United Arab Emirates_0

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MARKET ENTRY GUIDEUNITED ARAB EMIRATES (UAE)


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1 Introduction 3

2 ModesofSettingupaBusinessintheUAE 5

2.1 AverageTime(indays)RequiredforSettingupaBusiness 7

3 ProceduresforImmigrationtotheUAE, 8

3.1 VisaRequirements 10

3.2 KeyPointsforWorkPermits 11

3.3 RealEstate/FreeholdProperty 15

3.4 RentingProperty 19

3.5 AverageRentforOfceSpaceinDubaiandAbuDhabi 20

3.6 AverageLivingCostsforExpatriates 22

4 SocialSecuritySystemintheUAE 24

4.1 Pensions 25

5 FreeTradeZones(FTZs)intheUAE 25

5.1 IntroductionFTZs 25

5.2 ListofFTZs 27

5.3 ProceduresforStartingaCompanyinaFTZ 29

6 OpeningaBankAccountintheUAE 30

6.1 OverviewofRetailBanking 30

6.2 ProceduresforOpeninganAccount 31

6.3 MajorBanks, 33

7 RecruitmentofLocalStaff 35

7.1 MajorRecruitmentAgenciesandWebsites 36

7.2 BriefOverviewofLabourLaws 37

7.3 AverageSalaryRange 38

8 Taxation 41

8.1 TaxRates 41

8.2 DoubleTaxTreatybetweentheUAEandLuxembourg 46

8.3 RepatriationofProts 47

9 Appendix 47 AppendixI:UsefulLinksandAddresses 47

AppendixII:Embassies 51

10 Disclaimer 52


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1 Introduction

TheUnitedArabEmirates(UAE)isafederationofsevenemirates

thatwasformedon2December1971.TheUAEgovernmenthas

successfullymanagedtocreateabusinessenvironmentthat

isconducivetoeconomicgrowth.Thishashelpedpromotethe

UAEasaninternationalcentrefortrade,financeandservices,

attractingreputableglobalcompanies.

AccordingtodatafromtheNationalBureauofStatisticaldataoftheUAE,thetotalGDP(atfixedprices)amountedtoEUR

(200.84billion)AED977.32billionin2010,registeringagrowth

of1.4percent.ThecountrysGDPfor2009wasEUR198.01billion)

AED963.53million,wherethecurrencyshrunkby1.6percent.

Thepercentagecontributionofnon-oilsectorshasdecreasedto

about68percentin2010ascomparedwith71percentin2009.

Ontheotherhand,thepercentagecontributionoftheoilsec-

torinthetotalGDPincreasedfromabout29percentin2009

to32percentin2010,ledbythehikeofoilrevenueasaresultof

increaseofcrudeoilprices1.ItistobenotedthatUAEnowuses

2007asitsbaseyear.TheUAEscurrency,thedirham,issecureandfreelyconvertible.

Therearenorestrictionsonprofittransferorcapitalrepatriation

inthecountry.Importdutiesarelow(around5percentformost

ofthegoods)and,inthecaseofitemsimportedforuseinthe

freezones,non-existentinthecountry.Further,theUAEdoesnot

levycorporatetaxorpersonaltaxesandthecountryhassigned

58double-taxationavoidanceagreementsand32bilateralin-

vestmenttreatiesasof2011.Inaddition,thefinancialriskforthe

investmentsisminimalintheUAE(MoodyscreditratingAa2).

Thesefactors,combinedwithastrategicandaccessiblelocation

formajorregionalmarkets,anexcellent,reliableinfrastructureandanextremelystableandsafeworkingenvironment,make

1Source:MinistryofEconomy-UAE


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theUAEanidealcountryforinvestments.TheUAErankshighin

thelistoftheMiddleEasternandGCC(GulfCooperationCoun-

cil)countriesandisdeemedtobethemostattractivetodirectforeigninvestments(FDI),securingFDIinflowsworthEUR2.90

billion(USD4billion)during20102.

Variouseffortsthatarebeingmadetofosteranenablingregula-

toryenvironmentincludethefollowing:

| AmendmentstotheCompanyLawarecurrentlybeingmadeinordertostreamlineprocedures.

| TheFederalCommercialLawthatrequiresa51percent3local

partner for businesses located outside free zones is under

review.

| TheMinistry of Economyis in thefinalstages of drafting acompetition law that should provide further assistance in

combatingcartels.

| Thegovernmentisworkingonintroducingaforeigninvest-

mentlawthatwillfurtherincreaseprivatesectorcompeti-

tionandlowerinflation.

| TheFederalLawNo.24onconsumerprotectionwaspassedin

20064.

| Several rent ceiling initiatives were issued at the emirates

leveltodealwithrentincreases.

2Source:TheNational3Source:Government-UAE4ConversionRate:Theguresinthedocumenthavebeenconvertedwiththefol-lowingexchangerateconversion(Source:www.oanda.com)USDtoEUR2010=0.7548AEDtoEUR2010=0.2055


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TheUAEhasbeenacontractingpartytotheGeneralAgree-

ment on Tariffs and Trade (GATT) since 1994 and a member

oftheWorldTradeOrganisation(WTO)since1996.ItisalsoamemberoftheGreaterArabFree-TradeArea(GAFTA)inwhich

allGCCstatesparticipate.TheUAEisintheprocessofnegotiat-

ingfreetradeagreementswiththeUS,JapanandIndiaandhas

embarkedonnegotiations,eitherindividuallyorwiththeGCC,

onseveralregionaltradeagreements.

Thefollowingreportaimstodiscussthemostimportantissues

pertainingtotheadministrative,legalandfinancialaspectsof

settingupbusinessesandhiringpersonnel,aswellastheliving

conditions,intheUAE.

2 Modes of Setting up a Business in the UAE

TheUAEoffersaninvestmentenvironmentthatisamong

themostliberalandattractiveintheGulfregion.Economic

activitiesinthecountryareregulatedbythefederalgovern-

mentaswellasbyindividualemirates.Allbusinessactivitiesare

primarilycoveredbythreecategoriesoflicences:

1 Commerciallicencecoveringallkindsoftradingactivities

2Professional licence covering professional services, other

services,craftsmenandartisans

3Industriallicencetoestablishanindustrialormanufacturing

activity

Thissectionelaboratesonthecommoninvestmentvehicles

availabletoforeigninvestors,theprocedurestobefollowedin

ordertoestablishthemandtherelatedregulationsforeach

investmentmode.

Table1liststhemostcommonmodesofsettingupbusinesses

byforeigninvestorsandtherelatedlegalparticularitiesinvolved

intheprocess,aslaiddowninArticle5oftheCompaniesLaw

oftheUAE.


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Table 1: Different Modes of Setting up a Business in the UAE

MODESOFSETTING

UPABUSINESS

PARTICULARITIES

GeneralPartnership TheestablishmentofGeneralPartnershipcompaniesislimitedtoUAEnationalsonly.

PartnershipinCommendamandSharePartnershipCompany

TheDubaigovernmentdoesnotatpresentencouragetheestablishmentofthesecompanies.

JointVenture(JV) Thelocalequityparticipationinthejointventuremustbeatleast51percentbuttheprotandlossdistributioncanbeprescribedotherwise.

TheJVisnotrequiredtobelicensedortheagreementrequiredtobepublished.

Inpractice,JVsareseenasofferingasuitablestructureforcompaniescollaboratingonspecicprojects.

Public

andPrivateJoint-StockCompanies

Publicandprivatejoint-stockcompanystructure

issuitableforlarge-scaleprojectsoroperations.TheCommercialCompaniesLawstipulatesthatcompaniesengaginginbanking,insuranceornancialactivitiesshouldberunaspublicshareholdingcompanies.

Ontheotherhand,foreignbanks,andinsuranceandnancialcompaniescanestablishapresenceinDubaibyopeningabranchorrepresentativeofce.

TheminimumcapitalrequiredisEUR2million(AED10million)forapubliccompany,andEUR0.40million(AED2million)foraprivateshareholdingcompany.

ThechairmanandmajorityofdirectorsmustbeUAEnationals.

Thereislessexibilityofprotdistributionthanispermissibleinthecaseoflimitedliabilitycompanies.

LimitedLiabilityCompanies

Alimitedliabilitycompanyissuitablefororganisationsinterestedindevelopingalong-termrelationshipinthelocalmarket.

Thistypeofstructurecanbeformedbyaminimumof2andamaximumof50peoplewhoseliabilityislimitedtotheirshareinthecompanyscapital.

TheminimumcapitalrequiredisEUR2million(AED10million)forapubliccompany,andEUR0.40million(AED2million)foraprivateshareholdingcompany.

