Economy Profile 2015 Doing Business 2015
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Doing Business 2015 United Arab Emirates
Economy Profile 2015
United Arab Emirates
Doing Business 2015 United Arab Emirates 2
© 2014 The International Bank for Reconstruction and Development /
The World Bank
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ISBN (paper): 978-1-4648-0351-2
ISBN (electronic): 978-1-4648-0352-9
DOI: 10.1596/978-1-4648-0351-2
ISSN: 1729-2638
Cover design: Corporate Visions, Inc.Doing Business 2015 United Arab Emirates 3 CONTENTS Introduction .................................................................................................................................. 4 The business environment .......................................................................................................... 6 Starting a business ..................................................................................................................... 16 Dealing with construction permits ........................................................................................... 24 Getting electricity ....................................................................................................................... 31 Registering property .................................................................................................................. 38 Getting credit .............................................................................................................................. 44 Protecting minority investors ................................................................................................... 51 Paying taxes ................................................................................................................................ 62 Trading across borders .............................................................................................................. 67 Enforcing contracts .................................................................................................................... 72 Resolving insolvency .................................................................................................................. 79 Labor market regulation ........................................................................................................... 82 Distance to frontier and ease of doing business ranking ...................................................... 89 Resources on the Doing Business website .............................................................................. 92
Doing Business 2015 United Arab Emirates 4
INTRODUCTION
Doing Business sheds light on how easy or difficult it is 1, 2014 (except for the paying taxes indicators, which
for a local entrepreneur to open and run a small to cover the period January–December 2013).
medium-size business when complying with relevant
The Doing Business methodology has limitations. Other
regulations. It measures and tracks changes in
areas important to business—such as an economy’s
regulations affecting 11 areas in the life cycle of a
proximity to large markets, the quality of its
business: starting a business, dealing with construction
infrastructure services (other than those related to
permits, getting electricity, registering property, getting
trading across borders and getting electricity), the
credit, protecting minority investors, paying taxes,
security of property from theft and looting, the
trading across borders, enforcing contracts, resolving
transparency of government procurement,
insolvency and labor market regulation.
macroeconomic conditions or the underlying strength of
In a series of annual reports Doing Business presents institutions—are not directly studied by Doing Business.
quantitative indicators on business regulations and the The indicators refer to a specific type of business,
protection of property rights that can be compared generally a local limited liability company operating in
across 189 economies, from Afghanistan to Zimbabwe, the largest business city. Because standard assumptions
over time. The data set covers 47 economies in Sub- are used in the data collection, comparisons and
Saharan Africa, 32 in Latin America and the Caribbean, 25 benchmarks are valid across economies. The data not
in East Asia and the Pacific, 26 in Eastern Europe and only highlight the extent of obstacles to doing business;
Central Asia, 20 in the Middle East and North Africa and they also help identify the source of those obstacles,
8 in South Asia, as well as 31 OECD high-income supporting policy makers in designing regulatory reform.
economies. The indicators are used to analyze economic
More information is available in the full report. Doing
outcomes and identify what reforms have worked, where
Business 2015 presents the indicators, analyzes their
and why.
relationship with economic outcomes and presents
This economy profile presents the Doing Business business regulatory reforms. The data, along with
indicators for United Arab Emirates. To allow useful information on ordering Doing Business 2015, are
comparison, it also provides data for other selected available on the Doing Business website at
economies (comparator economies) for each indicator. http://www.doingbusiness.org.
The data in this report are current as of JuneDoing Business 2015 United Arab Emirates 5
CHANGES IN DOING BUSINESS 2015
As part of a 2-year update in methodology, Doing Finally, the name of the employing workers indicator set
Business 2015 incorporates 7 important changes. First, has been changed to labor market regulation, and the
the ease of doing business ranking as well as all topic- scope of this indicator set has also been changed. The
level rankings are now computed on the basis of indicators now focus on labor market regulation
distance to frontier scores (see the chapter on the applying to the retail sector rather than the
distance to frontier and ease of doing business ranking). manufacturing sector, and their coverage has been
Second, for the 11 economies with a population of more expanded to include regulations on labor disputes and
than 100 million, data for a second city have been added on benefits provided to workers. The labor market
to the data set and the ranking calculation. These regulation indicators continue to be excluded from the
economies are Bangladesh, Brazil, China, India, aggregate distance to frontier score and ranking on the
Indonesia, Japan, Mexico, Nigeria, Pakistan, the Russian ease of doing business.
Federation and the United States. Third, for getting
Beyond these changes there are 3 other updates in
credit, the methodology has been revised for both the
methodology. For paying taxes, the financial statement
strength of legal rights index and the depth of credit
variables have been updated to be proportional to 2012
information index. The number of points has been
income per capita; previously they were proportional to
increased in both indices, from 10 to 12 for the strength
2005 income per capita. For enforcing contracts, the
of legal rights index and from 6 to 8 for the depth of
value of the claim is now set at twice the income per
credit information index. In addition, only credit bureaus
capita or $5,000, whichever is greater. For dealing with
and registries that cover at least 5% of the adult
construction permits, the cost of construction is now set
population can receive a score on the depth of credit
at 50 times income per capita (before, the cost was
information index.
assessed by the Doing Business respondents). In addition,
Fourth, the name of the protecting investors indicator set this indicator set no longer includes the procedures for
has been changed to protecting minority investors to obtaining a landline telephone connection.
better reflect its scope—and the scope of the indicator
For more details on the changes, see the “What is
set has been expanded to include shareholders’ rights in
changing in Doing Business?” chapter starting on page
corporate governance beyond related-party transactions.
