The UAE is a white listed onshore jurisdiction that offers business opportunities that exist only in mature industrial and financial hubs. International Businesses moving to the UAE find themselves in a thriving market with excellent infrastructure.

A pro-business government encouraging foreign investment has also developed the country into a cosmopolitan centre welcoming a diverse specialist and competitive workforce. Further, Dubai has emerged as a popular jurisdiction for the relocation of high net worth individuals and a strong alternative to UK, Switzerland, Monaco, Singapore and such countries.

Special economic zones, free trade zones, and UAE offshore companies offer 100 percent ownership, repatriation of profit and capital exemption from taxes and a wide network of 80 double tax treaties. Outside economic and free zones, significant incentives are being offered to investors and corporate governance provisions ensure transparency and accountability.

The Global Competitiveness Index 2014-2015 published by the World Economic Forum (WEF) ranks the UAE as the 12th country in the world in terms of competitiveness.

1 MAJOR BUSINESS CENTRE 2-3

2 LEGAL ENTITIES 4-5

3 TAX PLANNING 6-7

4 REDOMICILIATION 8-9

5 DIFC AND FINANCIAL SERVICES 10-11

6 RELOCATION AND LIVING 12-15

TOPIC

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DUBAI FOR BUSINESS

DUBAI FOR BUSINESS

January 2015

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1 MAJOR BUSINESS CENTRE

The UAE has a vibrant free economy with a significant proportion of revenues arising from exports of oil and gas. Successful efforts have been made to diversify away from dependence on hydrocarbons and a solid industrial platform has been created together with a strong services sector. The establishment of free zones has been an important feature of this diversification policy and the reform of property laws gave a major boost to the real estate and tourism sectors.

The Global Competitiveness Report 2014-2015 issued recently by the World Economic Forum (WEF) ranks UAE as the 12th country in the world in terms of competitiveness (see page 3).

The UAE has established a council of competitiveness to enhance efforts to achieve sustainable development through the setting up of legislative frameworks and the provision of developed infrastructure that will further enhance the country’s status as a regional and global hub for investments. The council continues its communication with government agencies and the private sector through workshops and meetings, to coordinate efforts and explore ways to further enhance the competitiveness of the country.

Economic and fiscal policy

Since the early 1980s, the two main economic objectives set by the UAE government have been to reduce reliance on hydrocarbons and boost private sector investment. This strategy is being followed diligently in an effort to offset the country’s vulnerability to fluctuations in oil prices and to propagate economic growth and stability.

The fact that there are no restrictions on current and capital account transactions, helps to implement these objectives as does the fact that foreign entities repatriate dividends, profits, interest or royalties without restrictions, with the exception of foreign banks which are required to obtain the Central Bank of UAE’s approval.

The UAE aims to promote free trade with minimum restrictions on foreign trade and investment.

The policy of the UAE government to encourage foreign investment is evidenced with new and impressive industrial and commercial developments frequently announced.

Solid infrastructure

Infrastructure in the UAE is second to none. Telecommunications, including mobile telephony and land lines as well as internet access are at least as good as that of the world’s largest international business hubs. The road network is constantly upgraded and ports and airports are of world class standards. The UAE is creating one of the world’s biggest and most efficient

cargo handling centres. To date, the government has invested heavily in infrastructure development, and it has also opened up its utilities and other infrastructure to increase private sector involvement.

Security and stability

The UAE is enjoying political stability. This has enabled the implementation of sound economic policies reinforcing the country’s social structure to develop one of the most tolerant, prosperous, secure and safe societies in the world. Dubai and Abu Dhabi have been ranked the top two cities in the Middle East region for quality of life, according to latest editions of global surveys. Long time investors include a wide range of multinational companies headquartered across the globe.

Dubai to host World Expo 2020

Dubai has won the right to host the 2020 World Expo, sparking national jubilation in UAE as the business and tourism hub secured an extra recognition for its growing economy.

Five years after the economic crisis, Dubai became the first Middle East location designated to host the 2020 World Expo, fending off competition from Ekaterinburg in Russia, Izmir in Turkey and Sao Paulo, Brazil in the international vote held in Paris.

Expos dating back to the Great Exhibition of 1851 in London, are held every 5 years and allow nations to create pavilions to show-case national developments in science and culture.

“Expo 2020 will trigger higher levels of tourism, economic and investment activity in the UAE, further boosting the business environment” said Khalid Howladar, Dubai senior credit officer at Moody’s rating agency.

According to the World Bank, Dubai and the UAE provide the easiest and quickest way for foreign investors looking to set up in the Arab world.

A revival of trade and tourism, bolstered by the UAE’s status as a haven in the turbulence of the Arab spring, has helped lift economic growth. The expo will cement the country’s pre-eminence, with Dubai’s commercial sector anticipating an estimated €28,8bn economic boost and the creation of nearly 300.000 jobs.

H O S T C I T Y

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• Pro-businessgovernmentregulations

• Secrecy,assetprotectionandno international exchange of information agreements

• Globalheadquarterscentre

• Distinguishedanduniquelifestyle

• Bestretailhubandexperience

• Talentedanddiverselabourpool

• WorldclasslogisticsandITinfrastructure

• StrategiclocationonthetraderoutesofEast and West

• ExcellentnetworkofDoubleTaxTreaties

• Taxfreeenvironmentincluding:

- no income taxes

- no corporate taxes

- no limit on repatriation of profits

What Can Dubai Offer?

