Investors Guide to. Abu Dhabi. Ease of Doing Business.

Transcription

1 Investors Guide to Abu Dhabi Ease of Doing Business

2 Investors Guide to Abu Dhabi I.G.T.A.D / 2R 2nd Run Publisher: Abu Dhabi Chamber of Commerce & Industry (ADCCI) Copyright Abu Dhabi Chamber غرفة تجارة وصناعة أبوظبي ص.ب 662 أبوظبي اإلمارات العربية المتحدة Abu Dhabi Chamber of Commerce & Industry PO Box: 662, Abu Dhabi U.A.E : : : contact.us@adcci.gov.ae :

3 TABLE OF CONTENTS Introduction...9 Disclaimer Why Invest in Abu Dhabi? Abu Dhabi Economy Abu Dhabi Economic Vision Abu Dhabi Major Projects Infrastructure Economic Diversification Real Estate & Hospitality UAE Commercial Companies Law The Federal Companies Law The Commercial Agencies Law The Federal Industry Law The Government Tender Law Types of Commercial Companies General Terms & Conditions General Partnership Abu Dhabi Public Joint Stock Company Abu Dhabi Limited Liability Company (LLC) Abu Dhabi Simple Limited Partnership Abu Dhabi Joint Partnership (Venture) Abu Dhabi Private Joint-Stock Company Abu Dhabi Partnership Limited with Shares Abu Dhabi UAE Labor Law Company Registration Procedures Company Licensing Procedures & Required Documents Setting up an LLC in Abu Dhabi Emirate Setting up a foreign Branch in Abu Dhabi Emirate Activities that Require Prior Approvals Banking and Finance Commercial Banks [locally incorporated and branches of foreign banks] Restricted-Licence Banks Investment Banks Finance Companies Financial Investment Companies Banking, Financial, Investment Consultation Activities Money Exchanges Financial and Monetary Intermediaries [Financial/ Stock Brokers] Representative Offices of Foreign Financial Institutions Banks located in Abu Dhabi Emirate Foreign Trade Procedures Imports Clearance Procedures Importers Tariff: Temporary Imports Import-Required Documents Import Procedures: Exports Exports Required Documents Exports Procedures Re-Exporting Re-Export Required Documents Re-Export Procedures Abu Dhabi Specialized Free Zones SkyCity - Abu Dhabi Airport Free Zone (ADAFZ) Masdar City Twofour Khalifa Industrial Zone Abu Dhabi Abu Dhabi Chamber of Commerce & Industry Useful Contacts... 58

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5 H.H. Sheikh Khalifa bin Zayed Al Nahyan President of the United Arab Emirates and Ruler of Abu Dhabi Emirate

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7 H.H. General Sheikh Mohammed bin Zayed Al Nahyan Crown Prince of Abu Dhabi and Deputy Supreme Commander of the United Arab Emirates Armed Forces

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9 Introduction Foreign investment is a major contributor to Abu Dhabi Emirate economic growth and development. This guide has been especially prepared for investors (companies and individuals) interested in exploring new investment opportunities in Abu Dhabi Emirate. This guide will provide investors with information on Abu Dhabi Emirate economy, a brief on Abu Dhabi 2030 Economic Vision, the UAE commercial Law, company registration procedures, banking and finance, an introduction to specialized economic free zones, foreign trade procedures and an introduction to the Abu Dhabi Chamber of Commerce & Industry (ADCCI) services and the major role it plays in the private and public sectors. The Abu Dhabi Chamber welcomes all potential investors and is ready to provide them with guidance, market intelligence and legal consultation in order to assist them In recognizing the business environment, business opportunities and requirement for establishing their businesses. DISCLAIMER This guide is prepared by the ADCCI for the purpose of informing investors interested in investing in Abu Dhabi Emirate. All the information given in this guide is subject to change from time to time, so the reader should double-check the information that is needed with ADCCI and other Abu Dhabi governments. It should be noted that ADCCI is always ready to provide further information or assistance to its investors without any obligation at the following contact addresses: Abu Dhabi Chamber of Commerce & Industry United Arab Emirates, Abu Dhabi Emirate Tel. No.: Fax No.: P.O. Box contact.us@adcci.gov.ae Website:

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11 Abu Dhabi Chamber 11 Western Region Al Gharbia

12 12 Abu Dhabi Chamber 1.0 Why Invest In Abu Dhabi? The Abu Dhabi Emirate is the capital city of the seven emirates that compose the United Arab Emirates (UAE) federation. The Emirate of Abu Dhabi is made up of three regions; namely, Abu Dhabi, Al Ain, and Al Gharbia (Western Region). The total area of the emirate is 59,402 square kilometers, which represents approximately 87% of the total area of the UAE.

13 Abu Dhabi Chamber 13 The Emirate of Abu Dhabi is the wealthiest emirate as it holds 90% of the UAE s oil production, 10% of the world s oil reserves, and 5% of the global reserves of natural gas. Being one of the fastest-developing business and industrial centers in the Arabian Gulf and the Middle East regions, Abu Dhabi has been recognized over the years as a key foreign investment attraction for its stable and wealthy economy besides several reasons which are summarized as follows: More than US$136 billion worth of of future project investments Investments by by Abu Dhabi Government, Political, Economic, and Social Stability, Economic Diversification, State-of-the-art the Art Infrastructure, Multimodal Transportation System, Specialized Economic Zones, Free Zones, Low Labor Cost, Member of of WTO & GCC, Zero-tax Tax holiday on on Profits, Financial Services, Gateway for to Asia, Africa & Europe, and Foreign Ownership.

14 14 Abu Dhabi Chamber 1.1 Abu Dhabi Economy In 2013, The value of GDP in current prices was AED billion compared with AED billion in 2011, representing a growth rate of 4.8% over the period. The increase in GDP was driven by a rise in production by all economic activities, which confirms the strength and resilience of the Emirate s economy. Accordingly, the annual GDP per capita amounted to AED thousand in 2013, compared with AED thousand in 2012; causing a short decline in growth by 0.3%. The Gross fixed capital formation increased by 14.2% to AED 194 billion in 2013 compared with AED 170 billion in The oil activities amounted to AED 523 billion in This was the highest level following the previous peak in 2012 of AED 518 billion. Mainly due to the stability of oil prices and the strong increase in non-oil GDP, the contribution of oil activities to GDP decreased from 58% in 2011 to 55% in 2013 as the non-oil GDP continue to develop. As for the non-oil foreign trade; Abu Dhabi Emirates witnessed a growth rate of 8% in export/re-export sector, and a decrease of 16% in the imports over the period of

15 Abu Dhabi Chamber 15 Abu Dhabi Economic Variable Estimates ( ) Economic Activity * GDP at current prices (Million AED) 846, , ,239 GDP at current prices annual growth rates (%) GDP Per Capita at current prices (000 AED) GDP Per Capita at current prices (%) GDP at 2007 constant prices (Million AED) GDP at 2007 constant prices (%) Oil Share in GDP at current prices 484, , ,899 Oil Share in GDP at current prices (%) Gross Fixed Capital Formation at current prices (Million AED) 164, , ,900 Gross Fixed Capital Formation at current prices (%) Non-Oil Exports (Million AED) 11,478 15,412 15,996 Non-Oil Re-Exports (Million AED) 11,567 14,745 16,448 Non-Oil Imports (Million AED) 116, , ,255 Annual Inflation Rate (%) Source: : Statistics Centre - Abu Dhabi (SCAD), General Administration Customs Abu Dhabi Dept. of Finance *Preliminary estimates Abu Dhabi Emirate economy is based primarily upon its oil and gas production. While the petrochemical sector has dominated economic development, a growing diversification in the emirate s economy has been evident in recent years as the Emirates drives for a more sustainable and diversified economy as illustrated in its Abu Dhabi Economic Vision 2030 to reduce the relatively high dependence on oil and gas production.

16 16 Abu Dhabi Chamber 1.2 Abu Dhabi Economic Vision 2030 Abu Dhabi Economic Vision 2030, has been developed by Abu Dhabi Government in order to deliver upon the vision of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, Ruler of Abu Dhabi Emirate, for the ongoing economic success of the Emirate. The expectation is the creation of a long-term roadmap for economic progress for the Emirate through the establishment of a common framework aligning all policies and plans and fully engaging the private sector in their implementation. The initiative builds upon the foundations set by the Abu Dhabi Policy Agenda 2007/2008 and produced by a taskforce joining stakeholders from the public and private sectors. This will be achieved by broadening the sectors of economic activity, expanding the enterprise base, and growing external markets. Furthermore, Abu Dhabi will also continuously enhance competitiveness and improve productivity. Delivering on such commitments will be translated, according to base case growth scenarios, into entrenched sustainable development and significant levels of economic diversification by Moreover, Abu Dhabi Government has committed itself to direct public policy, by focusing on four key priorities: Key Priorities Economic development through encouraging investment and entrepreneurial activity and legislative reform. Social and human resources development, ensuring high quality education and health services. Infrastructure development and environmental sustainability ensuring a professionally designed and well-managed urban environment in towns and cities. Optimization of government operations by improving the efficiency and accountability of government departments.

