Setting-up a Business in the UAE Post-covid

25 August 2020 10:02 | Anonymous member (Administrator)

The Canadian Business Council (CBC) Abu Dhabi has hosted a webinar regarding Setting-up a Business in the UAE Post-covid on the 24th of August 2020. Awais Chughtai, Relationship Manager of CBC Abu Dhabi and moderator of the webinar introduced the topic by mentioning the main points of the discussion which are mainland setups, free zone setups, and visa updates. He then mentioned the partnering companies and introduced the guest speakers.

Jade Wong, Business Development Manager of PRO Partner Group started the presentation with background information about PRO. They are a corporate service provider of company formation and setup solutions established in 2010. Also, they offer services aimed to help entrepreneurs, companies and businesses to find their footing in the Middle East, particularly in the flourishing markets of GCC like  UAE, Qatar and Oman.

Their different services are categorized under company formation, corporate sponsorship, PRO services, and other services. In terms of company formation, they provide several methods where foreign investors can set up their businesses in the UAE and Qatar. In addition, they are specialized in mainland and free zone company formation. Regarding corporate sponsorship, they offer Local Partner Service as a ‘Corporate Nominee Partner or entity’ rather than an individual sponsor . Moreover, PRO services include Resident and Employee Visa, Labor and Immigration Cards, Labor Quota applications, Investor/Mission/Family Visas, Offshore Passes (CICPA), transfer of sponsorship, Emirates/Qatari ID Card. Furthermore, other services include Corporate Secretarial services, HR Services, Corporate Governance, Legal Document Attestation, SPC Approvals, Engineering Classification, CICPA Passes, and Special Purpose Vehicles. All of which aims to provide a hassle-free process for foreigners to start their business in the UAE.

Ms. Wong proceeded with information about company formation as there are various structures to consider when setting up a company from the mainland such as; Limited Liability Company (LLC), branch office, trade office, professional license, and free zones. There are factors to determine what solution is best such as types of activity on the license, which clients the entrepreneur plan to work with, how many employees the company plan to have and etc. One of the main concerns regarding company formation structure is deciding between LLC and Branch Office, which also depends on certain factors similar to the previous ones. LLC allows more flexibility for certain activities such as trading and real estate. In terms of ownership, it requires a 51% local sponsor whereas a foreign branch is 100% owned by the investor and requires a national service agent. However, government costs can be higher for a foreign branch and there is a requirement to submit a bank guarantee in the amount of AED 50,000 . The bank guarantee is against any future liabilities of the branch and will remain with the life of the branch until it is canceled or re-registered of the branch.

Some of the current updates of the mainland include the e-trader license, which allows UAE residents to set up a license without the requirement of a local sponsor or a national service agent and with a reduced cost. This update is very ideal and cost-effective for single business owners looking to set up a license to sell professional services and products, either on social media or websites. The e-trader license does not require an office space; meaning business owners can work from home to promote and sell products and services. However, there are  some limitations regarding trading of physical products and goods. Those activities are available for GCC nationals only, whereas non-GCC nationals can sell professional services only such as web design and advertising services.

In terms of the company formation process, the PRO Group can assist with all that is required; the service includes assisting with overseas document attestation, advising on incentives currently offered, applying for chosen corporate name and business activities, working with Counsel on the preparation of constitutional documents, legalizing documents at the Notary Public and Collection of the licenses. Regarding document attestation, it includes legal translation of documents, notarization, legalization by the Ministry of Foreign Affairs (MoFA), and Embassy attestation. In terms of executing the documents, it can proceed online so once the documents were agreed, the document approval could be carried out via Webex in Abu Dhabi. Also, now it is possible to carry out the notary in-person. Besides the set-up of the company, PRO Group can support additional requirements to help the business get running such as managing the visa process for employees and other secretarial services.

