USD, GBP and EUR. | Most UAE banks accept cheques in major currencies, charging rates starting at EUR 20 (AED100) and can take 3045 days for clearance.

12

Source: Gulf News 32

6.3 Major Banks13 The UAE has 28 foreign banks from several countries and 23 local banks. Foreign and local banks have established 111 and 754 branches respectively in the UAE, by the end of March 2009. Table 6 lists the major banks in the UAE and their total number in terms of each bank type.
Table 6: Major Banks in the UAE as of 31 March 2009 Bank Type Local Banks number of banks 23 names of major banks National Bank of Abu Dhabi Abu Dhabi Commercial Bank ARBIFT Union National Bank Commercial Bank of Dubai Dubai Islamic Bank PJSC Emirates Bank International Emirates Islamic Bank Mashreq Bank PSC Sharjah Islamic Bank Bank of Sharjah PSC United Arab Bank PJSC Invest Bank PLC National Bank of R.A.K. Commercial Bank International National Bank of Fujairah PSC National Bank of U.A.Q. First Gulf Bank Abu Dhabi Islamic Bank Dubai Bank Noor Islamic Bank Al Hilal Bank Ajman Bank

13

Source: Central Bank of the UAE 33

Bank Type Foreign Banks (Locally Incorporated)

number of banks 28

names of major banks National Bank of Bahrain Rafidain Bank Arab Bank PLC Banque Du Caire El Nilein Bank National Bank of Oman Calyon Bank Bank of Baroda BNP Paribas Janata Bank HSBC Bank Middle East Arab African International Bank BLC Bank (France) S.A. Al Ahli Bank of Kuwait Barclays Bank PLC Habib Bank Limited Habib Bank AG Zurich Standard Chartered Bank CitiBank N.A. Bank Saderat Iran Bank Meli Iran Blom Bank France Lloyd Bank TSB ABN-Amro Bank United Bank Limited Doha Bank Samba Financial Bank National Bank of Kuwait Banca Commercial Italiana

Restricted Licence Bank Investment Banks

United Arab Emirates Investment Bank P.J.S.C. HSBC Financial Services (Middle East) Limited. Noor Capita P.S.C.

Source: Central Bank of the UAE

34

7 Recruitment of Local Staff

There are a large number of employment agencies, recruitment agencies, consultants and job agencies in the UAE, which have been growing rapidly. According to the UAE Ministry of Labour, recruitment agencies are not allowed to charge fees for sign up and/or visas and/or to be placed in jobs. There are employment agencies (usually online) in Dubai that operate from another country and so could claim to be able to legitimately charge a fee. Employment agencies normally charge fees from the employer and not the employee. Some recruitment consultants in the UAE provide assistance with writing curriculum vitaes and application letters, and/or they may offer consulting services and psychometric evaluations to assist in choosing suitable careers and jobs. A few of the larger and more well-known job search firms operating in Dubai include BAC Middle East, Clarendon Parker, IQ Selection, Kershaw Leonard and SOS Recruitment. There are various recruitment channels available in the UAE. These include campus recruitment, headhunting agencies, media advertisements (newspapers, magazines, TV and broadcasting), Internet recruiting, on-site recruiting, internal references and walk ins. Different approaches are needed for various recruiting requirements.

35

7.1 Major Recruitment Agencies and Websites Table 7 lists the major recruitment agencies in the UAE and their websites.
Table 7: Major Recruitment Agencies and Websites TOP INTERNET RECRUITMENT AGENCIES Bayt.com Dubaidonkey.com Gulftalent.com Jobsindubai.com Jobtrackme.com Mawaride.com Monster.com Strategiy.com Jobs.theemiratesnetwork.com Dubizzle.com CLASSIFIED ADVERTISEMENTS Gulf News Khaleej Times WEBSITES Bayt.com dubaidonkey.com gulftalent.com jobsindubai.com jobtrackme.com mawaride.com monster.com strategiy.com jobs.theemiratesnetwork.com dubizzle.com WEBSITES www.gulfnews.com/ www.khaleejtimes.com/

