Dubai Company Setup : Start Your Company in Dubai UAE. Guide to Dubai Company Setup and Formation. Dubai Company Formation & Company Setup. Dubai is the one of the fastest growing business hub with the state of the art facilities available for local and international business. Dubai is an integral part of business world and is leading with innovation. Dubai is politically stable and has strong economic culture and government of Dubai offer friendly business regulations which attracts the investors from around the world. This article will provide you a Compaq guide regarding business setup in Dubai. Before you start your business in a unbeaten economy like Dubai first you need to under the culture of it. Dubai being an international city is a multi-cultural city, people from all around the world are present in Dubai. After familiarizing yourself with the cultural you must learn about the rules and regulations and kind of the business you can start.
Dubai Company Setup
Legal structure of business setup in Dubai is according to UAE Federal Law No. 8 of 1984, and after the amendment in Federal Law No. 13 of 1988 – the Commercial Companies Law, and its by-laws regulate the function of foreign business in Dubai, United Arab Emirates. In wide terms the requirements of these regulations are: The Federal Law requires a total local equity of not less than 51% in any commercial business and describes seven categories of business organizations which can be established in the UAE. This regulation explains the requirements in terms of shareholders, directors, minimum capital requirements and business incorporation processes. This law further lays down the requirements of governing conversion, merger and dissolution of companies and businesses.
In Dubai, you are given plenty of opportunities; you get benefits of best economy based on strong administrative foundations. Authorities of Dubai have divided the city in different economic jurisdictions. You can start different types of businesses in Dubai bases on type of business and location; types are divided in three main categories which are Mainland, Free Zones and Offshore. Another thing to remember is that Dubai welcomes foreign investment but there are rules and regulations that must be followed. In order for you to enter in Dubai, UAE you need to have sponsor, a sponsor will take your responsibility. Importance of a sponsor can be determined by the fact that for any purpose if it is business or you are just visiting you must have a sponsor. When it comes to start a business in Dubai you are require having a sponsor, any kind of business needs a sponsor or service agent. In mainland a local resident or a of United Arab Emirates based company act as a sponsor, for professional service you need service agent as sponsor and for setting up a free zone business you also need a sponsor, in this case free zone acts as your sponsor.
Business setup in Dubai mainland requires you to have a valid license issued by the administrative authority. The name of the authority is Dubai Economic Development (DED); it is a government agency responsible for issuing the business licenses. Renewal of the license, cancellation and up-gradation are also handled by Dubai Economic Development (DED). To ease the investors Dubai Economic Development (DED) operates for different localities, thought scrutiny process of the application is strict but department ensures the quick application processing. In Dubai mainland, Dubai Economic Development (DED) issues four types of licenses, commercial, professional service, Branch office and industrial license.
To setup your business in Dubai mainland under commercial license you are by law mandated to have the help from local UAE resident which is also called local sponsor. Local sponsor is by law hold the 51% shares of your business and you will hold only 49% of shares. However you are given full administrative rights. You can draw contracts with local sponsor and allocate a yearly fee for being a sponsor. Local sponsor sometimes work as silent partners. Local sponsor can be an individual or it can be a UAE based company or group.
However, if you are setting up a business which involve professional services you don’t need to have a local sponsor, in that case you only need a service agent. Service agent works on your behalf and helps you deal with the local administrative authorities to start your business. You are allowed to hold 100% of your professional business and service agent will only be paid once for the service he offered.
Free zones are special economic zones in Dubai which are specially designed to attract the foreign investment. Free zone based business are fully owned by the investor and there are plenty of options to choose with. Every free zone in Dubai has a governing authority or free zone authority. For business setup in Dubai you would need deal with the free zone authority. You may be asked by the authority to provide different legal documents before you finally give the go ahead in form of license by that authority.
Free zone offers different attractive options for foreign investors such as you are given 100% of ownership of your business. There are many options free of tax you can avail like no personal income tax, corporate tax exemptions. There are different types of business setup options in Dubai free zones like you can start of your business enterprise as a limited liability company or service provider organizations, there are different licensing options. Business setups in free zones are allowed to perform international trades. When time comes you can easily wind your business. There is less paper work involved when it comes to end your business from a free zone.
Offshore is another type of business setup offered in Dubai and has been very famous. Offshore means a business entity setup outside of the resident country in an offshore jurisdiction. Dubai offshore jurisdiction provides number of benefits to your business in terms of asset protection, tax optimization and business expansion. Businesses setup in Dubai offshore jurisdiction must abide the offshore companies rules and regulations and is not allowed to trade inside the offshore jurisdiction.
To sum up, after making decision with the kind of business you are willing to start in Dubai you need to deal with the concerned authority. The best way is to hire a professional help. You will be able to find number of consulting firms who are willing to help you deal with the paper work and the authorities. You will be asked by regulating authorities to provide different documents and submit paper work.
