MOVING YOUR HONG KONG BUSINESS TO DUBAI

Are you a business owner in Hong Kong seeking to broaden your horizons and tap into the rapidly growing market of the United Arab Emirates? Setting up and expanding your company to the UAE or another strategic city in the United Arab Emirates can offer a wide range of benefits, including a strategic location, a business-friendly atmosphere, and access to a dynamic market.

The below guide will walk you through the crucial processes and considerations involved in expanding your Hong Kong business to the UAE. With its strategic geographic location, excellent infrastructure, and favorable business regulations, the UAE offers an appealing destination whether you are considering opening a new branch, moving your headquarters, or exploring new avenues for growth.

WHY MOVE YOUR HONG KONG BUSINESS TO DUBAI & THE UAE?

There are numerous reasons to consider relocating your HK business to Dubai and the UAE, including the strategic location, business-friendly environment, tax advantages, outstanding infrastructure, diversified commercial prospects, and cultural variety that makes UAE an ideal country for relocating a Hong Kong business.

WHAT ARE THE BENEFITS FOR A HONG KONG FIRM TO MOVE THEIR BUSINESS TO DUBAI & THE UAE?

• UAE is one of Hong Kong’s largest export market in the Middle East region and globally.
• Minimal corporate tax and zero percent personal tax.
• A liberal trade regime will attract capital from across the UAE region.
• The UAE is an important market for re-export into other countries.
• The UAE is an entry route to other GCC countries, North Africa, Asia and beyond.
• Business is mainly conducted in English (the most common language in the UAE).
• Well established infrastructure, solid banking structure and stable political system.

HOW TO MOVE MY HONG KONG COMPANY TO DUBAI & THE UAE?

There are many things to consider for the present and the future of your business. It is recommended to seek advice from a professional business consultant who can discuss your options based on:

• Budget – is it feasible to relocate your business to Dubai?
• Business activities – can you perform the relevant activities to run your business in Dubai?
• Location – do you require an office, warehousing, access to port and airports, etc?
• Visa requirements – are you able to get a visa for you, your family, and employees?
• Banking – do you know which banking options are available with your business license?
• On-going support – after your company setup is completed are you aware of your business obligations to remain compliant?

WHICH STRUCTURE SHOULD I SELECT FOR MY HONG KONG COMPANY MIGRATING TO DUBAI & THE UAE?

There are two main structures to consider such as:

1. Free Zone company

2. Mainland company with a corporate sponsor

WHAT DOCUMENTS ARE REQUIRED TO SETUP MY HONG KONG COMPANY IN DUBAI?

There are several steps to the company setup process in Dubai that may be unfamiliar to many in the Hong Kong. Having an expert business consultant who will take care of the red tape involved to ensure the process is smooth and you are able to work on your business is essential.

Below we have listed the standard documentation requirements that includes (but not limited to):

• Detailed business plan.
• Completed new company setup application.
• Ultimate Beneficial Ownership (UBO) shareholder, Director, and General Manager passport and utility bill copies.
• Copies of your HK company documents (if applicable).
• Certificate of reference from a personal bank of each individual shareholder (depending on structure type).

Below we have highlighted an overview of the business setup process:

1. Selecting a trade name for your business – It must be translated into Arabic as well and does not contain any religious, government authority or names of external bodies. Our team will provide guidelines for selecting your company name and conduct checks to ensure that the company name is approved.
2. Choosing your business activity – selecting the right business activities is essential for your business. Depending on the business type, supporting documents such as: portfolio experience or educational qualifications may be required by the authorities.
3. Drafting and confirming completion of all the documents, applications are finalised in Arabic and English, and ready for submission.
4. Once the company setup is completed, the trade license will be issued, and we will be able to start the visa formalities and bank account opening process.

CAN I GET A VISA FOR ME & MY FAMILY TO LIVE IN DUBAI & THE UAE?

Yes, once your company is setup in the UAE, our team will start the formalities to obtain a UAE residency visa for the company owner / shareholder / General Manager/ Managing Director. Documents will be requested to complete the full visa process. Once the company owner’s visa is completed, normally we will be able to apply for your family visas, domestic workers, and any employees that you wish to hire under your company.

CAN I OPEN A COMPANY BANK ACCOUNT ONCE I MOVE MY HONG KONG COMPANY TO DUBAI?