Theforeignequityparticipationinthecompanymaynotexceed49percentbuttheprotandlossdistributioncanbeprescribedotherwise.

Responsibilityforthemanagementofalimitedliabilitycompanycanbevestedeitherwithaforeignoranationalpartner,orathirdparty.


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

Inordertostartabusiness,thelegalandbureaucratichurdles

that companies/entrepreneurs must overcome need to be

identified.Registrationishighlyimportanttoaccessarangeof

marketinfrastructure,includingfinance,physicalinfrastructure

(electricity,water)andcontractenforcement.Thegreaterthe

numberofprocedures,thewideristhescopeforenforcingthem

inunevenways.AccordingtoaWorldBankreport,theaveragetimetakento

startabusinessintheUAEishighincomparisontothatinJor-

dan,OmanandIran.Figure1illustratestheobstaclesinherent

instartingbusinessventuresinvariouscountries.

Figure1:ObstaclesinStartingBusinessesinVariousCountries

Source:TheWorldBankGroup-Document:DoingBusiness2011


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3 Procedures for Immigration to the UAE

TheUAEhassimplestepsandproceduresforimmigration.

Citizensof37countries(i.e.GCCnationalsandnationalsoflisted

countries)donotrequirevisaspriortoarrivalataUAEairport.A

personcomingtoworkintheUAErequiresavisathatcanonly

beobtainedonthepersonsbehalfbytheemployerorsponsor.

ThekindofvisarequiredforentryintotheUAEdependson

severalfactorssuchasnationality,thepurposeoftheplannedvisitanditsexpectedduration.

Thefollowingcategoriesofvisitorsmayreceivetheirvisitvisa

attheairport,uponarrival

1 AGCC (Arab Gulf Countries Council) residents who are not

GCCnationalsbutwhohaveahighprofessionalstatussuchas company managers, business people, auditors, account-

ants,doctors,engineers,pharmacists,oremployeesworking

inthepublicsector,theirfamilies,driversandpersonalstaff

sponsoredbythem,areeligibleforanon-renewable30-day

visauponarrivalattheapprovedportsofentry.

2Nationalcitizensofthefollowingcountries: theUK(withtherightofabodeintheUK),France,Italy,Germa-

ny,theNetherlands,Belgium,Luxembourg,Switzerland,Austria,

Sweden, Norway, Denmark, Portugal, Ireland, Greece, Finland,

Spain,Monaco,VaticanCity,Iceland,Andorra,SanMarino,Liech-

tenstein,theUnitedStates,Australia,NewZealand,Japan,Bru-

nei,Singapore,Malaysia,SouthKoreaandholdersofHongKong

SARpassportsaregrantedafreeofchargevisaforasinglevisit

uponarrivalintheUAE.Itshouldbenotedthatthislistissubject

tochangeanditisthereforebesttocheckwiththelocalUAE

embassyortheairlinethatwillbeusedtoflytotheUAE.

3Apersonwhodoesnotfallintooneofthepreviouscatego-riesrequiresavisaandasponsororanemployerforthevisit.

Theemployerorsponsornormallyappliesforthevisaonthe

personsbehalf.


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Validsponsorsmaybe:

| HotelsandTouristCompanies-canapplyforatouristvisa

(validfor30days);aservicevisa(validfor14days);oraVisit

Visa(validfor30daysandextendabletoupto60days)

| AirlinesandAirlinesHandlers-canapplyfora96-hourtransit

visaonbehalfoftheircrewmembers.

| OtherOrganizationsbased in theUAE -may only applyfor

visitvisasandservicevisas.| Individuals(relativesorfriends)alreadyresidentintheUAE-

canapply,subjecttoguidelines,foravisitvisa.

type of visa applicants visa sponsor

VisitVisa

Touristsonfamilyvisitsandonlong-termbusinessvisitswhowishtospendmorethan14daysintheUAE

Mustbeself-financedorsponsoredbyanycompanyorhotellicensedtooperateintheUAE

TouristVisa

TouristsfromEasternandWesternEurope,whoarenotentitledtoavisaissuedonarrival,andvisitorsfrom

Thailand,SouthAfricaandUAE

Mustbesponsoredbyhotelsandtouroperators

EntryServicePermitor14-dayStay

Businessmenandtourists

MustbesponsoredbyacompanyoracommercialestablishmentorahotellicensedtooperatewithintheUAE

TransitVisa

IndividualsflyingtoorfromEurope/theUSfromortoAsia/AfricaaswellasindividualspassingthroughUAEairports

MustbesponsoredbyanairlineoperatingintheUAEandshouldhaveavalidticketforonwardjourney

MultipleEntryVisa

BusinessvisitorswhoarefrequentvisitorstotheUAEandwhohavearelationshipwithareputablecompanyin

theUAE

VisitortoentertheUAEonavisitvisaandobtainthemultipleentryvisawhileinthecountry

Table 2: Visas Issued by the UAE Government


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3.1 Visa Requirements

UAEissuesseveralvisatypesdependingontheapplicant

type,durationandthepurposeofthevisit.

Table2liststhedifferenttypesofvisasissuedby theUAE

government.

duration fees

Validfor60daysandrenewableforatotalstayofupto90days

EUR20(AED100),withanadditionalEUR2.0(AED10)fordelivery;afeeofEUR100(AED500)chargedforrenewal

Validfora30-daystay,non-renewable

EUR20.0(AED100),withanadditionalEUR2.0(AED10)fordelivery

Validfor14daysfromthedateofissue,exclusiveofarrivalanddeparturedays,non-renewable

EUR24.0(AED120)withanadditionalEUR2.0(AED10)fordelivery

Validfor96hoursTraveldocumentsstampedwithanentryseal;nochargeforthisvisa

Validforsixmonthsfromthedateofissue;eachvisitnottoexceed30daysintotal.

EUR199.9(AED1000)


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3.1.1 Documents Required for Visa Applications

ForeignnationalsapplyingforaUAEvisamusthavethefol-

lowingdocuments:

| Passport

| Tworecentpassport-sizephotographs

| Duplicateapplicationform

| Letteror fax from thesponsorin theUAE to theconcerned

embassy

| Letterfromtheapplicantscompanyandacopyofit

3.2 Key Points for Work Permits5

| AnemployerpaysafeeofEUR40(AED200)foreachemploy-

eebroughttothecountryandEUR199.9(AED1000)foreach

approvedemployee.

| An establishment can change the work permit during the

validityperiod(thefirstissue)onlyonce,providedthatthe

permitischangedforsomeoneofthesamesex,nationality

andoccupationapprovedbytheMinistry.Itisallowedtoin-

terchangeanypersonwithanapprovednationalitywithan

Arabnationality,butnotapersonwithanArabnationality

withanothernationality.

| Nofeesarecollectedfortheworkpermitchangeapplication.

| Thefirstpermitcanberenewedforonemonthafteraperiod

of60daysfollowingtheissuedate.Ifthepermithasnotbeen

changed during this period, it is considered cancelled (feesarenotretrieved)andanapplicationforanewpermithasto

befiled.AlldecidedfeesEUR40(AED200)forworkpermit

applicationandEUR199.9(AED1000)toapproveandissue

theworkpermitandworkcontractarecollected.

5Source:MinistryofLabour-ProcedureGuideforLabourSector,GulfNews


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| Underthenewworkpermitruleseffective1January,2011,awork-

erwithanexpiredcontractintheUAEcannowobtainanewwork

permitandshifttoanotheremployerwithoutseekinghisspon-sorsconsent.Thepartiesmustfulfilltwoconditions:

Thetwocontractingpartiesmusthaveendedtheirworkrela-

tionshipcordially

Theworkershouldhaveworkedwithhisemployerforatleast

twoyearsthedurationofthenewlyinroducedlabourcard

| Ifanemployerdeliverstheworkpermitcancellationapplica-

tionanddoesnotcompleteactivitiesofapproval,thepermit

iscancelledwithoutfees;however,afineofEUR199.9(AED

1000)isdeductedfromtheestablishmentbalance.

| The authority of confirming the change is performed by la-

bour offices directors and labour licences directors withoutreferringtothepermitcommittee,providedthattherulesand

regulationsforworkpermitchangeareadheredto.

| A licence partner cannot change the system since a licence

partner is apossessor of theestablishment andnot an em-

ployeeintheestablishment.

| Thechangeisonlyapprovedafterconfirmingthattheapprov-ingfeesofEUR199.9(AED1000)werepaidforthefirstpermit

thatneededtobechanged.