24 of the Doing Business 2015 report. For more details
Fifth, the resolving insolvency indicator set has been
on the data and methodology, please see the “Data
expanded to include an index measuring the strength of
Notes” chapter starting on page 114 of the Doing
the legal framework for insolvency. Sixth, the calculation
Business 2015 report. For more details on the distance to
of the distance to frontier score for paying taxes has
frontier metric, please see the “Distance to frontier and
been changed. The total tax rate component now enters
ease of doing business ranking” chapter in this profile.
the score in a nonlinear fashion, in an approach different
from that used for all other indicators (see the chapter
on the distance to frontier and ease of doing business
ranking).Doing Business 2015 United Arab Emirates 6
THE BUSINESS ENVIRONMENT
For policy makers trying to improve their economy’s
regulatory environment for business, a good place to start ECONOMY OVERVIEW
is to find out how it compares with the regulatory
environment in other economies. Doing Business provides
an aggregate ranking on the ease of doing business
Region: Middle East & North Africa
based on indicator sets that measure and benchmark
regulations applying to domestic small to medium-size Income category: High income
businesses through their life cycle. Economies are ranked
from 1 to 189 by the ease of doing business ranking. This Population: 9,346,129
year's report presents results for 2 aggregate measures:
the distance to frontier score and the ease of doing GNI per capita (US$): 38,620
business ranking. The ranking of economies is determined
by sorting the aggregate distance to frontier (DTF) scores. DB2015 rank: 22
The distance to frontier score benchmarks economies
with respect to regulatory practice, showing the absolute DB2014 rank: 25*
distance to the best performance in each Doing Business
Change in rank: 3
indicator. An economy’s distance to frontier score is
indicated on a scale from 0 to 100, where 0 represents the
DB 2015 DTF: 76.81
worst performance and 100 the frontier. (See the chapter
on the distance to frontier and ease of doing business). DB 2014 DTF: 75.08
The 10 topics included in the ranking in Doing Business
2015: starting a business, dealing with construction Change in DTF: 1.73
permits, getting electricity, registering property, getting
credit, protecting minority investors, paying taxes, trading * DB2014 ranking shown is not last year’s published
across borders, enforcing contracts and resolving ranking but a comparable ranking for DB2014 that
insolvency. The labor market regulation indicators captures the effects of such factors as data
(formerly employing workers) are not included in this corrections and the changes in methodology. See
year’s aggregate ease of doing business ranking, but the the data notes starting on page 114 of the Doing
data are presented in this year’s economy profile. Business 2015 report for sources and definitions.
The aggregate ranking on the ease of doing business
benchmarks each economy’s performance on the
indicators against that of all other economies in the Doing
Business sample (figure 1.1). While this ranking tells much
about the business environment in an economy, it does
not tell the whole story. The ranking on the ease of doing
business, and the underlying indicators, do not measure all
aspects of the business environment that matter to firms
and investors or that affect the competitiveness of the
economy. Still, a high ranking does mean that the
government has created a regulatory environment
conducive to operating a business.Doing Business 2015 United Arab Emirates
THE BUSINESS ENVIRONMENT
Figure 1.1 Where economies stand in the global ranking on the ease of doing business
Source: Doing Business database.Doing Business 2015 United Arab Emirates THE BUSINESS ENVIRONMENT For policy makers, knowing where their economy regional average (figure 1.2). The economy’s rankings stands in the aggregate ranking on the ease of doing (figure 1.3) and distance to frontier scores (figure 1.4) business is useful. Also useful is to know how it ranks on the topics included in the ease of doing business relative to comparator economies and relative to the ranking provide another perspective. Figure 1.2 How United Arab Emirates and comparator economies rank on the ease of doing business Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database.
Doing Business 2015 United Arab Emirates 9 THE BUSINESS ENVIRONMENT Figure 1.3 Rankings on Doing Business topics - United Arab Emirates (Scale: Rank 189 center, Rank 1 outer edge) Figure 1.4 Distance to frontier scores on Doing Business topics - United Arab Emirates (Scale: Score 0 center, Score 100 outer edge) Note: The rankings are benchmarked to June 2014 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities. Source: Doing Business database.
Doing Business 2015 United Arab Emirates 10
THE BUSINESS ENVIRONMENT
Just as the overall ranking on the ease of doing business tells Doing Business introduced the distance to frontier score. This
only part of the story, so do changes in that ranking. Yearly measure shows how far on average an economy is from the
movements in rankings can provide some indication of best performance achieved by any economy on each Doing
changes in an economy’s regulatory environment for firms, Business indicator.
but they are always relative.
Comparing the measure for an economy at 2 points in time
Moreover, year-to-year changes in the overall rankings do allows users to assess how much the economy’s regulatory
not reflect how the business regulatory environment in an environment as measured by Doing Business has changed
economy has changed over time—or how it has changed in over time—how far it has moved toward (or away from) the
different areas. To aid in assessing such changes, most efficient practices and strongest regulations in areas
covered by Doing Business (figure 1.5).
Figure 1.5 How far has United Arab Emirates come in the areas measured by Doing Business?
Note: The distance to frontier score shows how far on average an economy is from the best performance achieved by any economy on
each Doing Business indicator since 2010, except for getting credit, paying taxes, protecting minority investors and resolving insolvency
which had methodology changes in 2014 and thus are only comparable to 2013. The measure is normalized to range between 0 and 100,
with 100 representing the best performance (the frontier). See the data notes starting on page 114 of the Doing Business 2015 report for
more details on the distance to frontier score.
