Business Setup In Dubai

Dubai is a city filled with endless opportunities, innovation and exposure. The infrastructure development, growing economy, government’s commitment, etc are attractive factors for establishing businesses in this Emirate. You may be interested in setting up a business in Dubai due to factors like a good business environment, the potential of earning good revenue, etc.

Starting a business is exciting but it requires knowledge, expertise, and assistance. You need not look further because this article is a complete guide with regard to business setup in Dubai.

What are the Jurisdictions for Business Setup in Dubai?

Businesses in Dubai are doing great and the numbers speak for themselves. Major reasons for the success include freedom of choice with regard to jurisdictions, business entities, activities, etc. UAE consists of seven emirates, each having its own jurisdictions like Mainland, Onshore and Offshore.

What is a Mainland Company?

A mainland company in Dubai is an onshore entity registered with the relevant government body. These companies can start businesses anywhere in the United Arab Emirates without any restrictions on business activities.

Some of the benefits of Mainland company formation include - 100% repatriation of profits and capital, good trading opportunities, no requirement of minimal capital or currency restrictions, easy company incorporation process, etc.

What is a Freezone Company?

A freezone company in Dubai is formed within a special jurisdiction with its own rules and regulations. The government regulatory body is the Freezone Authority, and there are approximately 28 freezones in Dubai as of March 2024.

The entrepreneurs make more room for solid planning and decision-making due to the three types of business entities in the Dubai freezone –

• Free Zone Establishment (FZE).
• Free Zone Company (FZC).
• Branch Office.

The benefits of Freezone company formation include confidentiality, repatriation benefits, 100% foreign ownership, no currency regulations, an easy immigration process and cheap labour.

What is an Offshore Company?

An offshore company setup is an entity which is established away from the UAE mainland and freezones. They are formed with the motive to operate outside the registered jurisdiction. An offshore company is also referred to as a non-resident company.

The benefits of an Offshore company formation include tax exemptions, asset protection, friendly legal regulations, multicultural business environment, favourable location, etc.

Key Differences between Mainland, Freezone, and Offshore Companies in Dubai

Let’s dive deeper and check out the differences between mainland, freezone, and offshore companies in UAE –

Mainland	Freezone	Offshore
a) 100% Ownership. b) Mainland companies are permitted to carry out both B2B and B2C activities. c) Mainland companies must own an office space in Dubai. d) Mainland companies need government clearance from the following governing bodies – Department of Economic Development. Ministry of Labour. Department of Culture and Tourism. Department of Public Works. Department of Municipalities and Transport. e) Mainland companies must conduct a financial audit every year.	a) 100% Ownership. b) Freezone companies are permitted to do only B2B activity. c) Freezone companies need not have office spaces but can rent one if necessary. d) Freezone companies are governed by regulatory bodies called The Freezone Authority. The officials issue specific regulations and permit specific business activities for the jurisdiction. e) Freezone companies like FZE and FZOC must audit every year.	a) An expat can own the company only if it is located outside of the UAE. b) Offshore companies are permitted to conduct business outside the country. c) Offshore companies are free to have a physical space outside the country. d) The Jebel Ali Freezone Authority (JAFZA), in connection with the Dubai government, is the regulatory body for offshore companies. This authority is responsible for issuing regulations, approvals, certificates, etc. e) Offshore companies need not prepare audit reports.

Types of Licences Required for Business Setup in Dubai

There are three types of licences in Dubai suitable for respective business activities. They are explained below –

i) Commercial Licence

A commercial licence allows companies to trade, import/export products and sell services within the UAE.

Business activities applicable under this licence are –

• Retail Shops.
• Wholesale trading.
• Supermarkets, grocery stores.
• Storage and warehousing facilities.
• Restaurants, food courts, food trucks.
• Services like tourism, real estate, transportation, etc.

ii) Industrial Licence

A licence that permits businesses to engage in manufacturing and production processes is called an industrial licence.