The Global Competitiveness Report 2014-2015 assesses the competitiveness landscape of 144 economies, providing insight into the drivers of their productivity and prosperity. The report remains the most comprehensive assessment of national competitiveness worldwide, providing a platform for dialogue between government, business and civil society about the actions required to improve economic prosperity. Competitiveness is defined as the set of institutions, policies and factors that determine the level of productivity of a country. The level of productivity, in turn, sets the level of prosperity that can be earned by an economy.

The UAE with a value of 5,3 (out of maximum 6) is now ranked 12th in the World Economic Forum’s Global Competitiveness Index, only 3 places behind the United Kingdom and ahead of 22 EU member countries. The UAE’s strong economic growth owes much to the government’s (particularly Dubai’s) focus on competitiveness. It has jumped rankings more than any other country in recent years.

(Source: World Economic Forum, 2014)

The World Economic Forum (WEF) is a Swiss non-profit foundation, based in Geneva. It is an independent international organization committed to improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional and industry agendas. The forum is best known for its annual winter meeting in Davos, in the Alps region of Switzerland.

Global Competitiveness Index 2014 - 2015

Rank Economy Value

1 Switzerland 5,7 2 Singapore 5,6 3 United States 5,5 4 Finland 5,5 5 Germany 5,5 6 Japan 5,5 7 Hong Kong SAR 5,5 8 Netherlands 5,5 9 United Kingdom 5,4 10 Sweden 5,4 11 Norway 5,4 12 United Arab Emirates 5,3 13 Denmark 5,3 14 Taiwan, China 5,3 15 Canada 5,2 16 Qatar 5,2 17 New Zealand 5,2 18 Belgium 5,2 19 Luxembourg 5,2 20 Malaysia 5,2

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2 LEGAL ENTITIES

Under UAE federal law, foreign businesses have three main entitiestochoosefrominordertoconductbusinessintheUAE:a local limited liability company (“LLC”), a free zone entity (“FZE”), and an international business company (“IBC”).

Companies can also operate by setting up a branch of a foreign company, a representative office of a foreign company, a private or public joint stock company.

Limited liability companies (LLCs)

A LLC can be formed with a minimum of two and a maximum of 50 persons whose liability is limited to their shares in the company’s capital. Companies with expatriate partners typically opt for this form of company. The voting rights in the company may not exceed 49 percent profit and loss distribution, and the share in allocation of liquidation proceeds can be mutually agreed upon. LLCs can sell directly to the local market.

The main advantages of setting up in one of the free zones in the UAEareasfollows:

• 100percentforeignownershipisallowed

• guaranteefor15-50yearsagainstthefutureimposition of corporation tax. It is not clear whether the guarantee would provide exemption against an imposition of VAT as well

• importofgoodsaredutyfree,providedthegoodsarenot supplied to the local market

• streamlinedprocedures:allformalitiesaretypically dealt with through the free zone authorities instead of the various government departments

• norestrictionsonhiringexpatriates

Free zone entities (FZEs)

If there is no need to sell goods directly to the UAE market, but office space and local staff are required, then setting up in a free zone is often more attractive than using a local company. Free zone companies also meet the growing necessity in international tax planning of having necessary substance. This is often impossible to deliver from the traditional offshore jurisdictions since they typically only offer an IBC regime.

The main advantages of setting up in one of the free zones in the UAEareasfollows:

• 100percentforeignownershipisallowed

• Guaranteefor15-50yearsagainstthefuture imposition of corporation tax. It is not clear whether

the guarantee would provide exemption against an imposition of VAT as well

• Importofgoodsaredutyfree,providedthegoodsarenot supplied to the local market

• Streamlinedprocedures:allformalitiesaretypically dealt with through the free zone authorities instead of the various government departments

• Norestrictionsonhiringexpatriates

International business companies (IBCs)

Dubai, through its Jebel Ali Free Zone, and Ras al Khaimah, through the RAKIA Free Zone and the RAK Free Trade Zone, offer an International Business Company (IBC) regime. These companies are ideal for any type of business that does not require a local office. This includes any passive investment activity eg holding shares in local or free zone companies, holding UAE real estate, or trading activities outside the UAE. IBCs cannot rent office space nor can they apply for staff visas and they are not allowed to trade with parties inside the UAE.

RAKIBCshavethefollowingattractivefeatures:

• notnecessaryfortheownerormanagertovisitthe UAE in person

• norequirementtodepositcapitalinabankaccount

• theonlydataonpublicrecordisthenameofthe company and date of incorporation

• norequirementtosubmitfinancialstatements

As with local and free zone companies, offshore companies can benefit from some of the tax treaties concluded by the UAE, by setting up a free zone branch.

Branch of a foreign company

Foreign companies can establish a branch office in the UAE. A branch office may not carry out any commercial activity in its own name, it may only negotiate and enter into contracts on behalf of the parent company, and if goods and services are required to fulfil that contract, they have to come directly from the parent. Support activities by the branch are allowed.