Yes, once the company is established and ready to operate, the next step is to get a UAE or Dubai company bank account. It is a mandatory requirement that the company shareholders / General Manager and any authorised signatory must be in the UAE to meet the banking representative and sign the relevant banking application forms. A company must meet banking policy, compliance, and central banking regulations. Any additional information may be requested from the bank to satisfy on-boarding and opening your UAE company bank account.

UAE local banks offer a range of company banking facilities that will be suitable for a Hong Kong company that has just relocated and setup in Dubai and the UAE. With a company bank account, there is often a requirement to maintain a minimum maintenance balance amount in your business bank account each month. If, however, a company does not meet and maintain the minimum balance amount each month, small banking fees will apply.

The documentation required for a company bank account includes but is not limited to:

• Hong Kong company documents —
  • Companies House full register details, Certificate of Incorporation, Articles of Association etc.
• UAE company documents —
  • Trade license, Memorandum & Articles of Association, Chamber of Commerce registration, share certificate, Certificate of Incorporation, business lease and business Ejari etc.
• Shareholder and Ultimate Beneficial Ownership (UBO) details —
  • Includes passport copies, visa copies, utility bill and bank account copy etc.

CAN A FOREIGNER OPEN A BANK ACCOUNT IN DUBAI?

A foreigner can have a bank account in Dubai. Creation will support the opening of a Dubai corporate bank account, including the following:

• Introductions to suitable banks locally and internationally (as applicable).
• We will analyse the market and arrange meetings with suitable banking options.
• Provide an outline of the initial documentary requirements to open a corporate bank account.
• Support with completing a banking business plan (often a mandatory requirement).
• Liaise with the bank and the company to satisfy Know Your Customer (KYC), Anti-money Laundering and compliance for on-boarding.
• Assistance with completion of bank application with a relevant bank.
• Arrange a meeting with a banking representative to complete document verification with the Ultimate Beneficial Owner and banking signatories.
• Liaise with the bank on compliance requests and support responses to banking questions.
• Ensuring full end-to-end service until you receive your banking credentials.

CAN I HAVE A BANK ACCOUNT IN THE UAE WITHOUT A RESIDENCY VISA?

When you obtain your UAE residency visa, you will be able to apply for a personal and corporate bank account. Holding a UAE residency visa will provide more banking options and banking facilities to support your business bank account. Certain UAE banks will only on-board those that have setup a company and are applying for their UAE residency visa. If you decide to setup a company and not apply for a UAE residency visa, Creation Business Consultants team can provide alternative offshore banking solutions that can be done remotely once your Dubai company setup is completed.

CAN A FOREIGNER START A BUSINESS IN DUBAI?

Dubai is the booming business hub in the Middle East. Dubai welcomes new businesses looking to enter or expand in the region. From start-ups to multinational companies looking to start or setup a business, there is a spirit towards wanting to attract foreign investment and top talented people. The UAE and Dubai are home to many cultures with 80% of the population as expatriates. Dubai is one of the top cities for driving entrepreneurs.

HOW CAN I START A SMALL BUSINESS IN DUBAI & THE UAE?

We can assist with setting up a small, medium sized to a multinational business in Dubai and the UAE. There are many options available to start a small business in Dubai. You need to ensure that you seek the correct advice from a business consultant who can guide you on the correct structure and business registration for not only the present but also the future of your business. Once your business setup in Dubai is completed, we will be able to assist with completing your visa and company bank account opening.

CAN A FREE ZONE COMPANY DO BUSINESS IN DUBAI?

Free trade zones are specially designated areas in the UAE that have a special tax, customs, and imports regime. A free zone company can do business in Dubai depending on where the company is registered and the nature of the business. Free zone companies can only trade / operate within their free zone jurisdiction. Should a free zone company wish to gain access to the local UAE marketplace, they must use the services of a third party or local distributor or setup a branch or company in the mainland as per UAE Commercial Companies Law (CCL).

WHICH FREE ZONE IS BEST IN THE UAE?

In the UAE there are over 50 free zones. Some free zones are industry specific and other free zones are more general and offer a range of business activities. Each free zone has their own set of regulations, reporting and lodgement requirements.

HOW MUCH DOES A TRADE LICENSE COST IN DUBAI?

