Business Setup In Dubai

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Business setup in Dubai is lucrative and workable for investors and entrepreneurs. Dubai is a magnet due to its environment, modern infrastructure, and strategic location.  

This guide will take you through the process of setting up a company in Dubai. And it’ll cover the different jurisdictions in Dubai. Plus the advantages of each jurisdiction and the documents for Dubai company registration.

Let’s start with the advantages.

Advantages of Setting up a company in Dubai:

Setting up a company in Dubai comes with a long list of benefits like:

  • No limitation on visa
  • Excellent tax benefits
  • Easy office space availability
  • No restrictions on global hiring
  • Immigration facilities are trouble-free
  • The entire business setup process is hassle-free and quick
  • Many designated and predefined free zones for easy business.
  • Excellent opportunity for business expansion or in the diversification aspect.
  • If you own a company on the mainland, you get opportunities to take up government projects.
  • The companies are eligible for full repatriation benefits. And this includes profits and financial assets.
  • Foreign investors need not find a UAE national sponsor for a free zone business setup. Foreign ownership is possible irrespective of the nationality of the investor.

Jurisdictions for Company Formation in Dubai

There are no limitations on what you can pursue as an entrepreneur. Dubai always welcomes people with business ideas. It provides several opportunities with endless benefits. 

Before you consider setting up a company in Dubai, select the right jurisdiction.

You may be wondering, what are the jurisdictions?

Dubai consists of 7 Emirates, each having its own jurisdiction, such as: 

  • Mainland 
  • Freezone 
  • Offshore

Each jurisdiction has distinct advantages. 

Now we’ll talk about the jurisdictions in various Emirates. The benefits these jurisdictions offer, and vital information for your Company formation in Dubai. 

But, you must determine where to start your business in Dubai. Choose your jurisdiction based on your needs and the type of activity.
 

Emirates and Jurisdictions for Business Setup in Dubai

Refer to the table below for picking the right jurisdiction across the right emirate. This will give you a better understanding of which Emirate encompasses which jurisdiction:

Emirates

Jurisdiction

Dubai

Mainland

Freezone

Offshore

Ras Al Khaimah

Mainland

Freezone

Offshore

Ajman

Mainland

Freezone

Offshore

Abu Dhabi

Mainland

Freezone

-

Sharjah

Mainland

Freezone

-

Umm-Al-Quwain

Mainland

Freezone

-

Fujairah

Mainland

Freezone

-

For a better understanding, you should learn about Mainland, Freezone, and Offshore areas.

What is a Mainland Company?

A mainland company is an onshore entity registered with the relevant government body. Dubai entities under the commercial, professional, and sole establishment are registered under the DED. They get the Dubai Mainland License.

The Department of Economic Development (DED) issues the trade license. The benefits of setting up a company in Dubai mainland are: 

  • There are no restrictions on business activities.

  • Mainland companies in Dubai or the UAE can trade with other mainland companies.
  • One of the most profitable options available to investors is the mainland.
  • The regulations of the Dubai mainland business are in such a way that it requires a local guardian (individual or an entity) to be chosen as part of the procedure to hold 51% of the claims.
  • Businesses may also open branches in other regions of the Emirate and the country.
  • There are no restrictions on the number of visas that can be obtained on a mainland license. But, it depends on the office space and size.

With the approval of the relevant authorities, the mainland company formation in Dubai becomes complete.
 

The Benefits of Setting up a Company in Dubai Mainland:

The following are some benefits of setting up a mainland company in Dubai:

  • 100% repatriation of profit & capital.
  • Office space decides the Visa quantity.
  • Can conduct business throughout the UAE.
  • Potential bid and work on the UAE government contracts.
  • Can set up their offices anywhere in the registered Emirate. 
    And many company branches, creating a solid presence in the local market.
     

What is a Freezone Company?

A freezone is a specified area in which businesses get taxed low or not at all. This is to encourage investments and increase economic activity within the economy.

These areas are jurisdictions that concentrate on particular or pre-defined commercial activity.

There are over 30 free zones in Dubai with specialized commercial operations. This makes the Dubai freezone company formation process simpler for investors to make a move.