17 Abu Dhabi Chamber 17 The Abu Dhabi Economic Vision 2030 aims to achieve effective economic transformation of the emirate s economic base and bring about global integration and enduring benefits to all. The Abu Dhabi Emirate has a core commitment to build a sustainable, diversified and high value-added economy by From Abu Dhabi Policy and Economic Vision, the below sectors are expected to form the emirate s engines of economic growth and diversification: Financial Services and Insurance (Capital Markets Focus) 27% Basic Industries & Manufacturing 20% Transportation & Logistics 18% Petrochemicals & Plastic Products 8% Tourism & Events 8% Media 5% Information and Communications Technology 5% Oil & Gas Services 4% Renewable Energy 5% Civil Aerospace 2% The complete Abu Dhabi Economic Vision 2030 and Abu Dhabi Policy Agenda, as well as Al Ain Plan, and Al Gharbia Plan can be downloaded from

18 18 Abu Dhabi Chamber 1.3 Abu Dhabi Major Projects With the involvement of the private sector, the Abu Dhabi Government has recently completed several major projects, while other key projects are yet to be executed, covering different economic sectors. The Abu Dhabi Economic Vision aims to achieve economic transformation of Abu Dhabi Emirate s economic base and bring about global integration and enduring benefits to all. It draws up the framework and contents for the process of the development envisaged for the next two decades, and thus represents a roadmap for the economic development of the emirate. Yet the ambitions of Abu Dhabi go far beyond its size and traditional business role as it is venturing into the industrial, tourism, and information technology fields Infrastructure Khalifa Port Relocation and redevelopment of the port facilities to Al Taweelah and reclaimed offshore island located 4.6km from shore with five development phases up to The initial phase consists of 3.2km berth length with a 16-metre draft and a handling capacity of 2 million TEU s (Twenty foot Equivalent Unit containers) and 8 million tons of general cargo. There will also be a dedicated bulk terminal for EMAL (Emirates Aluminum). The final phase in 2030 will feature a 15-square km port island with a capacity of 15-million TEU s and 35 million tons of general cargo with a 26-km berth length. More information can be found at: Khalifa Port Industrial Zone (KIZAD) The port is backed by one of the largest integrated industrial zones in the world with some 400 square km of land allocated to development long-term. Basic, midstream and downstream manufactures in industrial clusters such as those of aluminum, petrochemicals, glass, and paper, which will be among its features. The industrial zone will start to be operational from 2013 and is a milestone of the Abu Dhabi Economic Vision 2030, playing a major role in the emirate s industrial and economic diversification. More information can be found at: Abu Dhabi Airport Expansion Plan The new expansion of Abu Dhabi Airports Company (ADAC) will consist of a new 4,100-meter runway and control tower, over 50 gates and 121 check-in desks and self-check-in facilities. It includes a 630,000-sq. meter development, a central space size of three football pitches and 25,000 sq. meter of retail and F&B offering. Opening capacity of 20m p.p.a will be expanding to 40m p.p.a More information can be found at

19 Abu Dhabi Chamber Economic Diversification Masdar City Masdar City is an emerging global clean-technology cluster located in what aims to be one of the world s most sustainable urban developments powered by renewable energy. This multi-billion dollar free zone project is located about 17km from downtown Abu Dhabi will eventually be home to companies, researchers, and academics from across the globe, creating and international hub for companies and organizations focused on renewable energy and clean technologies. More information can be found at Advanced Technology Investment Company (ATIC) ATIC is building a multibillion-dollar semiconductor fabrication plant and advanced technology ecosystem in Abu Dhabi as part of the emirate s economic diversification and to tap the rising global demand for semiconductors. ATIC is building a skilled talent base in a capital and knowledge-intensive industry in alignment with Abu Dhabi Economic Vision More information can be found at Aerospace Cluster Mubadala Development Company (MUBADALA) is creating an integrated, knowledge-driven aerospace industry in Abu Dhabi that will establish the emirate as a global aerospace hub in the very near future; a sector that promises to deliver unprecedented levels of growth over the next two decades. This industry is being driven by Mubadala Aerospace s plan s to become a full-scale global MRO service provider to the airline industry, a primary risk-sharing partner to Original Equipment Manufacturers (OEM s), a high tech end-to-end manufacturing base, and to develop an integrated pilot training academy that will sustain the growing demand for pilots worldwide. More information can be found at

20 20 Abu Dhabi Chamber Emirates Aluminium (EMAL) A 50/50 joint venture between MUBADALA and Dubai Aluminum Company (DUBAL). EMAL will be built in two phases, on a 6sq km-site in Khalifa Port Industrial Zone in Al Taweelah located between Abu Dhabi and Dubai. Phase 1 of the project commenced production in 2009, with production capacity of 750,000 tons per annum. Upon completion of phase 2 in 2014, EMAL s production capacity will double to 1.5 million tons of aluminum per annum, making it one of the largest, most productive and most efficient aluminum smelters in the world. More information can be found at Abu Dhabi Polymers Park The First industry specific cluster in Abu Dhabi. A 4.2km²development located in the Industrial City of Abu Dhabi phase II (ICAD II). The project will host more than 50 factories as well as relevant industry services with multibilliondollar investment. Products will serve the local and regional demand for construction goods as well as industrial and consumer good packaging. More information can be found at ADBIC Petrochemicals project Abu Dhabi Basic Industries Company (ADBIC) Petrochemicals plans to reinforce the existing petrochemical industry in the UAE by identifying and investing in grassroots projects that complement those of existing Abu Dhabi petrochemical entities, including Borouge and Abu Dhabi National Chemicals Company PJSC (ChemaWEyaat). ADBIC approach is that a joint venture technology partnering in specific petrochemical products. Using leading technologies, in cooperation with industry leaders, ensures Abu Dhabi s access to leading capital cost and operating-cost structures, combining this with the emirate s strategic location and feedstock advantages. More information can be found at: Al Gharbia Tourism Apart from Liwa and Sir Bani Yas, there are many other natural scenic spots and islands found in the naturally beautiful Al Gharbia (the Western Region of Abu Dhabi Emirate) that are growing in popularity as part of eco-tourism. The Western Region Development Council (WRDC) has been promoting Al Gharbia since Al Gharbia is one of the largest deserts in the world, a wild, natural landscape ready and waiting to be discovered. More information can be found at

21 Abu Dhabi Chamber Real Estate & Hospitality Capital District The biggest single development project is the new capital District. It is the symbol of an inspired vision for governance and community development. At its heart will be a federal precinct, which will serve as the national seat of government for the United Arab Emirates and will host embassies as well as residential neighborhoods designed to accommodate the various needs and desires of Abu Dhabi diverse population. On 4,900 hectares, the plan propose a high degree of land use mix diversity to accommodate up to 370,000 residents connected with three levels of transit services. More information can be found at Al Maryah Island This is the heart of Abu Dhabi s new central business district (CBD) in Abu Dhabi Vision Also classified as an investment zone, the 105-hectare island will have a diverse mix attributes vital in the world s leading CBDs including world-class features such as: Premium grade commercial real estate, five-star hotels, unique residential neighborhoods and a variety of retail community facilities, public amenities, pedestrian friendly public realm, parks and open spaces, extensive transport network including 13 new bridges and integrated public transit system with both light rail and metro connecting to surrounding areas of Abu Dhabi. More information can be found at

22 22 Abu Dhabi Chamber Saadiyat Island A flagship project developed by Tourism Development & Investment Company (TDIC) into a world-class leisure, residential, business, cultural and tourism hub. Saadiyat Island will include seven unique districts offering a distinctive experience to visitors and residents. Iconic museums, including Louvre Abu Dhabi, Guggenheim Abu Dhabi and Zayed National Museum, will be the main highlights built on the island s cultural district; while the Marina District will be a major international business hub. Saadiyat Island will also include a number of hotels, resorts, two marinas, strong residential components of villas and apartments and two golf courses. Saadiyat will be home to 160,00 residents. More information can be found at: Yas Island Home of Ferrari World and Formula One race track. Yas Island is a major development by Aldar properties, occupying a total land area of 2,500 hectares, of which 1,700 hectares will be claimed for development. Major attractions on the island will include: world-class motor sports racetrack, signature hotels, Ferrari World Abu Dhabi theme park, water park, Abu Dhabi destination retail development of a 300,000-sqm retail area, links, parkland, golf courses, Lagoon hotels, marinas, apartments, villas and numerous food and beverage outlets that will create a unique international tourist destination. More info can be found at: or Al Reem Island The development sits on a natural island just 600 meters of the coast of Abu Dhabi main island. Spread across 6.5 million square meters, the island is being built by three major developers: Sorouh, Reem Investments and Tamouh. This mega development is one of the largest under construction in Abu Dhabi and will include a business district, a commercial district and a residential district, transforming the island into a city within a city. With its incomparable facilities and features, it s not surprising that some of the world s biggest names have chosen Reem Island as their home. The Paris-Sorbonne University and The Four Seasons have already begun construction of their premises. The island is expected to have a population of 200,000. More info can be found at:

23 Abu Dhabi Chamber UAE Commercial Companies Law Investors interested in practising any business activity in Abu Dhabi Emirate and the UAE in general, must be aware of the regulation of establishment and business in the UAE which is shared at the federal and emirate levels. The four major laws affecting foreign investment in the UAE: The Federal Companies Law, The Commercial Agencies Law, The Federal Industry Law, and The Government Tenders Law. These laws, especially the Federal Companies Law, are being revised to attract businesses and FDI to the country.

