Open economies in the Middle East || Comparison of UAE freezone entities

  UAE Qatar Jordan Israel Lebanon
Our ranking in order of preference 1 2 3 4 5
Summary at a glance
Total year 1 engagement set up costs? US$22,000 US$30,914 US$34,595 US$13,500 US$17,860
Total year 2 costs (incl. audit and tax)? US$9,850 US$6,600 US$14,620 US$6,300 US$11,100
Our Client must travel during the engagement? No No No No No
Total engagement period? 2 months 3 months 3 months 4 months 3 months
Corporation tax rate on net profits (click link)? 0% 10% 20% 26.50% 15%
Average monthly skilled labor salary (click link)? US$3,500 US$2,590 US$1,000 US$2,300 US$600
Average monthly office rental per sq m? US$40 US$40 US$27 US$25 US$34
Average monthly warehouse rental per sq m? US$25 US$28 US$20 US$9 US$25
Must be a 51% shareholder for trading business Yes Yes No No No
Must be a 51% shareholder for services business No No No No No
English language proficiency % of population? 70% 50% 45% 85% 40%
Incorporation requirements
How long to secure company registration number? 5 weeks 4 weeks 5 weeks 8 weeks 3 weeks
Minimum number of shareholders? 1 2 1 1 3
Individual and corporate shareholders allowed? Yes Yes Yes Yes Yes
Minimum number of directors? 1 1 1 1 1
Resident director required? No No No No No
Minimum paid up share capital? US$1 US$55,000 US$70,650 US$1 US$3,400
Fast turnkey solution available (click link)? Yes No No No No
Fastest time Healy Consultants set up company? 1 month . 1 month 1 month 1 month
Special permit or license required? No No No No No
Corporate director(s) allowed? Yes No No Yes Yes
Public register of shareholders & directors? Yes Yes Yes Yes Yes
Tax and accounting considerations
Corporate tax payable? 0% 10% 20% 26.50% 15%
Withholding tax on dividends paid overseas 0% 0% 0% 20% 10%
Annual financial statements required? Yes Yes Yes Yes Yes
Statutory independent annual audit required? Yes Yes Yes Yes No
Export taxes on goods and local GST or VAT? 0% 0% 16% 18% 10%
Best holding company to extract dividends? Marshall Islands Singapore Labuan Singapore UAE-RAK
Tax incentives for manufacturing start-ups? Yes Yes Yes Yes Yes
Access to how many double tax treaties? 66 50 32 54 34
Number of tax exempt free zones available? 37 8 18 1 5
GCC member (click link)? Yes Yes No No No
Corporate bank account considerations
Healy Consultants’ preferred bank? Emirates NDB SCB SCB Union Bank HSBC
How long to open corporate bank account? 4 weeks 3 weeks 4 weeks 4 weeks 4 weeks
Do I travel to open the bank account? No No No No No
Can open a US$ or £ or € bank account? Yes Yes Yes Yes Yes
Good internet banking available? Yes Yes Yes Yes Yes
Funds transfer currency controls No No No No No
Bank rating by World Economic Forum? 23 9 57 18 27
Ease of getting credit by WEF? score (1-7) 3 1 25 51 76
Employment considerations
Average skilled labour monthly salary? US$3,100 US$2,590 US$1,500 US$2,300 US$800
Average unskilled labour monthly salary? US$800 US$750 US$500 US$700 US$300
Average pension/insurance benefits % of salary? 12.50% 10% 13.25% - 6-9%
Minimum national salary? US$400 US$550 US$450 US$500 US$250
Mandatory labor unions? No No No No No
Minimum notice to dismiss employees? 1 month 2 months 1 month 1 month 3 months
Minimum redundancy indemnity? 1 month 2 months 1 month 1 month 3 months