Source: Doing Business database.Doing Business 2015 United Arab Emirates 11
THE BUSINESS ENVIRONMENT
The absolute values of the indicators tell another part of regulation—such as a regulatory process that can be
the story (table 1.1). The indicators, on their own or in completed with a small number of procedures in a few
comparison with the indicators of a good practice days and at a low cost. Comparison of the economy’s
economy or those of comparator economies in the indicators today with those in the previous year may
region, may reveal bottlenecks reflected in large numbers show where substantial bottlenecks persist—and where
of procedures, long delays or high costs. Or they may they are diminishing.
reveal unexpected strengths in an area of business
Table 1.1 Summary of Doing Business indicators for United Arab Emirates
Best performer globally
United Arab Emirates
United Arab Emirates
Saudi Arabia DB2015
Bahrain DB2015
Kuwait DB2015
Jordan DB2015
Indicator
Oman DB2015
Qatar DB2015
DB2015
DB2014
DB2015
Starting a Business
58 49 131 86 150 123 103 109 New Zealand (1)
(rank)
Starting a Business (DTF
89.97 89.96 76.92 85.61 71.30 79.29 83.14 82.71 New Zealand (99.96)
Score)
Procedures (number) 6.0 6.0 7.0 7.0 12.0 5.0 8.0 9.0 New Zealand (1.0)*
Time (days) 8.0 8.0 9.0 12.0 31.0 7.0 8.5 20.5 New Zealand (0.5)
Cost (% of income per
6.3 6.4 0.8 21.4 1.9 2.4 5.2 4.0 Slovenia (0.0)
capita)
Paid-in min. capital (%
0.0 0.0 192.2 0.0 74.0 206.3 62.6 0.0 112 Economies (0.0)*
of income per capita)
Dealing with
Hong Kong SAR,
Construction Permits 4 4 7 126 98 49 23 21
China (1)
(rank)
Dealing with
Hong Kong SAR,
Construction Permits 91.22 91.21 88.48 66.02 70.60 78.27 83.61 84.07
China (95.53)
(DTF Score)Doing Business 2015 United Arab Emirates 12
Best performer globally
United Arab Emirates
United Arab Emirates
Saudi Arabia DB2015
Bahrain DB2015
Kuwait DB2015
Jordan DB2015
Indicator
Oman DB2015
Qatar DB2015
DB2015
DB2014
DB2015
Hong Kong SAR,
Procedures (number) 10.0 10.0 11.0 16.0 20.0 11.0 15.0 11.0
China (5.0)
Time (days) 44.0 44.0 60.0 63.0 96.0 157.0 57.5 102.0 Singapore (26.0)
Cost (% of warehouse
0.2 0.2 0.2 9.5 1.6 0.7 0.0 0.4 Qatar (0.0)*
value)
Getting Electricity
4 3 73 44 93 79 40 22 Korea, Rep. (1)
(rank)
Getting Electricity (DTF
97.44 97.43 78.26 82.95 74.13 76.76 83.97 88.11 Korea, Rep. (99.83)
Score)
Procedures (number) 3.0 3.0 5.0 5.0 7.0 6.0 4.0 4.0 12 Economies (3.0)*
Time (days) 35.0 35.0 90.0 50.0 42.0 62.0 90.0 61.0 Korea, Rep. (18.0)*
Cost (% of income per
24.2 24.8 47.1 315.9 42.3 48.9 9.0 25.5 Japan (0.0)
capita)
Registering Property
4 4 17 107 69 19 36 20 Georgia (1)
(rank)
Registering Property
96.66 95.50 88.65 63.45 72.10 88.16 80.86 87.77 Georgia (99.88)
(DTF Score)
Procedures (number) 2.0 2.0 2.0 7.0 8.0 2.0 7.0 5.0 4 Economies (1.0)*
Time (days) 2.0 6.0 31.0 21.0 47.0 16.0 13.0 8.0 3 Economies (1.0)*
Cost (% of property
0.2 0.4 1.7 7.5 0.5 3.0 0.3 0.0 4 Economies (0.0)*
value)
Getting Credit (rank) 89 99 104 185 116 116 131 71 New Zealand (1)
Getting Credit (DTF
45.00 40.00 40.00 0.00 35.00 35.00 30.00 50.00 New Zealand (100)
Score)
Strength of legal rights
2 2 1 0 2 1 1 2 3 Economies (12)*
index (0-12)Doing Business 2015 United Arab Emirates 13
Best performer globally
United Arab Emirates
United Arab Emirates
Saudi Arabia DB2015
Bahrain DB2015
Kuwait DB2015
Jordan DB2015
Indicator
Oman DB2015
Qatar DB2015
DB2015
DB2014
DB2015
Depth of credit
7 6 7 0 5 6 5 8 23 Economies (8)*
information index (0-8)
Credit registry coverage
6.8 5.8 0.0 2.2 0.0 20.6 23.3 0.0 Portugal (100.0)
(% of adults)
Credit bureau coverage
28.3 27.0 48.3 0.0 32.0 0.0 0.0 47.0 23 Economies (100.0)*
(% of adults)
Protecting Minority
43 102 104 154 43 122 122 62 New Zealand (1)
Investors (rank)
Protecting Minority
60.83 49.17 50.00 41.67 60.83 45.83 45.83 57.50 New Zealand (81.67)
Investors (DTF Score)
Extent of conflict of
interest regulation 7.3 5.0 4.7 3.3 5.7 5.3 4.3 6.7 Singapore (9.3)*
index (0-10)
Extent of shareholder