3.2.1 Requirements for Eligible Applicants

| Theapplicantshouldbeover18andunder60yearsofage.

| Depending onemployerneeds, the age limitcan beextend-edto65years,butonlywiththeapprovaloftheMinisterof

Labour.

| The applicant should hold a professional degree or the rel-

evantskillsetsrequiredintheUAElabourmarket.

| Theworkpermitwillbecancelledincaseofdiseasessuchas

AIDSorTB(Tuberculosis).

| The applicant must hold a valid passport for at least six

months.


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3.2.2 Documents and Fees

IndividualWorkPermitApplicationfromoutsidetheUAE

Thefollowingdocumentsarerequiredincaseofapplyingfora

workpermitfromoutsidetheUAE:

| Workpermitapplication(outsidethestate)form.

| Acopyofthepassport.

| AcopyofthescientificqualificationattestedbytheembassyoftheUAEinthecountryinwhichthescientificcertificate

wasissuedandalsobytheUAEMinistryofForeignAffairsis

tobesubmitted.(However,nolicencesarerequiredforsimple

jobsinthecontractingandgeneralmaintenancesectors,or

forfishermenanddrivers.).

| Acopyofthedrivinglicenceistobeenclosedwhenapplying

foradrivingjob.

| AletterissuedbytheMinistryofHealthandtherelevantsci-

entificcertificatesaretobeenclosedwhenapplyingforthe

postofadoctor,pharmacist,nurseorothertechnicalmedical

occupations.

| A letter from the Ministry of Education is to be enclosed

whenapplyingtothepositionofateacherinprivateschools.

| Inthecaseofindustrylicences,anindustrialproductioncer-

tificateissuedbytheMinistryofFinanceandIndustryistobe

enclosed.| AcopyofthesignaturesconfirmationcardfromtheMinistry

ofLabourandManagementofNationalityandResidency.

| Acopyoftheeffectivelicence.

Fees:

| A fee of EUR 239.9 (AED 1200), which includes issuing the

workpermit,workcardandworkcontract,istobepaidbythe

employerfortheworkpermit.


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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

workpermit.

| AfeeofEUR199.9(AED1000)istobepaidbytheemployer

through electronic dirham when approving the work per-

mitapplication(includingtheworkcardfeesandthework

contractforthreeyears)

| Work validity for 60 days from the date of issue by the

MinistryofLabour;canberenewedforamonthafteraperiod

oftwomonths.

GroupWorkPermitApplicationfromoutsidetheUAE

Thefollowingdocumentsarerequired:

| A Primaryletter of application to obtain the permissionfor

thegroupwork(authorisedbytheministrysundersecretary).

| AGroupWorkPermitsApplicationform.

| Acopyofaneffectivelicence.

| Thesignatureconfirmationcard.

| The contractsand projectsrecord with the subcontracts at-

testedbytheMinistryofLabour.

Fees:

| AtotalofEUR239.9(AED1200)ischargedasfollows:EUR40(AED200)whenapplyingforthepermit,EUR199.9(AED1000)

foreachemployeeaftertheapprovalfromtheemployer.

Notes:

| Thegroupworkpermitisnotrenewableandisvalidforsix

monthsfromthedateoftheapproval.


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NewWorkCardandWorkContractoftheWorkPermit

ApplicationoutsidetheUAE

Thefollowingdocumentsarerequired:

| ANewWorkCardform.

| Threecopiesoftheworkcontract.

| Acopyoftheentrancepermission.

| Acopyofthepassport.| Acopyofa3-montheffectivemedicalexaminationapproved

bytheMinistryofHealthorPreventiveMedicineDepartment.

| Acopyofthesigningdependence.

| Acopyoftheeffectivecommercialpermit.

| Aself-addressedenvelopeforthepostoffice.

Fees:

| No fees are collected at this stage; they would have been

collectedpreviouslywiththeworkpermitissuancefees.

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

thetransaction,withoutinvolvinganyauthorisedemployee.

3.3 Real Estate/Freehold PropertyMostexpatriateslivingintheUAEnormallyrenttheapartment,

flatorvillatheylivein.

3.3.1TheDefinitionofFreehold

TheUAEcurrentlydoesnothaveafederallawdefiningfreehold.

Thefreeholdpropertylawisapplicableinoneemirate,Dubaiwhileitisunderdevelopmentintheotheremirates.Thelaw

meansthatthepropertypurchasedbyaforeignerisputinhis/


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hernameforlife,whichallowshim/hertoregistertheproperty

withtheLandsDepartment.Theownerthenhasfullrightstothe

property,includingtherighttosell,leaseorrentthepropertyathis/herowndiscretion.However,thepropertyrightstoforeign-

ersareavailablesubjecttoafewrestrictions.Theforeignerswho

ownpropertyinDubai,AjmanorRasAlKhaimahareeligibleto

applyforaUAEresidencevisavalidforthreeyears.

3.3.2 Freehold Property in Dubai

Dubaihasworkedtowardsthepromotionofrealestatedevelop-

ment.ThemajorpropertyboominDubaioccurredinMay2002,

whenDubaiscrownprince,GeneralSheikhMohammedbin

RashidAlMaktoom,issuedadecreetoallowforeignnationalsto

buyandownfreeholdpropertyinselectedareasofthecity,now

referredtoasNewDubai.Thesamemonthalsowitnessedthe

announcementofNakheelsman-madeisland,ThePalmJumei-

rah,whichwasfollowedayearlaterbythesecondman-made

palm-shapedisland,ThePalmJebelAli.Allpreviouslydeveloped

leaseholdpropertywasautomaticallytransferredtofreehold.

Aftertheinitialpropertyboom,variousnewdevelopersjoined

themarket.FreeholdpropertiesinDubaiarecurrentlymajorly

limitedtoareasonJebelAli,thePalmIslandprojects,TheWorld

islands,DubaiMarina,EmiratesHillsandAlBarsha.

Dubai Freehold Property Law

On14March2006,theDubaigovernmentissuedalawlegalising

foreignownershipofpropertiesindesignatedareasofDubai.

However,thelawdoesnotgivepropertyownerspermanent

residencevisasoranautomaticrighttoworkinDubai.


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3.3.3 Freehold Property in Rest of the UAE

OnceDubaibeganofferingfreeholdpropertiestocitizensof

othercountries,otheremiratesfollowedsuit.Thefollowingare

thevariousprojectsandpropertydevelopmentsintheemirates:

Ras Al Khaimah

RasAlKhaimahwasthefirstemiratetoemulateDubai,with

its1,300residentialunitdevelopmentnamedAlHamraVillage.

ThesecondfreeholddevelopmentforRasAlKhaimah,spread

across50acresofbeachfrontlandofafive-starresortfacility,is

TheCove.AnotherpopularRAKpropertyisthe1-millionsquare

metretouristdevelopment,SarayaIslands.

RasAlKhaimahsgovernmenthassetupitsownpublicjoint

stockpropertydevelopmentcompany,RAKProperties,whichreceivedfreeholdrightsforallitspropertiesfromthecitysruler

inNovember2005.RAKPropertieshasdevelopedawiderange

ofprojectsinthecity,whichincludesJulfarTowers,MinaAlArab,

MangroveIslandandKhorQurum.

Ajman

Ajmanwasthesecondemiratetofollow,withtheannounce-

mentofits15freeholdresidentialapartmentbuildingsnamed

AlNaeemiyaTowers.ThesamecompanythatdevelopedtheAl

NaeemiyaTowershascontinueddevelopingitsportfolioofAj-

manpropertieswithAlKhorTowers,AlRashidiyaTowersand

theAlCornicheTower.TameerRealEstateannouncedcomple-

tionofanEUR246.60(AED-1.2-billion)freeholdresidentialand

commercialprojectinAjman,namedAlAmeeraVillage,which

isbuiltontheEmiratesRingRoad.


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Sharjah

Sharjahhasalsostartedofferingpropertyforforeignowner-

ship,althoughthemajorityofpropertyispresentlyheldbylease.

SomeofitsupcomingtowersincludeABBCOTower,SharjahGate,

the32-storeyAlTaawunTower,andthe47-storeyAlSandos

Tower.Tameeralsoplanstodevelopvarioustowersthroughout

Sharjah,andAl-Hanoohasdevelopedthe60-millionsquarefoot

NujoomIslands.

Umm Al Quwain

TameerhasdevelopedtheEmiratesModernIndustrialAreathat

toprimarilyservethemanufacturingindustry,whichisbuiltnear

thefamousUAQAviationClub.Tameerhasalsodevelopedthe

EUR6billion(AED30billion)AlSalamCity,situatedalongtheEmiratesRoadinUmmAlQuwain.UmmAlQuwainsproperty

ownershiplawstatesthatnon-GCCnationalscanownproperty

butnottheland.

