Frequently Asked Questions

For German entrepreneurs planning to enter the market in Dubai or the United Arab Emirates, working with a local German law firm is a crucial success factor. German-language legal advice in Dubai combines local expertise with a German understanding of quality, creating security in a complex international environment.

Our German law firm in Dubai understands the legal, tax, and cultural differences between Germany and the UAE. It can structure contracts, corporate structures, and compliance issues to meet both the requirements of UAE law and the expectations of German entrepreneurs. This reduces risks, avoids misunderstandings, and ensures smooth processes for establishment, investment, or expansion.

In addition, clients benefit from direct communication in German, clear reporting channels, and a high degree of transparency and reliability, as they are known from the German legal culture. At the same time, German-managed law firms in Dubai have a strong network of local authorities, notaries, and banks – a decisive advantage in the rapid implementation of business decisions.

Dubai is considered one of the most attractive business locations worldwide. Entrepreneurs benefit from tax advantages, political stability, 100% foreign ownership in Free Zones, and strategic access to markets in the Middle East, Africa, and Asia. The excellent infrastructure, modern legal systems, and a business-friendly administration make Dubai particularly interesting for investors from Germany.

In Dubai, companies can be founded in three main categories:

• Mainland companies: suitable for business within the UAE; 100% foreign ownership has been possible in most industries since 2021.
• Free Zone companies: ideal for international business; full tax exemption and 100% ownership.
• Offshore companies: are generally used for asset management and are not intended for operational activities in the UAE.

The choice of the right structure depends on the business strategy and tax planning.

After the company is founded, owners and employees can apply for Residence Visas. These are usually issued for two years and are linked to the company structure. In addition, an Investor Visa or a Golden Visa allows for longer stays for entrepreneurs, investors, and professionals.

The main difference lies in the business area and regulation. Mainland companies are allowed to operate within the entire UAE, but are subject to the regulations of the Department of Economy and Tourism (DET). Free Zone companies are limited to the respective free trade zone, but enjoy advantages such as simplified establishment, tax exemption, and 100% ownership. Which option makes sense depends on the target group and the business model.

Previously, a local Emirati partner was required for many types of companies. However, since the 2021 amendment to the law, foreign investors can hold 100% ownership of Mainland companies in most industries. A local partner remains necessary only in a few strategic sectors. Full ownership has always been possible in Free Zones.

Contracts in Dubai are legally binding provided they comply with the civil law provisions of the UAE. In many cases, English law or the law of the Dubai International Financial Centre (DIFC), which is based on common law, can be agreed upon in the contract. For international entrepreneurs, a legal review and bilingual contract drafting (English/Arabic) is recommended to ensure enforceability.

Trademark and patent protection in the United Arab Emirates is clearly regulated by national laws and meets international standards. Trademarks should be registered with the UAE Ministry of Economy to assert property rights nationwide. International companies can also apply for protection via the Madrid Trademark Agreement. Early registration effectively protects against imitation and misuse.

Since June 2023, a corporate tax of 9% has been in effect in the UAE on corporate profits exceeding AED 375,000. Profits below that remain tax-free. Free Zone companies can continue to benefit from tax exemptions, provided they meet certain conditions. This makes Dubai one of the most attractive locations for international tax planning.

No, Germany and the United Arab Emirates no longer have a double taxation agreement (DTA). Under certain conditions, double taxation can nevertheless be avoided if certain conditions are met. An individual review is essential.

A value added tax (VAT) of 5% has been in effect in the UAE since 2018. Companies must register if their taxable annual turnover exceeds AED 375,000. Registration is with the Federal Tax Authority (FTA). Free Zone companies within so-called “Designated Zones” may be exempt from VAT under certain circumstances. Professional tax advice ensures that all obligations are correctly fulfilled.

Free Zone companies in Dubai can benefit from a full tax exemption on corporate profits and imports under certain conditions. Many Free Zones guarantee these benefits for at least 25 to 50 years. This makes them ideal for international investors who want to operate in a tax-optimized and flexible manner.

In Dubai, court costs are governed by Article 14 of Law No. 21 of 2015, according to which the court of first instance typically charges 6% of the value in dispute, subject to certain maximum limits:

• Up to AED 500,000: max. AED 20,000
• Between AED 500,001 and 1,000,000: max. AED 30,000
• Over AED 1,000,000: max. AED 40,000

Additional costs to be taken into account:

• Appeal: 50% of the fee paid in the first instance
• Cassation proceedings: Fixed fees – deposit AED 3,000, fee AED 2,000, possibly AED 1,000 for “staying execution”

• Court costs: Losing party – court may apportion costs in case of partial loss. Each party generally bears its own legal fees.
• Legal fees: A small subsidy (max. AED 2,000) may be granted to the prevailing party – at the discretion of the court.
• Communication or service costs: Usually charged to the applicant (plaintiff) when served by private couriers. The court will specify in its judgment who ultimately pays.
• Expert costs: Usually borne by the plaintiff, unless the court orders a different distribution.

In Dubai, as in Germany, for example, there is no law governing lawyers’ fees (RVG). For this reason, fees may vary, with billing generally being on an hourly basis based on the agreed hourly rate. In certain circumstances, flat fees may also be agreed, for example for company formations.