governance index (0- 4.8 4.8 5.3 5.0 6.5 3.8 4.8 4.8 France (7.8)*
10)
Strength of minority
investor protection 6.1 4.9 5.0 4.2 6.1 4.6 4.6 5.8 New Zealand (8.2)
index (0-10)
United Arab Emirates
Paying Taxes (rank) 1 1 8 45 11 10 1 3
(1)*
Paying Taxes (DTF United Arab Emirates
99.44 99.44 93.88 81.19 92.48 92.91 99.44 99.23
Score) (99.44)*
Payments (number per Hong Kong SAR,
4.0 4.0 13.0 25.0 12.0 14.0 4.0 3.0
year) China (3.0)*
Time (hours per year) 12.0 12.0 60.0 151.0 98.0 68.0 41.0 64.0 Luxembourg (55.0)
Trading Across Borders
8 9 64 54 117 60 61 92 Singapore (1)
(rank)
Trading Across Borders 91.46 91.59 77.27 78.92 68.00 78.05 77.79 73.01 Singapore (96.47)Doing Business 2015 United Arab Emirates 14
Best performer globally
United Arab Emirates
United Arab Emirates
Saudi Arabia DB2015
Bahrain DB2015
Kuwait DB2015
Jordan DB2015
Indicator
Oman DB2015
Qatar DB2015
DB2015
DB2014
DB2015
(DTF Score)
Documents to export
3 3 6 5 7 7 5 6 Ireland (2)*
(number)
Time to export (days) 7.0 7.0 11.0 12.0 15.0 10.0 15.0 13.0 5 Economies (6.0)*
Cost to export (US$ per
665.0 655.0 810.0 825.0 1,085.0 765.0 927.0 1,285.0 Timor-Leste (410.0)
container)
Cost to export (deflated
665.0 645.5 810.0 825.0 1,085.0 765.0 927.0 1,285.0
US$ per container)
Documents to import
5 5 8 7 10 8 7 8 Ireland (2)*
(number)
Time to import (days) 7.0 7.0 15.0 15.0 20.0 9.0 16.0 17.0 Singapore (4.0)
Cost to import (US$ per
625.0 615.0 870.0 1,235.0 1,250.0 700.0 1,050.0 1,309.0 Singapore (440.0)
container)
Cost to import (deflated
625.0 606.1 870.0 1,235.0 1,250.0 700.0 1,050.0 1,309.0
US$ per container)
Enforcing Contracts
121 121 123 114 131 130 104 108 Singapore (1)
(rank)
Enforcing Contracts
52.52 52.52 52.33 54.04 50.59 50.67 56.73 55.86 Singapore (89.54)
(DTF Score)
Time (days) 524.0 524.0 635.0 689.0 566.0 598.0 570.0 635.0 Singapore (150.0)
Cost (% of claim) 19.5 19.5 14.7 31.2 18.8 13.5 21.6 27.5 Iceland (9.0)
Procedures (number) 49.0 49.0 48.0 39.0 50.0 51.0 43.0 40.0 Singapore (21.0)*
Resolving Insolvency
92 88 87 145 127 112 47 163 Finland (1)
(rank)
Resolving Insolvency
43.51 44.02 44.24 30.17 36.02 39.02 58.27 21.67 Finland (93.85)
(DTF Score)Doing Business 2015 United Arab Emirates 15
Best performer globally
United Arab Emirates
United Arab Emirates
Saudi Arabia DB2015
Bahrain DB2015
Kuwait DB2015
Jordan DB2015
Indicator
Oman DB2015
Qatar DB2015
DB2015
DB2014
DB2015
Time (years) 3.2 3.2 2.5 3.0 4.2 4.0 2.8 2.8 Ireland (0.4)
Cost (% of estate) 20.0 20.0 9.5 20.0 10.0 3.5 22.0 22.0 Norway (1.0)
Outcome (0 as
piecemeal sale and 1 as 0 0 0 0 0 0 1 0
going concern)
Recovery rate (cents on
28.6 29.5 41.6 27.0 32.1 37.7 56.0 28.7 Japan (92.9)
the dollar)
Strength of insolvency
9.0 9.0 7.0 5.0 6.0 6.0 9.0 2.0 5 Economies (15.0)*
framework index (0-16)
Note: DB2014 rankings shown are not last year’s published rankings but comparable rankings for DB2014 that capture the effects of such
factors as data corrections and changes to the methodology. Trading across borders deflated and non-deflated values are identical in
DB2015 because it is defined as the base year for the deflator. The best performer on time for paying taxes is defined as the lowest time
recorded among all economies in the DB2015 sample that levy the 3 major taxes: profit tax, labor taxes and mandatory contributions, and
VAT or sales tax. If an economy has no laws or regulations covering a specific area—for example, insolvency—it receives a “no practice”
mark. Similarly, an economy receives a “no practice” or “not possible” mark if regulation exists but is never used in practice or if a
competing regulation prohibits such practice. Either way, a “no practice” mark puts the economy at the bottom of the ranking on the
relevant indicator.
* Two or more economies share the top ranking on this indicator. A number shown in place of an economy’s name indicates the number
of economies that share the top ranking on the indicator. For a list of these economies, see the Doing Business website
(http://www.doingbusiness.org).