Fujairah

Fujairahseffortstoenterintothefreeholdmarkethavebeenlimitedtotheconstructionofthe43-storey,170-metreAlJabar

Tower,whichwillcontain270residentialapartments,commer-

cialshopsandshowroomsandisbeingdevelopedbyAlJabel

Contracting.

Abu DhabiAbuDhabispropertylawcameintoeffecton14August2005,

when the emirates government announced a 99-year land

ownershipandarenewable50-yearsurfaceownershiptofor-

eignnationalsinspecifiedareasinAbuDhabi.Propertiesby

AldarPropertiesandtheAlReefVillasprojectbyManazeland

HydraPropertieshavepermittedforeignownershipaccording

tothenewpropertylaw.


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3.4 Renting Property

Therentingofpropertyisthedominantactivityintheproperty

marketoftheUAE.

3.4.1Rental Requirements

InordertorentpropertyintheUAE,therentfortheentireyearof

tenancyisnormallypaideitherincashorbycheque.Ifthepay-

mentismadebycheque,mostlandlordswilllimitittotwoto

fourchequepayments.Inadditiontothetenancypayment,ifthe

propertyhasbeenrentedthroughanagency,a5percent6com-

missionwillhavetobepaidtothem.Mostpremiseswillrequire

thepaymentofarefundablesecuritydepositequalto5percentof

theannualrent.Asutilitybillsarepaidbyatenant,itisnormally

requiredthatarefundabledepositrangingfromEUR199.9to399.9(AED1000to2000)bepaidtothelandlordfortheuseofwater,

electricityandgas.Somepremisesalsorequirethepaymentofa

10percentmunicipaltax7(Sharjahhasa5percentmunicipaltax).

3.4.2RentalLaws

TenancycontractsintheUAEnormallylastfortwoyears,withtheexceptionofSharjah,whereitisnormallyforthreeyears.

Withinthatperiod,landlordsarenotpermittedtoincreasethe

rentuntilitrequiresrenewal.Atthetimeofrenewal,alandlord

isnotpermittedtoincreasetherentbymorethanthatstated

inaccordancetotherentalindexsetbytheRealEstateRegula-

toryAgency(RERA)8.Ifadisputebetweenatenantandlandlord

occursontherentincrease,themattershouldbesettledbythe

MunicipalitysRentControlCommittee.Filingacasewiththe

RentControlCommitteewillcostEUR80.0or100.0(AED400

or500)9anditwillnormallytakeafewweeksormonthsbefore

6Source:Rootsland7Source:GovernmentUAE-Taxes8Source:GlobalPropertyGuide9Source:KMRent


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thetwopartiesaresummonedtoappearbeforethecommittee.

Ifthecaseiswonbytheplaintiff,thefeepaidtofileacasewill

bepaidbythelandlord.

3.4.3 Landlord Obligations

Landlordsarenormallyobligatedtotakechargeoftheannual

maintenanceoftheirpropertyand theyarenotpermitted to

evictatenantwithoutjustcausewithinthetenancycontract

timeperiod.

3.5 Average Rent for Off ice Space in Dubai and Abu Dhabi

OfficerentalratesintheUAEhavegrownsignificantlyoverthe

pastfewyears,mainlydrivenbythedemandfromthehighin-

fluxofmultinationalcompaniessettingupoperationsandthe

growthofexistingbusinesses.ThefollowingarethetrendsinaverageofficerentalexpensesinDubaiandAbuDhabi:

Dubai

DubaiislessexpensivethanLondon,HongKong,NewYorkand

Tokyo,whereaverageofficespacepricesaremorethanthree

timesthepricesin theUAE.Rentalrates(perannum)inDu-

baihavetripledand,onaverage,haverisentoawhoppingEUR

1,183.6(AED5,920)persquaremetreinfourthquarterof2008

fromEUR914.7(AED4,575)persquaremetreinfourthquarterof

200710.AccordingtoAstecosrentalresearch,rentsonSheikhZa-

yedRoadhaveescalatedtoEUR7075(AED350375)persquare

footascomparedtoEUR4448(AED220240).ThepricesatBur

DubaiandKaramaareatEUR52.2andEUR56and53(AED280

andAED265)persquarefoot,whichhaveshowna24percent

and51percentincreaseoverQ3of2006,respectively.Officerents

areexpectedtostabiliseinthelongtermwiththecompletion

ofprojectedcommercialunits.

10Source:Emirates-re


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Abu Dhabi

AccordingtoCBRichardsEllis,commercialspaceinAbuDhabiis

inhighdemand,withoccupancyratesatasaturationlevelof100

percent,creatingadditionalpressureonsupplyandrentallevels.

Thesupplyshortagehasnarrowedtherentalbandsamongthe

prime-,mid-andlow-qualityofficemarketdivisions.Rentson

olderbuildingsareonarelativedecline,whileoverallofficerents

intheCBDarearangeEUR449.8toEUR499.8(fromAED2250toAED2500)persquaremeter.Theleaseforofficerentalsis

generallythreeyearswithathree-monthdeposit.Annualrentis

generallypaidinadvancewithservicechargesof10-15percentof

theannualrent.However,certainareasofAbuDhabi,particularly

primeareas,havealreadysurpassedtheupperthresholdwith

increasesobservedtobemorethan50percent,andinsomecases,doublingyearoveryear,asshowninTable3.

Table 3: Comparative Prime Off ice Rental Levels (Per Annum)in Selected Areas of Abu Dhabi

LOCATIO q2 2006 eur (aed) q2 2007 eur (aed)

AlBateen 223.7279.6(12001500)

298.2465.9(16002500)

AlMarkaziyah 242.3307.5(13001650)

316.8465.9(17002500)

AlMushrif 223.7260.9(12001400)

37.355.9(200-300)

CornicheWest 223.7279.6(12001500)

639.78(3200)forQ22009

Source:TradeArabia-AbuDhabi

Afurtherriseinthedemandforofficespaceisexpectedwith

the implementation of diversification strategies, which will

broadentheopportunitiesindifferentsectors.


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3.6 Average Living Costs for Expatriates

Forapersonlivinginthesamemannerasanaveragewestern

expatriate,theoverallcostoflivingintheUAEwillbesimilarto

thatinmostEuropeancountries.Theno-taxationpolicyofthe

governmenthasasignificantimpactonthecostofcertainitems,

e.g.carsandelectronicproducts.Ontheotherhand,thecost

ofaccommodationisgenerallyhigh,asisthatofcertainfood

items,particularlyimportedfoods.Internationallyrecognisedbrandedfoodsandhouseholdgoodsmightbecostlierthanin

thehomecountry;however,thereareplentyofcheaperlocally

andregionallyproducedalternativesthatareofexcellentquality.

Table4showstheaveragemonthlymajorexpensesforasingle

person,coupleandfamilywithtwochildren.(Numbersinbrack-

etsrelatetothenotesfollowingTable4).

Table 4: Average Monthly Major Expenses for a Single Person,Couple and Family with Two Children

MOTL COSTS (EUR/AED)

Item CouplewithTwoChildren

Housing 19,99323,991/100,000120,000

Schooling 7,997.2/40,000HighSchool3,998.65,598/20,00028,000PrimarySchool

Utilities 199.9399.9/1,0002,000Electricityandwater2,399.2/12,000FullTimeMaid

CarRental 299.9/1,500permonth

Telephone 50/250

Insurance 38/190foracoverageof9,996.5/50,000

MaximumTotal 35,175.2/175,940


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Notes

1 Thesearetherentalcostsforaone-bedroomapartmentina

modernblock,probablyunfurnished,atwo-bedroomapart-

mentinasimilarblockandatwoorthree-bedroomapart-

ment or a modest villa. Apartments might have air-condi-

tioning included in the rent. Satellite television is probably

providedbutisunlikelytoincludeallchannels.Aswimming

pooland/orgymareusuallyprovided.2Thisdoesnotincludeluxuryfooditemsoralcohol.

3These rates include electricity (and air-conditioning), water

(andusuallysewageifchargedinconjunctionwiththewa-

ter)andanallowancefortelephonecharges.

4Thisincludesentertainment,diningout,sports,newspapersandmagazinesbutnotholidays(airfaresareoftenincluded

inworkcontractterms).

5Theseratesincluderunningcostsforanaveragefamilycar

and third-party insurance, petrol, servicing and repairs, but

excludedepreciationandcreditpurchasecosts.