36

7.2 Brief Overview of Labour Laws | Administered by the Federal Ministry of Labour and Social Affairs, the Labour Law in the UAE is loosely based on the International Labour Organisations model. UAE Law No. 8 of 1980, as amended by Law No.12 of 1986 (the Labour Law) governs most aspects of employer/employee relationships, such as work hours, leave, termination rights, medical benefits and repatriation. The Labour Law is protective of employees in general and overrides conflicting contractual provisions agreed under another jurisdiction, unless they are beneficial to the employee. | The ministry issues a model form of labour contract in Arabic, which is widely used. Other forms of contract are enforceable, provided they comply with the Labour Law. End-of-contract gratuities are set at 21 days pay for every year of the first five years of service and 30 days for every year thereafter. Total gratuity should not exceed two years wages. Employees are entitled to pro-rated amounts for service periods less than a full year, provided they have completed one year in continuous service. | Trade unions do not exist. In the case of a dispute between an employer and an employee, or in the interpretation of the Labour Law, the Ministry of Labour and Social Affairs will initially act as an adjudicator in an effort to resolve matters. If a party wishes to appeal any decision taken, it can take its case to court. Strikes and lockouts are forbidden. | The normal maximum working hours are 8 per day or 48 per week. However, these hours may be increased to 9 hours daily for people working in the retail trade, hotels, restaurants and other such establishments. Similarly, daily working hours may be reduced for difficult or dangerous jobs. Many businesses work on a two-shift system (for example, 8am1pm and 4pm 7pm). As in all Muslim countries, Friday is the weekly day of
37

rest. In practice, commercial and professional firms work 4045 hours a week and government ministries for about 35 hours. The weekend for office workers has traditionally been Thursday afternoons and Fridays but a number of organisations have changed over to a five-day week with the weekend comprising Fridays and Saturdays. During the Muslim holy month of Ramadan, normal working hours are reduced by two hours daily. | There are 10 days of public holidays (paid) in a year. An employees annual leave is two days for every month if his service is more than six months and less than a year. With every completed year of service after the first year, an employee is entitled to 30 days annual paid leave. This is in addition to public holidays, maternity leave for women and sick leave. | Expatriates who have not worked in UAE can avail a visa for 60 days to work temporarily. A fee of AED 500 needs to be paid for the job. Further, the employees who have served two years under an employer are eligible for transfer without the need for a no-objection certificate (NoC). 7.3 Average Salary Range The median salary ranges by job, employer type, industry, city and degree in the UAE in 2011, as per Payscale, are listed in the tables 812, respectively:
Table 8: Median Salary by Jobs in the UAE in 2011 JOBS Regional Sales Manager Project Manager Information Technology (IT) Mechanical Engineer Business Development Manager Human Resources Manager MEDIAN SALARY (IN EUR/AED) EUR 50,580.13 (AED 246,132) EUR 48,968 (AED 238,291) EUR 21,845.68 (AED 106,305) EUR 38,013.39 (AED 184,980) EUR 47,356.86 (AED 230,447)
38

Table 9: Median Salary by Employer Type in the UAE in 2011 EMPLOYER TYPE Company Private Practice/Firm Non-Profit Organisation Government State and Local School/School District Other Organisations College/University Self-employed Government Federal Foundation/Trust Franchise Hospital Contract Team MEDIAN SALARY (IN EUR/AED) EUR 31,495.36 (AED 153,265) EUR 28,313.17 (AED 137,777) EUR 37,009.32 (AED 180,094) EUR 37,896.46 (AED 184,411) EUR 19,172.53 (AED 93.297) EUR 24,858.92 (AED 120,968) EUR 36,242.19 (AED 176,361) EUR 28,951.05 (AED 140,881) EUR 38,435.90 (AED 187,036) EUR 42,559.67 (AED 207,103) EUR 18,994.57 (AED 92,431) EUR 23,967.88 (AED 116,632) EUR 20,869.35 (AED 101,554) EUR 20,084.54 (AED 97,735)

Table 10: Median Salary by Practice Area in the UAE in 2011 INDUSTRY Corporate, Business, Mergers & Acquisitions Litigation & Appeals General Real Estate/Construction/Land Use Trusts & Estates Insurance Law MEDIAN SALARY (IN EUR/AED) EUR 57542.06 (AED 280,010) EUR 51,254.78 (AED 249,415) EUR 43,537.64 (AED 211,862) EUR 49,320 (AED 240,000) EUR 51,254.78 (AED 249,415) EUR 27,659.07 (AED 134,594)

39

Table 11: Median Salary by City in the UAE in 2011 CITY Dubai Abu Dhabi Sharjah Al Ain Ajman Fujairah MEDIAN SALARY (IN EUR/AED) EUR 30,730.88 (AED 149,542) EUR 35,694,73 (AED 173,697) EUR 19,775.68 (AED 96,232) EUR 23,758.88 (AED 115,615) EUR 13,809.60 (AED 67,200) EUR 12,929.85 (AED 62,919)

