How to Open a Company in Dubai Textile City?

by Zaara 31, Mar 2020

How to Open a Company in Dubai Textile City?

Manufacturing is the second-largest economic industry in the United Arab Emirates (UAE) after the oil and gas industry. To be more precise, the textile industry plays one of the most critical roles in the UAE economies, representing close to 10% of the country’s Gross Domestic Products.

Dubai, the prominent city of the UAE, is known for its luxurious shopping malls and for the fact that the wealthiest persons in the world visit the Emirate for buying luxury products from these shopping centres. Among the most purchased merchandises here are clothes and textiles, due to which set up a textile business in Dubai can be considered by the investors.

All about Dubai Textile City Free Zone

Dubai Textile Village free zone is the joint venture between TEXMAS and Dubai Port and Customs Authority to enable the textile dealers in the Emirate and other parts of the sphere. DTC is an entity located in Al Awir Free Zone, promoting the storage of textile fabrics for long periods without enticing customs duty, which is 5% currently.  DTC free zone also has the full support of Dubai Ports and Customs; the Customs Authority will help to handle the visa requirements of DTC members. And last but not least, the rents and the terms of the lease are being accessible to the members are very competitive and welcomed by TEXMAS and the textile merchants of the country.

Business Setup in Dubai Textile City Free Zone

Business incorporation in Dubai Textile City, like any other business setup in Dubai free zones, is done through a procedure expected to follow by investors who wish to be one of the Dubai free zone companies in DTC. But before that, you need to select the type of business entity you need to set up a business.

Types of Corporate Structures in DTC Free Zone

  1. Free Zone Limited Liability Company - This is a separate legal entity with only one owner or shareholder. The owner or shareholder can either be an individual or a corporate entity.
  2. Free Zone Company - This is a corporate entity with two or more shareholders. Like FZ-LLC, they can be either individuals or corporate structures.
  3. Branch of a UAE or Foreign Company – A branch is an entity under the name of its parent company. It is representative of an existing company.

After choosing the type of business entity, next is to select the type of business activity.

Types of Business Activities Allowed in DTC Free Zone

Just like any other free zone in Dubai, DTC also has its list of business activities that they allow in their location. They are as under –

  • Trading
  • Textile
  • Fashion

After deciding which business activity your company is into, the next step is to register your business at DTC.

For Setting up a Freezone Establishment with a Corporate Owner/Applicant

  1. A trade name must be registered and proof presented.
  2. Before starting business formation activities the applicant must receive initial approval.
  3. A Memorandum of Association and/or Articles of Association for the corporate applicant must be provided. This must be notarized by the UAE Embassy in the country of origin.
  4. A resolution from the Board of Directors of the corporate applicant indicating the intent to establish a new business in Dubai. This must be notarized by the UAE Embassy in the country of origin.
  5. A certificate of registration for the corporate applicant from the registrar of companies in the origin country. This must be notarized by the UAE Embassy in the country of origin.
  6. The shareholders must provide passport copies
  7. The manager must provide a passport copy and C.V. (resume).
  8. The physical address of the corporate applicant must be provided.
  9. Personal Information Sheets must be completed for each shareholder and manager.
  10. Suitable space for the business must be leased and document provided.
  11. If a Local Agent is utilized, that agent must have a notarized Power of Attorney

For Setting up a Freezone Establishment with a Real Person

  1. A trade name must be registered and proof presented.
  2. Before starting business formation activities the applicant must receive initial approval.
  3. The owner/shareholder must provide a passport copy
  4. If a manager is designated, the manager must provide a passport copy and C.V. (resume).
  5. Personal Information Sheets must be completed for the owner/shareholder and manager.
  6. Suitable space for the business must be leased and document provided.
  7. If a Local Agent is utilized, that agent must have a notarized Power of Attorney

After your application is approved, the DTC free zone authorities will provide you with the Certificate of Incorporation and a Business License.

Documents Required for Company Incorporation in DTC

  • Passport copy of the owner and the shareholder
  • Passport and CV of the manager
  • Drafted Memorandum of Association and Articles of Association notarized by the UAE Embassy
  • The physical address of the corporate applicant
  • Proof of trade name reservation
  • Proof of initial approval for the business incorporation
  • Proof of capital
  • Board resolution of the parent company (this is for branch office)

Now that you know how to start a business in Dubai Textile City, here are a few benefits of setting a company in this free zone.

  • 100% foreign ownership
  • 100% corporate tax exemption
  • 100% personal income tax exemption
  • Customs duties exemption
  • Long lease period and attractive rent
  • Option to sublease the premises
  • Low operational expenses

The most important thing to know here is to get the appropriate license. To set up a textile business, you need a General Trading License. It is obtained when the Dubai Textile Company is registered. It should be known that Dubai and the other cities must follow the International System of Units which levies for the capacities of textile materials to be made in the metric system. The vendor must also make sure the sold products fulfil the national standard safety rules.

How can we help?

We at Commitbiz can help you set up a textile business in the UAE. Our advisors are well-versed with the legal structure and can make this process hassle-free. Contact us today to know more.