24 24 Abu Dhabi Chamber 2.1 The Federal Companies Law The UAE Federal Law No. (8) of 1984 Concerning Commercial Companies (CCL) is a federal statue applicable to all seven emirates that constitute the UAE. Federal Law No. (8) of 1984 or the CCL in the UAE, was issued by the late Sheikh Zayed bin Sultan Al Nahyan and published in the Official Gazette No. 137 of April The major amendments to this CCL include Federal Law No. (1) of 1984, Federal Law No. (13) of 1988, Federal Law No. (15) of 1998 and Federal Law No. (4) of One of the latest and important amendments to this law was issued on August 10, 2009 by HH Sheikh Khalifa bin Zayed Al Nahyan, UAE President, abolishing the minimum capital requirement of AED 150,000 for setting up a limited liability company (LLC) in the UAE, which was widely seen as a significant step for the small and medium enterprise sector. The provisions of this law apply to commercial establishments that are either incorporated in the UAE or have their activities based in the country. The law stipulates that the nationality of every company established in the country must be that of the UAE. Companies established in the free zones which are governed by special rules and regulations related to special economic zones are exempt from the provisions of this law. With the exception of acquiring the nationality of the country, the law does not apply to companies that operate in drilling, excavation, marketing and transport of oil and companies that produce, transport and market electricity, gas and desalinated water, as well as companies which are excluded by a resolution. The law defines a company as a contract under which two or more individuals commit themselves to contributing to a business venture aimed at making profits by providing their share of money or efforts or run under a profit / loss sharing basis.

25 Abu Dhabi Chamber 25 Articles of the Law Some of the main articles of the Commercial Companies Law are detailed below. Article (4) A business venture, as per the Article (4) of this law, includes every commercial, financial, industrial, agricultural, real estate or other types of economic activities. Article (5) The company established in the country should take one of the following forms: General Partnership Company, Simple Limited Partnership Company, Partnership Limited with Shares Company, Joint Participation Company, Private Joint Stock Company, Limited Liability Company and Public Joint Stock Company. Article (8) With the exception of Partnership Limited with Shares, the company incorporation agreement or any of its amendment should be written in Arabic and authenticated by a public notary, otherwise the contract or amendment will be null and void. Article (14) The partner s share can be a certain amount of money (cash share) or a property (corporeal share). Except for cases derived from the provisions of this law, the partner s share can be his work and efforts, but should not be in any case the reputation or authority he holds. Article (17) If it is agreed in the Memorandum of Association to exclude a partner from profits or losses, the memorandum will be null and void. However, the partner who contributes only with his efforts can be relieved from the losses. Article (19) If the Memorandum of Association does not specify a certain percentage of profit or lose for a partner, his share thereof will be proportional to his share of capital. If the Memorandum only specifies the share of profit for a partner, his share in losses will be equivalent to his share in profits, and vice versa. Other Provisions The law also explains the definitions of various forms of companies and issues relating to their ownership, capital requirements, management of company assets, distribution of profits and losses, responsibilities and obligations of company manager, holding ordinary or extraordinary general meetings, role and responsibilities of auditors and supervisory board and arbitration, among others. Opening a foreign company branch in the country, company re-organization and merger and company termination and dissolution are other issues covered by the UAE commercial companies law. Articles 322, 323 and 324 deal with inspection of companies and penalties for violating the law.

26 26 Abu Dhabi Chamber 2.2 The Commercial Agencies Law The Commercial Agencies Law requires that foreign principals distribute their products in the UAE only through exclusive commercial agents that are either UAE nationals or companies wholly owned by UAE nationals. (Now, this has also been revised.) The foreign principal can appoint one agent for the entire UAE or for a particular emirate or group of emirates. The law provides that an agent may be terminated only by mutual agreement of the foreign principal and the local agent, notwithstanding the expiration of the term of the agency agreement. 2.3 The Federal Industry Law The Federal Industry Law stipulates that industrial project must have a 51 percent UAE national s ownership. The law also requires that projects either be managed by a UAE national or have a board of directors with a majority of UAE nationals. Exemptions from the law are provided for projects related to extraction and refining of oil, natural gas, and other raw materials. Additionally, projects with a small capital investment or special projects governed by special laws or agreements are exempt from the Federal Industry Law.

27 Abu Dhabi Chamber The Government Tender Law The Government Tender Law stipulates that a supplier or contractor, with respect to federal projects, must either be a UAE national or a company in which UAE nationals own at least 51 percent of the share capital or foreign entities represented by a UAE distributor or agent. Foreign companies wishing to bid for a federal project must, therefore, enter into a joint venture or agency arrangement with a UAE national or company. Federal tenders must be accompanied by a bid bond in the form of an unconditional bank bond guarantee for five percent of the value of the bid. UAE Federal Government s entities often tender internationally. A complete copy of the above UAE Commercial Laws can be found at: Abu Dhabi Chamber Department of Economic Development Ministry of Economy

28 28 Abu Dhabi Chamber 3.0 Type of Commercial Companies Investors interested in commencing a professional/commercial business or industrial activity in Abu Dhabi Emirate; may do so through establishing a local or foreign proprietorship, or may join other natural individuals or legal entities willing to combine efforts, expertise and finance so as to initiate a joint company. In this case, a type of companies that suits their business under the Federal Law No. (8) of 1984 should be chosen. Article (5) of the said law provided for seven different types of companies as enshrined in the following succession:- It is worth mentioning that any company having any type other than those specified in the said article of Federal Law No. (8) of 1984 would be viewed as null and void, a case in which the signatories to an agreement on such nullified type of company would be jointly and severally liable for any obligation emanating thereby. Furthermore, Limited Liability Companies (LLC) are more commonly used by foreign investors. Hence, this section has come to consist of the general terms and conditions required to be fulfilled by any company incorporated in the United Arab Emirates/Emirate of Abu Dhabi; as well as of the characteristics and provisions relating to each type per se. Thus, it may be helpful for any businessman in terms of judging which type would be more appropriate for his/her company or which one is more eligible to realize his anticipated objectives.

29 Abu Dhabi Chamber General Terms & Conditions 1) Any company incorporated in the Emirate of Abu Dhabi should hold the UAE nationality and have its domicile in it. Of course, this should not necessarily entail enjoying the same rights and privileges entitled to nationals or confined to them. 2) Any company incorporated in the Emirate of Abu Dhabi should have one or more national partners having a share or shares of not less than 51%. This is, of course, not applicable in case of a General Partnership which should have its capital purely and entirely national. 3) All partners in any company incorporated in the Emirate of Abu Dhabi should sign a pertinent memorandum written in Arabic language and duly authenticated by the Notary Public at the Court of Law. However, testimony to prove a matter in variance or in excess of the stipulations in the company s memorandum should not be acceptable in case of any dispute arising between the partners. 4) Any company incorporated in the Emirate of Abu Dhabi should have its memorandum and any amendment thereto duly registered in the Commercial Register and the Companies Section at the Ministry of Economy. Except for Joint Participation, companies should also obtain the Abu Dhabi Chamber of Commerce & Industry Membership Certificate and the Department of Economic Development License. 5) Partners may not agree in the company s memorandum on depriving any of them of receiving profit nor on exempting any partner from suffering loss, otherwise the memorandum is to be considered null and void by the force of law. 6) Any company incorporated in the Emirate of Abu Dhabi should be duly licensed by the Department of Economic Development. The license should be annually renewed. 7) The memorandum of any company incorporated in the Emirate of Abu Dhabi should contain the following particulars: Each partner s name; surname; title; nationality- date of birth and domicile; the company s name, purpose, head office, capital, the share of each partner, lifetime, the commencement and end of fiscal year, the terms of profit/loss distribution, dispute-resolving party, terms of notification, terms of share assignment and value estimation, terms of joining or leaving by a partner(s), terms of liquidation, partners liabilities and any other information or stipulations agreed among partners who show willingness to include them in the memorandum, providing that such stipulations should be in conformity with the enacted laws.

