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Trade Regulations and Practices
1.
Imports into Dubai is permissible
to only those importers who have the appropriate trade license.
2.
Import
duties have been largely standardised at 4%, but
certain items such as food products, building materials, medical
products and any item intended 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.
3.
Spares of Machinery as well as Raw materials for production use are exempted from
import duty.
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 confirmed,
irrevocable letter of credit.
Exchange Control
By
virtue of being a stable currency, the Dirham is freely
convertible to any other currency. There are no
exchange controls in the UAE . 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
Since
1980, the central regulatory authority in Dubai is
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
a few
investment or merchant banks at present.
Emirates
Industrial Bank is normally the lender for short and
medium term loan for private entrepreneurs. The main
objective of the bank is to help local
business men and improve private sector
participation in the economic growth.
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.
Import
and export financing can be arranged through the
commercial banks. There is no clear norms for
Margins that commercial
banks charge the clients.
So , to a good extent, they are flexible.
Ownership of Land & Property
Foreign
companies and individuals are not permitted to own
land in Dubai. All property must be
rented or leased for the purposes of running a
business.
In the past, only GCC Nationals could own residential property, but now, expatriate land ownership is on the increase. This option is yet another method for encouraging foreign investment in the emirate. Currently, non-GCC Nationals are permitted to won land only in certain developments. GCC National, however, may purchase land and build their own villas. The main property developers are:
For details of the current property development projects in Dubai, click here.
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
income taxes. Direct taxation is against the
traditions of the UAE .
There is less probability in its being
introduced in the near future.
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