Business Setup in Dubai

Dubai is a global city, and the business hub of the Middle East. It is the most populous city in the UAE, and located in the north-eastern part of the country. Dubai is one of the world’s fastest growing economies, with the largest contributors to its GDP being real estate, trade, tourism and financial service industries. Despite the emirate’s infrastructure having been built on the oil exports over 3 decades ago, oil and natural gas contribute to less than 5% of its GDP now.

Dubai has gained the reputation of a leading trading hub in UAE, owing to premier business locations and an environment that is not unduly restrictive. It offers businessmen the most liberal operating conditions, tax exemptions, asset protection, complete privacy, and limited liability, in setting up a business in Dubai. The tax haven also offers tremendous promise to overseas companies, as it has:

  • Excellent growth trajectory (imports have doubled since 1990) and unique policies of liberalization
  • Prosperous market located in one of the world’s richest regions that is diversified and offers wide opportunities to traders
  • No trade barriers, quotas, exchange controls (open market)
  • High accessibility through air or water (around 90 airlines and 170 shipping lines)

Company Formation in Dubai

Commitbiz is conversant with the company formation laws and regulations in Dubai, and can help you set up your business here, availing the required licenses (Industrial/Service License, Trading/Commercial License, and Professional/General Trading License). You can choose from among a free zone, mainland or offshore company in Dubai.

Onshore and offshore sectors dominate the UAE economy; the difference between these 2 is that offshore sectors contain free zones that award foreign investment, while onshore sectors put restrictions on the foreign ownerships and take care of local business interests. Here’s a little summary of the 3 types of company formation in Dubai:

1. Free Zone Company

Free zones in Dubai are the most sought-after locations for international business operations and attract foreign direct investment due to their policies that generate employment while supporting economic reforms. Free zone setup is a highly profitable investment option for organizations because of incentives like:

  • 100% foreign ownership
  • Exemption of taxes
  • Customs privileges
  • Greater growth potential due to strategic location
  • Well established transport network and road connectivity
  • Proximity to large customer base
  • Affordable cost for high quality labour

2. Offshore Company

Many businesses prefer to set up an offshore company, also known as non-resident company, in Dubai as the income obtained from a holding company (offshore company) is not taxable.

Other than tax savings, people prefer having an offshore company as a holding company so that they can hold:

  • Interest of other companies in a separate jurisdiction
  • Licensing of franchises
  • Intellectual property rights like patent, trademark, copyright, etc.

3. Mainland Company

A business entity falling under commercialized geographical areas and directly registered under the Emirates government and its authorities is known as a mainland company. A mainland company in Dubai can carry out business across the UAE, but permits a maximum foreign shareholder equity capped at 49%. Mainland represents the most developed economy as it is setup directly in accordance to the legal structures of the Government policies.

Company Incorporation in Dubai

As per the Federal Law, it is mandatory for a commercial company in Dubai to have not less than 51% local equity (participation of UAE nationals). The law also defines 7 categories of business organisations that are permitted to establish in Dubai. These are:

Out of these 7 company types, Limited Liability Company (LLC) is the most commonly chosen one by foreign investors.

Moreover, 51% participation of UAE nationals is the general norm in the 7 aforementioned company types, except the following scenarios:

  • Where 100% local ownership is required
  • Free Trade Zones, where 100% foreign ownership is allowed
  • In activities with 100% Arabian Gulf Cooperation Council (AGCC) ownership, where wholly owned AGCC companies partner with UAE nationals
  • Where foreign companies register a representative office or branch in Dubai
  • In artisan or professional companies, where 100% foreign ownership is allowed

What is the Procedure for Business Setup in Dubai?

For setting up a business in Dubai, these steps may be followed:

  1. Submit the proposed company name and registration application to the Department of Economic Development (DED)
  2. Get the company’s Memorandum of Association in notarized in the DED
  3. File documents of the company with the DED to obtain a trade license from the Chamber of Commerce and Industry
  4. Submit the application at the Ministry of Labour for Establishment Card
  5. Get the native workers registered with the Ministry of Labour and General Authority for pension and social security

What are the Types of Business Licenses Available in Dubai?

The Department of Economic Development (DED), Dubai is the licensing authority that issues license for major activities. A fundamental prerequisite for all business activity in Dubai is to apply for and procure one of the following 3 categories of licenses:

1. Commercial License

Encompasses all kinds of trading activity

2. Industrial License

For setting up a manufacturing or industrial activity

3. Professional License

Meant for artisans, craftsmen and other professional service providers

Certain activities require special approval from a corresponding Ministry/Department. These are:

Business Activity Licensing Ministry/Department
Medical Pharmacy Ministry of Health
Telecommunication Equipment Ministry of Communication
Air transport, Air Cargo Department of Civil Aviation
Financial Institutions, Banks, Money Exchange Central Bank
Agriculture, Veterinary Ministry of Agriculture
Engineering & Construction Municipality
Industrial Project Expansion Ministry of Finance and Industry
Legal Consultancy Ruler's Office
Education, Training Ministry of Education
Publishing, Printing, Newspaper, Advertising, Video Film, Photography Ministry of Information
Branch of Foreign Company, Insurance Company, Chartered Accountancy Ministry of Economy
Customs Clearance, Freight Forwarding Sea Cargo Seaports and Customs Authority

Our Business Setup Services in Dubai

Commitbiz Management Consultants can help you with the following business setup services in Dubai:

  • Company incorporation
  • Company registration
  • Local sponsorship
  • Public Relations Officer (PRO) services
  • Accounting and bookkeeping
  • Auditing
  • Tax consulting
  • Value Added Tax (VAT) registration
  • Legal advisory
  • Setting up a branch office in Dubai
  • Intellectual property protection

Why Commitbiz?

Commitbiz helps entrepreneurs and firms in setting up a company in Dubai through company registration, incorporation and legal consulting services. Our experts take care of the banking, visa, legal, and licensing formalities, in accordance with the UAE laws. We guide you through your company formation, with your business objectives at the centre of our ecosystem, all the way.

If you are thinking of starting a business in Dubai, Commitbiz can help you with strategic consultation, legal and documentation formalities, and negotiations with local stakeholders. We have liaisons that help us handle the entire company formation procedures cost-effectively in an efficient and timely manner. Contact us for business setup in Dubai – our advisors will be glad to help out.

FAQs

How much time is required to set up a business in Dubai?

Company formation in free zones in Dubai can take anywhere from 3 to 10 days, whereas an offshore company can be established within 48 hours if the right documentation and resources are available.

What are the advantages of setting up an offshore company in Dubai?

An offshore company in Dubai allows for 100% foreign ownership, is exempt from corporate and personal taxes, and imposes no restrictions on repatriation of capital.