6Thisincludesprivatehealthcare,travel,carandcontentsin-

surance.Notethatpropertyisrented,therefore,buildingin-

suranceisusuallyunnecessary.

7Excessiveclothingisunnecessaryasaresult ofthe regions

hot climate. Office wear for men comprises a shirt and tie,

exceptonformaloccasions.


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4 Social Security System in the UAE

SmallpopulationsandhighGDPratesallowtheUAEgovern-

menttofundthewelfareofitspeoplewithoutneedingtoim-

posemanyfinancialobligationsonthem.Forexample,Dubai

doesnothaveobligatorystateoremployer-contributioninsur-

anceschemes.UAEnationalsworkingforprivatecompaniesare

entitledtothesamesocialsecurityandpensionbenefitsasUAE

nationalsworkingforthegovernment.Thegovernmenthopestoattractmorenationalstonon-governmentaljobsbyproviding

benefitsintheprivatesectortospeeduptheemiratisationof

theworkforce.Underthenationalpensionandsocialsecurity

scheme,whichcameintoeffectinthepublicsectorinMay1999,

nationalswhohavecontributedtotheschemewillbeeligiblefor

retirementanddisabilitybenefits;compensationonthedeathofthesenationalswillbegrantedtotheirdependents.Current

end-of-serviceentitlementsforgovernmentemployeeshave

beentransferredtothenewprogramme.

TheGeneralAuthorityforPensionsandSocialSecurity(GAPSS),

whichisanindependententitythatinvestsemployerandem-

ployeecontributionstofundthesocialsecurityprogramme,was

setuptooperatethescheme.Thegovernmentallocatedthere-

quiredcapitalofEUR100million(AED500million)inthe1998

budgetfortheestablishmentoftheauthority,whichcommenced

functioningasaninvestmentbodyfrom15December1998.

Nationalsareautomaticallyprovidedwithextensivehelpfromthestate,includingmedicalcare,sicknessandmaternitycover-

age,childcare,pensions,unemploymentbenefitsand,insome

instances,housinganddisabilitybenefits.

Foreignworkershaveaccesstomedicalfacilities.Infact,Dubai

ispressurisingcompaniestoprovidemedicalinsurancefortheir

employeestoeaseexpatriatepressureonstatehealthcarepro-

grammes;privatemedicalinsuranceisrecommendedformost

foreignnationals.


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4.1 Pensions

TherearenostatepensionschemesinDubaiforforeignexpatri-

ates,althoughcertainstateinstitutionsandsomeinternational

companieshavecorporatepensionschemes.Expatriatescan

takeadvantageoftheirhighdisposableincomeinDubaitoavail

themselvesofapersonalpensionplan.Therearemanycompa-

niesofferingavarietyofschemes,eitherbasedonlumpsums

orsupportedbyregularsavings.

5 Free Trade Zones (FTZs) in the UAE5.1 Introduction FTZs

TheUAEhasenjoyedsubstantialeconomicbenefitsandsignifi-

cantindustrialgrowthasaresultofitsflourishingFTZs.Financial

incentivestoestablishmanufacturingindustriesintheUAEareprimarilyfocussedonexemptionfromalltaxesanddutieslevied

onprofitsorproduction,withtheexceptionoflicensingfees.

Further,therearenorestrictionsonprofittransferorcapital

repatriation.Customsdutymayalsobeexemptedforqualify-

ingprojectsestablishedinspecialindustrialzones.Inaddition,

nationallyproducedproductsareaccordeda10percentprice

advantageingovernmentpurchasesoverimportedgoods.

Differenttypesofcompaniesthatcanbeestablishedinclude

thefollowing:

| FreeZoneCompany(FZCO/FZC)

| FreeZoneEstablishment(FZE)

| FreeZoneBranch


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Differenttypesoflicencesthatcanbeissuedincludethe

following:

| TradingLicence

| IndustrialLicence

| ServiceLicence

| NationalIndustrialLicence

Exemption

Itispossibleforcompaniesortheirbranchesengaginginatrade

orbusinessintheUAEtoenterintoanagreementwiththeruler

ofaparticularemiratewherebyitwillbeexemptfromanyli-

abilitytotaxationonitsincome.


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5.2 List of FTZs

Table5providesthenames,purpose,financialincentivesand

officialwebsitesofmajorFTZsintheUAE.

ZONE WEBSITE

TheAbuDhabiFreeZone www.hcsez.ae

TheSharjahFreeZone www.saif-zone.com/

HamriyahFree-Zone www.hamriyahfz.com

THEDUBAIFREEZONE

JebelAliFreeZone(JAFZ) www.jafza.co.ae

DubaiAirportFreeZone(DAFZ) www.dafza.gov.ae

DubaiTechnologyE-CommerceandMediaFreeZone

www.dubaimediacity.com

DubaiCarsandAutomotiveZone www.ducamz.co.ae

DubaiGoldandDiamondPark www.goldanddiamondpark.com

Source:UAEInteract-BusinessCentre-FreeZones


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OBJECTIVE FINANCIALINCENTIVES

Facilitiesforwarehousing,preciousmetalsandfood

100percentimportandexporttaxexemptions100percentrepatriationofcapitalandprotsNocorporatetaxesfor15years;renewablefor

anadditional15yearsNopersonalincometaxes

NotAvailable 100percentexemptionfromcorporateandpersonalincometaxesforcompanies,investorsandtheiremployees

ConsideredasoneofthemostadvancedfreezonesintheMiddleEastprovidingattractiveconcessionsandinvestmentincentivestoforeigninvestors,

includingexcellentmanufacturingandcommercialfacilities

100percentimportandexporttaxexemption100percentrepatriationofcapitalandprots

allowedNocorporateprotstaxNopersonalincometax

100percentforeignownership;companyformationperiodis5-20dayssubjecttoavailabilityoffacilityrequestedandsubmissionofnecessarylegaldocuments

Nocorporatetaxesforatleast15years;renewableforanadditional15years

Norestrictionsontherepatriationofcapitalandprots

Nopersonalincometaxes

Nocurrencyrestrictions

OfferssimilarincentivesasJAFZ,particularlyinviewofproximitytotheDubaiairport.

Nocorporatetaxupto15years;renewableforasimilarperiod

Freedomtomovecapitalincludingdividendsandprots

ExemptionfromimportdutiesNopersonalincometaxFullrepatriationofbothcapitalandprotsNocurrencyrestrictions

Manufacturingandcommercialfacilitieswithattractiveconcessionsandinvestmentincentivestoforeigninvestors

Nocorporatetaxesforatleast15years;renewableforanadditional15years

Norestrictionsontherepatriationofcapitalandprots

NopersonalincometaxesNocurrencyrestrictions

Facilitiesforthere-exportofautomotivevehiclestotheAfrican,AsianandMiddleEasternmarkets

GovernedbyJAFZrulesandregulations

NotAvailable NotAvailable


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5.3 Procedures for Starting a Company in a FTZ

TheFreeZoneAuthorityassessesacompanysrequirements

andtheirfeasibilityforstartingacompanyinaFTZthrougha

questionnaire.Licenceapplication,alistofinvoicerequiredfor

planning,consumerrequestforelectricityandFormBforenvi-

ronmentalconcerns,ifapplicable,areprovidedaftersubmitting

thequestionnaire.Finally,adulyfilledinlicenceapplicationis

tobesubmitted.Provisionalapprovalisgivenalongwithaspecimenleaseagree-

ment;personneldocumentsforthelicencerequirementaresub-

mitted.Afterthemeetingofthecompanyrepresentativeandthe

concernedauthoritytofinalisethedetailsoftheproject,actual

documentsareprocessed.


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6 Opening a Bank Account in the UAE6.1 Overview of Retail Banking11

| TheaggregatedbalancesheetofbanksoperatingintheUAE

grewby5.7percenttoreachEUR329.95billion(AED1605.6

billion)attheendof2010,againstEUR312.15billion(AED1519

billion)attheendof2009.

| Bytheendof2010,totaldepositswithbanksoperatinginthe

UAEamountedtoEUR215.7billion(AED1,049.6billion),fromEUR201.9billion(AED982.6billion)in2009.

| ForeignassetsofbanksreachedEUR47.98billion(AED233.5

billion)attheendof2010,increasingby12.2percentfromEUR

42.79billion(AED208.2billion)in2009.

| Capital&ReservesofbanksoperatingintheUAEincreasedbyEUR5.06billion(AED24.6billion),fromEUR47.55billion(AED

231.4billion)attheendof2009toEUR52.61billion(AED256

billion)attheendof2010.

