Dubai is a popular location for company registration in UAE with a favorable tax system. This city suggests international and domestic firms advanced infrastructure, a good location, and diversified industries with low expenditures. Dubai has over 30 special economic zones, attracting entrepreneurs to register their businesses here. The city has also become a shopaholic's paradise as it does not charge Value Added Tax (VAT). Below, we'll explore the primary strengths of business setup in Dubai and its primary stages.
Why You Should Choose a Business Setup in Dubai
Transnational corporations such as IBM, Deloitte, and Unilever opened divisions in the Emirates. Let's consider why entrepreneurs seeking success in the Middle East are starting their firms here.
- Favorable tax systems. Individuals working in Dubai or earning revenue there are exempt from individual income tax. Effective mid-2023, the Emirates adopted a federal corporate tax of 9% on earnings of AED 375,000 and more. FZ participants retain the opportunity to have a zero corporate tariff.
- Advantageous position. Dubai’s location between two major economic regions positions it as a central hub for trade and investment worldwide. The rapid development of markets in the Middle East, Africa, and South Asia reaches billions of customers. Also, you will find here the major port, Jebel Ali, and several big airports that handle a huge volume of passengers every day.
- Flexible organization models. The country suggests flexible options for business setup in Dubai to suit a variety of needs. When selecting free zones, such as the Dubai Multi Commodities Centre (DMCC), entrepreneurs benefit from 100% ownership, total return of profits, and zero duties. The Mainland historically required a local partner, but current regulations permit full foreign proprietorship.
Business owners and investors may easily receive a long-term residence visa (up to 10 years), which gives them greater confidence in long-term planning.
Possible Corporate Structures in the Emirates
When starting a business setup in Dubai, it's essential to define the proper organizational framework. This affects your level of oversight over the firm and your overall liabilities. Below, we'll describe the most beneficial structures.
- Sole Proprietorship. It's a model fully owned by one person. If you plan to start such a firm, you will need to have a residence permit. The owner controls all the company's decisions and earnings and is fully liable for any debts.
- LLC. It is a standard framework in which participants' responsibilities are restricted to the sum of their contributions. Until recently, when launching an LLC in the Mainland, foreigners were required to transfer more than 50% of the company's stock and ownership, but this rule has now been abolished in most fields.
- A branch office. It is a simple way of business setup in Dubai that doesn't require registering a separate brand. It's a part of your parent company that may manage business in the Emirates. When interacting with government agencies, you must select a local service agency or sponsor, but you must not transfer shares to them.
- A subsidiary. It is a legal entity that is separated from the parent firm. If you launch such an organization in an economic zone, you may fully own it. You may also choose to opening a company in UAE as an LLC or another legal model, depending on your objectives.
- Partnership. This category enables you to join forces with local firms or other foreign organizations in a special economic zone or the Mainland. In this case, you divide the risks and profits of the firm.
Before business setup in Dubai, analyze the strengths and weaknesses of various organizational models to adopt the optimal one.
How to Setup a Business in Dubai
When you select a company formation, you can't make a profit without a proper business plan. Such a document will help you form a non-standard tactic and identify potential challenges. Let's discuss how to start a business in Dubai.
Define Your Field of Activity
Whether you plan to launch a small firm or a cryptocurrency exchange, there are more than 2,000 categories of activities to select from in the commercial, manufacturing, and tourism fields. More information about business setup in Dubai can be found on the Ministry of Economy and Commerce website.
Select an Economic Zone if Necessary
Most entrepreneurs locate their organizations near firms operating in the same area. The specific focus and activities of your company can guide the choice of an economic zone. DMCC is the most considerable business center in the city. More than 26,000 registered organizations, from startups to transnational corporations, operate there. Such an economic zone accounts for approximately 15% of direct investment in Dubai.
Come up with a Firm Name
Applicants must select a corporate name that meets applicable standards and should not repeat the brands of other organizations. Entrepreneurs may check the availability of their desired name with the local Ministry of Economy. The firm should operate under a confirmed name. It must not be offensive or controversial. The brand should be consistent with the firm's intended activities.
Apply for Preliminary Approval
To prevent problems during the final stages of business setup in Dubai, you must receive preliminary confirmation from the authorities. You can apply online, in person, or with the help of a third-party representative. The list of documents depends on the category of firm, but typically includes the following:
- Incorporation form and trade license
- Copy of passport or ID
- Copy of visa or residence permit
- Company Articles of Association
- Project rationale
If you do not know how to setup a business in UAE and submit applications, we recommend consulting with our specialists. They will lead you through all stages and ensure that you have compiled and attached the correct documents.
Open a Corporate Bank Account
After receiving initial confirmation from the authorized institutions, you should open a commercial account to receive and send funds related to corporate activities. Many reputable financial institutions operate in Dubai, including HSBC, Citibank, and Abu Dhabi Commercial Bank.
Determine the Firm Location
Prospective entrepreneurs should define the address of their future office. They may lease or purchase real estate for business setup in Dubai. The optimal firm location depends on the selected firm category, the labor force, and financial capabilities. Various economic zones suggest offices ranging from 20 to 2,000 square meters or more.
Submit an Application for Final Approval
You must prepare all documents and legal data before submitting your data to get final confirmation. In some situations, entrepreneurs must apply for a business license. You must be prepared to provide the following information:
- Initial confirmation and all previously submitted documents.
- Lease agreement submitted to the Real Estate Regulatory Authority.
- A properly drafted agent services contract (this is actual if we speak about firms that are fully owned by non-GCC nationals).
- Confirmation from other authorized institutions.
All you need to do is pay the established fee to get the license through the specified payment systems. After that, you are permitted to begin commercial operations.
Bottom Line
If you're planning a business setup in Dubai but don't know where to begin, we recommend contacting ExecDubai. Our specialists will help you select the optimal organizational model and advise you at every step of the licensing procedure, saving your effort. And, most importantly, you don't need to arrive at the Emirates.
Our services go beyond the launch of the firm. We're also ready to assist with accounting, auditing, and regulatory matters. Don't miss your chance to succeed. Contact ExecDubai to get expert advice on how to start a business in UAE.