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In recent decades, Dubai has successfully established itself as the fastest-growing economy and a global economic hub, luring entrepreneurs and businesses worldwide. Its strategic position, excellent tax policies, and world-class infrastructure create a perfect environment to launch a business idea. However, due to several complexities and considerations involved, the process of business setup in Dubai can be a bit confusing and overwhelming, especially for beginners.
In this guide, we will help you understand the detailed procedure of company formation in UAE so that you can enjoy your journey to entrepreneurship with minimum complications.
Advantages of business setup in Dubai
There are several compelling reasons to consider Dubai, UAE as your ultimate business destination: –
Tax benefits – The tax regime in Dubai is ideal for any business setup. The country imposes no personal taxes on individual income and no corporate taxes for certain sectors. This makes it appealing for firms that want to lower their tax liabilities. In addition, business setup in Dubai free zones provides an exemption from import-export duties and full repatriation of business profits.
Strategic location – The geographical placement of Dubai makes it easy for businesses to reach markets in the Middle East, Africa, and Asia. The Emirate serves as a key link between the East and the West.
World-class infrastructure – The world-class infrastructure of Dubai is equipped with high-tech buildings, airports, communication centers, and seaports. Businesses can make the most of the newest technologies and facilities.
Government support – Dubai’s business-friendly regulations and incentives make it the top commercial hub. Moreover, the government encourages foreign investors by facilitating easy licensing and company formation in UAE. The free trade agreements, less bureaucracy, and low paperwork are some of the added benefits of business setup in Dubai.
Types of Business Setup in Dubai
The Mainland and Free Zones in Dubai meet a variety of business demands. Each jurisdiction has its own set of advantages and is suited for specific businesses.
- Mainland – Mainland allows businesses to operate locally and internationally. They have fewer limitations compared to free zone companies. For instance, they can trade directly with the UAE market without the need for a local distributor. Moreover, they can easily secure government contracts and bid for high-yielding projects. With the recent reforms, businesses operating in certain sectors can enjoy 100% ownership.
- Free Zone – Free Zone offers businesses 100% foreign ownership and complete absolution from personal and corporate taxes. There are around 30 free zones in Dubai that provide facilities and incentives tailored to various industries. Moreover, free zone companies are allowed to trade in and out of the country without paying customs tariffs. However, they are restricted from trading directly in the UAE. For this, they need to hire a local distributor.
- Offshore – Offshore is an ideal option for those who want to conduct overseas activities while saving taxes. Foreign companies and entrepreneurs often set up offshore businesses in Dubai in order to get the most out of international tax breaks and manage money in a foreign country. However, they are only restricted to handling contracts, assets, and international trade.
Documents and approvals required for Dubai business setup
To start business operations officially in Dubai, business owners need to register their companies and secure the necessary approvals. They need to have a few essential documents in order to complete the process, such as –
- Valid passport copies of all shareholders
- Memorandum of Association (MoA)
- Office Tenancy Contract
- Trade Name Approval
- Initial Approval
Along with these documents, there are certain approvals that they might require depending on their business activity. For example,
- For general transport including driving schools, fire equipment, alarm and safety systems, used-car dealers, used auto parts, and car rental – Ministry of Interior
- For legal activities and legal consultancy – Ministry of Justice
- For architectural and engineering affairs – Local Municipal Department
- For telecommunication activities – Telecommunications and Digital Government Regulatory Authority (TDRA)
- For travel and tourism, general services, charter trading, ship and maritime agencies, car clubs, charter air transport, foreign company branches – Executive Council
- For insurance activities and insurance consultancy – Ministry of Economy
- For health-related activities – Local Health Departments
- For onshore and offshore gas and oil-field services, onshore and offshore oil drilling operations – Supreme Petroleum Council
Guide to setting up a business in Dubai
Business setup in Dubai requires several considerations. Let’s dive into them one by one: –
Choose the activity
When setting up a business in the UAE, the business owner needs to determine a specific activity or a category of activity. They can choose from the list of approved activities set forth by the licensing authority. Moreover, choosing the right activity helps you choose the right license for your business operations – commercial, industrial, or professional.
Choose the right jurisdiction
Depending on the chosen activity, business owners can choose from the various choices of jurisdictions available in Dubai – Mainland, Free Zone, and Offshore. Choosing the right jurisdiction offers multiple benefits to the business.
Choose a company name
This is probably the most significant part of the company setup process. The UAE has established strict guidelines for naming a company. For instance,
- The name must be unique and in line with the cultural and religious values of the country.
- The selected name should not resemble any existing company name within the UAE.
- The name must be compatible with the chosen business activity.
- The name must be followed by the abbreviation of the legal structure.
To check whether your desired company name is available for registration in Dubai, consult with the company formation advisors at Shuraa.
Gather all the required documents
The documentation process can vary depending on the chosen jurisdiction and activity. For instance, mainland companies are required to have an office space within the region. Therefore, the business owners must prepare a tenancy contract and submit it to the authorities. On the other hand, free zone companies can opt for virtual offices. However, they too would require approval from the respective licensing authorities.
Shuraa Business Setup has assisted thousands of entrepreneurs and corporations worldwide in commencing their business operations in Dubai by accurate document submissions. Get in touch today to avoid any delays and errors.
Get your license
After successful submission, the authorities will review the license application and verify the documents. If in any case objections arise, the authorities may request additional documents or information. However, if the application is approved, the authorities will issue the license to the company owner within 4-6 working days.
Partner with Shuraa to launch your company in Dubai
Business setup in Dubai or anywhere in the world can be an exciting opportunity as well as a stressful task. What adds to the stress is the proper submission of documents and meeting administration requirements, which is why you need a reliable partner who can help you at through these complexities effortlessly.
Shuraa Business Setup has been successfully helping businesses set up their bases in the UAE for over two decades. Their advisors are well-versed with the challenges foreign investors can face while entering a new market. Hence, they help them overcome these difficulties, handle their administrative chores, and encourage them to follow the rules so that the process of business setup in Dubai goes more quickly and smoothly.
So, get in touch with Shuraa Business Setup right away for expert advice and assistance.
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