Table 12: Median Salary by Certification in the UAE in 2011 CERTIFICATION Certified Professional Engineer (PE) Project Management Professional (PMP) Cisco Certified Network Associate (CCNA) Microsoft Certified Professional (MCP) Business Certificate Chartered Accountant (CA) Microsoft Certified Systems Engineer (MCSE) Certified Public Accountant (CPA) Project Management Certificate MEDIAN SALARY (IN EUR/AED) EUR 36,898.35 (AED 179,554) EUR 58,232.74 (AED 283,371) EUR 23,156.77 (AED 112,685) EUR 28,718.83 (AED 139,751) EUR 29,152.02 (AED 141,859) EUR 42,098.52 (AED 204,859) EUR 30,113.15 (AED 146,536) EUR 45,858.97 (AED 223,158) EUR 49,528.58 (AED 241,015)

40

8 Taxation
The UAE is an attractive location to invest or set up business operations, particularly in light of the relative scarcity of personal and corporate taxes. Only a few industries in the UAE are in fact subject to taxes. It is expected that this approach will not change in the medium or long term. The UAE has entered into numerous double-taxation avoidance treaties with other countries to avoid instances of tax being levied on a person in connection with the same matter in two different countries. 8.1 Tax Rates14 There is no federal tax legislation in the UAE; instead each emirate follows its own tax law. The following taxes are not applicable in the UAE: | Personal income tax | Capital gain tax | Value-added tax | Withholding tax | Corporate tax Currently, there are legislations in force in the emirates of Abu Dhabi, Dubai and Sharjah, establishing a general corporate taxation regimethe Abu Dhabi Income Tax Decree of 1965 (and its amendments), Sharjah Income Tax Decree of 1968 (and amendments) and Dubai Income Tax Decree of 1969 (and amendments). In practice, however, only oil, gas and petrochemical companies and branch offices of foreign banks are required to pay taxes.

14

Source: Income Tax in UAE, Move one 41

8.1.1 Personal Taxation There is no personal income tax levied in the UAE. | Municipality service charges are levied on individuals living and working in the UAE. | Service charge percentages vary among the emirates. | A service charge of 510 percent is imposed on food purchased in restaurants. Hotels require a 1015 percent service charge per night on room rates. These charges are usually included in the customers bill, which the municipality will collect from restaurants and hotels. | A tax of 50 percent is charged on import of alcohol. An individual, who has a liquor licence, is required to pay an additional 30 percent tax on liquor upon buying. | Hotels also require an additional 15 percent service charge on the services they provide. 8.1.2 Corporate Tax There is no federal tax legislation on corporate tax in the UAE; instead, each emirate follows its own tax rules. Abu Dhabi There are no corporate, income, withholding, sales or valueadded taxes currently imposed in Abu Dhabi, apart from the following exceptions: 1 Taxes on oil and gas companies at rates specified in the relevant concession agreement 2 Flat rate on annual profits of branches of foreign banks 3 Flat rate service tax on hotel services and entertainment

42

However, according to the Abu Dhabi Income Tax Decree of 1965 (as amended by Abu Dhabi Income Tax Decree Number (4) of 1972), every chargeable person who conducts trade or business, including the rendering of any services in Abu Dhabi, shall be subject to a scale on income basis, with a maximum of 55 percent tax as listed in Table 13.
Table 13: Tax in the UAE as Percent of Income INCOME Less than EUR 199,930 (AED 1,000,000) Equal to or more than EUR 199,930 (AED 1,000,000) but less than EUR 399,860 (AED 2,000,000) Equal to or more than EUR 399,860 (AED 2,000,000) but less than EUR 599,790 (AED 3,000,000) Equal to or more than EUR 599,790 (AED 3,000,000) but less than EUR 799,720 (AED 4,000,000) Equal to or more than EUR 799,720 (AED 4,000,000) but less than EUR 999,650 (AED 5,000,000) More than EUR 999,650 (AED 5,000,000) PERCENT TAX 0 10 20 30 40 55

Source: Al-Tamimi - Document - Taxation Law in the UAE

Dubai In Dubai, all companies are required by law to pay tax on their earnings. The rates of tax are on a sliding scale up to a maximum of 50 percent. In practice, however, only oil, gas and petrochemical companies and branch offices of foreign banks are required to pay tax. The Dubai Income Ordinance of 1969 and Dubai Income Tax Decree of 1970 (and its amendments) specifies that an organization that conducts trade or business in Dubai will be subject to taxation as listed in Table 13.