  • In a Freezone, an investor can have a special tax fee status. Plus, the trade conditions are such that any investor can manufacture.
  • This allows the business owners to have 100% business ownership. Also, several tax advantages and 100% repatriation are some important benefits.
  • There are no currency regulations of any kind in UAE freezones.
  • Freezone companies can do business within the particular freezone and outside the UAE.

Now, you know about the benefits of company setup in Dubai freezone.
 

The Benefits of Setting up a Company in Dubai Freezone:

The advantages of setting up a freezone company in Dubai include -

  • 100% exemption from import and export tariffs.
  • 100% repatriation of profit and capital.
  • Quick and easy company creation.
  • 100% ownership.
     

What is an Offshore Company?

An offshore company is a legal entity incorporated outside the investor's home country. The company doesn't operate or generate revenue inside the country it started. Thus, the corporate tax for offshore companies is 0%. Or a small percentage as decided by the authority of the jurisdiction.

Established business investors often choose to setup an offshore business. JAFZA is a popular offshore location for setting up a business. It offers advantages like:

  • Little or no tax and international status. These are 2 criteria that catch the owners' interest.
  • Investors wanting to protect their assets or enjoy tax exemptions prefer offshore locations.

The Benefits of Setting up a Company in Dubai Offshore:

Here are some benefits of setting up an offshore company in Dubai:

  • Zero Corporate Tax.
  • Low Authorised Capital.
  • Remote incorporation is possible.
  • Company incorporation is very cheap.
  • The paid-up capital of these companies is generally 0 USD. 
  • The registers of the company are generally private. Thus, the structure of these companies is confidential.
     

Process for Setting up a Company in Dubai Mainland, Freezone, and Offshore Jurisdictions:

Now, you know the differences and advantages of all three jurisdictions. But, it is also essential to understand how to set up your business in these jurisdictions. 

The following points will explain the company formation process for the three jurisdictions.

 


Dubai Mainland Company

  • Select Company Structure – LLC, SP, Branch of Foreign Company.
  • Choose a Company Name – With Guidelines and Rules.
  • Prepare Application – MOA, AOA.
  • Select your Office Space.
  • Get License Approvals, which are subject to conditions.
  • Complete Final Formalities – Company Stamp, employment visas, bank account, labor card, etc. 

Dubai Freezone Company

  • Choose your business activity.
  • Find a suitable Freezone location.
  • Choose a suitable business name.
  • Arrange the documents and apply for the license.
  • Open a corporate bank account for your business. 

Dubai Offshore Company

  • Choose your company name.
  • Pick your business activity and Shareholding percentage.
  • Fill out the Dubai company registration application form.
  • Submit the required documents to the authorities.
  • Open your Offshore bank account.
     

Key Differences between Mainland, Freezone, and Offshore:

If you’re planning to set up a business in Dubai, knowing the differences between Mainland, Freezone, and Offshore companies is vital. 

These jurisdictions are diverse, each serving a specific corporate structure. Here are the key differences:

Mainland

Freezone

Offshore

100% Ownership.

100% Ownership.

Unless the company is outside the UAE, an expat can own the entire company.

Mainland companies can do both B2B & B2C activities.

Freezone companies can do only B2B activity.

They have the freedom to conduct business outside of the Emirates. But, they are not permitted to conduct business within the UAE.

Mainland companies must have 200 sq ft of office space.

Freezone companies don't need office space. But, you can set it up if you need one.

Offshore companies cannot have a physical office in the UAE. But, they are free to have it outside the country.

Visa limits don't apply to mainland companies. But, the number of visas depends on your workspace area. Thus, if your organization requires more visas, it must first get or rent a larger workspace.

The number of visas that freezone companies can apply for is less. It depends on the freezone's regulations and ranges from one to six.

An offshore company formation does not need a resident visa because there is no need for an office space.

You would need government clearance from many government organizations for a mainland company.

These include the:

  • Department of Economic Development
  • Ministry of Labour
  • Department of Culture & Tourism
  • Department of Public Works
  • Department of Municipalities & Transport, and so on.

Each freezone has its own set of laws and regulations. The businesses established within it must follow only those rules and regulations.

