Due to its excellent infrastructure and facilities, Dubai continues to draw an increasing number of foreign investors. But when starting a business in Dubai, great care must be taken because every step needs to be carefully planned.
Local and international business owners can select the kinds of companies they are interested in and register them in accordance with the legal requirements. It should be noted that local and international investors coming to Dubai must meet slightly different requirements.
When you decide to launch your business, there are three types of companies in the UAE. They are Mainland, Offshore, and Free Zone businesses. We’ll work with you to identify the best option based on your requirements. You can read more about each type in the sections below.
A mainland company is a business that has been granted a license by the Department of Economic Development (DED) in that specific United Arab Emirates emirate. A business established on the mainland is permitted to operate in any sector of commerce, industry, or tourism. Companies need permission from the authorities to regulate their businesses, per DED procedural rules.
Foreign investors have the option of acquiring 100% ownership of their UAE Mainland-based company. The appointment of a manager under the Articles of Incorporation (MOA) or service contract, for a temporary or ongoing period, is one of the constitutional documents and procedures that shareholders must complete. Contact us to find the best fit as your requirements.
The most popular location to start a business in the United Arab Emirates are in the UAE Free Zones, which has long attracted foreign investors.
Free zone businesses are automatically regarded as tax residents of the UAE, which means that they are covered by double taxation agreements. However, there are additional requirements that must be met if a free zone company wants to get a tax residency certificate.
Every free zone has unique requirements for the types of activities that are permitted, the efficiency of those activities (which is crucial when a founder applies for a visa), reputation (which may be relevant when opening a bank account), audit requirements, and company establishment processes. Connect with us to find the best suitable freezone for your business.
The main distinction between an offshore company and one located in a free zone or on the mainland is that, in the eyes of UAE authorities, offshore companies are not automatically regarded as tax resident businesses.
Offshore businesses are only intended for operations outside of the United Arab Emirates, and they are also run from abroad. In essence, the UAE only registers a company like this as a legal entity; however, it is managed elsewhere. Offshore businesses are not covered by double taxation agreements.
The nature of your business operations, the jurisdiction you choose, and other factors will determine the type of company setup that is best for you. The following business structures can all be established in Dubai’s mainland, and many of them are also allowed in UAE free zones.
You are ensured complete ownership of your business when you establish yourself in a free zone. Additionally, you can take advantage of no currency restrictions, a waiver of customs taxes, and capital and profit repatriation.
In some circumstances, mainland companies can be established anywhere in the UAE with 100% foreign ownership. They do not, however, gain from the other benefits mentioned above. Read the choices below to determine which kinds of company formation in Dubai are best for you.
The Dubai Limited Liability Company employs the most people of all the businesses. Other business entities that can be registered in Dubai include:
One of the most prevalent business models worldwide is this one. It must be established by a minimum of two individuals and a maximum of fifty. Each shareholder’s liability is capped at the value of their shares, just like in a limited partnership.
LLCs are permitted to engage in a variety of activities in the UAE, except for those involving banking, insurance, and other financial services.
In the UAE, people in recognized professions like law enforcement, medicine, accounting, and engineering can establish a civil company. Partners may own 100% of the company, and only professional business activities are permitted for civil companies.
More precisely, such activities are described as being either physical or intellectual and being carried out by one or more natural persons with respect to a specified capital. A few guidelines must be followed for incorporation in order to open a civil company.
There are 2 types of partnerships:
Two or more partners can create a general partnership. The business, along with all of its obligations and liabilities, is owned by both partners. Only citizens of the UAE may establish this type of business. The company name may contain the names of the partners.
When one partner breaks their commitment to the partnership, files for bankruptcy, passes away, or loses their mental capacity, the partnership may be dissolved. However, if all the remaining partners agree, the partnership may continue in such a situation.
The term “limited liability” refers to the fact that in this case, the partners’ liability for the debts of the company is limited to the amount they invested in it.
Partners must once more be UAE citizens. Limited liability company partners are not permitted to use their full names as the company name.
There are several types of branch offices in Dubai. Branches can be setup for:
As you can see, setting up a business in Dubai and the UAE doesn’t have to be particularly difficult if you have the right information.
However, some prior understanding of the procedure is necessary. Furthermore, it’s crucial to keep in mind that the application procedure is only simple if your license application is finished and error-free at the time of submission.
When starting a new company in the UAE, it’s a good idea to work with a company formation specialist like Shuraa to help you make sure that this is the case. Shuraa Business Setup will help you with all the requirements in forming your business.