11Source:CentralBank


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6.2 Procedures for Opening an Account

OpeningabankaccountintheUAEisastraightforwardprocess,

althoughrequirementsvaryfrombanktobank.Onlyresidents

canopenacurrent/checkingaccount.However,somebanksal-

lownon-UAEresidentstoopensavingsaccounts.

Foreignnationalsneedtoprovidethefollowingdocumentsto

openabankaccountintheUAE:

| Avalidpassport(originalandcopy)

| Avalidresidencevisa

| Anofficial identification,suchasalabourcardordriversli-

cence

| Asalarycertificatefromtheemployer

| Aletterofno-objectionfromtheemployer/sponsor

Note:

Somebankssetaminimumaccount/balancelimit.

6.2.1 Salary Transfer Account

| The requirement to open a salary transfer account is a no-

objectionletterfromtheemployeraddressedtotherespec-

tivebranch.

| Dependentsonahusbandsorfathersvisawhowanttoopen

accountsneedtheiroriginalpassportstoverifythesponsor-

ship.

| Banks alsoofferaccountstonew entrantswhoseresidence

permits are under processing, provided they submit either

aletterfromtheemployercertifyingtheiremploymentora

letterofintroductionorverificationfromabankwhichthe

applicanthasanaccountwithinhis/herhomecountry.


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6.2.2 Phone and Internet Banking

| Duetosecurityreasons,somebanksrequireabranchvisitfor

evenminorchangestoaccountdetails.Otherbanks,however,

offerphoneandInternetbanking.

| ThedegreeoffunctionsofaphoneorInternetbankingplan

differsfrombanktobank.Somebanksonlyallowforbillpay-

mentandfundtransfertoitsdifferentbranchesorotherlocal

banksonlineoroverthephone.

6.2.3 Foreign Currency in the UAE 12

| Most major banks offer customers the option to open ac-

countsinmajorcurrenciessuchasUSD,GBPandEUR.

| MostUAEbanksacceptchequesinmajorcurrencies,charging

ratesstartingatEUR20(AED100)andcantake3045daysfor

clearance.

12Source:GulfNews


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6.3 Major Banks13

TheUAEhas28foreignbanksfromseveralcountriesand23lo-

calbanks.Foreignandlocalbankshaveestablished111and754

branchesrespectivelyintheUAE,bytheendofMarch2009.

Table6liststhemajorbanksintheUAEandtheirtotalnumber

intermsofeachbanktype.

Table 6: Major Banks in the UAE as of 31 March 2009

Bank Type umber ofbanks

ames of major banks

LocalBanks 23 NationalBankofAbuDhabiAbuDhabiCommercialBankARBIFTUnionNationalBank

CommercialBankofDubaiDubaiIslamicBankPJSCEmiratesBankInternationalEmiratesIslamicBankMashreqBankPSCSharjahIslamicBankBankofSharjahPSCUnitedArabBankPJSCInvestBankPLCNationalBankofR.A.K.CommercialBankInternationalNationalBankofFujairahPSCNationalBankofU.A.Q.FirstGulfBankAbuDhabiIslamicBankDubaiBankNoorIslamicBank

AlHilalBankAjmanBank

13Source:CentralBankoftheUAE


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Bank Type umber ofbanks

ames of major banks

ForeignBanks(LocallyIncorporated)

28 NationalBankofBahrainRadainBankArabBankPLCBanqueDuCaireElNileinBankNationalBankofOmanCalyonBankBankofBaroda

BNPParibasJanataBankHSBCBankMiddleEastArabAfricanInternationalBankBLCBank(France)S.A.AlAhliBankofKuwaitBarclaysBankPLCHabibBankLimited

HabibBankAGZurichStandardCharteredBankCitiBankN.A.BankSaderatIranBankMeliIranBlomBankFranceLloydBankTSBABN-AmroBankUnitedBankLimited

DohaBankSambaFinancialBankNationalBankofKuwait

RestrictedLicenceBank

1 BancaCommercialItaliana

InvestmentBanks

3 UnitedArabEmiratesInvestmentBankP.J.S.C.

HSBCFinancialServices(MiddleEast)Limited.

NoorCapitaP.S.C.

Source:CentralBankoftheUAE


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7 Recruitment of Local Staff

Therearealargenumberofemploymentagencies,recruitment

agencies,consultantsandjobagenciesintheUAE,whichhave

beengrowingrapidly.AccordingtotheUAEMinistryofLabour,

recruitmentagenciesarenotallowedtochargefeesforsignup

and/orvisasand/ortobeplacedinjobs.Thereareemployment

agencies(usuallyonline)inDubaithatoperatefromanother

countryandsocouldclaimtobeabletolegitimatelychargeafee.Employmentagenciesnormallychargefeesfromtheemployer

andnottheemployee.

SomerecruitmentconsultantsintheUAEprovideassistance

withwritingcurriculumvitaesandapplicationletters,and/or

theymayofferconsultingservicesandpsychometricevaluations

toassistinchoosingsuitablecareersandjobs.

Afewofthelargerandmorewell-knownjobsearchfirmsop-

eratinginDubaiincludeBACMiddleEast,ClarendonParker,IQ

Selection,KershawLeonardandSOSRecruitment.

TherearevariousrecruitmentchannelsavailableintheUAE.

Theseincludecampusrecruitment,headhuntingagencies,me-

diaadvertisements(newspapers,magazines,TVandbroadcast-

ing),Internetrecruiting,on-siterecruiting,internalreferences

andwalkins.Differentapproachesareneededforvariousre-

cruitingrequirements.


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7.1 Major Recruitment Agencies and Websites

Table7liststhemajorrecruitmentagenciesintheUAEandtheir

websites.

Table 7: Major Recruitment Agencies and Websites

TOPINTERNETRECRUITMENTAGENCIES

WEBSITES

Bayt.com Bayt.com

Dubaidonkey.com dubaidonkey.com

Gulftalent.com gulftalent.com

Jobsindubai.com jobsindubai.com

Jobtrackme.com jobtrackme.com

Mawaride.com mawaride.com

Monster.com monster.com

Strategiy.com strategiy.com

Jobs.theemiratesnetwork.com jobs.theemiratesnetwork.com

Dubizzle.com dubizzle.com

CLASSIFIEDADVERTISEMENTS WEBSITESGulfNews www.gulfnews.com/

KhaleejTimes www.khaleejtimes.com/


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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

InternationalLabourOrganisationsmodel.UAELawNo.8of

1980,asamendedbyLawNo.12of1986(theLabourLaw)gov-

ernsmostaspectsofemployer/employeerelationships,such

as work hours, leave, termination rights, medical benefits

andrepatriation.TheLabourLawisprotectiveofemployeesin general and overrides conflicting contractual provisions

agreedunderanotherjurisdiction,unlesstheyarebeneficial

totheemployee.

| TheministryissuesamodelformoflabourcontractinArabic,

whichiswidelyused.Otherformsofcontractareenforceable,

providedtheycomplywiththeLabourLaw.End-of-contractgra-

tuitiesaresetat21dayspayforeveryyearofthefirstfiveyears

ofservice and30daysfor everyyear thereafter.Total gratuity

shouldnotexceedtwoyearswages.Employeesareentitledto

pro-ratedamountsforserviceperiodslessthanafullyear,pro-

videdtheyhavecompletedoneyearincontinuousservice.| Tradeunionsdonotexist. Inthecaseofa disputebetween

anemployerandanemployee,orintheinterpretationofthe

LabourLaw,theMinistryofLabourandSocialAffairswillini-

tiallyactasanadjudicatorinanefforttoresolvematters.Ifa

partywishestoappealanydecisiontaken,itcantakeitscase

tocourt.Strikesandlockoutsareforbidden.

| Thenormalmaximumworkinghoursare8perdayor48per

week.However,thesehoursmaybeincreasedto9hoursdaily

forpeopleworkingintheretailtrade,hotels,restaurantsand

othersuchestablishments.Similarly,dailyworkinghoursmay

be reduced for difficult or dangerous jobs. Many businessesworkonatwo-shiftsystem(forexample,8am1pmand4pm

7pm). As in all Muslim countries, Friday is the weekly day of


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rest.Inpractice,commercialandprofessionalfirmswork4045

hoursaweekandgovernmentministriesforabout35hours.