The cost for your company setup will vary depending on the business activity, approvals, structure, location, business facilities, number of shareholders and staff. The government fees and licensing authority fees will vary for each company setup depending on several variables. Free zones/ licensing authorities may have a monthly discount or promotion on fees. However, the cheapest option is not always the most suitable option. Certain licensing authorities do not have high creditability with the UAE banks making it difficult to obtain a corporate bank account. Ultimately you need an established UAE company that will give you the ability to have a company bank account and a UAE residency visa (if need be). It is recommended to seek advice from a business consultant who can guide you on the most appropriate options available.

HOW MUCH DOES IT COST TO RENEW A TRADE LICENSE IN DUBAI?

Normally, the cost of a company renewal is averaging around 80% -90% of the initial company setup fees. There are other factors that you need to consider that most business consultants fail to mention regarding regulatory and compliance requirements. It is important to engage a qualified business consultant that ensures your business operates and remains compliant whilst mitigating any risk to your business, its shareholders, directors, and the General Manager.

WHAT ARE THE DOCUMENTS REQUIRED FOR TRADE LICENSE RENEWAL IN DUBAI?

The documents required for your company renewal will vary depending on the licensing authority. Some licensing authorities will have different sets of requirements for regulatory compliance. Therefore, it is recommended to seek the assistance from a professional business consultant to ensure the company license is renewed correctly, to avoid any late renewal penalties or fines.

IS DUBAI A GOOD PLACE FOR BUSINESS?

Dubai is a suitable place for a Hong Kong business looking to setup or expand in the region. With 9 percent corporate tax and zero percent personal tax, this makes Dubai more appealing to Hong Kong businesses.

CAN A HONG KONG CITIZEN MOVE TO DUBAI?

Yes, a Hong Kong citizen can move to Dubai, provided they get a job, and the Dubai company will sponsor and provide a UAE residency visa. Another option is if you move your Hong Kong business and setup in Dubai, you will be able to get a UAE residency visa under your UAE registered company. Dubai is a good place for families as it is a very safe place to live and work in. There is a great expat community and attractions to the brits. There are numerous British schools that teach British curriculum education as well. In the UAE, there are non-profit British Business Groups to help and support individuals and companies from the HK with business interests in Dubai and the UAE.

WHAT ARE THE CULTURAL CONSIDERATIONS & CHALLENGES FOR HONG KONG BUSINESSES OPERATING IN THE UAE?

Hong Kong companies operating in the UAE must navigate cultural barriers and considerations. Consider the following when moving your Hong Kong company to the UAE:

• Respecting local UAE traditions, customs, and Islamic principles is crucial.
• Dress modestly and conservatively specially in public and professional settings.
• The official language of the UAE is Arabic, but English is commonly used, particularly in professional situations.
• Be mindful of religious holidays, such as Ramadan, when working hours and procedures could change.
• Avoid discussions on topics like politics, religion, and local customs.
• Consult with legal and commercial specialists to understand local laws, form the right relationships, and assure compliance.

WHAT IS THE POTENTIAL LANGUAGE BARRIERS BETWEEN UAE & HONG KONG & HOW TO OVERCOME THEM (OUTSIDE OF ENGLISH LANGUAGE BUSINESS CONTEXTS)?

• The official language of the UAE is Arabic, although English is also extensively used in professional situations. Yet, communication issues may still arise. Here are a few strategies for getting around potential language barriers:
• To ensure efficient communication, interact with English-speakers in the UAE’s businesses and professions.
• To communicate your point, use clear, basic language.
• Avoid employing idioms or slang that non-native English speakers can find challenging to understand.
• Be aware of how communication differs among cultures and modify your strategy accordingly.
• Consult with local experts, consultants, or business partners who are well-versed in both the English language and the region’s culture. They can offer insightful information and serve as middlemen, ensuring efficient contact between Hong Kong and the UAE.

HOW TO PROTECT INTELLECTUAL PROPERTY RIGHTS WHILE DOING BUSINESS IN THE UAE?

The UAE’s Ministry of Economy is the designated authority for registering and safeguarding Intellectual Property (IP). Through the ministry’s website, you can register a patent, copyright, and trademark.