30 30 Abu Dhabi Chamber 3.2 General Partnership Abu Dhabi 1) Article (23) of Federal Law No. (8) of 1984 Concerning Commercial Companies defined the General Partnership as being a company formed by two or more partners who are jointly liable to the extent of all their assets for the company liabilities. It is understood from the above provision that the number of partners should not be less than two, but may be more. This is in addition to a main characteristic which makes all partners jointly liable for the company s debts. This means that the company s liabilities should be borne by all partners to the extent of all their assets. Such liability is; therefore, not limited to the incash or in-kind shares of the partners in the capital. This is, of course, dissimilar to the partners liability in a limited liability company or to that of a silent (limited) partner in the simple limited partnership or to that of a shareholder in a joint-stock company. However, it is worth mentioning here that in a general partnership, execution may not be enforced on the assets of a partner unless upon acquiring an execution decree against the company claiming to discharge a debt in case of failure to do so. In this case only, the execution may be enforced on a partner s own assets. 2) Article (25) of the said law also provided that all partners in a general partnership must be holders of the UAE nationality, contrary to the case of all other types of companies in which it is stipulated that any company incorporated in the UAE should have one or more national partner whose share or shares must not be less than 51% of the capital. But in this single case of a general partnership, the company ownership is confined to UAE nationals only. 3) In a general partnership, as in any other type of companies, the partner s intention should be concentrated on working together in order to realize profit. They also must accept to bear loss, if any. But failure to do so means that the concept of partnership will be prejudiced and the company will be void. However, the basic pillars for the company must be available. These are the assets and capacity of partners in addition to the purpose and the required headquarters. 4) The name of a general partnership should consist of the names of all partners, or it may only be confined to the name of one or more of the partners with an addition indicating the existence of a company. Such indication may be through adding certain words like (...& Brothers), (...& Partners or Company) and (...& Sons). However, a general partnership may have a special trade name. But, in case the name of an individual non - partner is mentioned in the company name with his knowledge and without objection from his side, then he will be jointly liable for the company s liabilities along with other registered partners. It is a practice in the Emirate of Abu Dhabi to get a trade name approval and the trade license from the Abu Dhabi Department of Economic Development (DED) before having the company s memorandum duly registered with the Companies Section at the Ministry of Economy.

31 Abu Dhabi Chamber 31 It is also understood from the above that it is prohibited to use the name of a non- partner in the company s name; if it so happens without the knowledge of such individual, he may present an objection. Because without such objection; if it is proved that his name was used with his knowledge, and then he will be as liable for the company s debts as other duly registered partners and jointly with them. 5) It is stipulated by the law that the memorandum of a general partnership should include: The name, surname and title (if any) of each partner, in addition to his/her nationality and date of birth; The company s name, purpose of incorporation, headquarters and branches (if any), capital and the share undertaken to be presented by each partner whether it is in-cash or in-kind or merely a right; the estimated value of shares, pertinent terms of presentation and date of maturity, dates of incorporation and termination and the terms of management, with a special reference to the names of authorized persons who may sign on behalf of the company and up to the extent of their powers; It should also include the commencement and end of the company s fiscal year and the percentages of profit/loss distribution among partners; In addition to all these major pieces of information required by the law, the memorandum of a general partnership should also include other information agreed upon by all partners such as the formation of the board of directors, terms of share assignment, partners liabilities, along with terms of competition if allowed or not. Decision terms of issuance, reasons of company dissolution, terms of liquidation, dispute-settlement agency and any other statements agreed upon by the partners, provided that they should not be in contravention to the laws. 6) The memorandum of a general partnership should not provide for an agreement on depriving a partner of profit or exempting him from suffering losses, otherwise the memorandum will be considered void. However, it may be agreed to exempt the partner who contributes nothing but his work from bearing a loss. This is because the capital of a general partnership may be paid in cash; in kind or merely by doing some work, although the registered capital should be only formed from in-cash and in-kind shares, and this is the reason why such a partner with a work share only may be exempted from suffering losses, as he, in such a case, may lose his time and effort without getting a regular salary against his work, which is viewed as his contribution to the company s capital. 7) Partners should agree on the percentage of profit and loss in the company memorandum, but may not agree on distribution of fictitious profits through over-exaggerating the estimate of the company s assets. 8) Each partner in a general partnership will be deemed merchant. The bankruptcy of the company will lead to the bankruptcy of all partners. Accordingly, this would entail that each partner in the company should be fully capacitated, whereas incapacitated individuals may not be partners in a general partnership. 9) The shares of partners in a general partnership may not be represented by negotiable instruments and may not be assigned to others unless upon approval by all partners. This restriction is reflecting the private feature of the company.

32 32 Abu Dhabi Chamber 10) The management of a general partnership may be the responsibility of one or more of the partners or a person who is not a partner. The competence of the manager(s) should be specified in his letter of appointment. In case the manager is a partner and so appointed in the company s memorandum, he may not be dismissed except by the unanimous vote of the partners, otherwise dismissal should result in dissolution of the company unless its continuation is so provided in the memorandum. However, a manager may not resign without appropriate justifications, otherwise he will be liable for indemnification. Appropriate justifications here are meant to be those deemed acceptable by all partners. In case of different opinions, the judge at the court of law is to take a rightful decision. The manager may be held responsible for any damage inflicted on the company or caused to the partners or others in case he acts in contravention to the provisions of the company s memorandum. 11) The law also provided that joining the company or withdrawal of partners; avoidance of the memorandum; dissolution or liquidation of the company should all be effected at the Commercial Register / Abu Dhabi Department of Economic Development (DED) and at the Company Section / Ministry of Economy. 12) The law did not fix a certain capital amount for a general partnership. 3.3 Public Joint Stock Company Abu Dhabi Article (64) of Federal law No. (8) of 1984 Concerning Commercial Companies defined a public joint stock company as that whose capital is divided into equal-value negotiable shares and in which a partner is only liable up to the extent of his share in the capital. Any joint-stock company should have a name derived from its purpose and showing the statement (PUBLIC JOINT-STOCK COMPANY). The capital of a joint-stock company should not be less than Dhs.10 million. Its memorandum and articles of association should also be identical with the form prepared by the Ministry of Economy, whereas the share value should not be less than one Dirham and not more than a 100 Dirhams. However, the company s share should be nominal and negotiable but not issued to holder. 3.4 Limited Liability Company (LLC) Abu Dhabi Article (218) of Federal law No. (8) Concerning Commercial Companies has defined the limited liability company as that in which the number of partners may not exceed fifty and should not be less than two. Each partner should only be liable up to the extent of his share in the capital, and partner s participation should not be represented by negotiable deeds. In case the number of partners is more than seven, a supervisory board should be formed of at least three partners to supervise the company s operation and management. Article (220) prohibited a limited liability company from practising certain activities such as insurance, banking and investment of funds for the account of others.

33 Abu Dhabi Chamber 33 Whereas Article (227) fixed the capital of a limited liability company to be not less than Dhs.150 thousand and formed of equal shares of a minimum value of one thousand Dirham s each. However, a share should not be divisible, whereas the in-cash and in-kind shares should be distributed among all partners; and the value of each share should be fully paid up at the time of incorporation. Profits or losses should also be equally divided among them unless it is otherwise provided in the company s memorandum. This means that the profits or losses may be distributed according to rates that differ from those of shares in the capital. A limited liability company should be represented by one or more managers to be selected from among the natural partners, whether from inside or outside the company, provided that they should not be more than five in number. In case the company s memorandum did not specify the manager s responsibilities, they may have the largest scope of powers. According to the provision of article (244) of the law, a limited liability company should have a general assembly formed of all partners. It may also be provided that the company may have a board of directors as well. A limited liability company should have its own trade name derived from its purpose, or formed of the name(s) of a partner(s), or any other innovated name. All partners should be committed to fulfill payment of the company s capital at the time of incorporation. This must be proved by a bank certificate, certifying that the company s capital has been fully paid up. Each of the partners should, however, be only liable up to the extent of his share in the capital. In case of loss and insufficient assets to fulfill the company s obligations, or if the partners were reluctant to cover such a loss, the company should be dissolved and liquidated. Upon liquidation, the accrued amount should be distributed to fulfill the company s debts. However, no partner should be liable for the company s obligations in all his own assets unless otherwise a partner has guaranteed to fulfill certain debts, loans or any other facilitating action on behalf of the company towards the bank or any other third party according to a personal guarantee instrument. A memorandum of a Limited Liability Company should include the following particulars: Name, nationality, profession and address of each partner; the company name, purpose, lifetime, headquarters, capital and terms of increase or decrease; terms of share assignment; management; name(s) and capacities of the manager(s); terms of the general assembly convocation; term in office; and terms of decision-taking; terms of memorandum amendment; partner entry and exit; fiscal year; notifications. The limited liability company form is considered as one of the most important forms of partnership for foreign partners, especially that it could be agreed to distribute the profits on proportions different from the consideration of experience and the efforts of the foreign partner.