TheweekendforofficeworkershastraditionallybeenThurs-dayafternoonsandFridaysbutanumberoforganisationshave

changedovertoafive-dayweekwiththeweekendcomprising

FridaysandSaturdays.DuringtheMuslimholymonthofRam-

adan,normalworkinghoursarereducedbytwohoursdaily.

| Thereare10daysofpublicholidays(paid) inayear.Anem-ployeesannualleaveistwodaysforeverymonthifhisserv-

iceismorethansixmonthsandlessthanayear.Withevery

completedyearofserviceafterthefirstyear,anemployeeis

entitled to 30 daysannual paid leave.This is in addition to

publicholidays,maternityleaveforwomenandsickleave.

| ExpatriateswhohavenotworkedinUAEcanavailavisafor

60 days to work temporarily. Afee of AED500needsto be

paidforthejob.Further,theemployeeswhohaveservedtwo

yearsunderanemployerareeligiblefortransferwithoutthe

needforano-objectioncertificate(NoC).

7.3 Average Salary Range

Themediansalaryrangesbyjob,employertype,industry,city

anddegreeintheUAEin2011,asperPayscale,arelistedinthe

tables812,respectively:

Table 8: Median Salary by Jobs in the UAE in 2011

JOBS MEDIANSALARY(INEUR/AED)

RegionalSalesManager EUR50,580.13(AED246,132)

ProjectManagerInformationTechnology(IT)

EUR48,968(AED238,291)

MechanicalEngineer EUR21,845.68(AED106,305)

BusinessDevelopmentManager EUR38,013.39(AED184,980)

HumanResourcesManager EUR47,356.86(AED230,447)


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Table 9: Median Salary by Employer Type in the UAE in 2011

EMPLOYERTYPE MEDIANSALARY

(INEUR/AED)

Company EUR31,495.36(AED153,265)

PrivatePractice/Firm EUR28,313.17(AED137,777)

Non-ProfitOrganisation EUR37,009.32(AED180,094)

GovernmentStateandLocal EUR37,896.46(AED184,411)

School/SchoolDistrict EUR19,172.53(AED93.297)

OtherOrganisations EUR24,858.92(AED120,968)

College/University EUR36,242.19(AED176,361)

Self-employed EUR28,951.05(AED140,881)

GovernmentFederal EUR38,435.90(AED187,036)

Foundation/Trust EUR42,559.67(AED207,103)

Franchise EUR18,994.57(AED92,431)

Hospital EUR23,967.88(AED116,632)

Contract EUR20,869.35(AED101,554)

Team EUR20,084.54(AED97,735)

Table 10: Median Salary by Practice Area in the UAE in 2011

INDUSTRY MEDIANSALARY(INEUR/AED)

Corporate,Business,Mergers&Acquisitions

EUR57542.06(AED280,010)

Litigation&Appeals EUR51,254.78(AED249,415)

General EUR43,537.64(AED211,862)

RealEstate/Construction/LandUse EUR49,320(AED240,000)

Trusts&Estates EUR51,254.78(AED249,415)

InsuranceLaw EUR27,659.07(AED134,594)


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Table 11: Median Salary by City in the UAE in 2011

CITY MEDIANSALARY

(INEUR/AED)

Dubai EUR30,730.88(AED149,542)

AbuDhabi EUR35,694,73(AED173,697)

Sharjah EUR19,775.68(AED96,232)

AlAin EUR23,758.88(AED115,615)

Ajman EUR13,809.60(AED67,200)

Fujairah EUR12,929.85(AED62,919)

Table 12: Median Salary by Certification in the UAE in 2011

CERTIFICATION MEDIANSALARY(INEUR/AED)

CertifiedProfessionalEngineer(PE) EUR36,898.35(AED179,554)

ProjectManagementProfessional(PMP)

EUR58,232.74(AED283,371)

CiscoCertifiedNetworkAssociate(CCNA)

EUR23,156.77(AED112,685)

MicrosoftCertifiedProfessional(MCP) EUR28,718.83(AED139,751)

BusinessCertificate EUR29,152.02(AED141,859)

CharteredAccountant(CA) EUR42,098.52(AED204,859)

MicrosoftCertifiedSystemsEngineer(MCSE)

EUR30,113.15(AED146,536)

CertifiedPublicAccountant(CPA) EUR45,858.97(AED223,158)ProjectManagementCertificate EUR49,528.58(AED241,015)


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8 Taxation

TheUAEisanattractivelocationtoinvestorsetupbusiness

operations,particularlyinlightoftherelativescarcityofpersonal

andcorporatetaxes.OnlyafewindustriesintheUAEareinfact

subjecttotaxes.Itisexpectedthatthisapproachwillnotchange

inthemediumorlongterm.TheUAEhasenteredintonumerous

double-taxationavoidancetreatieswithothercountriestoavoid

instancesoftaxbeingleviedonapersoninconnectionwiththesamematterintwodifferentcountries.

8.1 Tax Rates14

ThereisnofederaltaxlegislationintheUAE;insteadeachemir-

atefollowsitsowntaxlaw.Thefollowingtaxesarenotappli-

cableintheUAE:

| Personalincometax

| Capitalgaintax

| Value-addedtax

| Withholdingtax

| Corporatetax

Currently,therearelegislationsinforceintheemiratesofAbu

Dhabi,DubaiandSharjah,establishingageneralcorporatetaxa-

tionregimetheAbuDhabiIncomeTaxDecreeof1965(andits

amendments),SharjahIncomeTaxDecreeof1968(andamend-

ments)andDubaiIncomeTaxDecreeof1969(andamendments).

Inpractice,however,onlyoil,gasandpetrochemicalcompanies

andbranchofficesofforeignbanksarerequiredtopaytaxes.

14Source:IncomeTaxinUAE,Moveone


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8.1.1 Personal Taxation

ThereisnopersonalincometaxleviedintheUAE.

| Municipality service chargesare leviedonindividualsliving

andworkingintheUAE.

| Servicechargepercentagesvaryamongtheemirates.

| A service charge of 510 percent is imposed on food pur-

chasedinrestaurants.Hotelsrequirea1015percentservice

chargepernightonroomrates.Thesechargesareusuallyin-

cludedinthecustomersbill,whichthemunicipalitywillcol-

lectfromrestaurantsandhotels.

| A taxof 50 percent is chargedon importof alcohol. An in-

dividual,whohasaliquorlicence,isrequiredtopayanad-

ditional30percenttaxonliquoruponbuying.

| Hotelsalsorequireanadditional15percentservicechargeon

theservicestheyprovide.

8.1.2 Corporate Tax

ThereisnofederaltaxlegislationoncorporatetaxintheUAE;

instead,eachemiratefollowsitsowntaxrules.

Abu Dhabi

Therearenocorporate,income,withholding,salesorvalue-

addedtaxescurrentlyimposedinAbuDhabi,apartfromthe

followingexceptions:

1 Taxesonoilandgascompaniesatratesspecifiedintherel-

evantconcessionagreement

2Flatrateonannualprofitsofbranchesofforeignbanks

3Flatrateservicetaxonhotelservicesandentertainment


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However,accordingtotheAbuDhabiIncomeTaxDecreeof1965

(asamendedbyAbuDhabiIncomeTaxDecreeNumber(4)of

1972),everychargeablepersonwhoconductstradeorbusiness,includingtherenderingofanyservicesinAbuDhabi,shallbe

subjecttoascaleonincomebasis,withamaximumof55percent

taxaslistedinTable13.

Table 13: Tax in the UAE as Percent of Income

INCOME PERCENTTAX

LessthanEUR199,930(AED1,000,000) 0

EqualtoormorethanEUR199,930(AED1,000,000)butlessthanEUR399,860(AED2,000,000)

10


20


30


40

MorethanEUR999,650(AED5,000,000) 55

Source:Al-Tamimi-Document-TaxationLawintheUAE

Dubai

InDubai,allcompaniesarerequiredbylawtopaytaxontheirearn-

ings.Theratesoftaxareonaslidingscaleuptoamaximumof50

percent.Inpractice,however,onlyoil,gasandpetrochemicalcom-

paniesandbranchofficesofforeignbanksarerequiredtopaytax.TheDubaiIncomeOrdinanceof1969andDubaiIncomeTaxDe-

creeof1970(anditsamendments)specifiesthatanorganiza-

tionthatconductstradeorbusinessinDubaiwillbesubjectto

taxationaslistedinTable13.


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Oilcompaniespayupto50percenttaxontheUAE-sourcedtax-

ableincomewhilebankspay20percenttaxontaxableincome

(incometaxonbranchofficesofforeignbanksordinance(No.2)of1997).Thetaxableincomeofbanksiscalculatedwithreference

totheirauditedfinancialstatementswhereasthatofoilcompa-

niesiscalculatedwithreferencetotheirconcessionagreements.

Oilcompaniesalsopayroyaltiesonproduction.

