14 Oct 2019
UAE: Virtual Business Licences Now Available for Overseas Investors in Dubai
A new virtual business scheme designed to attract foreign investment was launched by Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, deputy ruler of the Emirate of Dubai on 1 October 2019. Investors from 101 jurisdictions, including China and Hong Kong, can now obtain a Virtual Commercial Licence that will allow them to establish business operations in Dubai without the need to be physically present in the country. According to Sami Al Qamzi, the director-general of the Dubai Economic Department, the licence is the first of its kind.
The virtual licence is only open to individuals and businesses that are non-resident in the United Arab Emirates, and that wish to undertake a range of specified activities in several permitted sectors, including computer programming, consultancy and related activities; design services, including jewellery and fashion design; and activities relating to printing and advertising. A full list of permitted services is available here.
Applications for a licence can be made through the Dubai Virtual Commercial City website by completion of the online application form, along with submission of various documents. Following a background check, approvals will be made within 30 days, whereupon the applicant will need to register in person at a VFS Global office. There are VFS Global offices in Shanghai and Shenzhen.
Fees are payable at the end of the process. Fees for a company start-up licence for a sole proprietorship are AED200 for registering the company name and AED670 per year for the Virtual Commercial Licence. In total, this is equivalent to US$238 for one year; US$422 for two years, and US$605 for three years.
The licence does not automatically guarantee physical access to the UAE - either in the form of a business, visitor or resident visa for any of the company’s partners, directors or employees. The Dubai government authorities, however, are working on a simplified visa process for the holders of Virtual Commercial Licences. Business bank accounts in the UAE for virtual companies are also not guaranteed, and are provided at the discretion of commercial banks. The Dubai Virtual Commercial City, however, does assist in bank account applications.
Dubai has a favourable tax regime which is applicable to Virtual Commercial Licence holders. Value-added tax in the UAE is 5%, and there is no income tax on non-financial entities. Moreover, licence owners can manage all their business-related activities online, including document signing, as digital signatures are legally binding in the UAE.