Representative office

A foreign company may also establish a representative office in the UAE. Such representative offices may undertake marketing and promotional activities on behalf of their parent company, but are not permitted to trade.

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Public and private joint stock companies

A public joint stock company must have a minimum of 10 founder members and must be managed by a board consisting between 3 and 12 directors. The chairman of the board of directors and a majority of the directors must be UAE nationals. 51 percent of the shares must be held by UAE nationals.

General partnership

Partners in a general partnership can only be UAE nationals. Each partner is jointly and severally liable for all liabilities of the partnership.

Joint participation (venture)

A joint participation (venture) is defined as a company established with two or more partners who share the profits and losses of one or more commercial businesses being carried out by one of the partners in his/her personal name. In practice, joint ventures are seen as offering a suitable structure for companies working together on specific projects.

Features of Main Legal Entities

Ownership

Minimum number of shareholders Minimum capital

Capital pay-up at inception

Type of shares

Directors: Minimum required Director(s) location

Audited accounts

Name

Time frame for incorporation

Language

Legalization process of POA & corporate documents

Registered office

Shelf companies

51% of the shares must be held by a UAE national (the “local partner”)2

AED 1

Not required, in principle

Registered

1At least one director must be UAE resident

Required. To be filed yearly at the time of licence renewal

Prior approval required, some wording sensitive. Ends with “LLC”

4 weeks upon receipt of full documentation

Arabic/English

Legalization and super-legalization mandatory

Mandatory tenancy agreement on physical premises

Not available

Free Zone Limited Liability Company (“FZE”)

International Business Company (“IBC”)

Local Limited Liability Company (“LLC”)

100% foreign ownership allowed

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AED 10.000 – 1.000.000 depending from zone to zoneDepending from zone to zone

Registered

1-2, depending on zone In some zones UAE resident is required, in other not

Required. To be filed yearly at the time of licence renewal

Prior approval required, some wording sensitive. Ends with “FZE”, FZC” or FZ-LLC”

2-8 weeks upon receipt of full documentation, depending on the zone English

Legalization and super-legalization mandatory

Mandatory tenancy agreement on physical premises – virtual office facility available

Not available

100% foreign ownership allowed

1

AED 1

Not required

Registered and bearer

1No restriction

Not required

Prior approval required, some wording sensitive. Ends with “Ltd”

1-3 days upon receipt of full documentation

English

Apostile sufficient for RAK IBC. Legalization and super-legalization mandatory for JAFZARegistered agent

Available

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3 TAX PLANNING

TaxationCorporation tax

The UAE federation does not impose a federal corporate income tax.

With the exception of oil companies and branches of foreign banks, entities registered in the UAE are not required to file corporate tax returns in the UAE, regardless of where their UAE business is registered.

Personal income tax

There are currently no personal income taxes imposed on individuals working in the UAE.

VAT

There is currently no VAT in the UAE.

Other taxes

Withholding taxThere are no withholding tax regulations in the UAE that apply to payments such as royalties, interest or dividends etc made from the UAE entities to other persons, resident or non-resident.

Municipality taxMunicipality property taxes are levied in the emirates in various forms, but generally as a percentage of the annual rental value. In some cases, separate fees are payable by both tenants and property owners.

Hotel taxGenerally emirates impose a 5 percent hotel tax on the value of hotel services and entertainment.

Transfer pricing and thin capitalization

There is, at the moment, no transfer pricing regime in the UAE. There are also no thin capitalization (debt equity ratio) requirements in the UAE.

Customs dutyIn January 2003, the GCC countries created a customs union by removing the trade barriers between them. A flat rate of duty of 5 percent was imposed on imported goods apart from listed exemptions at the first point of entry into the GCC. Those goods may then move freely between GCC countries without the imposition of further duties.

Double tax treatiesDubai is a no tax emirate.

Accordingly, double tax treaties aim at making Dubai a more attractive territory in which to operate by reducing taxation levied in the foreign jurisdiction on profits remitted abroad by foreign corporations operating in Dubai.

Dubai has an extensive and growing list of double tax treaties, which currently numbers over 80. This network includes treaties with China, Cyprus, France, Germany, India, Indonesia, Italy, Luxembourg, Malaysia, Malta, the Netherlands, Singapore, South Korea and Ukraine.

The “place of incorporation” criterion is part of many of the UAE treaties and simply put, if a company is incorporated or created in the UAE, then it will be a resident for the purposes of that particular treaty eg Armenia, Finland, Mauritius, Mongolia, Luxembourg, Sri Lanka, Austria, Switzerland, Mozambique and New Zealand.

UAE expanding tax treaty network

The UAE offers an ever extensive and steadily expanding tax treaty network, enabling investors to reap the tax benefits of using a UAE based entity as a vehicle to hold investments worldwide, while also increasing the attractiveness for the foreign investors to set up in UAE.

While in the past countries were hesitant to allow significant benefits in treaties with low or zero tax countries such as the UAE, many newer treaty partners have realized the advantages of making it attractive for inwards investments by investors in one of the wealthiest countries on earth.

