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AGCC Customs Exemption

According to the AGCC Unified Economic Agreement drawn up on 8 June 1981, products originating in any AGCC state are exempted from customs duty (and other charges having an equivalent effect) in any other AGCC state.

However, to qualify as national products, the value added ensuing from their production in member states must not be less than 40% of their final value and the factory must be licensed by the Ministry of Finance and Industry. In addition, the share of the member state citizens in the ownership of the producing plant must not be less than 51% unless the ownership is 100% AGCC. Every item for which exemption is claimed must be accompanied by a certificate of origin duly authenticated by the appropriate government agency.

Tenders

In Dubai, government projects and orders are generally put out to tender. The required qualifications, specialisations and other terms and conditions for participation vary according to the project and the authority concerned.

Certain tenders are offered internationally but where local tenders are involved only those companies licensed and registered with the department concerned are eligible to bid. In order to qualify to participate in a tender one or more of the following may apply:

1) The tenderer shall be a firm wholly owned by UAE nationals. In the case of a partnership, at least 51% of the equity must be owned by UAE nationals. A foreign party may only tender if it has a UAE representative or agent with the necessary documents;

2) The tenderer should hold a valid licence from the Economic Department;

3) The tenderer must be a member of the Dubai Chamber of Commerce and Industry.

Taxation

There is no corporate tax in Dubai. The only exceptions to this are oil producing companies and branches of foreign banks. Likewise, there are no personal taxes. Direct taxation is against the traditions of the UAE and it is highly unlikely that it will be introduced in the near future.

Trade Regulations and Practices

Imports into Dubai can only be undertaken by those importers who have the appropriate trade licence. Import duties have been largely standardised at 4%, but there are many exemptions, including food, building materials, medical products and any item destined for the Jebel Ali Free Zone. Food products must carry dates of manufacture and expiry and meat for the local market must have a certificate to prove compliance with Islamic law.

Trade practices in Dubai are in line with normal international standards. All correspondence should be in Arabic or English. As a sophisticated market, full technical specifications should be provided with CIF Dubai prices and Middle East references. Payments are normally effected by letter of credit.

The UAE is a signatory of the General Agreement on Tariffs and Trade (GATT).

Exchange Control

There are no exchange controls in the UAE and its currency, the UAE dirham, is freely convertible. The dirham is linked to the US dollar, the currency in which oil revenues are paid. The current exchange rate is Dh 3.675 = US$ 1 and no revaluation has occurred since 1977.

Banking and Finance

The regulatory authority since 1980 has been the UAE Central Bank. Some 47 commercial banks operate, with a total of around 350 branches, of which about 28 are foreign banks with a combined total of more than 200 branches. Federal law restricts foreign banks to no more than eight branches each.

Federal law requires that every commercial bank must have a paid-up capital of at least Dh 40 million. There are few investment or merchant banks at present.

For medium-term or long-term industrial finance, local companies can approach the Emirates Industrial Bank, set up by the UAE government with an initial capital of Dh 500 million. Its main objective is to help develop the private sector.

Bill discounting can be arranged with the commercial banks, either foreign or locally owned. Leasing and hire purchase are available from local finance companies specialising in this business. Factoring is not practised in the UAE.

Import and export financing can be arranged through the commercial banks. Margins are often required by the banks. Such margins and the facilities offered by the banks will mainly depend on their relationships with their customers.

Accountancy

The registration of accountants and auditors in the UAE is governed by Federal Law No.9 of 1975. There is no local professional body of accountants but many of the large international accountancy firms have offices in Dubai. Under Federal Law No.13 of 1988, as amended, all businesses are required to keep financial records but current legislation is not specific as to the nature of such records.

Land Ownership

Foreign companies and individuals are not permitted to own land or real estate in Dubai. All property must be rented or leased for the purposes of running a business.

Trade Marks and Patents

Towards the end of 1992, the UAE President enacted three Federal Laws on the protection of industrial and intellectual property. These laws came into effect in 1993 and provide protection against commercial piracy and fraud. The laws are: Federal Law No. 37 of 1992 on Trademarks, Federal Law No. 40 of 1992 on Protection of Intellectual Property and Copyright, and Federal Law No. 44 of 1992 on Protection of Industrial Property.

Legal System

There is a comprehensive framework of legislation to ensure that business in the UAE is conducted in a fair and orderly manner. There are laws dealing with commercial transactions, intellectual property, labour and other aspects of business life.

Dubai has many local and international law firms willing to advise foreign business organisations on legal matters.

There are Federal Courts in all emirates except Dubai and Ras Al Khaimah, which have retained their local courts. Dubai has civil, criminal and Shariah (Islamic) Courts of first instance. All court decisions may be brought to the Dubai Court of Appeal. Thereafter, a final appeal may be made to the Dubai Court of Cassation.

The Civil Court (as opposed to the Shariah court) has jurisdiction over labour, civil and commercial transactions, as well as personal matters (e.g. wills, divorces etc) relating to non-Muslims. The language of the Courts is Arabic and advocates admitted to plead are Arab nationals.

Visas

The UAE Federal Authorities are primarily responsible for all immigration matters, and visitors are advised to consult their nearest UAE embassy or consulate if in doubt about visa requirements. Information can also be obtained from the overseas offices of the Dubai Commerce and Tourism Promotion Board.

In general, all visitors, except transit passengers who do not leave the airport on arrival and citizens of the Arab Gulf Cooperation Council states - Bahrain, Kuwait, Qatar, Oman and Saudi Arabia - must obtain visas sponsored by a local entity such as a hotel, company or travel and tourism firm to enter the UAE. However, British citizens with the right of abode in the UK and AGCC residents of certain qualifying nationalities and professions are issued automatic 30 day visas on arrival, and German and US citizens may obtain multiple entry visas from UAE Embassies.

Visas are easily obtainable for other visitors except for Israelis and travellers whose passports bear Israeli stamps.

A business visitor may enter Dubai with either a transit visa or a visit visa. Both types of visa require the sponsorship of a company or hotel licensed to operate within the UAE.

A transit visa entitles its holder to a stay of 14 days exclusive of arrival and departure days. A visitor planning a longer stay in the UAE may prefer to enter the country with a visit visa which entitles him to a stay of 30 days renewable twice up to a total of 100 days including a grace period of 10 days. A visit visa further entitles its holder to change his status to that of residence or employment provided certain conditions are met. A visa holder may enter and leave the country through any port of entry in the UAE.

Airlines may require confirmation that the sponsor is holding a valid visa for the incoming visitor.

Health requirements

No health certificates are presently required for entry to Dubai, although it is as well to check before departure, as health restrictions may vary, depending upon the situation at the time.

Customs

Duty-free allowances: cigarettes - 2,000; cigars - 400; tobacco - 2kg; alcohol (non-Muslim adults only) - 2 litres spirits and 2 litres wine; perfume - a reasonable amount. No customs duty is levied on personal effects entering Dubai. The Dubai Duty Free Shop has a sales outlet in the Arrivals Hall of the airport but alcohol may only be purchased on departure.

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