Paper Example on UAE Trade Policies

In the world of trade, UAE (United Arab Emirates) plays a significant role since its among the leading exporters and importers of Merchandise. It is partners with the major world countries in the trade like the European Union, Japan, Canada, and the USA hence making it the most important country in the Middle East. While the fee zones are countries that operate out of the customs ground for issues governed by the legislature, taxes or even duties.

Nevertheless, for UAE 32 free trades there are some rules and regulations that a foreign country has to follow for them to do business in UAE. These restrictions are employed to ensure there is a smooth relationship, and the business is carried out without any challenges. Any foreign country wishing to engage in business with UAE is not allowed to import products into UAE and resale it or offer any service as a registered commercial agency. This is only carried out with the help of Commercial Agency Law and the Commercial Code which intermediates between foreign countries and the UAE. Its through this agency that the foreign countries doing business provide their goods and services. A state that has not yet obtained a commercial agent before the company may not be able to trade with UAE. The taxes and any commission that is to be given to the country is being controlled by the agency depending on their agreements. Failure to renew one's license with the agency leads to cancellation of your opportunity to do business in the UAE. A body that deals with the licenses makes regular visits to ensure that all the licenses are up to date. In case one is starting a company, and he or she is a foreigner, the rule states that the firm has to belong to the foreigner entirely and a local service agent has to be elected to represent the company (El Shimy, 2008).

This agent is not supposed to be involved in the affairs of the company but assists in matters like issuing of visas to the employees or labor cards. The Department of Economic Development controls and protects the consumers and also raising awareness to their rights and responsibilities. They implement measures and policies for the environment and the users of various products in the Emirates. This is to ensure no pollution to the environment and also safeguarding its people. Also without a valid importer code from the customs one may not be able to import his goods into any of the countries. The goods have to coincide with the activities of the licensed company for the goods to be allowed into the country. In case the goods being imported into the country does not rhyme with these conditions they can be rejected by the customs. Also when exporting any goods from the country, the transportation company has to submit to the customs officers according to the rules and regulations to obtain an exit permit. The exported goods need to be analyzed in details to the competent customs office. Goods imported into the countries for purposes like exhibitions or marketing have to be returned to the country in the same condition the came in. A letter showing the use, the period of time the product is going to stay in the country and the day and time it will leave that country is produced at the customs office (El Shimy, 2008).

Also, despite the rules and regulations enforced by the foreign companies, when it comes to taxes for exports, there are taxes except on scrap metals, but other export products are tax-free. For imports, in either of these free trade zone countries, they must have full ownership of the company, then pay personal taxes and cooperate taxes for around 15 years which is renewable for another 15 years. Businesses that are within the free trade zones are not entitled to ownership, distributorship and sponsorship and the free trade zone provide all the goods and services. The country does not allow any subsidies to the foreign banks, but they are subjected to a 20% tax on the total profit they make, and it is exceptional to the national bank. The competent authorities ensure foreign equity on the projects in areas where the natural resources are located. Imports of manufacturing materials face a 5% tariff, but all the materials for the licensed industrial project enter into the UAE duty-free. The taxes sometimes they may be exaggerated leading to some companies experiencing difficulties in the importation of their products. This, on the other hand, affects its operational not to mention the business failure. In return, it affects the economy of the UAE countries, and it may lead to the closure of the business permit of such company (PWC, 2015).

UAE offers great opportunity when it comes to trade since it already has ready market thus encouraging countries to do business with it. Its partnership with the world most major countries has also boosted the economy in a very high percentage hence expansion of the country. Some key contributors sectors of the country like tourism have been greatly influenced due to the ease of trade established in the country. However due to the rules and regulations enforced by the country against the foreign countries it limits the growth of the sector to its maximum potential. Exploitation of the foreign countries may occur either by the commercial agency or the officials discouraging business or even a substantial investments. The only beneficiaries of the trade policies mainly are the free trade zones since they do not have to undergo a lot of struggles regarding taxes and tariffs unlike the foreign companies (PWC, 2015).

In conclusion, trade has been a major pillar of the economy of the UAE. This is mainly attributed to the establishment of the free trade zones and also purchase from the foreign countries. Creation of employment opportunity has also been created through to the investments as well as the exploitation of the natural resources like oil. The partnership of UAE with the world leading countries in trade has also put it in the limelight and also enhancing peace. In addition, UAE remains one of tourism attraction region in the world characterized with iconic skylines of high rises and world well-known beach resorts.

References

El Shimy, N. (2008). From Free Zones to Special Economic ZonesThe UAE Case Study. Retrieved from https://www.oecd.org/mena/competitiveness/41613492.pdfPWC (2015) Doing Business in the UAE: A tax and legal guide. Retrieved from https://www.pwc.com/m1/en/tax/documents/doing-business-guides/doing-business-guide-uae.pdf