There are a number of key benefits to look out in a treaty country withtheUAEwhichmakeitattractive:

• loworzerowithholdingtax

• absenceofliabilitytotaxrequirement

• UAEsourceincomeisexemptedratherthantaxcreditsgiven

• limitedanti-avoidanceprovisions

• wheneveraUAEtaxresidencecertificateisrequired

Limitation on treaty benefits (LOB)

Only a few UAE bilateral treaties include a LOB clause, although the more recent treaties tend to include them. Treaties covering LOBclausesinclude:

• India(new2007Protocol)requiringabonafidebusiness activity

• Luxembourgwhichincludesconsultationiftreaty shopping is taking place

• Belgiumrequiresattentiontobegivenifimproperuseof the agreement is found

• Netherlands’bilateraltreatywhichspecificallyexcludes companies or individuals who are exempted from tax by a special tax regime under the laws of one of the contracting states

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Exchange of information

The majority of UAE treaties do not contain the new OECD exchange of information clause.

This is of critical importance as Article 26 on exchange of information has been greatly expanded since July 2005. Prior to 2005, one contracting state could not request another contracting state to provide information that could not be sought under the laws of the other contracting state in the absence of criminal activity.

UAEalsohasdoubletaxtreatieswiththefollowingcountries:Algeria (0 dividends, 0 interest, 10% royalties), Armenia (0/3, 0,5) Azerbaijan (5/10, 0/7, 5/10), Bangladesh (0,0,0), Barbados (0,0,0), Benin (0,0,0), Brunei (0,0,0), Fiji (0,0,0), Guinea (0,0,0) Jordan (0,0,0), Kenya (0,0,0), Korea (5/10,0/10,0), Libya (0,0,0), Mexican (0,0,0), Mongolia (0,0,10), Morocco (0/5/10,0/10,0/10), Mozambique (0,0,0/5), Pakistan (10/15,0/10,12), Palestine (0,0,0), Panama (5,0/5,5), Philippines (0/10/15,0/10,10), Sri Lanka (0/10,0/10,10), Sudan (0,0,5), Syria (0,0/10,18), Tajikistan (0,0,10), Turkmenistan (0,0,10), Uruguay (0,0,0), Uzbekistan (0/5/15,0/10,10), Venezuela (5/10,10,10), Vietnam (0/5/15, 0/10, 10) Yemen (0,0,10)

Even with a post 2005 OECD information exchange clause, countries are not at liberty to enter into “fishing expeditions”.

Information exchange even under a new treaty is far more restricted than, for example, information exchanges pursuant a Tax Information Exchange Agreement (TIEA), that many OECD grey list countries will be forced to enter into.

Albania 0 0 0

Austria 0 0 0

Belarus 5/10 5 5/10

Belgium 0/5/10 0/5 0/5

Bosnia and Herzegovina 0/5/10 0 5

Bulgaria 0/5 0/2 0/5

Canada 5/10/15 0/10 10

China 7 7 10

Cyprus 0 0 0

Czech Republic 0/5 0 10

Egypt 0 0/10 10

Estonia 0 0 0

Finland 0 0 0

France 0 0 0

Georgia 0 0 0

Germany 5/10/15 0 10

Greece 0/5 0/5 0/5

Hong Kong 0 0 0

Hungary 0 0 0

India 10 0/5/12.5 10

Indonesia 10 0/5 5

Ireland 0 0 0

Italy 5/15 0 10

Japan 0 0 0

Kazakhstan 5 10 10

Latvia 0/5 0/2.5 5

Lebanon 0 0 5

Lithuania 0 0 0

Luxembourg 5/10 0 0

Malaysia 10 0/5 10

Malta 0 0 0

Mauritius 0 0 0

Montenegro 0/5/10 0/10 0/5/10

Netherlands 5/10 0 0

New Zealand 15 0/10 10

Poland 0/5 0/5 5

Portugal 5/15 0/10 5

Romania 0/3 0/3 3

Russia 0 0 0

Serbia 0/5/10 0/10 10

Seychelles 0 0 5

Singapore 5 0/7 5

Slovenia 0/5 0/5 0/5

Spain 5/15 0 0

Switzerland 5/15 0 0

Thailand 10 10/15 15

Tunisia 0 2.5/5/10 7.5

Turkey 5/10/12 0/10 10

Ukraine 0/5 0/3 0/10

Recipient Dividends % Interest % Royalties % Recipient Dividends % Interest % Royalties %

UAE Double Tax Treaties Network

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4 REDOMICILIATION

Companiesredomicileforavarietyofreasons,including:

• benefitfromafavourabletaxenvironment

• takeadvantageoflessstringentregulationandscrutiny

• aligntheirplaceofregistrationwiththeirshareholderbase

• movetoaninternationalfinancialcentre

• accessspecialistcapitalmarkets

Where an existing company migrates or redomiciles to RAK FTZ, the company’s existing legal status, goodwill and operational history is preserved. This process will allow for companies who currently operate in more costly, difficult regulatory, high tax and high risk environments in other countries to migrate to RAK FTZ without triggering a disposal of their assets or a diminution in their goodwill or operating history.

