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Creating a civil establishment is one of the several options for foreign entities looking to set up a business in the UAE.
While the setup process is becoming more streamlined, in some cases taking mere weeks, there are unique differences and requirements for those looking to open a civil establishment or a professional firm.
The majority of companies setting up in the UAE fall under the UAE Commercial Companies Law (CCL). These companies’ activities usually center on trading.
Civil establishments are those that are set up under the Civil Transactions Law 5 of 1985 or Civil Code. As such, they differ from firms under CCL. Just like opening a mainland business, they also require a local service agent who will not have any involvement in the business.
Civil companies can be formed for specific activities that are not considered commercial/trade. They are formed for the purpose of offering experiences and knowledge for other industries to tap, e.g. consultancy (engineering, architectural, accounting, legal, medical, marketing, management and others).
Individuals or companies that wish to expand their professional practice in the UAE can set up their business under this format.
The benefits of setting up a civil company include the absence of income and corporate taxes, and 100% repatriation of capital and profits, among others.
• Civil company setup requires a local service agent
• Such setup is typically preferred by professionals
• Benefits include the absence of corporate taxes
Source: Nicholas Baker, Special to Classifieds
The writer is a freelancer