34 34 Abu Dhabi Chamber 3.5 Simple Limited Partnership Abu Dhabi Article (47) of Federal Law No. (8) of 1984 defined a simple limited partnership as being a company formed by one or more general partners liable for the company liabilities up to the extent of all their assets, and one or more limited partners liable for the company liabilities up to the extent of their respective shares in the capital only. All general partners in a simple limited partnership should be holders of the UAE nationality. The name of a simple limited partnership should be formed of the names of one or more of the general partners with an additional indication to the existence of a company. In addition to the aforementioned, the company may have an innovated trade name. But, in all cases, the name of any limited partner should not be mentioned in the company s name. In case it so happens with the knowledge of such a limited partner, he should be viewed as a general partner vis-à-vis any other bona-fide third party. A simple limited partnership is considered a partnership company vis-à-vis the general partners. This means that they will be liable for its obligations or liabilities in all their assets, whereas the limited partners will be liable for such obligations within the limits of their share in the capital. However, in addition to the general particulars, the company memorandum should include the name, surname, nationality, date of birth and domicile of each limited partner in addition to his share in the capital and the paid-up amount thereof. A limited partner may not interfere in any management functions involving a third party even if he has been so authorized. However, he may contribute to internal managerial performances within the limits provided for in the company s memorandum. He may also have the right to request access to the profit/loss accounts and the balance sheet so as to make sure of accuracy. He may further have the right to review the company s books and documents, whether by himself or by virtue of a power of attorney made in favor of another partner or a third party, provided that this would not cause damage to the company or hindrance to its functions. On another scale, if a limited partner performed any management function prohibited by the law, even if this occurred upon an explicit authorization (power of attorney) or implicitly by general partners, they all will be jointly liable for any obligation arising from such performance. With regard to the company s decisions, the law provided that the decisions of a simple limited partnership should be taken by unanimous consensus of all general and limited partners unless the company s memorandum provides that majority of votes would be sufficient. Hence, the numerical majority would be adopted or counted upon unless it is otherwise provided. As for those decisions relating to the amendment of the company s memorandum, the law stipulated that such decisions should not be valid unless they are issued upon unanimous consensus of all general and limited partners.

35 Abu Dhabi Chamber Joint Partnership (Venture) Abu Dhabi Article (56) of Federal Law No. (8) of 1984 Concerning Commercial Companies defined a joint participation as being a company concluded between two or more partners on sharing the profits or losses incurred by a single or multiple business operations performed by one of the partners in his personal name. The law also provided that such a company should be confined to the relationship between partners and may not be effective vis-à-vis any third party. However, the company existence may be proved by all familiar means of evidence, whereas its pertinent contract should regulate the rights and obligations of each partner, the terms of profit/loss distribution and the capital amount. It is worth mentioning here that the contract of a joint participation is neither subject to registration in the commercial register nor to the necessity of being publicized. Yet no municipality license may be issued for such participation whose contract may otherwise be authenticated before the Notary Public. According to the law provision, a partner in a joint participation may not be viewed as merchant unless he runs business operations by himself. However, each partner in such a company should remain owner of his share unless it is otherwise agreed upon. The law, on the one hand, prohibited a joint participation from issuing stocks or negotiable bonds. The most important characteristics of this company is that a third party may not have the right of recourse except towards the partner whom he dealt with. If an action performed by the partners is conducive to letting a third party be informed of the company s existence, it may then be considered a real company in which the partners will be jointly liable towards third parties. On the other hand, the law provided that any partner in a joint participation should have the right to review the company s books and documents either by himself or through his attorney who may be another partner or a third party, providing that such review should not cause the company any damage or loss, and any agreement to the contrary should be considered null and void according to the said law. 3.7 Private Joint Stock Company Abu Dhabi Article (215) of Federal Law No. (8) of 1984 Concerning Commercial companies defined a private joint stock company as being that in which a number of not less than three (3) founding members may in company among themselves from a private joint-stock company whose shares may not be floated to public subscription, but they must fully subscribe to the total capital which may not be less than (Dhs. 2 million). Except for the provisions made on public subscription, all the provisions provided in the aforementioned law concerning public joint stock companies should be applicable to private joint-stock companies. However, the law permitted a joint-stock company to be converted to a public joint stock one in case the following terms and conditions are duly fulfilled: 1. The nominal value of issued shares should be fully paid-up; 2. A period of two fiscal years should have elapsed since the early inception of the company; 3. The company should have realized net profits distributable among shareholders with the average of not less than 10% of the capital during the said two years elapsed before the date of requesting conversion; 4. The extraordinary general assembly should have taken a decision on conversion upon fulfilling the majority of votes representing at least three-quarters of the company s capital; and 5. The Minister of Economy would have agreed to issue a decision declaring the company s conversion to a public joint-stock company. The decision should be promulgated in the official gazette along with the company s memorandum and articles of association at the expense of the company.

36 36 Abu Dhabi Chamber 3.8 Partnership Limited with Shares Abu Dhabi Article (256) of Federal Law No. (B) of 1984 defined a partnership limited with shares as being a company formed of general partners who are jointly liable to the extent of all their assets for the company s liabilities, and participating partners who are only liable to the extent of their shares in the capital, whereas all general partners should be holders of the UAE nationality. Accordingly, this type of company is considered a general partnership for all general partners because they will be liable up to the extent of all their assets for the company s obligations. However, the general partner in such type is considered a merchant even if he did not have such capacity before joining the company. The capital of a partnership limited with shares should not be less than (Dhs 500,000) divided into equalvalue negotiable shares. However, the provisions concerning shares in the public joint-stock-company type should be applicable to those of a partnership limited with shares whose name must also be formed of the name(s) of one or more general partner(s), whereas an innovated addition derived from the company s purpose may be introduced to the original name. This means, that the name of a participating partner may not be mentioned in the company s name. If it so happens with the knowledge of such a participating partner, he will be considered a general partner vis-à-vis any bona-fide third party. In all cases, the term partnership limited with shares should be added to the company s name, and the provisions concerning the incorporation of a joint-stock company shall be effective in the case of a partnership limited with shares, with consideration to the following: 1- All general partners and other incorporates should sign the company s memorandum and articles of association, whereas they all must be considered as incorporate of a public joint-stock company as far as liability for the company s obligations is concerned; and 2- The names, surnames, nationalities and domiciles of all general partners should be mentioned in both the company s memorandum and articles of association. On another scale, the law provided that the company s management should be entrusted to one or more general partner(s). The company s memorandum and articles of association should provide for the names and powers of those to whom management is entrusted. The law also prohibited a participating partner from interfering in the company s management operations involving any third party even if such interference has occurred upon authorization. However, a participating partner may take part in internal management functions within the limits specified in the company s articles of association. If a participating partner acts in violation of such prohibition, he should be liable to the extent that absorbs all his assets for the obligations incurred by what management functions he has performed. In case such functions were performed upon an authorization by general partners, those who issued such authorization will be liable for the obligations incurred by his actions. The law also provided that a partnership limited with shares must have a supervisory board formed of at least three members to be appointed by the general assembly from among participating members or other third parties. The board s term in office should last for one year renewable in accordance with the provisions stipulated in the company s articles of association. The general partners may not have a vote for the appointment of the supervisory board. A partnership limited with shares should also have a general assembly comprising all shareholders, and should be subject to the provisions made on the general assemblies of public joint-stock companies. According to the law, the general assembly of a partnership limited with shares may not take decisions involving any third party unless upon approval by the company s managers.

37 Abu Dhabi Chamber UAE Labor Law The UAE Labor Law is governed under the Federal Law No.(8) of The Labour Law applies to protect both interests of employers and employees whether UAE nationals or expatriates and requires employment contracts to be locally compliant. The Labor Law covers issues such as visas, health insurance, termination gratuities and repatriation upon termination of employment. Work permits are required where expatriates must be sponsored by a UAE national or a company duly established in the UAE. A work permit is typically granted, in conjunction with a residency visa, by the employer acting as sponsor and is valid for a term of period. The visa is renewable. A medical (including a blood test) must be passed before a residency visa can be issued. For more information on the UAE Labor Law, please visit the Ministry of Labor website at Company Registration Procedures As mentioned earlier in section three, investors interested in practising any business activity, whether commercial/professional or industrial, should do so through establishing a legal entity, which requires choosing one of the legal forms of a commercial company, that shall practise such activity. Once the legal form of a company is identified, the following applications and documents shall be gathered and completed in order to complete the registration process at the Department of Economic Development (DED), The Center of Waste Management Abu Dhabi (CWM), Abu Dhabi Chamber of Commerce & Industry (ADCCI) and Ministry of Economy (ME). Many economic activities will require prior approvals from other government authorities to complete registration process with DED, CWM, ADCCI, and ME.