The response to the global financial crisis by many OECD countries has been to call for greater regulation, greater scrutiny and ultimately increased taxes. However, this will result in increased costs of doing business in a global business environment where companies must seek to reduce costs to weather and survive the forecast downturn in global markets.

The RAK FTZ registration system allows companies to base their global operations and activities for a fraction of the regulatory costs of being incorporated in a doing business in other countries. Offshore companies can also do business within in the UAE provided appropriate licenses are obtained.

Migrate to UAE

The ability to migrate companies to RAK FTZ opens tax planning dimensions for investors and businessmen.

Within UAE, it is also possible to redomicile in DIFC (Dubai International Financial Centre) and DTMFZA (Dubai Technology and Media Free Zone Authority) which are specialized free zone authorities in financial services and technology, respectively.

Foreign companies can redomicile and enjoy the tax and other benefits provided by the UAE tax free regime and its wide network of double tax treaties.

They can also take advantage of a pleasant country which is an International Financial Centre, and a fine place to work and live.

What is required to redomicile

Therearetwodistinctpartstoredomiciliation:

The outgoing jurisdiction

a) the outgoing company must be fully up to date with filings. For example, if financial statements are required these must be filed up to date together with any outstanding annual returns etc. Most offshore jurisdictions do not require financial statements to be filed rather they would need from the directors a declaration of solvency and ability to continue as solvent in the incoming jurisdiction

b) there must be no on-going legal process against the outgoing company

c) various documents need to be filed with and obtained from the outgoing registry

d) a certificate of good standing and certificate of incumbency must be obtained in every case

The incoming jurisdiction RAK FTZ

Accordingly an overseas company, if authorized by the laws of the jurisdiction in which it is incorporated, can apply for continuation as a company in RAK FTZ. The application must include all information and documents required by RAK FTZ including resolutions, certifications, declarations, confirmations, opinions, authorizations and clearances. Upon approval of the application for continuation, the authority will issue a provisional ‘certificate of continuation’ of such terms and conditions as it considers appropriate. The company should, within 3 months from the date of issue of the provisional certificate, file with the authority a certificate evidencing that the overseas company has ceased to be incorporated under the laws of the current jurisdiction and return the provisional certificate of continuation. RAK FTZ shall issue the final certificate of continuation which shall be effective from the date of continuation stated in the provisional certificate of continuation.

UponcontinuationofacompanyinRAKFTZ:

• allassets,tangibleandintangible,rightsandallother property of any kind of the company continue to belong to the company

• thecompany,itsofficersanddirectorscontinuetobeliable for obligations of the company prior to its redomiciliation

• anyexistingcauseofaction,claim,dutyorliabilityto prosecution in respect of the company is unaffected

• anycivil,criminaloradministrativeactionorproceeding pending by or against the company is unaffected

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Detailed process to redomicile in RAK FTZ

A foreign company may submit through a registered agent to the Registrar of Companies in RAK FTZ Authority to be registered in UAE as a continuing company. The application for consent mustbeaccompaniedbythefollowingdocuments:

• statutoryorregulatoryprovisionwhichincludesareference to the statutory of regulatory provisions as amended or reenacted from time to time

• proofthatthecompanyhasobtainedallnecessary authorizations and consents required under the laws of the jurisdiction in which it was incorporated

• certificationthatthecompanyis,hasbeen,andwillremain as far as is reasonably foreseeable, solvent, signed by the directors of the company

• detailsofanychargescreatedindicatingtheorderinwhich they will be registered

• thewrittenconsentofdirectors/shareholdersto(i)the making of the application and (ii) the order of registration of charges

• acertificatesignedbytheregisteredagentmakingthe application in the form prescribed in the regulations

• theapplicablefee

• anoticeintheformasdepictedintheregulations announcing its intention to continue in the RAK FTZ

The Registrar, after considering the application and making any other enquiries, grants his/her written consent.

Andorra

Anguilla

Antigua

Barbuda

Aruba

Austria

Bahamas

Bahrain

Barbados

Belgium

Belize

Bermuda

British Virgin Islands

Brunei

Cayman Islands

Liechtenstein

Luxembourg

Macao

Malaysia (Labuan)

Maldives

Malta

Marshall Islands

Mauritius

Montserrat

Nauru

Netherlands Antilles

Panama

Philippines

Portugal (Madeira)

Cook Islands

Costa Rica

Cyprus

Dominica

Gibraltar

Grenada

Guernsey

Hungary

Ireland

Isle of Man

Israel

Jersey

Latvia

Lebanon

Liberia

Samoa

Seychelles

St Kitts and Nevis

St Lucia

St Vincent

Grenadines

Switzerland

Turks and Caicos Islands

UAE

Uruguay

US Virgin Islands

USA (Delaware)

Vanuatu

Countries Allowing Redomiciliation

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5 DIFC AND FINANCIAL SERVICES

UAEhastwoparalleljurisdictionsgoverningfinancialservices:

• stateofUAEgovernedbyUAEFederallegislation

• DubaiInternationalFinancialCentre(“DIFC”),afreezone governed by its own laws and regulations

DIFC is a self regulated common law jurisdiction with its own system of financial regulation overseen by the Dubai Financial Services Authority (“DFSA”).