Source: Doing Business database.Doing Business 2015 United Arab Emirates 16
STARTING A BUSINESS
Formal registration of companies has many WHAT THE STARTING A BUSINESS
immediate benefits for the companies and for
business owners and employees. Legal entities can INDICATORS MEASURE
outlive their founders. Resources are pooled as
several shareholders join forces to start a company. Procedures to legally start and operate a
Formally registered companies have access to company (number)
services and institutions from courts to banks as well
Preregistration (for example, name
as to new markets. And their employees can benefit
verification or reservation, notarization)
from protections provided by the law. An additional
benefit comes with limited liability companies. These Registration in the economy’s largest
limit the financial liability of company owners to their business city1
investments, so personal assets of the owners are not
Postregistration (for example, social security
put at risk. Where governments make registration
registration, company seal)
easy, more entrepreneurs start businesses in the
formal sector, creating more good jobs and Time required to complete each procedure
generating more revenue for the government. (calendar days)
What do the indicators cover? Does not include time spent gathering
information
Doing Business measures the ease of starting a
business in an economy by recording all procedures Each procedure starts on a separate day (2
officially required or commonly done in practice by procedures cannot start on the same day).
an entrepreneur to start up and formally operate an Procedures that can be fully completed
industrial or commercial business—as well as the online are recorded as ½ day.
time and cost required to complete these procedures. Procedure completed once final document is
It also records the paid-in minimum capital that received
companies must deposit before registration (or
within 3 months). The ranking of economies on the No prior contact with officials
ease of starting a business is determined by sorting Cost required to complete each procedure
their distance to frontier scores for starting a (% of income per capita)
business. These scores are the simple average of the
distance to frontier scores for each of the component Official costs only, no bribes
indicators. No professional fees unless services required
To make the data comparable across economies, by law
Doing Business uses several assumptions about the Paid-in minimum capital (% of income
business and the procedures. It assumes that all per capita)
information is readily available to the entrepreneur
and that there has been no prior contact with Deposited in a bank or with a notary before
officials. It also assumes that the entrepreneur will registration (or within 3 months)
pay no bribes. And it assumes that the business:
Is a limited liability company, located in the Has a start-up capital of 10 times income per
largest business city and is 100% domestically capita.
owned1.
Has a turnover of at least 100 times income per
Has between 10 and 50 employees. capita.
Conducts general commercial or industrial Does not qualify for any special benefits.
activities.
Does not own real estate.
1
For the 11 economies with a population of more than 100 million, data for a second city have been added.Doing Business 2015 United Arab Emirates 17 STARTING A BUSINESS Where does the economy stand today? What does it take to start a business in United Arab the largest business city of an economy, except for 11 Emirates? According to data collected by Doing Business, economies for which the data are a population-weighted starting a business there requires 6.0 procedures, takes average of the 2 largest business cities. See the chapter 8.0 days, costs 6.3% of income per capita and requires on distance to frontier and ease of doing business paid-in minimum capital of 0.0% of income per capita ranking at the end of this profile for more details. (figure 2.1). Most indicator sets refer to a case scenario in Figure 2.1 What it takes to start a business in United Arab Emirates Paid-in minimum capital (% of income per capita): 0.0 Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the starting a business indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database.
Doing Business 2015 United Arab Emirates 18 STARTING A BUSINESS Globally, United Arab Emirates stands at 58 in the other useful information for assessing how easy it is for ranking of 189 economies on the ease of starting a an entrepreneur in United Arab Emirates to start a business (figure 2.2). The rankings for comparator business. economies and the regional average ranking provide Figure 2.2 How United Arab Emirates and comparator economies rank on the ease of starting a business Source: Doing Business database.
Doing Business 2015 United Arab Emirates 19
STARTING A BUSINESS
Economies around the world have taken steps making it they often are part of a larger regulatory reform
easier to start a business—streamlining procedures by program. Among the benefits have been greater firm
setting up a one-stop shop, making procedures simpler satisfaction and savings and more registered businesses,
or faster by introducing technology and reducing or financial resources and job opportunities.
eliminating minimum capital requirements. Many have
What business registration reforms has Doing Business
undertaken business registration reforms in stages—and
recorded in United Arab Emirates (table 2.1)?
Table 2.1 How has United Arab Emirates made starting a business easier—or not?
By Doing Business report year from DB2010 to DB2015
DB year Reform
The United Arab Emirates made starting a business easier by
abolishing the minimum capital requirement and simplifying
DB2010 documentation requirements for registration, including by
eliminating the requirement to show proof of deposit of
capital.
The United Arab Emirates made starting a business easier by
merging the requirements to file company documents with the
DB2012 Department for Economic Development, to obtain a trade
license and to register with the Dubai Chamber of Commerce
and Industry.
The United Arab Emirates made starting a business easier by
eliminating the requirement for a company to prepare a name
DB2013
board in English and Arabic after having received clearance on
the use of office premises.
Note: For information on reforms in earlier years (back to DB2005), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.Doing Business 2015 United Arab Emirates 20
STARTING A BUSINESS
What are the details?
Underlying the indicators shown in this chapter for
STANDARDIZED COMPANY
United Arab Emirates is a set of specific procedures—
the bureaucratic and legal steps that an entrepreneur
must complete to incorporate and register a new Legal form: Limited Liability Company
firm. These are identified by Doing Business through
collaboration with relevant local professionals and Paid in minimum capital requirement: AED 0
the study of laws, regulations and publicly available City: Dubai
information on business entry in that economy.
Following is a detailed summary of those procedures, Start-up Capital: 10 times GNI per capita
along with the associated time and cost. These
procedures are those that apply to a company
matching the standard assumptions (the
“standardized company”) used by Doing Business in
collecting the data (see the section in this chapter on
what the indicators measure).
Table 2.2 Summary of time, cost and procedures for starting a business in United Arab Emirates
Time to
No. Procedure Cost to complete
complete
Reserve a company name and Apply for registration at the
Department of Economic Development (DED)
To register a company and submit a registration application, the
entrepreneur must first obtain preliminary approvals from the Licensing AED 110 for initial
Section of the Dubai Department of Economic Development (DED) on approval + AED 210
1 the business activities, trade name, and identity of partners. The name 1 day
for name
availability check, reservation, and payment can now be done online at
reservation
the website of DED.