43

Oil companies pay up to 50 percent tax on the UAE-sourced taxable income while banks pay 20 percent tax on taxable income (income tax on branch offices of foreign banks ordinance (No. 2) of 1997). The taxable income of banks is calculated with reference to their audited financial statements whereas that of oil companies is calculated with reference to their concession agreements. Oil companies also pay royalties on production. Customs duties are extremely low and there are many exemptions. Goods imported and intended for re-export often benefit from customs duty as do manufacturers on the import of their machinery, raw materials and spare parts used for industrial purposes. Sharjah specifies that tax, on the scale listed in Table 13, shall be imposed on the taxable income of every chargeable person for each income tax year ending after the date of this decree. In practice, however, only oil, gas and petrochemical companies and branch offices of foreign banks are required to pay tax on their net profit. 8.1.3 Property Tax15 In the UAE, tax is payable by residential and commercial tenants according to the annual rent of a residential property at the rate of 5 percent and for a commercial property at the rate of 10 percent. Abu Dhabi | A property tax is charged in Abu Dhabi to obtain and renew business licences. In general, taxes are assessed at around 510 percent of the applicants annual office rental and 5 percent of the annual rental of the residence of the manager whose name appears on the licence.
15 Source: Al-Tamimi - Document - Taxation Law in the UAE 44

The Sharjah Income Tax Decree of 1968 (and its amendments)

Dubai | In Dubai, all residential properties are subject to an annual property tax payable to the Dubai Municipality. | The amount of tax payable depends upon the employment status of the tenant. All professional, managerial and other senior employees in commercial, professional and industrial sectors are charged at the rate of 5 percent of the annual rent of their property, whereas in the banking sector, the percentage is 15 percent of the annual rent of their property. | It is the tenants obligation to pay the property tax. The Dubai Municipality often collect the tax from the tenants employer through the Department of Economic Development at the time of issuing or at the annual renewal of the employers trade licence. | The Dubai Department of Economic Development collect the tax with reference to a list to be submitted by companies applying for the issue or renewal of their trade licences. The list contains the names and job titles of all of the companys employees and the amount of their rent. | Junior employees are charged at a flat rate of EUR 60 (AED 300). A flat rate of EUR 199.9 (AED 1000) is payable in the absence of a lease agreement. | The Dubai government has introduced new tax rules wherein a 5-percent tax will be charged on residential units (including vacant freehold properties) based on the real estate index RERA and 10 percent tax will be charged on commercial units in addition to 1 percent transfer fee based on selling price.

45

Sharjah | In Sharjah, all leased residential properties are subject to an annual property tax payable to the Sharjah Municipality, charged at 2 percent of the annual rent shown in the tenancy agreement, subject to a minimum of) EUR 60 (AED 300) and payable when the tenant notarises the agreement. 8.2 Double Tax Treaty between the UAE and the Luxembourg The UAE has 58 double-taxation avoidance agreements and 32 bilateral investment treaties in place. Applicable since November 2005, the main tax law regarding double-taxation is specified in the agreement between the UAE and the Grand Duchy of Luxembourg to avoid double-taxation and to boost bilateral trade and investment between the two states. This agreement provides equal taxation treatment to investors in the UAE and Luxembourg. Moreover, it provides an environment that stimulates foreign direct investment, encourages business ventures, and enhances cooperation and the economic growth levels of both countries. Further, it paves the way for new com mon projects that benefit the economies of the two countries. The agreement also encourages tourism and bilateral trade between the two countries, especially after the implementation of income and profit tax exemption regulations granted to national air cargo companies. 8.3 Repatriation of Prof its There are no exchange controls or restrictions on repatriation of profits in the UAE; 100 percent repatriation of capital and profits is allowed

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9 Appendix

Appendix I: Useful Links and Addresses

TYPE OF ORGANISATION Board of Economic Development in Dubai ADDRESS Dubai Cargo village room 3035, 3rd floor P.O. Box 211024 Dubai United Arab Emirates Mr. Albert PANSIN Executive Director Fax: +971 4 283 3031 E-mail: [email protected] E-mail: [email protected] Embassy of the United Arab Emirates 73 avenue F.D. Roosevelt B-1050 Bruxelles Tel: +32 2 640 60 00 Fax: +32 2 646 24 73 E-mail: [email protected] www.uaeembassybrussels.be UAE Government Not Applicable E-mail: [email protected] www.uae.gov.ae/home.htm Ministry of Finance and Industry P.O. Box 433 Abu Dhabi Office Tel: +971 2 6726000 Fax: +971 2 6663088 P.O. Box 1565 Dubai Office Tel: +971 4 3939000 Fax: +971 4 3939738 E-mail: [email protected] www.uae.gov.ae/mofi/default.htm UAE MINISTRIES, AGENCIES AND SERVICES