In the UAE there is no distinction between banking and other financial services in relation to cross-border activities. The financial regulation is based on the criterion of territoriality and it prohibits from carrying any financial activity without being licensed.

Establishing onshore

The activity of financial consultation and financial analysis is an activity subject to licensing by the Emirates Securities and Commodities Authority (“ESCA”), pursuant to the Federal Law No (4) of 2000 concerning the Securities & Commodities Authority and the amendments thereof.

In order to obtain a licence to practice the activity of financial consultation and financial analysis, the following key conditions mustbemet:

• UAEcompany(oneoftheformsinFederalLawpertainingto Commercial Companies) applying and at least 51 percent of its share capital is held by UAE nationals or GCC nationals

• thepurposesofthecompanyincludepractisingthe business of financial consultation and analysis

• thepaidupsharecapitalofthecompanyisatleastAED 1.000.000 (approximately USD 272.000)

• thecompanyhastherequiredqualifiedtechnicaland administrative personnel to practice the business of financial consultation and financial analysis

• thecompanyhasaninternalcontrolandregularaudit system

• providetherequiredadministrativeandtechnicalstaffto practice its business

• foreigncompanieslicensedbysimilarregulatoryauthorities in their own countries may practice the business of financial consultation and financial analysis, provided that such companies have at least 5 years of experience and that they satisfy the conditions

DIFC

DIFC is an onshore financial centre strategically located between the east and west, which provides a secure and efficient platform for business and financial institutions to reach into and out of the emerging markets of the region. The quality and range of DIFC’s independent regulation, common law framework, supportive infrastructure and its tax-friendly regime make it the perfect base to take advantage of the region’s rapidly growing demand for financial and business services.

DIFC fills the time zone gap for a global financial centre between the leading financial centres of London and New York in the west and Hong Kong and Tokyo in the east. Guided by its core values of integrity, transparency and efficiency, DIFC is playing a pivotal role in meeting the growing financial needs of the region.

World class regulatory environment

At the heart of the DIFC model is an independent risk-based regulator, the Dubai Financial Services Authority (DFSA), which grants licences and regulates the activities of all banking and financial institutions in DIFC. The regulatory body was created using principle-based primary legislation modelled closely on that used in London and New York. The DFSA has played a major role in providing financial companies the confidence that they have a sound, stable, secure and growth-oriented platform for their business.

Unique legal framework

DIFC is unique in that it has a legislative system consistent with English common law. Given its construct, DIFC has its own set of civil and commercial laws and regulations and has developed a complete code of law governing financial services regulation. As part of its autonomy, DIFC has created an independent judicial system. The DIFC Courts is the entity responsible for the independent administration and enforcement of justice in DIFC. The courts have exclusive jurisdiction over all civil and commercial disputes arising within DIFC and or relating to bodies and companies registered in DIFC.

Benefits of Setting Up in DIFC

• platformtoaccessregionalwealthandinvestment opportunities

• 100percentforeignownership

• zeropercenttaxrateonincomeandprofits(guaranteedfor a period of 50 years)

• awidenetworkofdoubletaxationtreatiesavailabletoUAE incorporated entities

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• noexchangecontrols(freecapitalconvertibility)

• highstandardsoflaws,rulesandregulations

• internationallegalsystembasedoncommonlawof England & Wales

• awhollytransparentoperatingenvironment,complying with global best practices, and internationally accepted laws and regulatory processes

• avarietyoflegalvehiclesthatcanbeestablishedwith capital structuring flexibility

• accesstoalargepoolofskilledprofessionalsresidingin Dubai and the region

• amoderntransport,communicationsandinternet infrastructure

• aresponsiveone-shopservicesforvisas,workpermitsand other related requirements

Dubai Financial Services Authority (DFSA)

Created under Law No 9 of 2004 and entirely independent of the DIFC Authority and the DIFC Judicial Authority, the DFSA is the integrated regulator responsible for the authorization, licensing and registration of institutions and individuals who wish to conduct financial and professional services in or from DIFC. The DFSA also supervises regulated participants and monitors their compliance with applicable laws regulations and rules. The DFSA is empowered to make rules and regulations as well as develop policy on relevant market issues and, in turn, enforce the legislation that it administers.

Categories of licences

Authorized firms can be divided into five categories of licence, each with its own rules and capital requirements.

CATEGORY 1 (Full licence)

Accepting deposits, managing a profit sharing investment account (PSIA)

CATEGORY 2 (Principal)

Providing credit, dealing in investments as principal

CATEGORY 3 (Asset management)

A. Dealing in investments as principal (where it does so only as a matched principal) or dealing in investments as agent

B. Providing custody (where it does so for a fund) or acting as the trustee of a fund

C. Managing assets, managing a collective investment fund, providing custody (where it does so other than for a fund), managing a restricted PSIA or providing trust services (where it is acting as trustee in respect of at least one express trust)

CATEGORY 4 (Advising and custody)

Arranging credit or deals in investments, advising on financial products or credit, arranging custody, insurance intermediation, insurance management, operating an alternative trading system, providing fund administration or providing trust services (where it is not acting as trustee in respect of an express trust).