Here are few steps you may follow, first of all do research and decide the type of business you are willing to embark, choose jurisdiction and follow through. It is recommended to get the help from a professional when it comes to business setup in Dubai. Ready your paper work for the licensing and get a guide on licensing terms and conditions as there are certain activities you are allowed and certain activities you are not allowed to perform. There are license you can choose which allows multiple business activities.
Dubai Company Setup – Start Your Company in Dubai UAE. Guide to Dubai Company Setup and Formation. Dubai Company Formation & Company Setup.
Company setup in Dubai
Dubai Company Setup : Start Your Company in Dubai UAE. Guide to Dubai Company Setup and Formation. Dubai Company Formation & Company Setup. There are three main ways you can set up a company in the UAE. This can be in mainland (in conjunction with a local partner who would own 51 per cent of the company), known as an LLC – limited liability company; via one of the many UAE free zones, particularly popular with foreign entrepreneurs cause they offer are 0% corporation and personal tax, 100% company ownership, 100% repatriation of capital and profits, no currency restrictions and 100% import and export tax exemption; with an offshore company. The costs can vary: for an LLC, for example, they can start from AED 30,000 / AED 60,000. The free zone options also vary: the costs can start from Dh20,000. Even less for an offshore company, but with some restrictions as well: for example no visa resident allowed and also some States / companies don’t accept them for fiscal reasons.
So why to setup a business in UAE now?
According to the IMF, the UAE is expected to lead economic growth in the Arabian Gulf in 2017, increasing by 2.5%, significantly ahead of the region’s biggest economy, Saudi Arabia, which is forecast to grow at 0.4%.
While the technical, administrative and ﬁnancial aspects of company formation in Dubai can seem daunting, by following a simple step-by-step process with the right support, it is far more straightforward and aﬀordable than you might think. We have helped numerous companies establish themselves in various free zones and can break the process down into the following six steps.
1. Choose your business activity
The nature of your business can have a bearing on which free zones you can or should set up in. For example, some free zones only allow certain types of activity, such as media, medical or transport, and aside from the restrictions, it often makes sense to set up in close proximity to businesses in the same sector. Look at transport links too. If your business relies heavily on import and export, you will probably want to choose one of the free zones situated near an airport or port.
The final decision can be taken later in the preparation process, but establishing your business activity will certainly give you a steer and can help to eliminate some options early on. However, there is no need to pigeon-hole your business, as it is possible to have multiple business activities listed under one trade licence.
2. Choose your company name
The UAE has some strict naming conventions, so before you commit to a company name, make sure it conforms. Any names that include offensive language are forbidden, as are any company names that refer to Allah, Him or indeed any other religious, sectarian or political groups such as the FBI or Mafia. If you choose to name your business after a person, that person must be a partner or owner of the company and their full name must be used – no initials or abbreviations.
A business set-up expert will be able to give you chapter and verse on all the naming conventions. You can save a lot of time and effort by running your proposed name past them to check whether it passes and if it doesn’t they can help you come up with something that does.
3. Finalise all incorporation paperwork
You will be required to complete an application for your chosen company name and activity, to be provided along with copies of shareholders’ passports to the relevant government authorities. Some free zones will require additional documentation, such as a business plan or Non-Objection Certificate (NOC) – a letter from a current sponsor confirming that you are allowed to set up another business in the UAE. While perhaps the most arduous of all these steps, the paperwork does not have to be too taxing providing it is undertaken with expert help. Your business set-up partner can advise you on the paperwork required and help you complete it.
Some free zones will require additional documentation, such as a business plan or Non-Objection Certificate (NOC) – a letter from a current sponsor confirming that you are allowed to set up another business in the UAE.
4. Receive your license notiﬁcation
This is the easiest step of all. Once your application has been processed, the government will issue you with your company licence. At Virtuzone we notify our clients when their documents are ready to be collected.
5. Process your visa (if needed)
And so to the final step of company formation in Dubai. As well as applying for your own visa, many free zones allow you to put in applications for staff and dependants – the exact number you can submit will depend on which free zone you choose to set up in. So, if you are looking to obtain visas for a spouse, child, maid or driver, it is best to seek expert advice to ensure that firstly, it is possible to do so in your chosen free zone, and secondly, that both you and anyone you are hoping to sponsor for a visa meet all of the entry criteria. Assuming this all checks out, the process is made up of four simple stages: entry permit, status adjustment, medical fitness test, then Emirates ID registration and visa stamping.
For some free zones / activities you may not be required to apply for a visa (NO visa package) saving money and time.
6. Open a bank account
Once your paperwork has been returned, you will have all the documentation you need to open your corporate bank account. The UAE is home to many banks, both local and international, including Emirates NBD, Abu Dhabi Commercial Bank and the Commercial Bank of Dubai, along with global names such as HSBC, Citibank and Barclays. You can either approach the bank of your choice or ask your business set-up partner to arrange meetings with a number of institutions to help you choose the most suitable option.
With some banks you can open a corporate bank account also without having the resident visa. Dubai Company Setup : Start Your Company in Dubai UAE. Guide to Dubai Company Setup and Formation. Dubai Company Formation & Company Setup.