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TYPE OF ORGANISATION Ministry of Foreign Affairs

ADDRESS P.O. Box 1 Abu Dhabi Office Tel: +971 2 4444488 Fax: +971 2 4449100 P.O. Box 3785 Dubai Office Tel: +971 4 2221144 Fax: +971 4 2280979 E-mail: [email protected] http://mofa.gov.ae/

Ministry of Labour

Abu Dhabi Office Tel: +971 2 6671222 Fax: +971 2 6665889 Dubai Office Tel: +971 4 2691333 Fax: +971 4 2695011 E-mail: [email protected] http://www.mol.gov.ae/

Ministry of the Economy

Planning Sector P.O. Box 904 Abu Dhabi Office Tel: +971 2 6271100 Fax: +971 2 6261344 Economy Sector P.O. Box 901 Abu Dhabi Office Tel: +971 2 6265000 Fax: +971 2 6260000 E-mail: [email protected] www.moep.gov.ae

48

TYPE OF ORGANISATION Immigration Department

ADDRESS Abu Dhabi Office Saeed bin Tahnoon St. Abu Dhabi Tel: +971 2 4462244 Al Ain Aditaba Road, near Dubai Islamic Bank, opposite Carrefour supermarket. Tel: +971 3 7625555 Dubai Office Department of Naturalization and Residency, Trade Centre Road, near Bur Dubai Police Station Tel: +971 4 3980000 P.O. Box 407 Abu Dhabi Office Tel: +971 2 6322200 Fax: +971 2 6322260 E-mail: [email protected] http://www.akaryah.org.ae

Emirates Organization for Properties

State Audit Institution

P.O. Box 3320 Abu Dhabi Office Tel: +971 2 6448800 Fax: +971 2 6448688 P.O. Box 5513 Dubai Office Tel: +971 4 2286000 Fax: +971 4 2286111 E-mail: [email protected] [email protected] www.saiuae.gov.ae/

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TYPE OF ORGANISATION The Belgian and Luxembourg Association in the Emirates

ADDRESS E-mail: [email protected] http://www.uae.clubnieuws.be/

BELGIAN AND LUXEMBOURG ASSOCIATIONS IN THE UAE

UAE MINISTERS, AGENCIES AND SERVICES Trade and Investment Office - Abu Dhabi Luxembourg Embassy Silver Wave Tower - Office 1001 Meena Road P.O. Box No 44909 Abu Dhabi - United Arab Emirates Mr Marc Scheer Executive Director E-mail: [email protected] Tel: +971 2 4912 446 Fax: +971 2 4912 289 www.investinluxembourg.ae Trade and Investment Office - Dubai P.O. Box 211024 Dubai United Arab Emirates Mr. Albert Pansin Executive Director

Email: [email protected] [email protected] Mobile: 0097150 624 9030

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Appendix II: Embassies

EMBASSY UAE Embassy in Belgium ADDRESS UAE Embassy 73 Av. F. Roosevelt 1050 Bruxelles, Belgium Tel: +32 2 640 6000 Fax: +32 2 646 2473 E-mail: [email protected] Belgium Embassy in the UAE Al Masaood Tower (6th floor) Hamdan Street Abu Dhabi Tel: +971 2 6319 449 Fax: +971 2 6319 353 E-mail: [email protected] http://www.diplomatie.be/abudhabi/

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10 Disclaimer
The Government of the Grand Duchy of Luxembourg declines all responsibility regarding the use of information featured in this document. The contents are provided for information purposes only. They contain information which is not necessarily complete, exhaustive, precise or up to date. In the event of discrepancies between the texts of this publication and the original documents, the original documents as officially published shall apply. This publication may refer to external sites over which the Government of the Grand Duchy of Luxembourg has no control and for which it declines all responsibility.

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Luxembourg for Business 19-21 Boulevard Royal L-2914 Luxembourg Grand Duchy of Luxembourg [email protected] www.luxembourgforbusiness.lu

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DECEMBER 2011