In the United Arab Emirates (UAE), companies are categorized based on their activities, ownership, and the level of foreign ownership. One of the categories is a Category 3 company, which is a popular choice for many businesses operating in the UAE.
Understanding Category 3 Company
A Category 3 company in the UAE refers to a company that is owned fully or partially by non-GCC nationals or entities. GCC stands for Gulf Cooperation Council and consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The non-GCC nationals or entities can own up to 49% of the company’s shares, while the remaining 51% must be owned by a UAE national or a company wholly owned by UAE nationals.
Advantages of Category 3 Company
Category 3 companies offer several advantages for foreign investors:
- Ease of establishment: Setting up a Category 3 company in the UAE is relatively straightforward and involves minimal bureaucratic procedures.
- Access to local markets: Category 3 companies can conduct business within the UAE and have access to local markets, allowing them to serve the UAE’s growing consumer base.
- No personal income tax: UAE does not impose personal income tax on individuals, including shareholders of Category 3 companies.
- Full repatriation of profits: Category 3 companies are allowed to repatriate their profits and capital outside of the UAE, providing a favorable environment for foreign investors.
Activities of a Category 3 Company
A Category 3 company can engage in various activities, including:
- General trading
- Consultancy services
- Management services
- Information technology services
- Logistics and distribution
- Retail and wholesale trading
A Category 3 company in the UAE is a company that allows non-GCC nationals or entities to have partial ownership while requiring at least 51% of the shares to be owned by a UAE national or a company fully owned by UAE nationals. This type of company offers various advantages, including ease of establishment, access to local markets, no personal income tax, and the ability to repatriate profits. If you are considering starting a business in the UAE, a Category 3 company may be a suitable option for you.