Quota ratio of foreign workers to local staff? Yes Yes Yes Yes Yes
How long to get work permit approved? 3-4weeks 3-6 weeks 5-7 weeks 4-8 weeks 6-9 weeks
Manufacturing considerations
Cost per unit of electricity? US$ 0.04 1.9 0.23 0.17 0.02
Rank for getting electricity (click link) 4 40 44 109 54
Warehousing space rental (per sq. m.)? US$25 US$28 US$20 US$9 US$25
Ranking for transport infrastructure (click link) (1-7 best) 6.6 5.3 3.6 3.9 3
Ranking for customs procedures out of 10 (click link)? 6 5.4 4.5 4.4 3.1
Average import duty % on raw materials? 0% 0% 0% 0% 0%
Government incentives for startups? Yes Yes Yes Yes Yes
Computer literacy % of population? 90% 90% 90% 95% 90%
Internet connectivity rating? Strong Strong Strong Strong Strong
Global business efficiency index (click link)? 23 21 54 30 -
Preferred manufacturing city? Dubai Doha Amman Tel Aviv Beirut
Proximity of sea port in kilometers? 11 1 341.4 2.4 1.5
Proximity of airport in kilometers? 31 5 19 20 7.7
Proximity of rail in kilometers? 0 5 19 20 7.7
Literacy % of population 90% 96.30% 93.40% 97.80% 93.50%
Local purchasing power (GDP per capita) US$43,876 US$97,518 US$5,422 US$37,032 US$10,058
Local market size (in millions of people) 9.57 2.1 6.5 8.1 4.5
Average annual inflation rate in 2014? 3% 3.10% 5.50% 1.50% 3.20%
Average unemployment rate in 2014? 2.60% 0.6 12.60% 6.70% 6.60%
Ease of doing business index (click link) 22 50 117 40 104
Country rating (click link) AA AA BB- A+

  RAK onshore company Jumeirah Lake towers Dubai airport free zone Jebel Ali free zone Sharjah Airport Free Zone
Our recommendation in order of preference 1 2 3 4 5
Summary
Total Healy Consultants fees (US$) 16,850 26,950 17,800 23,363 27,890
Incorporation time 2 weeks 3 weeks 3 weeks 3 weeks 3 weeks
Yearly office rent estimate (US$) 7,750 10,000 7,750 9,500 8,000
Yearly warehouse rent estimate (US$) 25,000 24,500 25,000 25,000 27,000
Share capital estimate (US$) for free zone company 41,000 13,700 (per shareholder) 136,200 136,200 41,000
Share capital estimate (US$) for free zone establishment 40,850 13,700 27,250 27,250 41,000
Virtual office allowed Yes Yes No No No
All shareholders must travel required for company formation Yes Yes Yes Yes Yes
Legal considerations
Minimum number of shareholders 2 1 2 2 2
Minimum number of directors 2 1 2 2 2
Corporate shareholders allowed Yes Yes Yes Yes Yes
Corporate directors allowed Yes Yes Yes Yes Yes
100% foreign ownership allowed Yes Yes Yes Yes Yes
Public register of shareholders and directors No No No No No
Tax considerations
Exempt of corporate tax on profits Yes Yes Yes Yes Yes
Annual tax return to be submitted No No No No No
Statutory audit required Yes Yes Yes Yes Yes
Access to UAE double tax treaties Yes Yes Yes Yes Yes
Can rent office premises outside free zones No No No No No
Allowed to import raw materials? Yes Yes Yes Yes Yes
Allowed to export goods? Yes Yes Yes Yes Yes
How long to get work permit approved 3-4 weeks 3-4 weeks 3-4 weeks 3-4 weeks 3-4 weeks
Free zone work permit fee per person 3,950 3,950 2,950 3,950 2,300
Draft Invoice

Summary at a Glance Dubai Saudi Arabia Qatar Oman Bahrain Abu Dhabi
Total company engagement set up costs $22,000 $75,190 $30,914 $26,900 $23,131 $29,690
Subsequent annual costs (incl audit and tax) $9,850 $18,840 $6,600 $5,970 $7,662 $15,350
