1. © Berlin 2016 UAE & KSA – Incorporation Procedures

2. Content 1. UAE 1. Setting up your business in the UAE (Mainland) 2. Mainland vs. Freezone 3. LLC vs. Branch 4. Distributorship 2. KSA 1. The “new” push for foreign investment 2. Setting up your business in the KSA

3. Step 1 - Select your business activity/ activities Step 2 - Select the legal form (LLC, Branch, etc.) Step 3 - Select a Trade Name Step 4 - Initial Approval Certificate Step 5 - Prepare MoA + Local Service Agent (LSA) Agreement Step 6 - Establish business location Step 7 - Get all necessary approvals Step 8 - Collect your Business License 1.UAE Setting up your business (Mainland)

4. 1.UAE Mainland vs. Free zone Mainland Advantage 1: Can do business in the entire country (mainland + freezone) Advantage 2: Better business partners Disadvantage 1: Majority participation (51% at least) of a local partner Disadvantage 2: For Branch and representative office - a local service agent is required. There is possibly a lengthy process to establish the company. Freezone Advantage 1: 100% ownership by foreigners allowed Advantage 2: Usually a guaranteed tax exemption for 50 years. Also, usually faster in processing administrative issue. Disadvantage 1: Not all activities are allowed in all free zones Disadvantage 2: In general, the rule is that you can do business ONLY in the free zone (and internationally) but NOT with mainland companies.

5. LLC Stands for Limited Liability Company (comparable with a GmbH) Creation of a one-man company is possible A local partner is required (at 51% share ownership) Liability is limited to share capital Branch Not an independent company Activity is limited to the activity of the parent Local service agent (LSA) is required Unlimited liability of the foreign company No possibility of using Tax incentives (profit is attributed to the parent company) 1.UAE LLC Vs. Branch

6. Every foreign company needs a distributor in and from the UAE! Advice 1: Choose your partners very carefully Advice 2: Exclusive jurisdiction in the UAE Only UAE courts can decide about distributorship-related legal disputes Only UAE law is applicable Even arbitrational proceedings are NOT allowed (not even DIFC proceedings!) Other country’s arbitration awards will NOT be enforced by UAE courts! 1.UAE Distributorship in Dubai

7.  Low oil prices a major problem for KSA They are also main accelerator towards a transformed less oil-dependent economy Value-added tax, income tax, profit tax. Vision 2030: Balance Fiscal Budget, End Oil Dependence, Create more jobs Saudi Arabian General Investment Authority (SAGIA) Priority for: energy, transport & logistics, ICT, (information, communication& technology), health, life sciences, human capital. A taste of the upcoming:  Four “economic” cities to be BUILT (Medina, Hael, Jazan and Rabigh) 150 billion USD to GDP, 1.3 million jobs King Abdullah Economic City (KAEC) [NEXT SLIDE] 2.KSA The “new” push for foreign investment

8. In Rabigh, located along the Red Sea coast Comprises six main areas: Industrial Zone, Sea port, Residential area, Educational zone, Resorts, Financial Island By completion (mid 2030s), 100 billion USD invested, 1 million jobs created This megaproject is about the size of Washington, DC Sea Port: Was opened in December 2013. By September 2015, more than 100 local and multinational companies were operating in the industrial zone (Mars, Sanofi, Pfizer, Danone). The port has also signed with two of the world’s biggest ship lines - Denmark’s Maersk and Geneva-based MSC. This port will be a direct competitor to Dubai’s Jebel Ali Port! In 2018, the “Haramain” High Speed Rail line from Medina to Mekka will link the KAEC to the new international airport in KSA. 2.KSA King Abdullah Economic City (KAEC)

9. Foreign Investor (Industrial, Commercial and Service Sectors) 1.Commercial Name Reservation 2.Issue SAGIA License (online gate) 3.Obtain Commercial Registration (MoA Membership with Saudi Chamber of Commerce) (Special Activity - Healthcare, Transportation, Insurance Media) 1.Approval from Authorized Government Entities 2.Commercial Name Reservation 3.Issue SAGIA License (online gate) 4.Obtain Commercial Registration (MoA + Membership with Saudi Chamber of Commerce) 2.KSA Setting up your business (through SAGIA) Government Contract (Industrial, Commercial and Service Sectors) 1. Sign Government Contract 2. Ministry of Commerce and Industry 3.General Organization for Social Insurance 4. Ministry of Labor

10. GERMELA GmbH Kronenstraße 1 10117 Berlin Germany Hamburg Office: Lehmweg 17 20251 Hamburg Germany Phone: +49 (40) 414 252 60 Fax: +49 (40) 414 252 61 Email: info@germela.cominfo@germela.com www.germela.com Thank you! Dubai Office: Vision Tower, Floor 17 Business Bay, Dubai UAE Phone: +971 4 288 8345 Fax: +971 4 332 0005