You want to create your company in Dubai ? In the United Arab Emirates, the economic activity, tax advantages and simplicity of the procedures make for ideal conditions if you wish to create and develop a company. Dubai is truly a city where anything is possible, and many entrepreneurs are interested in that prospect. In this guide, you will discover how to set up a company in Dubai.
WHY CHOOSE DUBAI TO CREATE A COMPANY?
Setting up a company is not something you do on a whim, and it is of course always important to study the market carefully and weigh the pros and cons. If Dubai is a destination that attracts so many entrepreneurs, it is for many reasons.
First of all, the administrative procedures are much less restrictive than in the U.S.. Everything is done to encourage entrepreneurship.
Obviously, taxation is very advantageous. Dubai is not considered as a tax haven by international institutions, yet there is no corporate tax in Dubai. Although a VAT applies on products and services sold since January 1, 2019, it is only 5 %. In addition, many areas remain exempt from VAT (real estate, transportation, energy, education, healthcare...). Moreover, many zones are also exempt from VAT, and in any case this VAT only applies above a certain threshold.
The creation and registration of a company is very quick, and there are several possibilities regarding the structure of the company, allowing a great flexibility. There is no minimum capital investment required to set up a business, and you don't even have to be a resident of the emirate.
Finally, Dubai also benefits from a very healthy economy. The city has successfully made the transition from an oil paradise to a tourist paradise, and growth is expected to continue in the years to come.
FREE ZONE, MAINLAND AND OFFSHORE COMPANIES
When creating a company in Dubai, you can choose to set it up in a free zone or opt for an offshore company (extra-territorial company).
CREATE A FREE ZONE COMPANY IN DUBAI
A free zone is a geographical area in which benefits are offered to companies in order to encourage investment and economic growth.
A free zone company is physically based in Dubai. Free zone companies must operate in certain specific areas:
- Sale of goods (e-commerce, dropshipping...)
- Industrial activity
- Consulting and services (holding, IT, marketing, advertising, communication...)
- Import-export (food, furniture, vehicles...)
Founding a free zone company has many advantages:
- With a free-zone company, you can own the entire capital of your company
- You can obtain a work and residence visa
- It is possible to hire staff locally
- You do not have to have physical offices
- You will not have to pay profit and capital gains taxes
- Customs fees are waived for import-export outside the UAE
- You will not have to pay any social charges
- There will be no withholding tax on dividends
There are already several dozens of free zones where it is possible to set up a business in Dubai, such as Dubai Export Freezone, Dubai Studio City, Dubai World Trade Centre District Free Zone or Dubai Production City.
The process of setting up a Free zone business in Dubai is quick and easy. You will need to provide a passport and a photo ID.
CREATE A MAINLAND COMPANY IN DUBAI
CREATE AN OFFSHORE COMPANY IN DUBAI
THE PROCEDURE TO CREATE A COMPANY IN DUBAI
To set up your business in Dubai, you will need to follow several important steps.
ESTABLISH YOUR BUSINESS PLAN
It is during this important preliminary stage that you will do your market study and establish your business plan. In Dubai, as anywhere else, no project can succeed without being carefully thought out, and you will of course have to take into account your target and your competitors, but also settle some fundamental questions:
- What are your financing requirements?
- Your staff requirements: how many future employees will you need? Will they operate from Dubai or from abroad?
- What are your space requirements? Do you need office or storage space?
Preparing this step with the utmost seriousness will give you more leverage with banks when it comes to finding financing.
CHOOSE THE LEGAL FORM OF YOUR COMPANY
Then comes the essential step of choosing the structure of your company and its legal status. You will have to choose one of the 3 types of companies present in Dubai and the United Arab Emirates:
- An offshore company, to be able to trade anywhere in the world without having to be physically present on Dubai soil;
- A freezone company, to obtain more tax advantages if your activity allows to choose this legal form;
- A Mainland company (LLC), for more freedom of action, which will allow you to set up everywhere in Dubai in more sectors of activity.
It is only after having chosen this legal form that you will be able to go further in the procedure, obtain a license and register your company.
REGISTERING YOUR COMPANY IN DUBAI
You will first have to choose the name of your company and file it with the Department Of Economic Development (DED) in Dubai. Be careful, respect the rules in the choice of this name, which should not be offensive or refer to a religious or political opinion, in particular.
Depending on the type of structure you choose, but also on the field in which you are going to work, you will need different documents in order to constitute your file. This is one of the steps for which you can benefit greatly from the help of experts who can accompany you and advise you on legal and fiscal issues.
OBTAINING A LICENSE
In order to carry out a profit-making activity in Dubai, you will also need a licence. There are 3 types of licenses in the UAE: commercial license, industrial license and professional license. Depending on the type of license, the annual fee for obtaining it ranges from AED 15,000 to AED 25,000 (Dubai currency). To validate this step, when setting up an Onshore company, you will need a business bank account hosted in Dubai.
To obtain the appropriate license according to your type of activity, you will have to apply directly to the chosen free zone for a free zone company, or to the DED for a local company.
Here again, you can greatly benefit from the help of specialists in business creation to facilitate your procedures. Several documents must be presented in order to obtain this license:
- An Memorandum of Association (MoA) defining the scope of the company's activities;
- A certificate of reservation of the company name;
- A photocopy of the passport;
- A lease agreement, in case offices are leased for Onshore companies;
- An Initial Approval Certificate issued by the government;
- A No Objection Certificate issued by the sponsor, if applicable.
There it is, I hope I have given you all the information you needed! Good luck to you!
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