Fujairah is unique when compared with the other emirates in the UAE. One of the fastest developing regions in the Middle East, Fujairah is a major trading and shipping economy. This focus ensures a remarkably business friendly environment with the added advantage of excellent logistical support.
We explore the three forms of business entities that can be set up in Fujairah
1. Permanent Establishments
A permanent establishment is “a fixed place of business” or a specific geographical location with facilities for running a business or an enterprise. There are seven legal forms that Permanent Establishments can take:
- General Partnerships
Ownership is divided between two or more general partners.
- Limited Partnerships
Comprises of at least one active partner and one silent partner (who does not get involved in day-to-day operations).
- Joint Participation (or Venture)
Involves at least two partners who share and transfer the profit or loss with other businesses run by them separately.
- Public Joint Stock Companies
Company is owned in shares by a public body. This requires at least 10 founding members and a minimum initial capital of AED 10 million.
- Private Joint Stock Companies
Owned by a few individuals. It requires at least three founding members and a minimum capital of AED 2 million. The shares of a private joint stock company may or may not be offered to the public.
- Limited Liability Companies
A partnership of a maximum of 50 individuals who are liable for the profit, loss and assets of the company in the ratio of the capital they invested.
- Partnerships Limited with Shares
An amalgamation of an LLC and a partnership. It comprises of general partners, who are involved in the administrative affairs of the company, and participating partners. Both groups are liable for the profit and losses of the company in the ratio of the shares and assets they own.
2. Branch Offices or Representative Offices
Branch offices are copies of their parent companies and hold licenses to conduct affairs of business under the respective label or brand name. On the other hand, representative offices are promotional offices or back offices that perform tasks to support the branch offices or company headquarters. Representative offices usually have a very small number of employees.
3. Free Zone Entities
The UAE federal law imposes a degree of restrictions on foreign companies looking to operate in country, like limiting foreign ownership to 49%. For organisations and entities discouraged by such restrictions, Fujairah Free Zone offers an alternative. It is a special economic area that significantly relaxes a lot of the restrictions placed on foreign companies.
Fujairah Free Zone also provides scores of incentives and services for businesses operating within its boundaries. Some of these benefits are:
- 100% foreign ownership
- 100% repatriation of capital and profits
- Tax exemptions for a period of 50 years
- 100% exemption of import and export duties
- No currency restrictions
- Recruitment assistance
- Easy and long-term leases on warehousing and manufacturing facilities
Fujairah Free Zone Authority governs and manages operations within the free zone. It is also the licensing body for companies looking to operate in the area.
Setting up a company in Fujairah, and especially in the free zone, is a pretty easy process. If you’re looking to set up offices in Fujairah Free Zone, it would be very helpful to get in touch with a reputable company formation agent to guide you through the entire process.