38 38 Abu Dhabi Chamber 5.1 Company Licensing Procedures & Required Documents Setting Up An LLC In Abu Dhabi Emirate Simple Four Steps: Step 1: DED Trade Name Reservation Requirements: Filling the Trade Name Application form in order to reserve a new company name and main business activity (company name should be related to main business activity) and submit it to DED membership department for approval. The Trade Name application should include the following information and documents: a) Suggested name(s) of new company, main trade activity, legal form and license type. b) Full name of the UAE partner, (min. 51% ownership) if a natural person. If the 51% ownership is a company (National Company, 100% UAE Company), application should include company name, its nationality (UAE) and sharing type. c) Full name of the foreign partner (max. 49% ownership) if a natural person. If the 49% ownership is a foreign company (having a proof of at least 2-year-long existence in a foreign country), the application should include foreign company s name, its nationality and sharing type. Required Documents: 1. Passport copies of all UAE and foreign owners and partner s. 2. If a UAE national company: A signed and stamped letter of interest in setting up a new LLC from the company s board of directors, copy of commercial license showing all company owners are 100% UAE nationals. 3. If a Non-UAE company: A signed and stamped letter of interest in setting up a new LLC from the mother company s board of directors. Letter to be stamped by the notary public s office and the UAE Embassy. A Copy of valid foreign company registration with minimum two years of existence proof, and commercial license that contains owners names and business activities. 4. All documents are to be available in Arabic on a CD as a soft copy. Note: Investors can assign a power of attorney to represent them or their firm to complete the new company s registration process. A copy of the power of Attorney letter is to be attached to a passport copy of the representative. All Documents and power of attorney letter must be translated into Arabic and stamped by a legal translation firm, and be subsequently notarized. Assigned power of attorney from a foreign company abroad, must be signed and stamped by the UAE embassy, and having it notarized by the Ministry of Foreign Affairs of the mother company s country and translated into Arabic by a legal translation firm.

39 Abu Dhabi Chamber 39 Step 2: The DED Initial Approval Required Documents: 1. Company partnership agreement to be duly authenticated by the Notary Public (UAE National(s) share should not be less than 51%) and without prejudice to other provisions and requirements provided in the Commercial Company Law in respect of the company type. 2. A new corporate bank account must be opened at a national or international bank existing in the Abu Dhabi Emirate, and a minimum of Dhs150,000 has to be deposited for initial approval and immigration purpose later on. Once a bank account is set, a bank certificate of deposited amount is to be produced of the cash shares listed in the company s articles of association. 3. Foreign investors should submit approved trade name reservation form, bank certificate stating that the company s initial capital is or exceeds Dhs150,000, and the company s notarized memorandum and articles of association with passport(s) to Immigration & Naturalization Department for approval of an investor s visa. Note: If the investor holds a valid UAE visa, a letter of no-objection letter from the sponsor is requested for submission as well. Step 3: The DED Commercial License and the ADCCI Membership Required Documents: Once the DED initial approval is obtained, an office lease contract involving the headquarters through which the activity is intended to be practised, plus a sign board of company s information placed outside office, and a no-objection letter from The Center of Waste Management Abu Dhabi (CWM) is required for the DED commercial license and the ADCCI membership completion. Various business activities will require other competent authorities approvals which are mentioned in section Once the DED initial approval has been obtained, company office lease contract, and letters of approvals from all competent authorities are issued and submitted to the DED Membership Department, a site visit will be made by the DED officers to verify the address and existence of office location; and upon completion of the site visit, a new DED commercial license and ADCCI Membership will be issued (To be renewed annually). Step 4: Ministry of Economy Registration of partnership agreement duly authenticated by the Notary Public. Submission of a copy of the company s Commercial Licences from the DED and Membership of ADCCI, and an original copy of memorandum of association.

40 40 Abu Dhabi Chamber Setting Up A Foreign Branch In Abu Dhabi Emirate The Commercial Companies Law covers the formation and regulation of branches and representative offices of a foreign company in the UAE and stipulates that they may be 100% foreign owned, provided that a local service agent is appointed. A branch office, legally regarded as part of its parent company, is a fully fledged business, permitted to perform contracts or conduct other activities as specified in its licence. A branch office may only be engaged in activities similar to those of its parent company. Only UAE nationals or national entities 100% owned by UAE nationals may be appointed as local service agent to companies with a foreign branch. Local service agents also sometimes referred to as sponsors are not involved in the operations of the company, but to assist only in obtaining visas, labor cards and administrative work and are paid lump sum fee per annum. Companies which have a trading nature should have a manufacturing units in their country of origin. Simple steps to set up a foreign branch: 1. Submission of New licence application to the Ministry of Economy for approval, 2. Trade Name reservation at the DED, 3. DED Initial Approval, 4. DED Commercial License and ADCCI Membership, and 5. Submission of a copy from Commercial Licenses from DED, Membership of ADCCI, and original copy of MOU to Ministry of Economy. Please refer to section for more details on the requirements and documents requested to set up a branch office in Abu Dhabi.

41 Abu Dhabi Chamber Activities That Require Prior Approvals Activities engagement which require approvals by competent authorities obtainment of the approval given by the authorities mentioned herein below shall be a prerequisite for practising the activities subsumed under each and every respective authority: EXECUTIVE COUNCIL Travel & Tourism - General Services - Charter Trading - Ship & Maritime Agencies - Car Clubs -Charter Air - Transport - Foreign Company Branches. MINISTRY OF INTERIOR General transport, Driving Schools, Key Cutting and Stamp Making, Fire Equipment, Alarm and Safety Systems, Used Car Dealers, Used Auto Parts, Car Painting and Denting, Rent A Car, Organizing Festivals and Festivities. MINISTRY OF JUSTICE Law Firms - Legal Translation - Legal Consulting. MINISTRY OF LABOUR Manpower Recruitment Societies Nurseries. MINISTRY OF COMMUNICATION Land Transport Telecommunication Equipment and Maintenance (To be annually renewed). MINISTRY OF ECONOMY Insurance, Insurance Consultancy, Brokers, Inspection Experts, Damage / Loss Assessors. MINISTRY OF CULTURE Video & Cassette Library Shops - Software Import, Export, Distribution and Sales Bookshops (Newspapers, Books, Magazines) - Cinema Houses & Theaters Radio / TV / Drama / Movie Production & Artistic Studios - Exhibition Organization, Management and Marketing - Printing Presses - Press Service Offices - Publicity & Advertising - Offices Sponsoring Art & Drama Troupes to Present Their Shows Inside the UAE Issuing Publications & Periodicals - Music, Lute and Ballet Teaching & Tuition - Printing Works - Visit & Greeting Cards Logo & Gift Items-Advertising Printing - Printing Service Offices (To be annually renewed).

42 42 Abu Dhabi Chamber SUPREME PETROLEUM COUNCIL Onshore-Offshore Gas & Oil-field Services - Onshore-Offshore Oil Drilling Operations. GENERAL AUTHORITY FOR HEALTHCARE Medicines - Medicinal Stores - Pharmacies - Private Medical Clinics - Scientific Offices & Medical Laboratories Hospitals - Veterinarians Clinics - Veterinary Medicines - Requisites of Agricultural, Livestock & Fisheries Production (To be annually renewed). DEPARTMENT OF TRANSPORT Shipping - Maritime Services & Transport - Shipbuilding, Maintenance and Inspection - Forwarding & Clearing - Air Freight & Transportation. ABU DHABI MUNICIPALITY Metropolitan / City Landscaping Dept., Places for Contract Leases. DED & TOWN PLANNING DEPT. Civil Engineering & Architectural Consultancy (To be annually renewed). HIGHER CORPORATION FOR SPECILIZED ECONOMIC ZONES Establishment of Industrial Plants (To be annually renewed). UAE CENTRAL BANK Banks, Stocks & Bonds, Financial Investments - Financial Consultancy - Money Exchange - Banking Representation Offices (To be annually renewed). GENERAL POSTAL AUTHORITY Courier Services (To be annually renewed). ABU DHABI TOURISM AUTHORITY Travel, Tourism and Furnished Flats. DEPARTMENT OF ECONOMIC DEVELOPMENT General Trading Representation of Companies- Trade Names Public Joint-Stock Companies Licensing.