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6 RELOCATION AND LIVING

Over the past years, the UAE has increasingly emerged as one of the most popular jurisdictions worldwide for the relocation of high net worth individuals (HNWIs), even becoming a preferred alternative to traditional jurisdictions such as the UK, Switzerland, Monaco and Singapore.

With no taxes applied on individuals, straightforward administrative requirements and low processing costs, coupled with political stability, excellent accessibility and sunny weather all round, the UAE is indeed a very attractive proposal as a residency jurisdiction.

The UAE’s position has further been reinforced by the ongoing tax backlash in other hubs – eg amended UK regimes pertaining to “non-doms”, first signs of erosion of the lump sum tax system in Switzerland as well as plans from various countries to tighten the screw on Europe’s tax havens.

Why Relocate in the UAE?

• exemptionfromincometaxandwealthtaxforindividuals

• noquotasonthenumberofissuedresidencepermits

• norequirementtoobtainafiscalquitusfromtheforeign country

• nominimumrequirementregardingthetimespent annually in the jurisdiction other than visiting the UAE at least once every six months

• norequirementtoeffectivelyresideintheUAE

• competitivecostsforissuanceandrenewalofthe residence permit

• competitivecostsofongoingsubstantiation

• presenceofinternationallyrecognizedfinanciallegaland tax services providers

• primaryhubandplatformtoaccessinternationalbusiness

• politicalstability

• pleasantclimate

Residence permits

Individuals, other than UAE and GCC citizens, must have a residence visa if they want to live in the UAE. Obtaining a residence permit is the primary condition for being considered as resident in the UAE. As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction.

For many expatriates, the company that employs them will act as their sponsor and secure them residence visa. For those who do not come on an employment contract, there are two other ways forobtainingUAEresidency:

• investmentinrealestate(propertyresidencevisa)

• setupofcorporatestructuretoactassponsor

Real estate investor/property residence visa

UAE government in June 2011 introduced a new system extending the validity of the visa granted to real estate investors for up to 3 years.

The following rules and conditions govern the issuance of a real estateinvestorvisa:

• thepropertyisbuiltandreadyforaccommodation

• theapplicantprovesownership(titledeedissuedbythe Land Registrar)

• thepropertyisworthminimumAED1million(equivalentto US$300.000) with no mortgage

• theapplicant’sincomeishigherthanAED10.000(US$3.000) monthly

Corporate structure

The other way to obtain residency is through a corporate structure.

As a general rule, one has to have a sponsor in order to apply for a residence permit in the jurisdiction. For foreigners, setting up a company is a practical way of obtaining sponsorship.

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 the northern Emirates. Usually, these options consist of “flexi desks” or “flexi offices”.

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Lifestyle

There is little crime in the UAE and the country is clean, with modern facilities. Foreign newspapers, magazines, films and videos are readily available. Alcohol is available for consumption by non-muslims in certain emirates and may be consumed at home, in hotels and on licensed club premises. There is also a wide range of entertainment available including clubs, cinema, theatres, desert safaris, and there are many sporting facilities, restaurants and hotels. Women are permitted to work and can drive and move around unaccompanied.

Transport

The UAE has a comprehensive road network with driving on the right hand side of the road.

Taxis are the main form of public transport. Visitors may hire a car if they hold an international driving license.

Major international car rental companies operate in the UAE.

Education

There are government schools in all the emirates providing free primary and secondary education to UAE nationals.

There are private foreign schools offering the academic curriculum of the UK, the US and other countries such as Italy, Japan, Iran, France, Germany, India and Pakistan as well as the international baccalaureate.

Medical services

The department of health and medical service provides medical care to all UAE nationals, visitors and resident expatriates. The department issues health cards to individuals that entitle them to subsidized consultation and free medicines.

Fees on medical examination by consultants in hospitals are less for health card holders than for non-card holders while UAE nationals who hold health cards are exempt from these charges.

Working hours

Normal hours of work are 8 hours a day.

Relocation to Dubai described as “new Switzerland”

Over the past years, the UAE has increasingly emerged as one of the most popular jurisdictions worldwide for the relocation of high net worth individuals (HNWIs), even becoming a preferred alternative to traditional jurisdictions such as the UK, Switzerland, Monaco and Singapore.

Dubai is widely described as the “new Switzerland”. Many advantages exist for HNWIs in Dubai to fit this description, including:

• pro-businessandadvantageoustaxregime,nopersonaland corporate taxes, no capital restrictions and 100 percent repatriation of capital and profits

• bankconfidentialityandnoexchangeofinformation agreements with any country

• soundanddevelopedeconomywithsignificantnatural resources, state reserves and growth prospects

• mature,safe,wellcapitalizedandregulatedbankingsector

• bankingsystemthatallows24/7onlinetransfercapabilities and cash withdrawals

• stablecurrencypeggedtotheUSdollareliminating currency risks

• aregimethatprohibitsunethicalandhighriskactivities

• nosocialunrestandlowcrimerate

• abundanceofhighendaccommodationfacilities,marinas, entertainment, luxury lifestyle and world class shopping

• businesshubwithsignificantcommercialactivityand profusion of top end office space, staff and executives for employment