Customsdutiesareextremelylowandtherearemanyexemptions.Goodsimportedandintendedforre-exportoftenbenefitfromcus-

tomsdutyasdomanufacturersontheimportoftheirmachinery,

rawmaterialsandsparepartsusedforindustrialpurposes.

Sharjah

TheSharjahIncomeTaxDecreeof1968(anditsamendments)specifiesthattax,onthescalelistedinTable13,shallbeimposed

onthetaxableincomeofeverychargeablepersonforeachin-

cometaxyearendingafterthedateofthisdecree.Inpractice,

however,onlyoil,gasandpetrochemicalcompaniesandbranch

officesofforeignbanksarerequiredtopaytaxontheirnetprofit.

8.1.3 Property Tax15

IntheUAE,taxispayablebyresidentialandcommercialten-

antsaccordingtotheannualrentofaresidentialpropertyat

therateof5percentandforacommercialpropertyattherate

of10percent.

Abu Dhabi

| ApropertytaxischargedinAbuDhabitoobtainandrenew

business licences. In general, taxes are assessed at around

510 percent of the applicants annual office rental and 5

percentoftheannualrentaloftheresidenceofthemanager

whosenameappearsonthelicence.

15Source:Al-Tamimi-Document-TaxationLawintheUAE


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Dubai

| In Dubai, all residential properties aresubject to an annual

propertytaxpayabletotheDubaiMunicipality.

| Theamountoftaxpayabledependsupon theemployment

statusofthetenant.Allprofessional,managerialandother

senioremployeesincommercial,professionalandindustrial

sectorsarechargedattherateof5percentoftheannualrent

oftheirproperty,whereasinthebankingsector,thepercent-ageis15percentoftheannualrentoftheirproperty.

| Itisthetenantsobligationtopaythepropertytax.TheDubai

Municipalityoftencollectthetaxfromthetenantsemployer

through the Department of Economic Development at the

time of issuing or at the annual renewal of the employers

tradelicence.

| TheDubaiDepartmentofEconomicDevelopmentcollectthe

taxwithreferencetoalisttobesubmittedbycompaniesap-

plyingfortheissueorrenewaloftheirtradelicences.Thelist

containsthenamesandjobtitlesofallofthecompanysem-

ployeesandtheamountoftheirrent.| Junior employeesarechargedat aflatrateof EUR 60(AED

300).AflatrateofEUR199.9(AED1000)ispayableintheab-

senceofaleaseagreement.

| TheDubaigovernmenthasintroducednewtaxruleswherein

a5-percenttaxwillbechargedonresidentialunits(includ-ingvacantfreeholdproperties)basedontherealestateindex

RERAand10percenttaxwillbechargedoncommercialunits

inadditionto1percenttransferfeebasedonsellingprice.


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Sharjah

| In Sharjah, all leased residential properties are subject to

anannualpropertytaxpayabletotheSharjahMunicipality,

chargedat2percentoftheannualrentshowninthetenancy

agreement,subjecttoaminimumof)EUR60(AED300)and

payablewhenthetenantnotarisestheagreement.

8.2 Double Tax Treaty between the UAE and the Luxembourg

TheUAEhas58double-taxationavoidanceagreementsand32

bilateralinvestmenttreatiesinplace.ApplicablesinceNovember

2005,themaintaxlawregardingdouble-taxationisspecifiedin

theagreementbetweentheUAEandtheGrandDuchyofLux-

embourgtoavoiddouble-taxationandtoboostbilateraltrade

andinvestmentbetweenthetwostates.Thisagreementprovidesequaltaxationtreatmenttoinvestors

intheUAEandLuxembourg.Moreover,itprovidesanenviron-

mentthatstimulatesforeigndirectinvestment,encourages

businessventures,andenhancescooperationandtheeconomic

growthlevelsofbothcountries.Further,itpavesthewayfor

newcommonprojectsthatbenefittheeconomiesofthetwo

countries.Theagreementalsoencouragestourismandbilateral

tradebetweenthetwocountries,especiallyaftertheimplemen-

tationofincomeandprofittaxexemptionregulationsgranted

tonationalaircargocompanies.

8.3 Repatriation of Prof its

Therearenoexchangecontrolsorrestrictionsonrepatriation

ofprofitsintheUAE;100percentrepatriationofcapitaland

profitsisallowed


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9 AppendixAppendix I: Useful Links and Addresses

TYPEOFORGANISATION ADDRESS

UAEMINISTRIES,AGENCIESANDSERVICES

Board of Economic

Development in Dubai

Dubai Cargo village

room3035,3rdfloorP.O.Box211024Dubai

UnitedArabEmirates

Mr. Albert PANSIN

Executive Director

Fax:+97142833031

E-mail:[email protected]:[email protected]

Embassy of the United

Arab Emirates

73avenueF.D.RooseveltB-1050Bruxelles

Tel:+3226406000Fax:+3226462473

E-mail:[email protected]

UAE Government NotApplicable

E-mail:[email protected]/home.htm

Ministry of Finance

and Industry

P.O.Box433AbuDhabiOfficeTel:

+97126726000Fax:+97126663088

P.O.Box1565DubaiOfficeTel: +97143939000Fax:+97143939738

E-mail:

[email protected]/mofi/default.htm


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Ministry of Foreign Affairs P.O.Box1AbuDhabiOfficeTel:+97124444488Fax:+97124449100

P.O.Box3785DubaiOfficeTel:+97142221144Fax:+97142280979

E-mail:[email protected]://mofa.gov.ae/

Ministry of Labour Abu Dhabi Off ice

Tel:+97126671222Fax:+97126665889

Dubai Off ice

Tel:+97142691333Fax:+97142695011


http://www.mol.gov.ae/

Ministry of the Economy Planning Sector

P.O.Box904AbuDhabiOfficeTel:+97126271100Fax:+97126261344

Economy SectorP.O.Box901AbuDhabiOfficeTel:+97126265000Fax:+97126260000



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Immigration Department Abu Dhabi Off ice

SaeedbinTahnoonSt.AbuDhabiTel:+97124462244Al AinAditabaRoad,nearDubaiIslamicBank,oppositeCarrefoursupermarket.

Tel:+97137625555Dubai Off ice

DepartmentofNaturalizationandResidency,TradeCentreRoad,nearBurDubaiPoliceStationTel:+97143980000

Emirates Organizationfor Properties

P.O.Box407AbuDhabiOfficeTel:+97126322200Fax:+97126322260

E-mail:[email protected]://www.akaryah.org.ae

State Audit Institution P.O.Box3320AbuDhabiOfficeTel:+97126448800Fax:+97126448688

P.O.Box5513DubaiOfficeTel:+97142286000Fax:+97142286111

E-mail:[email protected]@muhasaba.gov.aewww.saiuae.gov.ae/


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BELGIANANDLUXEMBOURGASSOCIATIONSINTHEUAE

The Belgian and

Luxembourg Association

in the Emirates

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

UAEMINISTERS,AGENCIESANDSERVICES

Trade and Investment

Office - Abu Dhabi

Luxembourg Embassy

SilverWaveTower-Office1001MeenaRoadP.O.BoxNo44909AbuDhabi-UnitedArabEmirates

Mr Marc Scheer

ExecutiveDirectorE-mail:[email protected]

Tel:+97124912446Fax: +97124912289

www.investinluxembourg.ae

Trade and Investment

Office - Dubai

P.O.Box211024DubaiUnitedArabEmirates

Mr. Albert Pansin

ExecutiveDirector

Email: [email protected] [email protected]: 00971506249030


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Appendix II: Embassies

EMBASSY ADDRESS

UAE Embassy in Belgium UAE Embassy

73Av.F.Roosevelt1050Bruxelles,BelgiumTel:+3226406000Fax:+3226462473


Belgium Embassy

in the UAE

Al Masaood Tower(6thfloor)HamdanStreetAbuDhabiTel:+97126319449Fax:+97126319353


http://www.diplomatie.be/abudhabi/


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10 Disclaimer

TheGovernmentoftheGrandDuchyofLuxembourgdeclinesall

responsibilityregardingtheuseofinformationfeaturedinthis

document.Thecontentsareprovidedforinformationpurposes

only.Theycontaininformationwhichisnotnecessarilycomplete,

exhaustive,preciseoruptodate.Intheeventofdiscrepanciesbe-

tweenthetextsofthispublicationandtheoriginaldocuments,

theoriginaldocumentsasofciallypublishedshallapply.ThispublicationmayrefertoexternalsitesoverwhichtheGovern-

mentoftheGrandDuchyofLuxembourghasnocontrolandfor

whichitdeclinesallresponsibility.


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