Agency: Department of Economic Development
Notarize the company’s Memorandum of Association at DED
The applicant notarizes the standard Memorandum of Association
(MOA) at DED. Notarization takes no more than 1 day. A common 0.25% of the capital
practice is for the entrepreneur’s lawyer to obtain a preliminary (for 3 copies of the
approval from the notary beforehand, so that the client can arrive at a Memorandum of
2 1 day
specified time and have the documents notarized immediately. The Association), AED 5
maximum notary fee is AED 10,000. for each page of
the additional copy
Agency: NotaryDoing Business 2015 United Arab Emirates 21
Time to
No. Procedure Cost to complete
complete
File company documents with the Department for Economic
Development (DED); Obtain trade license and Register for
membership at the Dubai Chamber of Commerce and Industry
(DCCI)
To obtain the Trade License and Commercial Registration Certificate,
the LLC must submit the following original documents to the
Commercial Registry at the DED Trade License and Commercial
Registration Department. These documents can also be submitted
online due to the ongoing efforts by DED to render electronic
registration available and convenient.
- The prescribed application form, signed by the company manager(s)
or their legal representative(s).
- The memorandum of association (an original and a copy).
- A letter issued by the DED, attesting to the company name approval.
- The original letter of company approval, issued by the DED
Committee of Limited Liability Companies.
- Passport copy of each partner.
If Commercial Registry officials deem the documentation to be in order,
the company name will be entered into the Commercial Register. The
DED then forwards the following documents to the Federal Ministry of
Economy to arrange for publication:
- Notarized memorandum of association (copy).
- The application for entry of the company name in the Commercial
Register (copy). see procedure
3 - Extract of the entry of the company name in the Commercial Register. 3 days
details
Publication takes several months. However, this time frame is not
important because the authorities will accept a copy of the Ministry's
receipt of publication fee payment. After the publication, the Ministry of
Economy issues its approval letter.
Before the newly formed company can begin operations, it must apply
to the DED for a trade license. After the notary public at the Commercial
Registry notarizes the memorandum of association, a license
application form is completed in Arabic, signed by the authorized
company signatory and filed with the DED in duplicate. The DED files
one copy and forwards the other to the UAE Federal Ministry of
Economy.
The trade license application must be filed with the applicable fee and
the following documents:
- The prescribed form for setting out the proposed company name in
Arabic and English.
- The original lease for the company’s office premises.
- The prescribed form for obtaining the Dubai Municipality Building
Department’s clearance on the suitability of the office premises.
All business activities fall into three categories of licenses: (1)
commercial licenses, covering all kinds of trading activity; (2)
professional licenses, covering professions, services, craftsmen, and
artisans; and (3) industrial licenses, establishing industrial or
manufacturing activity.Doing Business 2015 United Arab Emirates 22
Time to
No. Procedure Cost to complete
complete
Upon the conclusion of this procedure, the DED issues the original
Trade License and Commercial Registration certificates. Upon
presentation of the receipts showing payment of the Ministry
publication fee and the Chamber of Commerce membership fee, the
DED will issue the original trade license and certificate of commercial
registration for the limited liability company and the DCCI membership.
Alternatively, the online license application is available whereby the
applicant submits the filled-in form, completes online payment and
instantly receives the license certificate which can then be printed out.
Recently, DED has launched electronic memorandum of association and
"120-day" hassle-free trade license initiatives. These reforms aim
towards the transition towards online registration, making it easier to
start a business.
Fees are: 5% of the value of the lease agreement + AED 1,000-3,000
waste fees + AED 480 for company registration + AED 350 fees for
nameboard + AED 1,200 for Chamber of Commerce membership
registration
Agency: Department for Economic Development
Apply for the establishment card at the Ministry of Labor
Either the entrepreneur or the authorized representative of the
company should go in person to apply for the "Establishment Card" at
the Ministry of Labor. Provided the trade license is obtained and the 1 day AED 2,000
4
fees are paid, the "Establishment Card" can be issued the same day.
Agency: Ministry of Labor
Register native workers with the Ministry of Labor
According to Ministerial decree No 1215/2005, native workers must be
registered with the Ministry of Labor.
The following documents are required for submission during this
registration:
- 3 copies of the employment contract 1 day no charge
5
- A copy of employer's passport
- A copy of the trading license
- A proof that the worker is a UAE citizen
Agency: Ministry of LaborDoing Business 2015 United Arab Emirates 23
Time to
No. Procedure Cost to complete
complete
* Register native workers with the General Authority for Pension
and Social Security
1 day
Registration requires the submission of the native workers’ updated (simultaneous with
6 salary certificates or labor contracts. no charge
previous
procedure)
Agency: General Authority for Pension and Social Security
* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.Doing Business 2015 United Arab Emirates 24
DEALING WITH CONSTRUCTION PERMITS
Regulation of construction is critical to protect the WHAT THE DEALING WITH CONSTRUCTION
public. But it needs to be efficient, to avoid excessive
PERMITS INDICATORS MEASURE
constraints on a sector that plays an important part in
every economy. Where complying with building
regulations is excessively costly in time and money, Procedures to legally build a warehouse
many builders opt out. They may pay bribes to pass (number)
inspections or simply build illegally, leading to Submitting all relevant documents and
hazardous construction that puts public safety at risk. obtaining all necessary clearances, licenses,
Where compliance is simple, straightforward and permits and certificates
inexpensive, everyone is better off. Submitting all required notifications and
What do the indicators cover? receiving all necessary inspections
Doing Business records the procedures, time and cost Obtaining utility connections for water and
for a business in the construction industry to obtain sewerage
all the necessary approvals to build a warehouse in Registering the warehouse after its
the economy’s largest business city, connect it to completion (if required for use as collateral or
basic utilities and register the warehouse so that it for transfer of the warehouse)
can be used as collateral or transferred to another Time required to complete each procedure
entity. (calendar days)
The ranking of economies on the ease of dealing with Does not include time spent gathering
construction permits is determined by sorting their information
distance to frontier scores for dealing with
Each procedure starts on a separate day.
construction permits. These scores are the simple
Procedures that can be fully completed online
average of the distance to frontier scores for each of
are recorded as ½ day.
the component indicators.