How long to set the company up? 1 month 6 weeks 1 month 3 weeks 3 weeks 1 month
How long to open company bank account? 2 weeks 3 weeks 2 weeks 2 weeks 2 weeks 2 weeks
Issued share capital required $1 $27,000 $55,000 $390,000 $2,660 $55,000
Corporate bank account location SCB Dubai NCB KSA SCB Qatar HSBC Oman SCB Bahrain SCB Dubai
Tenancy agreement required before incorporation? Yes Yes Yes Yes Yes Yes
Do you travel for company incorporation? Yes Yes No Yes Yes Yes
Resident director required? No No No No No No
Incorporation requirements
Resident shareholder required? Yes No Yes Yes No Yes
Minimum number of directors 1 1 1 2 2 1
Minimum number of shareholders 2 2 2 2 2 2
Resident company secretary required? No Yes Yes Yes Yes No
Individual shareholders allowed Yes Yes Yes Yes Yes Yes
Corporate shareholders allowed Yes Yes Yes Yes Yes Yes
Corporate director(s) allowed Yes Yes No Yes Yes Yes
Public register of shareholders and directors Yes Yes Yes Yes Yes Yes
Tax and accounting considerations
Corporate tax payable % 0% 20% 10% 12% 0% 0%
Statutory audit required Yes Yes Yes Yes Yes Yes
Annual tax return to be submitted Yes Yes Yes Yes Yes Yes
Access to how many double tax treaties 66 31 37 28 61 66
Tax exempt free zones available 31 6 2 4 3 4
Resident company for local tax purposes Yes Yes Yes Yes Yes Yes
Withholding tax payable 0% 5-15% 0% 0% 0% 0%
How long to get work permit approved 1 month 1 month 1 month 1 month 1 month 1 month
Can the entity hire expatriate staff in the country? Yes Yes Yes Yes Yes Yes
Logistics considerations
Allowed to sign sales contracts with local clients Yes Yes Yes Yes Yes Yes
Allowed to invoice local clients Yes Yes Yes Yes Yes Yes
Average monthly salary of skilled labour $3500 $3700 $4500 $4000 $3500 $3500
Average monthly salary of unskilled labour $800 $1300 $700 $1000 $2000 $800
English spoken by what % of the population (estimate) 78% 40% 60% 30% 45% 50%
Literacy rate % 94% 95% 97% 91% 96% 94%
Office rental per square meter per month US$65 US$25 US$58 US$25 US$20 US$45
Warehouse rental per square meter per month US$30 US$13 US$30 US$13 US$10 US$20
Country credit rating AA A+ AA A- BBB- AA
Internet connectivity rating Strong Poor Strong Fair Strong Fair
GDP per capita (US$) US$64,500 US$52,200 US$143,400 US$39,700 US$51,700 US$64,500
Government liberal or controlling of daily business Moderate Moderate Moderate Strict Liberal Moderate
Population % tertiary enrollment 25% 41% 12% 29% 29% 25%
Global competitiveness ranking (1-6) 5.11 5.10 5.24 4.64 4.45 5.11
Ease of doing business global ranking 2014-2015 (lower the better) 31 82 68 70 65 31
Population 2 million 28 million 2 million 3 million 1 million 0.61 million
Unemployment rate 4% 6% 0.4% 15% 4% 4%
Inflation rate (2014-2015) 1.27% 3.5% 3.1% 0.6% 2.8% 1.27%
GDP 2015 US$ billion US$82billion US$752billion US$210billion US$78billion US$34billion US$248billion
Average annual growth (2014-2015) 4.4% 2.7% 6% 2% 5.3% 4.4%
Estimate of engagement costs US$ US$ US$ US$ US$ US$
Healy Consultants engagement fees 5,950 28,750 13,025 11,250 10,900 11,140
Government fees 6,200 11,650 9,500 1,280 1,031 6,800
Corporate bank account opening 4,950 3,750 2,950 2,950 2,950 2,950
Estimate of total outgoings in Year 1 22,000 75,190 32,370 26,900 23,131 29,690
Draft sales invoice attached