Guide

Exporting to the United Arab Emirates

Taxes, duty and legal considerations when exporting to the United Arab Emirates

There are a lot of things to consider before you start exporting to the United Arab Emirates.

It's essential to find out about local rules and regulations on tax and duty in your intended market.

Start-up considerations

Under federal legislation, the principal relevant options available for conducting business in the UAE are:

  • participation in a local company or other commercial entity
  • establishment of a branch office
  • appointment of a commercial agent or distributor
  • establishment of a branch or subsidiary in one of the free zones of the UAE

Ownership

When establishing a local company or other commercial entity, foreign ownership is generally limited to 49 per cent, with the remaining 51 per cent to be held by UAE nationals. Under the Commercial Companies Law (CCL) there are 7 forms of recognised commercial entity.

Branch offices

If you’re establishing a branch office, you need consent from the Ministry of Economy and to deposit a bank guarantee of AED 50,000. The branch office has to be sponsored by a UAE national or a locally registered company entirely owned by UAE nationals. A formal national agency agreement is needed where the national agent sponsors and assists the foreign company in return for a fee.

In certain businesses, you need to get the permission of a particular authority, e.g. the Central Bank regarding finance, and the Municipality in Dubai regarding engineering and construction.

Commercial agents

If you just intend to export goods or services to the UAE, you may want to appoint an agent, distributor or franchisee, which must be either a UAE national or a company entirely owned by UAE nationals.

UAE free zones

The free zones offer a wide variety of benefits to businesses and a degree of flexibility including:

  • 100 per cent foreign ownership through branches, single or multiple shareholder companies - known as Free Zone Enterprises (FZEs), Free Zone Companies (FZCOs) or Free Zone Limited Liability Companies (FZ-LLC)
  • no national agent required for branch offices of foreign companies
  • no customs duties on imports and re-exports (except re-exports into onshore UAE)
  • special assistance in getting work permits for staff
  • guaranteed exemptions from corporate taxes

Legal considerations

You need to comply with the federal laws governing business activity including the:

  • Commercial Companies Law (CCL)
  • Commercial Register Law
  • Commercial Agencies Law
  • Civil and Commercial Codes

If you intend to trade or invest in the UAE, you need the correct authorisations and licences. Each Emirate may also have additional requirements.

Standards and technical regulations

The UAE does prohibit and restrict the importation of specified products. Dubai Trade provides examples of UAE prohibited items.

While the GCC’s Common Customs Law sets the framework for the GCC’s import regulations, each member state administers its own list of prohibited, restricted and exempted products. Exporters who want to re-export within the other GCC markets should take note of the individual member states lists as the lists are not harmonised, but independently administered.

A Certificate of Origin is needed for all exports to clear customs. Certificates of Origin must be provided by the original exporter and recognised by an authorised representative in UK.

The Gulf Standardization Organization (GSO) sets the framework for the UAE’s packaging and labelling requirements. GSO’s technical requirements for food exports state that all UAE food imports provide information in Arabic, either as part of the packaging or as an affixed label, detailing the:

  • products and brand name
  • lot identification
  • production and expiry dates
  • country of origin
  • manufacturers name
  • net content weight in metric units
  • list of ingredients and additives in descending order of proportion

You should consider cultural norms and values when designing and developing product packaging.

Intellectual property

While a framework of legislation for the main intellectual property (IP) rights in the UAE does exist, there are no specialist IP courts and a lack of specialist local advocates.

This can make civil litigation a challenge, so enforcement of IP rights is often achieved in other ways. This includes in the case of trade mark infringement by filing complaints about counterfeiters with the police or customs authorities.

Read more about protecting your intellectual property overseas.

Income tax

Income tax legislation is only applied in practice to foreign banks, oil and gas companies.

There is no direct personal taxation in the UAE. Most Emirates levy various municipal taxes. Indirect taxation through official fees is commonplace.

There is no taxation on capital gains.

VAT

There is currently no value added tax or sales tax in the UAE, although the imposition of a GCC wide value added tax has been widely discussed for the last several years.

Customs

The UAE generally levies customs duties on imported goods at the rate of 5 per cent. Higher rates of duty apply to alcohol and tobacco. Some categories of goods are exempt, e.g. certain agricultural products, printed material and pharmaceuticals. Exemptions may also be granted for goods imported for industrial or manufacturing purposes.

Where goods are imported into a UAE free zone, customs duties are not payable.

Goods can only be imported into the UAE by a company that is registered in the UAE and the goods must be relevant to the licensed business activity of the business.

There are no duties or tariffs on exports.

Goods manufactured in Israel cannot be imported into the UAE.

Pornographic material, ivory/rhino horns, cannabis, alcoholic beverages, firearms, fireworks, narcotics and opium are also strictly prohibited.

All printed matter, films and tapes must be cleared by the Ministry of Information.

Documentation

The documents needed for the import and export of goods to and from the UAE are:

  • invoices – initiated by supplier
  • Certificate of Origin
  • Bills of Lading / Airway Bill

Entry requirements

Visas are available for business and tourists visits, transit and residency. If you are a UK citizen you can get a 30 day visa on arrival. Business visitors can be sponsored by an employer with a business licence.

The UAE has started to introduce smart gates, currently in Abu Dhabi and Dubai, which speed up the passport control process if you have a UK readable passport. It is expected that this system will eventually be introduced into all UAE airports.

If you’re employed in the UAE your employer will normally sponsor you and will get you a residency visa and labour card. You can’t work in the UAE without these.

If you establish your own business in the UAE you’ll be responsible for getting your residency visa. You can apply for your residency visa once you’ve got your trade licence.