Furthermore, you need permission for certain activities from the non-freezone government authorities.

The offshore company formation is available in Ras Al Khaimah (RAK) and Jebel Ali  (JAFZA). That particular offshore authority is in charge of obtaining approval.

Mainland companies must prepare a financial audit every year.

Some freezones do not need an audit preparation. Only freezone corporations, such as FZE and FZCO, must undergo a year-end audit.

The offshore company is not required to prepare an audit. They can do one to stay updated.

Documents Required for a Business Setup in Dubai:

You’ll have to submit the following documents for setting up your Dubai company:

  • Identity and address proofs of the business shareholders & investors
  • Memorandum and articles of association
  • Filled application form
  • Business plan
     

Types of Licenses for Business Setup in Dubai

Your Dubai company registration will need one of the following licenses:

Types of Licenses for Business Setup in Dubai Image


Cost of Business Setup in Dubai

The Department of Economic Development (DED) Dubai grants the licenses for setting up a company in Dubai mainland. And the free zone companies will get their licenses from the respective free zone authorities.

The Dubai business setup cost will depend on the business activity opted for. If you want to set up your business at a low cost; it’s better to seek a professional consultant.

There are business setup consultants in Dubai. They're assisting foreign expats in setting up their company in Dubai in a hassle-free way. They take care of the complete process so you don’t lose your mental peace.

They'll break down the cost of your company registration, making your work easier. The below table highlights the respective prices.
 

Incorporation

Duration

Price (starts from)

Company Type

Professional Firm

4 - 6 

Working Days

AED 10,000

Mainland

Holding Company

4 - 6 

Working Days

AED 10,000

Freezone’

IFZA

4 - 6 

Working Days

AED  12,900

Freezone

Commercial Company

5 - 6 

Working Days

AED  13,000

Mainland

Branch Foreign Company

6 - 9 

Working Days

AED  14,000

Mainland

JAFZA

8 - 10 

Working Days

AED  20,000

Freezone

Note: The cost of setting up a company in Dubai may vary as per the business activity and the entity you pick. The above-mentioned costs are the general prices.

What should you do next?

Now you have a clear understanding of the process for Dubai company registration. The sort of business activities you undertake will determine which choice is best for you. Everything comes down to your requirements and objectives.

Commitbiz business setup consultants in Dubai will provide you with handholding support. They’ve been assisting foreign expats in setting up their businesses for the last 16 years. We’ve served 150+ nationalities. We’re offering a plethora of business setup services in Dubai:

If you want to set up your business in a hassle-free way, do contact us now.

Frequently Asked Questions (FAQs)

Can a foreigner set up a business in Dubai?

Yes. The government actively encourages foreign investors and entrepreneurs for setting up their companies in Dubai.

Can you own 100% ownership over a business in Dubai?

Yes, Dubai allows investors to own 100% ownership of their businesses.

What are the steps for business setup in Dubai freezone?

List of steps for setting up a company in Dubai freezone;

  • Determine the type of legal entity.
  • Choose a trade name.
  • Apply for a business license.
  • Choose an office space.
  • Get pre-approvals, register your business and get your license.

Which are the most profitable ideas for business setup in Dubai?

Here are the best ideas for setting up a company in Dubai: 

  • E-commerce and Online Marketplaces
  • Real Estate Development
  • Tourism and Hospitality

What is the corporate tax in Dubai?

The corporate tax in Dubai is 9%

What are the major business licenses in Dubai?

The major business licenses in Dubai include:

  • Tourism License
  • Industrial License
  • Agricultural License
  • Commercial License
  • Professional License 
  • Occupational License

Who is eligible for a local sponsor in Dubai?

The individual has to be a UAE national and should be above 21 years & can be a professional, business owner, or government employee.

Which is the common business structure in Dubai?

Limited Liability Company (LLC) is the common business structure in Dubai.

Can I incorporate a branch office in Dubai?

Yes, you can incorporate a branch office.

How long will it take to setup a freezone company?

It will take around 4 to 6 weeks.

Can you name a popular offshore area in Dubai?

JAFZA is one of the most popular areas for offshore business setup in Dubai