Procedure considered completed once final
To make the data comparable across economies, document is received
Doing Business uses several assumptions about the
business and the warehouse, including the utility No prior contact with officials
connections. Cost required to complete each procedure (%
The business: of warehouse value)
Official costs only, no bribes
Is a limited liability company operating in
the construction business and located in Will have complete architectural and
the largest business city. For the 11 technical plans prepared by a licensed
economies with a population of more than architect or engineer.
100 million, data for a second city have
Will be connected to water and sewerage
been added. Is domestically owned and
(sewage system, septic tank or their
operated.
equivalent). The connection to each utility
Has 60 builders and other employees. network will be 150 meters (492 feet) long.
The warehouse: Will be used for general storage, such as of
books or stationery (not for goods requiring
Is valued at 50 times income per capita.
special conditions).
Is a new construction (there was no
Will take 30 weeks to construct (excluding all
previous construction on the land).
delays due to administrative and regulatory
requirements).Doing Business 2015 United Arab Emirates 25 DEALING WITH CONSTRUCTION PERMITS Where does the economy stand today? What does it take to comply with the formalities to build business city of an economy, except for 11 economies for a warehouse in United Arab Emirates? According to data which the data are a population-weighted average of the collected by Doing Business, dealing with construction 2 largest business cities. See the chapter on distance to permits there requires 10.0 procedures, takes 44.0 days frontier and ease of doing business ranking at the end of and costs 0.2% of the warehouse value (figure 3.1). this profile for more details. Most indicator sets refer to a case scenario in the largest Figure 3.1 What it takes to comply with formalities to build a warehouse in United Arab Emirates Note: Time shown in the figure above may not reflect simultaneity of procedures. Online procedures account for 0.5 days in the total time calculation. For more information on the methodology of the dealing with construction permits indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected here, see the summary at the end of this chapter. Source: Doing Business database.
Doing Business 2015 United Arab Emirates 26 DEALING WITH CONSTRUCTION PERMITS Globally, United Arab Emirates stands at 4 in the ranking provide other useful information for assessing how easy of 189 economies on the ease of dealing with it is for an entrepreneur in United Arab Emirates to construction permits (figure 3.2). The rankings for legally build a warehouse. comparator economies and the regional average ranking Figure 3.2 How United Arab Emirates and comparator economies rank on the ease of dealing with construction permits Source: Doing Business database.
Doing Business 2015 United Arab Emirates 27
DEALING WITH CONSTRUCTION PERMITS
Smart regulation ensures that standards are met while compliance costs reasonable, governments around the
making compliance easy and accessible to all. Coherent world have worked on consolidating permitting
and transparent rules, efficient processes and adequate requirements. What construction permitting reforms has
allocation of resources are especially important in sectors Doing Business recorded in United Arab Emirates (table
where safety is at stake. Construction is one of them. In 3.1)?
an effort to ensure building safety while keeping
Table 3.1 How has United Arab Emirates made dealing with construction permits easier—or not?
By Doing Business report year from DB2010 to DB2015
DB year Reform
The United Arab Emirates made dealing with construction
permits less time consuming by improving its online system
DB2010
for obtaining no-objection certificates, building permits and
completion certificates.
Note: For information on reforms in earlier years (back to DB2006), see the Doing Business reports
for these years, available at http://www.doingbusiness.org.
Source: Doing Business database.Doing Business 2015 United Arab Emirates 28
DEALING WITH CONSTRUCTION PERMITS
What are the details?
The indicators reported here for United Arab
BUILDING A WAREHOUSE
Emirates are based on a set of specific procedures—
the steps that a company must complete to legally
build a warehouse—identified by Doing Business Estimated cost of
through information collected from experts in AED 7,662,104
construction :
construction licensing, including architects, civil
engineers, construction lawyers, construction firms,
City : Dubai
utility service providers and public officials who deal
with building regulations. These procedures are The procedures, along with the associated time and cost,
those that apply to a company and structure are summarized below.
matching the standard assumptions used by Doing
Business in collecting the data (see the section in this
chapter on what the indicators cover).
Table 3.2 Summary of time, cost and procedures for dealing with construction permits in United Arab
Emirates
Time to
No. Procedure Cost to complete
complete
Request and obtain Civil Defense approval
1 1 day no charge
Agency: Civil Defense Department
Request and obtain all No Objection Certificates (NOCs) and
building permit online from the Building Department of Dubai
Municipality
As of 2012, all No Objection Certificates (NOCs) can be applied for
online through the Dubai Municipality portal at the same time as the
building permit. NOCs are required from the following departments
and are valid for 2 years:
• Dubai Electricity and Water Authority (DEWA) on electrical wiring
installation drawings
2 • Dubai Electricity and Water Authority (DEWA) on water connection 24 days AED 11,203
• Drainage and Irrigation Department of Dubai Municipality on
drainage and sewage
• Etisalat on phone connection
BuildCo also submits the final drawings online at the Building
Department of the Dubai Municipality for approval.