You can carry out the following business activities through this licence –

• Manufacturing of Home Appliances.
• Textile Manufacturing.
• Metal Manufacturing.
• Paper Manufacturing.
• Product Manufacturing, etc.

iii) Professional Licence

A licence that authorise individuals to practice a profession of their choice in Dubai is called a professional licence. Some of the professional activities you can take up are –

• Accounting and Auditing.
• Engineering.
• Advertising.
• Banking.
• Medical.
• Law.

Which Documents are Required for Dubai Company Registration?

The documents which need to be submitted for starting a company in Dubai are listed below –

• Title Deeds.

• Business plan.
• Application forms.
• Copy of registration certificate.
• Registration Identification Code Form.
• Specimen signature of the member(s) of the company.
• Passport copies of the company’s shareholder(s) and manager(s).
• 2 years of audited financial reports/certificate of reference from the bank.
• Letter of Intent (letter including the investment idea and the investor’s plan).

What is the Procedure for Setting Up a Company in Dubai?

As you have gained knowledge about the essentials of Dubai company registration, let's take a look at the steps -

Step 1 – Choose Appropriate Business Activity, Jurisdiction and Entity

For setting up a business in Dubai, you start by making certain decisions like selecting the right jurisdiction, entity and business activity. The chosen business activity must complement the vision and mission of your company.

Similarly, the chosen jurisdiction should support the nature of the company and adhere to the legal regulations. You also need to ensure choosing an appropriate legal entity such as an LLC, sole proprietorship, partnership etc.

Step 2 – Register a Business Name

In this step, you need to register a name for your company. This name must adhere to certain legal regulations and should not violate public interests. The name must be unique and not be similar to other registered companies. It must be approved by the Department of Economic Development and the Ministry of Economy.

Step 3 – Apply for a Trade Licence

As discussed earlier about the types of licences, in this step, you need to apply for any of the trade licences depending on your business activity for a Dubai company registration.

Step 4 – Apply for Visas

You need to apply for visas depending on the jurisdiction, office space, and number of employees. Fill out application forms and submit details of the employees and reasons for applying for the visa.

Step 5 – Open a Bank Account

You have come to the last step of Dubai company registration, where you need to open a bank account. This bank account helps in maintaining business transactions and facilitates multiple accounts and multiple currencies. You need to submit documents and details of your business, obtain approvals from the bank and begin with your company in the UAE.

Cost factors affecting Business Setup in Dubai

Planning and sticking to a budget is important when starting a business in Dubai. Let’s look at the cost factors affecting the business setup –

a) Consultancy Costs

The cost incurred by the company for consultation with experts regarding legal advice, business ideas, business planning or understanding other essential requirements makes up consultancy costs.

b) Registration Costs

The next cost factor is registration costs which affect the setting up of businesses in Dubai. The cost incurred by the company in the form of application fees, advance fees, etc makes up registration costs.

c) Licence Costs

You need to obtain the right licence to carry out business activities in the Emirate. The cost incurred by the company for getting this legal document adds up to licence costs.

d) Rental Costs

Renting office space is a significant part of setting up a business in Dubai. Office space costs depend on location, size, nature of business, and other facilities.

e) Visa and Immigration Costs

The company needs to consider the cost incurred for the visa and immigration of their employees. Each jurisdiction has its own visa processing regulations, visa application fees, medical examination fees and other related expenses.

f) Other Costs

Various other costs affect your company's budgeting, such as administrative fees, documentation fees, salaries, etc. They vary and depend on the complexity of the business structure and specific requirements.

Now that you are familiar with the process of setting up a business in Dubai, we suggest that you get in touch with our business setup consultants at Commitbiz. They can guide you with regard to the business laws, legalities, and market dynamics in Dubai.

Book a free consultation with us to clear all your doubts and turn your dream of setting up a business in Dubai into reality. We offer top-quality business setup services in Dubai –

• Legal Advisory.
• VAT Services in Dubai.
• PRO Services in Dubai.
• Branch Office in Dubai.
• Business Incorporation.

• Local Sponsor in Dubai.
• Shelf Company in Dubai.
• VAT Registration in Dubai.
• Business Centres in Dubai.
• Office Space for Rent in Dubai.
• Accounting and Audit Services.
• Opening a Bank Account in Dubai.
• Tax Residency Certificate in Dubai.
• Intellectual Property Services in Dubai.

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