What is the process of Company Formation in Dubai?

Dubai is one of the world’s best place for company formation as it provides the most favorable opportunities for business in every field. Also the Dubai’s government is very keen and supportive in the development of the corporate structure. Therefore, forming a company in Dubai is most favorable as the government welcomes the entrepreneurs warmly.

Company setup consultants is the comprehensive solution and prestigious company setup consultant in Dubai. They offer entire business setup services for everything a new company needs in UAE.

For starting a business in Dubai, UAE you need a clear understanding on choosing the best business structure.

What are the business structures in Dubai?

Three different types of jurisdictions are available for the formation of the company in Dubai and all these jurisdictions have their own rules; also they prove to be beneficial for different types of business.

These could be Dubai mainland company, Free zone company and offshore company.

Dubai mainland company:

Mainland company is also known as onshore company that is licensed by the Department of Economic Development (DED) of the Dubai. Moreover, Mainland companies are business entities that are allowed to function and operate within the boundaries of Emirati jurisdiction that come under commercialised geographical regions.

This company formation in Dubai can be a very lucrative investment option for investors and business establishments. Primary, possessing a Dubai mainland license helps you enjoy maximum freedom and flexibility to grow and operate your business. Addionally, there are certain regulations and policies amended by the government that administers the operation of mainland companies in UAE. 

The UAE government has allowed for 100% foreign ownership for the businesses located on the mainland. Earlier, the expat business owners were only allowed to own a maximum of 49% ownership of their business while the remaining 51% share belonged to the Emirati sponsor. Now, the foreigners opening a company in Dubai will no longer need an Emirati shareholder according to the changes to UAE company law.

Free zone company:

These type of companies are designed to conduct the international business or the business between the zones. One of the greatest benefits of business set up in Dubai Free zone is that foreign investors can enjoy 100% ownership.

Apart from complete ownership benefits, monetary benefits like complete tax exemptions, 100% repatriation benefits, absence of foreign exchange restrictions are the added benefits of Dubai free zone company formation.

Free Zone Authority (FZA) is the governing body in charge of the activities related to a Free Zone company like license issuance and operation. The Commercial laws governing the UAE mainland companies are not applicable to the Free zone companies.

You are supposed to select your desired free zone jurisdiction based on the type of business. Your business activity should match the category of the preferred Free zone.

Even though offshore companies share some of the benefits of Freezone companies in Dubai, they are not identical.

The best-known example of a free zone is Ras Al Khaimah (RAK), offering a wide range of facilities: 0% corporate tax, 100% foreign ownership allowed, 100% capital repatriation, etc. for investors interested in starting a business in Dubai.

Offshore company:

It is also known as non-resident company, it is the best option to conduct international business only. People prefer setting up offshore company as the holding company so that they could hold for instance shares of other companies in the other jurisdictions as the holding company, intellectual property rights and licensing of franchises of company.

An offshore company in Dubai is a business establishment that conducts its operation outside of the location of its origin or original location of registration. With the rise of offshore company formation in Dubai, UAE in 2003, the UAE has become a perfect hub for businesses across the world.

An offshore company (RAK Offshore for instance) does not have any special requirements or limitations regarding the owners/shareholders of the company; offshore company pays 0% corporate tax; an offshore company cannot activate within the UAE.

Offshore company formation in the UAE helps one to have 100% ownership in their assets in UAE and run their business in a profitable way. Some of the reasons  to opt for an offshore company formation in the UAE:

• To enjoy monetary benefits like tax exemptions
• To garner international funding
• To enjoy the benefits of investor-friendly laws and regulations
• Future plans for business expansion.
• To facilitate international trade

What documents and Fees for Company Setup in Dubai, UAE are required?

Here are some of the common documents you will be expected to procure when setup a company in dubai:

• Copies of the passports of the owner and the partners for business setup in Dubai.
• The memorandum of association of the business.
• The statutory documents of the business.
• The filled-out application form.
• A copy of the tenancy agreement of the office space.
• The approval letter of the trading name.

However, documents required will differ depending on the economic zone of your choice.

What is the fees for trade license?

the fees vary depending on where you choose to start your business and the business activities you mean to perform. However, you can expect to pay anywhere from AED 10,000 to AED 15,000 for the business trade license.

What are the types of entities for company formation in Dubai?

There are eight main legal entity options. The types are as follows:

• Limited liability company formation
• Free zone company formation in Dubai
• Offshore company formation in Dubai
• Dubai Mainland company setup
• Branch and representative offices
• Professional firms in Dubai
• Shareholding companies
• Joint venture companies

What are business licenses available in Dubai?

There are three categories of licenses:

Dubai commercial license:

This type of license includes all sort of trading activities, it is a type of Limited Liability Company (LLC). According to the article 22 of company law, there should be 51% shares at least of UAE national. 51% Emirati shareholder will be paid annually.

Dubai professional license:

This is the type of sole establishment. The owner of licence has 100% foreign ownership. For obtaining this license UAE national must be appointed as the local service agent but he will not hold any share in the company. Sponsorship fee is paid on yearly basis.

Dubai industrial license:

It is for setting up a industrial or manufacturing activity.

Advantages of company formation in Dubai:

The advantages includes:

Exemption from Taxes:

Dubai is a tax free haven for businessmen from all over the world, your corporate and personal earnings will be 100% free from any taxes. The businesses formed in the free trade zones enjoy with even more benefits.

Lenient Authorities:

The local authorities in Dubai are visionary. They are constantly making policies that are making Dubai more friendly for foreigners from all around the world. You can expect them to continue providing incentives for businesses.

Ease of Doing Business:

The ease of doing business here in Dubai is one of the main attractions for investors and entrepreneurs. The UAE ranks high in the world index for the ease of doing business.

Excellent Infrastructure:

Dubai has a world class infrastructure that promises the best of what is currently available. A good infrastructure is very important for the future of any business. Dubai’s ability to withstand potential nature calamities and regional instabilities is truly impressive.

Versatility and Flexibility:

Dubai offers a range of business activities to choose from when you are starting. Flexibility is required for businesses to run smoothly and the authorities in Dubai understand that. The mainland and the free zones offer various types of legal forms and business trade licenses for businesses. Business centers in Dubai also offer various types of office spaces that further enhances the flexibility of businesses here.

Limited Ownership Restrictions:

Previously, foreigners need a local sponsor to start their own business in mainland Dubai. However, that is no longer the case, expect a few strategically important sectors like the oil and gas industry; foreigners can own 100% of their businesses in the UAE.

Excellent Living Conditions:

The residential areas in Dubai are some of the most advanced in the world. The government of the UAE has launched the golden visa for entrepreneurs, investors, and exceptional students.

Worldwide Talents:

You can also get visas and work permits for any foreigners you hire so that they can come to the UAE and work for you. All of the thanks to the liberal labour laws here in Dubai.

Geographical location:

Dubai is called the gateway between the East and West. The strategic locations make it perfect for international businesses to reach wider customer base. Its close proximity to India and China also makes it a perfect location for certain businesses.

Stable Conditions:

The Dubai is the most politically stable country in the Middle East. You can rest assured that your business will not suffer due to regional instabilities.