Federal Law No. 38 of 2021 on Copyrights and Neighbouring Rights defines an intellectual work as any unique literary, artistic, or scientific work, regardless of its description, manner of expression, importance, or goal. The following creative works are shielded by copyright legislation:

• Articles, books, and pamphlets.
• Databases, software, and applications for computers.
• Speeches, sermons, lectures, etc.
• Pantomimes, musicals, and plays.
• Musicals with conversation and those without.
• Audio-visual works, also known as audio-visual works.
• Building projects, architectural blueprints, and architectural drawings.
• Etchings, lithography, screen printing, sculptures, paintings, drawings, etc.

WHAT IS THE EFFECT OF MOVING A HONG KONG BUSINESS TO DUBAI FOR HONG KONG DOMESTIC TAX OBLIGATIONS?

The UAE and Hong Kong signed an income and capital tax agreement on April 12, 2016. The agreement is a first of its sort for the two nations.

The agreement covers Hong Kong income tax, corporation tax, and capital gains tax in addition to income tax and corporate tax in the UAE.

A company’s residence for treaty purposes will be decided by mutual agreement between the competent authorities if it qualifies to be a resident of both Contracting States.

WHAT ARE THE HEALTH CARE & INSURANCE CONSIDERATIONS FOR EMPLOYEES MOVING TO THE UAE?

To live and work in the UAE, foreigners must have health insurance. The kind of policy is determined by the employee’s position and compensation, among other things. Employers are required to offer health insurance in Dubai and Abu Dhabi.

WHAT IS THE COST OF LIVING IN DUBAI IN COMPARISON TO THE HONG KONG?

The same as any modern city, the cost of living is always something that is on the rise, in particular rental prices in the current boom. This however could be seen positively if you are going to be investing in a property to later rent out.

WHAT IS THE IMPACT OF UAE’S CLIMATE ON CERTAIN TYPES OF BUSINESSES (E.G., MANUFACTURING, OUTDOOR SERVICES)?

Extremely hot temperatures are common in the UAE, especially in the summer, which might make some manufacturing operations difficult. To maintain ideal operating conditions, heat-sensitive machinery and materials could need additional cooling procedures.

Companies that provide outdoor services, like construction companies or landscaping businesses, confront difficulties with worker safety and productivity in hot weather. It’s important to have the right training, have access to shade and water, and plan your workday for cooler times of day because heat stress, dehydration, and exhaustion can be serious problems, especially for outdoor services.

WHAT ARE THE EFFECTS OF ISLAMIC LAW & CUSTOMS ON BUSINESS PRACTICES?

The UAE follows Shari’ah law, which is different to the Common Law. It is always a good idea to do your research around this and how it may affect your business. If you are planning to live or invest in the UAE, the regulations around inheritance, relationships and how to conduct yourself in public are worth paying attention to.

WHAT ARE THE REGULATIONS & PROCEDURES TO BRING EXPATRIATE WORKERS TO THE UAE?

Bringing Hong Kong expatriate workers to the UAE involves following specific regulations and procedures. The employer is responsible for initiating all the applications and submitting the required documents to the relevant government authorities. Here’s an overview of the key steps and requirements:

• The UAE requires a work permit, known as a labour card or employment visa, for expatriate workers to legally work in the country.
• The employer in the UAE needs to provide a formal offer of employment to Hong Kong expatriate worker, outlining the terms and conditions of employment, including salary, benefits, and duration of the contract.
• Hong Kong expatriate worker must obtain an entry visa to enter the UAE for employment purposes.
• The Hong Kong expatriate worker is required to undergo a medical examination at an approved medical center or hospital in the UAE to obtain a fitness certificate.
• Upon arrival in the UAE, the Hong Kong expatriate worker needs to apply for an Emirates ID card, which serves as a national identification document.
• After entering the UAE, the Hong Kong expatriate worker must complete the process to obtain a residency permit (residence visa) within a specified timeframe.
• The UAE mandates that employers provide medical insurance coverage for their employees, including Hong Kong expatriate workers.

WHAT ARE THE CHALLENGES & STRATEGIES IN REPATRIATING PROFITS FROM THE UAE TO THE HONG KONG?

Understanding currency limitations, tax laws, and financial factors in detail is necessary to successfully navigate the repatriation of profits from the UAE to Hong Kong. Businesses can build successful strategies and assure compliance with the relevant rules and regulations of both nations by working with specialists in international taxation, accounting, and cross-border transactions.