43 Abu Dhabi Chamber Banking and Finance The UAE Central Bank was established in 1980 to direct monetary, credit, and banking policy. It maintains the UAE government s reserves of gold and foreign currencies, acts as the bank for banks operating in the UAE, and serves as the state s financial agent at international financial institutions. The Central Bank is authorized to issue licenses and regulations for banks and other financial institutions which are distinctly categorized into: Commersial Banks, Restricted-Licence Banks, Investment Banks, Finance Companies, Financial Investment Companies, Banking, Financial, Investment Consultation Activities, Monetary Intermediaries, Financial Intermediaries, and Representative Offices of Foreign Financial Institutions. 6.1 Commercial Banks [locally incorporated and branch of foreign banks] Banks in the UAE are divided into two major categories: locally incorporated banks which are public shareholding companies licensed in accordance with provisions of the Federal Law No. (10) of 1980, and branches of foreign banks which have obtained Central Bank s license to operate in the country as per provisions of the said Law. Historically, national banks (with majority national shareholding) and foreign banks existed prior to the establishment of the former Currency Board and; hence, before the Central Bank was created and commenced its operations. Within such historical circumstances the number of banks and their branches in the country and abroad increased very rapidly on obvious disproportion to the capacity of the local market; hence, provoking the monetary authority at that time to withhold issuance of licenses to any new bank and set about reducing the number of branches of a foreign bank to a maximum of eight branches.

44 44 Abu Dhabi Chamber 6.2 Restricted License Banks A Restricted-Licence Bank is a commercial bank, which is not authorized to accept deposits from residents in local currency, but may receive deposits in foreign currencies. Such bank may also extend credit facilities to residents and non-residents. There is only one restricted-license bank operating in the country at present; namely, Banca Commercial Italiana. 6.3 Investment Banks Federal Law No. (10) of 1980 defined an Investment Bank as a bank that does not accept deposits whose maturities are less than two years, but may borrow from its head office, from local or foreign banks, or from financial markets. There are two investment banks operating in the UAE at present; namely, the United Arab Emirates Investment Bank (PJSC), and HSBC Financial Services (Middle East) Limited. 6.4 Finance Companies Finance companies may conduct one or more of the following principal business activities: Extending advances and/or personal loans for personal or other consuming Purposes; Financing small trade and small businesses, as well as opening letters of credit and issuing guarantees on behalf of customers; Participating in the capital of projects and/or in the issuance of shares or bonds and/or certificates of deposit; and The finance company cannot conduct any other additional business activities without the prior approval of the Board of Directors of the Central Bank; such activities cannot be amended without the approval of the Board of Directors of the Central Bank. 6.5 Financial Investment Companies In order to organize and promote the business of financial investment companies to the appropriate internationally recognized standards and protect investors, the Board of Directors of the Central Bank issued Resolution No. 164/8/94 dated 18/4/1995. The resolution defines financial investment companies as those conducting one or more of the following businesses: Opening investment accounts and managing portfolios on behalf of others, whether individuals or companies; Preparing feasibility studies for projects and marketing allotments and stocks of shareholding companies; Establishing and/or managing investment trust funds; Establishing and/or managing other investment funds and act as trustee of funds entrusted to it by a trust to manage on behalf of a beneficiary; and Subscribing to companies capital and participating in syndicated loans.

45 Abu Dhabi Chamber Banking, Financial, Investment Consultation Activities As per the UAE Central Bank Board of Directors Resolution No. 164/8/94, a natural or juridical person licensed to offer banking, financial and investment consultations against a fee, may conduct one or more of the following main activities: Preparing feasibility studies regarding investing in banking, financial or investment projects in financial markets and various securities; Designing various strategies, which aim at improving the performance level of existing banking, financial and investment projects; Providing advice or opinion to a natural or juridical person, directly or in writing or through publications, regarding the value of securities or any other financial instruments, or regarding any banking services available in the country or expected to be provided in the future; Recommending to a natural or juridical person, directly, in writing or through publications, to carry out banking activities or to benefit from banking services, provided by banking institutions, or to invest or show interest in securities or any other financial instruments, or to purchase or sell such securities or instruments; Looking for technical investment methods with a better return, and providing general instructions or directives regarding the development of banking services or investment programs; and Issuing periodical or non-periodical reports with limited circulation regarding the banking system, or available banking services or services which may become available in the future; or regarding securities or any other financial instruments which include, among other things, an analysis of and a promotion for such instruments. 6.7 Money Exchanges Money Exchange is a thriving business in the UAE owing to its demographic structure, which contains large numbers of expatriates regularly transferring remittances to their families and relatives in their home countries. The number of moneychangers operating in the country and volume of their transactions have increased rapidly in recent years. 6.8 Financial and Monetary Intermediaries [Financial/ Stock Brokers] As per the UAE Central Bank Board of Directors Resolutions Nos. 126/5/95 and 153/5/97, a Financial/ Monetary Intermediary means any natural or juridical person, other than the financial institutions, licensed to conduct the business of financial and monetary brokerage activities. The business carried out by the intermediary shall be confined to intermediating in the sale and purchase of domestic and foreign stocks and bonds, currencies and commodities, as well as intermediating in money market transactions.

46 46 Abu Dhabi Chamber 6.9 Representative Offices of Foreign Financial Institutions The Representative Offices should represent a bank or any other financial institution incorporated outside the country. A Representative Office can undertake the following activities in the UAE: Representing the financial institution licensed to deal inside the country, including contacts on its behalf with concerned agencies as well as promoting its services in the local market; Providing the head office of the licensed financial institution with data relating to economic developments in the country; Providing customers of the licensed financial institution with information on the local market; Providing data to a local agency, which intends to develop its business at countries wherein the licensed institution conducts its business; and Providing customers with banking, financial and investment consultation services Banks located in Abu Dhabi Emirate Local Banks Abu Dhabi Commercial Bank Commercial Bank International First Gulf Bank National Bank of U.A.Q PSC Al Ahli Bank of Kuwait Bank Saderat Iran El Nilein Bank National Bank of Oman Abu Dhabi Islamic Bank Commercial Bank of Dubai Invest Bank PLC Noor Islamic Bank Al Khaliji (France) S. A. Banque Misr Habib Bank A.G Zurich Rafidain Bank Ajman Bank Dubai Bank Mashreq Bank PSC Sharjah Islamic Bank Arab African International Bank Barclays Bank PLC Habib Bank Ltd. Standard Chartered Bank Al Hilal Bank Dubai Islamic Bank PJSC National Bank of Abu Dhabi Union National Bank Arab Bank PLC BNP Paribas HSBC Bank Middle East Limited United Bank Ltd. Al Masraf Bank Emirates Islamic Bank National Bank of Fujairah PSC United Arab Bank PJSC Bank Melli Iran CitiBank N.A. Janata Bank Al Ahli Bank of Kuwait Bank of Sharjah PSC Emirates NBD Bank National Bank of R.A.K (RAK Bank) Bank of Baroda Credit Agricole National Bank of Bahrain Foreign Banks Al Ahli Bank of Kuwait Arab Bank PLC Bank Saderat Iran BNP Paribas Credit Agricole Habib Bank Ltd. National Bank of Bahrain Standard Chartered Bank Al Khaliji (France) S. A. Bank Melli Iran Banque Misr CitiBank N.A. El Nilein Bank HSBC Bank Middle East Limited National Bank of Oman United Bank Ltd. Arab African International Bank Bank of Baroda Barclays Bank PLC Habib Bank A.G Zurich Janata Bank Rafidain Bank

47 Abu Dhabi Chamber Foreign Trade Procedures As a member of the World Trade Organization (WTO) and a party to other regional free trade agreements (FTAs) throughout the GCC, Abu Dhabi Emirate, and the UAE have low duty rates of 5% on general goods imported from outside the GCC. There are no duty on exports, while import duties are normally charged on products imported into the UAE (outside of the free zones), at rates which can vary according to the nature of the imported product (e.g. higher duties apply to alcohol and tobacco products). The duty may be alleviated by exemptions based on the importer s status (e.g. free zone entity, majority owned by a GCC national, etc.) or exemptions based on the type of product. The following section will explain imports, exports and re-exports documents requirements and procedures in more detail.

48 48 Abu Dhabi Chamber 7.1 Imports Any goods imported into Abu Dhabi Emirate must be declared at Abu Dhabi Customs in accordance with the Gulf Co-operation Council law. In order to make such a declaration, the importer is required to be present at customs with the documentation relating to the import consignment so that the details of the import consignment can be verified, and any tariffs due can be paid. It is recommended to assign a Customs Clearing Agent (or Broker) to proceed with Customs declaration process. clearing agents are registered as authorized Customs System Users (CSU) and can potentially finish the declaration quicker. In addition to capturing and submitting the consignment particulars into the CSU, importers are required to submit the following documents: 1. Bill of Loading or Air waybill, 2. Delivery Order, 3. Commercial Invoice, 4. Certificate of Origin, 5. Packing List, 6. Manifest, and 7. Import License and Release Order (Restricted Goods) Clearance Procedures The particulars of the shipment must be captured onto the Customs Al Dhabi Computer System and submitted for processing. In addition to this, the documents described above must be presented to Customs for verification. Customs will advise whether the clearance has been accepted, whether it requires amendment by the importer or whether an intervention such as an inspection is required. If an amendment is required, the importer should amend the declaration and re-submit the information and documentation to Customs. Customs will notify the importer of the amount payable on the shipment, at which point the importer can select the method of payment to be used to settle the Customs liability. This liability may include tariffs (duty) and certain transaction fees. Once the payment has been verified, Customs will release the cargo Importers Tariff As of June 2006, tariffs are placed at: 1) 50% for all intoxicating liquors, 2) 100% for tobacco products, and 3) 5% for all other products. The tariffs are calculated on the Cost, Insurance and Freight (CIF) value of the goods.