Agency: Building Department of Dubai Municipality
Request and receive foundation (concrete) work inspection from
the Building and Housing Department of Dubai Municipality
3 1 day no charge
All inspections and approvals can be requested online and are free of
charge. As part of the staged inspections, Dubai Municipality will
inspect the septic tank.Doing Business 2015 United Arab Emirates 29
Time to
No. Procedure Cost to complete
complete
Agency: Building Department of Dubai Municipality
Request and receive inspection from the Civil Defense (Fire
Department)
4 1 day no charge
Agency: Civil Defense Department
Request and receive final inspection from the Building Department
of Dubai municipality
In order to request the final inspection, BuildCo must fill out an
application online and submit the following documents:
• Survey Section’s approval
• Civil Defense's approval (not required for villas)
• A copy of the land plan
5 • A copy of the building license 1 day AED 100
• A copy of the construction inspection statement
• A copy of the worksite block inspection statement
• The approved charts (that should be available at the worksite during
inspection)
Agency: Building Department of Dubai Municipality
* Obtain building completion certificate from the Building
Department of Dubai Municipality
Approval is given at the time of final inspection. However, the
completion certificate is not issued on the spot, but the applicant can
6 print it online. 0.5 days no charge
Agency: Building Department of Dubai Municipality
* Obtain building occupancy permit
7 0.5 days no charge
Agency: Dubai Lands Department
* Obtain inspection and approval from DEWA for final water
supply
8 1 day no charge
Agency: Dubai Electricity and Water Authority (DEWA)Doing Business 2015 United Arab Emirates 30
Time to
No. Procedure Cost to complete
complete
Obtain final water connection from DEWA
9 14 days AED 2,250
Agency: Dubai Electricity and Water Authority (DEWA)
* Build septic tank
10 3 days AED 4,000
Agency: Drainage and Irrigation Department
* Takes place simultaneously with another procedure.
Note: Online procedures account for 0.5 days in the total time calculation.
Source: Doing Business database.Doing Business 2015 United Arab Emirates 31
GETTING ELECTRICITY
Access to reliable and affordable electricity is vital for WHAT THE GETTING ELECTRICITY
businesses. To counter weak electricity supply, many
firms in developing economies have to rely on self- INDICATORS MEASURE
supply, often at a prohibitively high cost. Whether
electricity is reliably available or not, the first step for Procedures to obtain an electricity
a customer is always to gain access by obtaining a connection (number)
connection.
Submitting all relevant documents and
What do the indicators cover? obtaining all necessary clearances and permits
Doing Business records all procedures required for a Completing all required notifications and
local business to obtain a permanent electricity receiving all necessary inspections
connection and supply for a standardized warehouse,
as well as the time and cost to complete them. These Obtaining external installation works and
procedures include applications and contracts with possibly purchasing material for these works
electricity utilities, clearances from other agencies Concluding any necessary supply contract and
and the external and final connection works. The obtaining final supply
ranking of economies on the ease of getting
electricity is determined by sorting their distance to Time required to complete each procedure
frontier scores for getting electricity. These scores are (calendar days)
the simple average of the distance to frontier scores Is at least 1 calendar day
for each of the component indicators. To make the
data comparable across economies, several Each procedure starts on a separate day
assumptions are used. Does not include time spent gathering
The warehouse: information
Is owned by a local entrepreneur, located Reflects the time spent in practice, with little
in the economy’s largest business city, in follow-up and no prior contact with officials
an area where other warehouses are Cost required to complete each procedure
located. For the 11 economies with a (% of income per capita)
population of more than 100 million, data
Official costs only, no bribes
for a second city have been added.
Excludes value added tax
Is not in a special economic zone where
the connection would be eligible for
subsidization or faster service. Is to either the low-voltage or the medium-
voltage distribution network and either
Is located in an area with no physical
overhead or underground, whichever is more
constraints (ie. property not near a railway).
common in the area where the warehouse is
Is a new construction being connected to located. Included only negligible length in the
electricity for the first time. customer’s private domain.
Is 2 stories, both above ground, with a total Requires crossing of a 10-meter road but all
surface of about 1,300.6 square meters the works are carried out in a public land, so
(14,000 square feet), is built on a plot of there is no crossing into other people's
929 square meters (10,000 square feet), is private property.
used for storage of refrigerated goods
Involves installing one electricity meter. The
The electricity connection: monthly electricity consumption will be
26880 kilowatt hour (kWh). The internal
Is 150 meters long and is a 3-phase, 4-wire
electrical wiring has been completed.
Y, 140-kilovolt-ampere (kVA) (subscribed
capacity) connection.Doing Business 2015 United Arab Emirates 32
GETTING ELECTRICITY
Where does the economy stand today?
What does it take to obtain a new electricity connection Most indicator sets refer to a case scenario in the largest
in United Arab Emirates? According to data collected by business city of an economy, except for 11 economies for
Doing Business, getting electricity there requires 3.0 which the data are a population-weighted average of the
procedures, takes 35.0 days and costs 24.2% of income 2 largest business cities. See the chapter on distance to
per capita (figure 4.1). frontier and ease of doing business ranking at the end of
this profile for more details.
Figure 4.1 What it takes to obtain an electricity connection in United Arab Emirates
Note: Time shown in the figure above may not reflect simultaneity of procedures. For more information on the methodology of the
getting electricity indicators, see the Doing Business website (http://www.doingbusiness.org). For details on the procedures reflected
here, see the summary at the end of this chapter.
Source: Doing Business database.Doing Business 2015 United Arab Emirates 33 GETTING ELECTRICITY Globally, United Arab Emirates stands at 4 in the ranking perspective in assessing how easy it is for an of 189 economies on the ease of getting electricity entrepreneur in United Arab Emirates to connect a (figure 4.2). The rankings for comparator economies and warehouse to electricity. the regional average ranking provide another Figure 4.2 How United Arab Emirates and comparator economies rank on the ease of getting electricity Source: Doing Business database.
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