• worldclasshealthsystem

• topinternationalschoolsanduniversitiesatalllevels

• advancedtelecommunications

• airconnectionsviaworldclassairportswithsignificantdirect flights and major transit hub

• agoodclimate,sunnyformostoftheyearattheseacoast

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HNWI - COMPARISON OF FAVOURITE RELOCATION COUNTRIES

Main advantages

Key conditions in practice

Quotas on number of issued residence permits

Mandatory interview

Presence of applicant during the application

Time frame of completion of procedure

Validity and renewal of residence permit

Required legal presence “day counting”

Competitive tax system.Tax incentive schemes.Relatively law capital gains tax.Facilitated access to all Schengen states.Comprehensive tax treaty network.Good standard of living and health care.Politically stable.

Investment of a min value of £1mn, £5mn or £10mn into qualifying UK investments.

None

No

Not required

4-8 weeks

Valid for 3 years, renewable for 2 years. After 5 years, a permanent residence can be applied for.

Delege:notrequired.In practice, recommended not to spend more than 183 days in another jurisdiction. 180 days required to qualify for permanent residence.

EUROPESwitzerlandUnited Kingdom

No minimum stay. No need to declare worldwide income and assets if annual lump-sum taxation. No capital gains tax, except on sale of business property.Free access to all Schengen States. Comprehensive tax treaty network.Politically stable.

Constitution of a company (and minimal investment in such company) orlump-sum taxation.

EU/EFTACitizens:NoneAllothers:Yesforfirsttimeapplicants

Yes

Not required

EU/EFTACitizens:2-4weeksAllothers:2-4months.

EUCitizens:5years.After5years,apermanent Residence (valid for up to 10 years) can be applied for.Allothers:Validfor1year–annualrenewal until Permit can be applied for (10 years initial period).

Delege:Notrequired.In practice, recommended not to spend more than 183 days in another jurisdiction.

Cost of 1 bdr flat(70 m2)

Taxation

Rental:US$46.700/yearPurchase:US$ 545.000

Annualtaxfilings:mandatory.IncomeTax:minof20%Capitalgainstax:maxof28%.Wealth/networthtax:none.Gifttax:yes,butwithpossibleexemption.Inheritancetax:noneforanestatetoup to a max value £325.000 Special regime available to so-called “Resident nondomiciled”:OnlyforUKsourceincome and foreign income remitted to the UK.

Rental:US$25.000/yearPurchase:US$630.000

Annualtaxfilings:MandatoryIncomeTax:LeviedontheFederal,cantonal and municipal level.Capitalgainstax:Noneexceptonsaleof business property.Inheritance,Giftandwealth/nettax:Levied at the cantonal and municipal level.

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MIDDLE EASTUAEMonaco

ASIASingapore

No Income and capital gains. No direct inheritance tax. Free access to all Schengen States.Comprehensive tax treaty network.

Real estate investmentorsubscribe to a tenancy agreement.

None

EUcitizens:NoAllothers:Yes

Not required for initial application. Required for collection of residence permit.

EU/EFTACitizens:4-6weeks.Allothers:3-4months+2weeksfromthe date of interview.

ResidencePermit1-3:Validfor1yearand renewable yearlyResidencePermit4-6:Validfor3yearsand renewable for the same term.

Required.Monaco must be the main home to maintain tax residence status.

No minimum stay.Total exemption from income, wealth, gift and inheritance tax.Competitive costs of issuance and ongoing substantiation of residence permit.Yearly sunny climate.Accessibility.Comprehensive tax treaty network.Politically stable.

Constitution of a Companyorinvestment in real estate USD 500.000

None

No

Not required for initial application.Required for visa processing and collection.

3-4 weeks

Valid up to 3 years.Renewable for up to 3 years.

Delege:Notrequired.In practice, 1 day every 6 months and recommended not to spend more than 183 days in another jurisdiction.

All foreign income is exempted even if remitted to Singapore.No capital gains, wealth, inheritance nor gift taxes.Comprehensive tax treaty network.

USD 2.000.000 investment. Applicant to produce 3 years audited financial statement of his/her company.

None

Yes

Required for interview.Not required otherwise.

8 months

Valid up to 3 years.Renewable for up to 5 years.

Required.More than 183 days.

Rental:US$30.000/yearPurchase:US$2.695.000

Annualtaxfilings:mandatory.IncomeTax:None(unlessFrenchcitizen).Capitalgainstax:None,exceptforFrench residents.Gift,Inheritancetax:0to16%onMonaco assets.Wealth/networthtax:None.

Rental:US$12.000/yearPurchase:US$300.000

Annualtaxfilings:None.IncomeTax:None.Capitalgainstax:None.Inheritancetax:None.Gifttax:None.Wealth/Networthtax:None.

Rental:US$30.000/yearPurchase:US$1.100.000

Annualtaxfilings:mandatory.Incometax:20%onincomegeneratedinSingapore:Noneonforeign income even if remitted to SingaporeCapitalgainstax:None.Inheritancetax:None.Gifttax:None.Wealth/NetWorthtax:None.

(Courtesy of M/ Advocates of Law, UAE)

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