Business Setup Glossary

Key terms and definitions for company formation, licensing, and business operations across the Gulf region.

C

Commercial Register: An official government registry that records all licensed companies operating in a jurisdiction. In the GCC, registration in the commercial register is mandatory for mainland companies and provides legal recognition. The register contains details such as company name, shareholders, capital, and authorised activities.
Corporate Tax: A tax levied on the net profits of businesses. The UAE introduced a 9% corporate tax in June 2023 on profits exceeding AED 375,000. Saudi Arabia applies a 20% rate to foreign-owned companies, while GCC nationals pay 2.5% zakat. Qatar levies 10% on most companies. Free zone qualifying income may be exempt.

DMCC (Dubai Multi Commodities Centre): One of the largest and most popular free zones in Dubai, specialising in commodities trading, financial services, and technology. DMCC offers company setup packages, flexi-desk options, and a purpose-built business district in Jumeirah Lakes Towers. It consistently ranks among the top free zones globally for new company registrations.

Economic Substance Regulations (ESR): Rules requiring companies in the UAE and other GCC countries to demonstrate that they have adequate substance (employees, expenditure, physical assets) in the jurisdiction relative to the income they earn there. ESR applies to companies engaged in specific activities such as banking, insurance, shipping, and holding company operations.
Ejari: The Dubai government's official tenancy registration system. All rental agreements in Dubai must be registered through Ejari to be legally valid. Business setup companies require an Ejari registration for their office lease as part of the trade licence application and renewal process.

Flexi Desk: A shared or virtual office arrangement offered by free zones and business centres in the GCC. A flexi desk licence allows a company to obtain a trade licence without renting a dedicated office space, reducing setup costs significantly. The company receives a registered business address and limited use of shared meeting facilities.
Free Zone: A designated economic area within a GCC country that offers special regulations, including 100% foreign ownership, tax exemptions on qualifying income, and simplified customs procedures. Each free zone has its own authority, fee structure, and permitted activities. The UAE alone has over 45 free zones across its seven emirates.

Investor Visa: A residence visa issued to a company owner or shareholder based on their investment in a GCC business. In the UAE, investor visas are available for mainland and free zone company owners. The visa duration and conditions depend on the type of licence, investment amount, and jurisdiction.

JAFZA (Jebel Ali Free Zone): One of the oldest and largest free zones in the UAE, located adjacent to Jebel Ali Port in Dubai. JAFZA specialises in manufacturing, logistics, and trading companies. It offers warehouse, office, and light industrial unit options, with direct access to the port and Al Maktoum International Airport.

Mainland Licence: A trade licence issued by the Department of Economic Development (or equivalent) that allows a company to operate anywhere within the country, including direct trade with the local market. Mainland companies are not restricted to a specific zone and can bid on government contracts. The UAE now permits 100% foreign ownership for most mainland activities.
Memorandum of Association (MOA): A legal document that establishes the terms of a company's formation, including the company name, shareholders, share capital, management structure, and objectives. In the GCC, the MOA must be notarised and filed with the relevant authority. It is a mandatory requirement for company registration in most jurisdictions.
MOHRE (Ministry of Human Resources and Emiratisation): The UAE federal ministry responsible for regulating the labour market, issuing work permits, and enforcing employment law. MOHRE oversees the Wage Protection System, processes work permit applications, and mediates employment disputes. It is the primary regulatory body for private-sector employment in the UAE.

Partner Visa: A residence visa sponsored by a business entity for a partner or co-owner of the company. In the GCC, each partner in a company may be eligible for a residence visa based on their shareholding. The requirements and number of visas available depend on the licence type, office size, and jurisdiction regulations.
PRO Services (Public Relations Officer Services): Services provided by a specialist (PRO) who handles government-related paperwork and approvals on behalf of a company. In the GCC, PRO services include visa processing, trade licence renewals, document attestation, and liaising with government departments such as immigration, labour, and municipality authorities.

Trade Licence: The official government permit required to conduct business in a GCC country. Trade licences specify the activities a company is authorised to perform and must be renewed annually. There are three main categories: commercial (trading), professional (services), and industrial (manufacturing). Each activity requires a separate permit or must be listed on the licence.

VAT Registration: The process of registering a business with the tax authority for Value Added Tax purposes. In the UAE, VAT registration is mandatory for businesses with taxable supplies exceeding AED 375,000 annually. Saudi Arabia requires registration above SAR 375,000. The standard VAT rate is 5% in the UAE and 15% in Saudi Arabia.