Setting up a company in Dubai

Setting up a company in Dubai

The city of Dubai is a business giant in the Middle East. Over time, it has expanded its horizon of opportunities for constant trade and business development. Hence, aspiring entrepreneurs and new-age investors who are thinking of setting up a company in Dubai can enjoy several benefits with the region’s business-friendly reforms and liberal policies. Moreover, they receive immense support and amenities to succeed, thrive and connect to the rest of the world.

Hence, to ease this whole procedure, this article will discuss a few important things one needs to learn about business formation in Dubai.

Benefits of setting up a company in Dubai

Some of the major advantages of starting a company in Dubai are detailed below –

1. Minimal tax policies

Taxes are not a concern for businesses operating in Dubai. The minimal tax policy of the UAE ensures that foreign investors get the most out of their venture without having to spend a lot on taxes. In addition, a few companies are subject to VAT(5%), which is again the lowest in the world.

2. Investment security

The laws of the primary authorities of Dubai like DED, RERA, and DLD are fair, indiscriminate, and supportive of new businesses. Moreover, they do not levy any hidden charges or costs from these business owners. Hence, it raises confidence among new-age investors to set up their companies in the Emirates.

3. Population growth

The flourishing economy and the growing population make Dubai an epicenter for emerging industries. As foreign enterprises continue to find their base in the UAE, it is quite evident that companies can never run out of business or clients.

4. Hassle-free visa management

Dubai allows you to obtain visas for shareholders, employees, family members, etc., as per your needs, once you have received your business license. Additionally, Dubai Mainland has more favorable regulations regarding visa applications as it allows business owners to opt for multiple visas.

5. Business-friendly environment

By adopting technology for business incorporation procedures, Dubai has simplified the company registration process for expat investors. In simple terms, applicants can now complete all the steps easily and within a few days as the paperwork has been minimalized and the applicant can submit their applications online.

6. Business ownership

By making constructive amendments to the Commercial Companies Law, the UAE has allowed foreign investors to have complete ownership of their respective businesses. This is probably a major step to invite more foreign investments to the Gulf country.

7. Strategic location

Dubai sits on the crossroads connecting from all directions of the sea and land. Being one of the world’s biggest re-export hubs, with one of the most active and busiest airports/seaports, Dubai boasts an efficient logistics infrastructure. Moreover, the UAE government continues to invest greatly in enhancing the Emirate and turning it into one of the world’s greatest tourist hubs.

8. Advanced infrastructure

The Emirate holds the most developed and advanced infrastructures in all of Central Asia. Moreover, its logistical capabilities including public transportation, telecommunication facilities, and public terminals are ever-growing. Besides, the grand event of Expo 2020 exhibited momentous advancements Dubai has made in its overall infrastructure.

Types of licenses available for business setup in Dubai

The Department of Economic Development(DED) issues mainly three types of licenses in Dubai –

Commercial license

Involves trading activities, and buying and selling of goods and services. This license covers import & export, sales, logistics, travel & tourism, general stores, and real estate services.

Industrial license

Covers businesses engaged in manufacturing activities such as transforming natural materials and resources into final products through manual or mechanical means. For example, textiles, paper, metal, etc.

Professional license

For individuals, artisans, or craftsmen who deliver expert or skill-based services to other entities. For example, consultancy services, medical services, beauty salons, repair services, etc.

Different locations for setting up a company in Dubai

Before starting off with the business setup process, you first need to decide on the base location for your company. There are basically three options of locations or jurisdictions available for company establishment –

1. Mainland

The Mainland jurisdiction in Dubai is home to numerous start-ups, small and medium companies as well as large multi-national companies. Investors and entrepreneurs who want to reach out to a diversified audience and expand to the local UAE markets can set up their businesses in the Mainland. After the amendment in the Commercial Companies Law, Mainland authorities have eliminated the rule of the mandatory requirement of a local sponsor/local service agent for company formation and allowed 100% expatriate ownership. However, certain categories of business such as energy, banking, Oil & Gas, etc. do not allow foreign ownership.

Read More about Mainland Company Formation in Dubai

2. Free Zone

Foreign investors looking for 100% ownership of their company can consider setting up their business in any of the Dubai Free Zones. The concept of a free zone was primarily introduced to generate foreign interest in UAE’s market. Subsequently, several business incentives were established to attract more investments from foreign nations. For example, 0% personal tax, 100% foreign ownership, and many more. However, there is one key limitation of setting up a company in the Free zone. Unlike Mainland, Freezone entities are not allowed to do direct trade with the local market.

Read More about Free Zone Company Formation in Dubai

3. Offshore

Investors can register offshore companies in Dubai Free Zones, although it won’t be considered a substitute for a free zone company. Apparently, there is a major difference in operation and ownership between these two entities. Offshore companies can only operate outside the UAE, and not inside. Unlike Free Zones, they also mandate the requirement of a local sponsor who will own 51% of the company shares, which will ultimately restrict the foreign ownership to 49%. Moreover, there are no requirements for minimum capital for company incorporation.

If you need more information about the Mainland, Free Zone, and Offshore jurisdictions, speak with the business consultants of UAE Expansion and get assistance in choosing the right locations for your company.

Procedure for Setting up a Business in Dubai

The Dubai authorities have established certain well-defined steps to register a company in Dubai effectively. They are –

  • Determine the industry you want to operate in
  • Decide your company’s legal structure
  • Register a trading name for your company
  • Decide the base location for your business
  • Draft the LSA and MOA of the company
  • Finalize all the formation paperwork
  • Set up an office space
  • Open a corporate bank account
  • Apply for mandatory visas
  • Hire skillful employees

Connect with the business experts of UAE Expansion to get complete assistance and support for registering your business in Dubai or anywhere in the UAE.

Required documents for starting a business in Dubai

  • Passport-size photograph of the applicant
  • Application form for company registration
  • Passport copies of all the legal partners
  • Copy of the Emirates ID
  • LSA and MOA (Notarised and attested)
  • UAE Visa of the applicant
  • Ejari Number/lease contract
  • External approvals, if any

Cost of business setup in Dubai

Although there is no rough number to indicate the exact cost of business setup in Dubai, the overall calculation will be based on the company’s size, type, location, etc. Additionally, it will also involve the charges incurred to obtain legal permissions from the authorities.

Setting up a company in Dubai may seem like a costly affair at first, but if you do your homework and preparation beforehand, you can avail a low-cost company formation in Dubai. UAE Expansion professionals can offer you affordable business incorporation packages without compromising your needs and business interests.

Establish your venture in Dubai with UAE Expansion

The team of business consultants and legal advisors at UAE Expansion has already assisted more than 50,000 companies worldwide to establish and prosper in the Dubai marketplace. They will help you find the perfect location and also help with the associated paperwork too.

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