Saturday, 28 July 2012


There are several advantages to choosing the United Arab Emirates (“UAE”), and in particular Dubai, as the base and jurisdiction for your joint venture business or project. Some of these advantages have already been touched upon earlier and other advantages will be noted in this section. The main discussion will focus primarily on doing business in Dubai since there are variations between each of the 7 Emirates despite the fact that the UAE Companies Law is federal and applicable to all companies carrying on business in the UAE.

 As of the date of publication of this general information brochure, there is no Dubai or UAE income, company or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by a Dubai company situate in a “free zone” or the shareholders of the free zone company(“FZCO”), other than by shareholders of the free zone company that might otherwise be subject to Dubai taxation by virtue of being a UAE national. The free zone Dubai company is also not subject to any stamp duty or similar duty or tax on the issue, transfer or redemption of its shares. In addition, within all of the various ‘free zones’ there is a guarantee of no taxation for several decades which includes no imposition of any tax computed on profits or income, or computed on any capital assets, gain or appreciation on any free zone company operations and such tax free assurance ensures there would be no tax in the nature of estate duty or inheritance tax applicable to the shares, debentures or other obligations of the FZCO. There are certain ‘user’ related fees imposed in certain zones but these are not considered to be taxes.

There are several business structures that can be used for a joint venture business or project in the UAE ranging from a contract venture, a general partnership, a limited partnership, a joint stock company or a free zone company located within one of Dubai’s many free trade zones. Since it is beyond the parameters of this general information brochure to delve into detail on each of the possible business forms open to joint venture participants, this brochure will focus on the most common form of joint venture structures used in Dubai.

In each of the business forms mentioned, regulation of the joint venture arrangement will essentially be by the agreement negotiated among the co-venturers as supplemented by the provisions of the applicable laws of Dubai and the UAE. As such, it is important for readers to have a basic understanding of the UAE company law to understand how a joint venture will be impacted right from the content of the agreement through dissolution of a joint venture

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