Next, Libbie Burtinshaw, Operations Manager of PRO Partner Group talked about recent updates in terms of government departments, travel restrictions, and visas across Dubai and Abu Dhabi. In Dubai, the notary is executed in person whereas in Abu Dhabi, both online and in-person would work. Dubai’s notary executions are easier because there is no pre-approval required, unlike Abu Dhabi. Currently, most government departments are open, however, not necessarily fully functioning. Although, since 5th of July 2020 it was announced that 100% of federal government staff were to return to their office. Government department opening times are back to what they were pre-COVID yet some departments do close earlier. Some notable changes in government processing are with the MoFA as they have changed their operations. In-person attestation has been stopped, an online application must be made, next the payment is done and then the documents are sent via impost for completion and then returned within 5 to 7 working days. Ms. Burtinshaw emphasized that they are not sure if MoFA will revert to in-person attestations. In Abu Dhabi, PRO Group is not able to have visa stamping done directly at immigration. Instead of in-person, they have to submit documents through empost and then they take around 5 working days to be sent back. However, Dubai’s visa stamping currently can be done in-person. Also, in terms of travel restrictions, there are still limited travels into Abu Dhabi yet other Emirates are a lot easier to travel around. Most changes implemented because of COVID-19 have been reversed with regards to the government office closures; however, social distancing is still to be maintained.

Regarding Abu Dhabi and Dubai visa, it is not possible to apply for a new employment visa for somebody who is outside of the UAE. In addition, outside country visa applications and mission visas being applied are stopped currently. Visas that were expired after the 1st March and up until the 12th of July 2020, they were auto extended until the end of the year. However, residents who are currently in the UAE and their visa is expired from after the 12th of July are expected to renew it within three months of expiration whereas those who are currently outside of the country will have to renew their visa within one month from the day of return to the country. Also, approvals are necessary for those who are outside of the UAE in order to return here. For Dubai visa holders they have to apply online application through GDRFA, whereas for Abu Dhabi and other Emirates it is through ICA. Anyone who was inside the UAE on a tourist visa either had to extend before the 10th of August or change of status to a new visa or exit; otherwise, fines would have occurred from the 12th of July. In terms of traveling outside of the UAE, if someone is traveling to their home country and have less than six months on their visa this will not be a problem as long as they return before their visa’s expiry date. However, if visa holders are traveling somewhere other than their home country then it will depend on the destination country as some countries expect to see at least six or three months on the visa. Regarding traveling into the UAE and quarantining, currently residents must download either the Dubai smart app or the al Hosn app and self-quarantine for 14 days at their home or at a designated facility. In Dubai, there is a quarantine declaration to be completed and submitted on arrival, which acknowledges a 14-day quarantine period. However, Ms. Burtinshaw stresses that all the information she has mentioned is subject to change with little or no notice based on COVID-19 updates.

Afterward, Ms. Wong has continued the presentation about free zone company formation. Comparing to the mainland, the free zone allows 100% ownership with no requirement for a local sponsor or a national service agent at an affordable cost. Currently, there are around 40 different free zones across the UAE and specialized in different sectors including media, communications, logistics, IT, trading, and manufacturing. Below is a screenshot of the pros and cons of the free zone company.

Next, Ms. Wong talked about Dual Licenses which enable free zone companies to extend their business to the UAE mainland market while operating from their free zone office without the need to rent a second office in the mainland. Regarding recent updates, there has been a stimulus and discounted packages for new incorporations, relief measures for existing businesses, no requirement for attested documents in certain free zones, and lease promotions. Finally, she mentioned how COVID-19 in fact sped up the process with the use of technology.

The webinar proceeded with Q&A.

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About the Canadian Business Council Abu Dhabi

The Canadian Business Council Abu Dhabi (CBC) promotes business relations, commerce and investment between Canada and the UAE with a particular focus on the Emirate of Abu Dhabi. We provide opportunities for Canadian business executives in the UAE to meet on a regular basis and to exchange information about business opportunities. As a link with organizations in Canada, CBC Abu Dhabi is dedicated to the development of trade and corporate investment between Canada and the UAE and assist Canadian companies and business people who are establishing or contemplating to establish a trading base in this country.

About PRO Partner Group

Without the support and services of an experienced, trustworthy and proactive partner, establishing a business in the Middle East can be a complex, time consuming and even daunting process. For international companies wishing to set up in the UAE or Oman (and the law firms who represent them), our promise is clear.

We will remove that complexity, minimise that time and eliminate that stress. PRO Partner Group is the leading Company Setup, Local Partnership and PRO Service provider in Abu Dhabi, Dubai, the wider UAE, Oman and Qatar. We provide a dedicated corporate local partnership platform for companies, ensuring the foreign party retains full security and control of the local business.

Maryam Almansoori, Intern, CBC Abu Dhabi

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