49 Abu Dhabi Chamber Temporary Imports Temporary import (entry) of goods via customs inlets to the Country temporarily (with guarantee of the Customs duties value) for the purpose of manufacture and completing/finishing or repairing; or execution of certain projects or for exhibitions, shows, and fairs; and henceforth, re-export Import Required Documents 1. Letter from authority organizing the Exhibition/Show in some cases: 2. proposal or original statement of border crossing stamped by the customs centre of the country of origin or neighboring country. 3. The importer shall submit a detailed statement of the consignment to be imported (number, item, quantity, photos of some consignments such as gold and jewelry). 4. The original bill showing items and quantity of goods to be exported. 5. Packing list Import Procedures 1. The importer must notify Customs before clearance of temporary import request. 2. Bills attached must include serial number for each item to enable Customs to both view and compare contents with bills to facilitate the process of clearance. 3. After comparison, the importer keeps a copy of bills stamped by Customs along with remarks of the Customs officer (contents conforming to re-export, exhibiting, return). 4. Bodies importing for exhibitions shall apply via the authority organizing the exhibition to facilitate entry; and the application is addressed to the Director General of Customs before importing the goods % of the goods value shall be paid (value of goods & shipping value + insurance + (1%) on goods). 6. The customs official shall approve the customs statement clear the consignment and refer the transaction to Section with complete documents till re-export. 7. Goods will be granted a period of temporary entry of six (6) months only and in case of export after expiry of this period the amount shall not be refunded. 8. In case the importer wishes to extend this period, he will have to apply to the General Customs Administration before expiry of the insurance period (There are fees for extension of insurance period). 9. To recover the insurance amount, the importer or the Customs broker, has to notify the Customs to Compare the bills with the contents upon export in order to obtain clearance of the imported cargo. 10. Then he shall approach the Customs Admin. to submit the clearance in order to recover the insurance amount. 11. Temporary entry is not allowed for spare parts, tires, batteries and otherwise consumable materials in the projects.

50 50 Abu Dhabi Chamber 7.3 Exports The export procedures in Abu Dhabi vary depending on the type and volume of merchandise as the export of some goods is subject to periodic restrictions based on the local consumption and need. People can also dispatch their personal belongings via Abu Dhabi ports for non-commercial purposes Exports Required Documents 1. Original invoice 2. Packing list 3. Bill of lading 4. Original Certificate of Origin Exports Procedures 1. Obtain the necessary approval from concerned authorities for the shipment of goods that are subject to export restrictions imposed on certain items and quantities. (For more details on prohibited and restricted goods, read section 5.5). 2. Prepare the documents required to complete the customs declaration process and submit them to the customs officer for verification. 3. Submit the Original Certificate of Origin of goods intended for export to the customs officer for checking its correctness. 4. The customs office will view the items and their quantities. 5. Receive the customer copy of customs declaration form.

51 Abu Dhabi Chamber Re-Exporting Re-export involves importing merchandise of foreign origin into the country and shipping it to another destination in the same condition as that existing when it was imported or after reprocessing inside the country. The documentation and clearance procedures are simple and largely in favor of businesses and take only few minutes to complete if you have all the required documents Re-Export Required Documents 1. Original Invoice. 2. Copy of declaration on temporary entry or import for re-export purpose. 3. Original Certificate of Origin Re-Export Procedures 1. Make sure that there are no restrictions on the export or the quantities of certain items before you approach the Customs with your consignment and the required documents. 2. Submit your shipment to the Customs officer who will check the number of consignments in each item and the total number of consignments to be re-exported. 3. The customs officer will also verify the type and volume of the items to be re-exported and whether the lead seal which is used to prevent unauthorized opening of goods under Customs control is intact. 4. After the officer prepares the customs declaration, receive your copy.

52 52 Abu Dhabi Chamber 8.0 Abu Dhabi Specialized Free Zones The UAE Federal Constitution, the federal laws relating to free zones and the powers reserved by the individual emirates under the federal structure, permit each emirate to set up free zones for general or industryspecific activities. The purpose of free zones is to encourage foreign direct investment (FDI) into the UAE. Free zone entities are not generally required to have any UAE nationals as owners/sponsors. This contrasts with most companies incorporated in the UAE outside of the free zones, where UAE nationals are typically required to own at least 51 percent of the company s capital. Various free zones have been set up in the UAE, most of which are in the Emirate of Abu Dhabi. Free zones are authorized to enact their own laws and regulations in specific areas, which in some cases override federal and emirate laws on the subject-matter. Since the UAE first free zone established in the UAE have been successful in attracting foreign investment and technological expertise and developing the growth or re-exports and transshipment as a major commercial activity which led all emirates to create such free zones to attract inward investment, employment generation and significant economic growth. Aside from the advantages already available to companies in the UAE customs territory of zero personal and corporate taxes, freedom of repatriate capital and profits, and 100% of foreign ownership of companies, and hence a full control over their business activities; each free zone has its own advantages based on individual locations, facilities, areas of specialization, establishment and operating costs. Abu Dhabi Emirate currently holds four major free zones specialized in different economic sectors. Abu Dhabi Airport Free Zone (ADFZ) is a business and logistics park of all light industries related to aviation sector offering world-class services and facilities. Masdar City is specialized in clean renewable energy. Twofour54 free zone concentrates on media and production free zone.

53 Abu Dhabi Chamber 53 SKYCITY - ABU DHABI AIRPORT FREE ZONE (ADAFZ) Abu Dhabi Airports Company (ADAC), the owner and operator of Abu Dhabi International Airport is set to establish a logistics park next to the airport which is planned to operate as a free zone facility. Its creation marks a milestone in Abu Dhabi s plans to establish itself as a dynamic business centre. The logistics park will take advantage of Abu Dhabi International Airport s strategic geographical position at the crossroads between east and west, and the large-scale economic development of the emirate. The Abu Dhabi Airport Business and Logistics Park serves a broad range of business sectors including: Aviation & Aerospace Telecommunications Logistics, Cargo & Freight Food stuff and beverages Electronics and electrical Pharmaceuticals & medical equipments Consultancy and business development Cosmetics and perfumes Computers, internet and IT solutions Media and its related service More detailed can be found on MASDAR CITY Established in 2006, Masdar is a commercially driven enterprise that operates to reach the broad boundaries of the renewable energy and sustainable technologies industry there by giving it the necessary scope to meet these challenges. Masdar City Free Zone in Abu Dhabi has recently begun accepting applications from companies operating in the renewable energy and clean technology sectors. It is now possible to incorporate companies, register branches of foreign and local companies and carry on business in Masdar City Free Zone. This is good news for international companies focused on these growing sectors in the Middle East. More details can be found on TWOFOUR54 Named after the geographical co-ordinates of Abu Dhabi this is a media-focused free trade zone, offering attractive fiscal benefits for companies, 100% foreign ownership and an efficient and clear regulatory framework. More details can be found on KHALIFA INDUSTRIAL ZONE ABU DHABI (KIZAD) Khalifa Industrial Zone Abu Dhabi (KIZAD) is the region s largest industrial free zone. Companies can have 100 percent foreign ownership: located halfway between Abu Dhabi and Dubai, KIZAD has both a free zone and an international investment zone status. KIZAD offers three core benefits that make it the industrial zone of tomorrow. Industries will have outstanding access to global markets, be subject to a low operating cost environment, and benefit from the ease of doing business. Furthermore, KIZAD offers free zone and non-free zone options for companies, knowing that one size does not fit all. More details can be found on

54 54 Abu Dhabi Chamber 9.0 Abu Dhabi Chamber of Commerce & Industry The Abu Dhabi Chamber of Commerce & Industry (ADCCI) is an autonomous institution of public interest. It enjoys its own legal status to represent the various services and productive activities of the private sector in Abu Dhabi Emirate. According to the provisions of the Chamber Law, all natural and legal persons - having their headquarters, branch or representation office in the Emirate to exercise any commercial, industrial, vocational or professional activity in the emirate - must join the ADCCI and obtain its membership certificate.