How to set up a company in Dubai? Dubai is one of the most prominent business destinations in the world, attracting entrepreneurs and investors from different countries thanks to its encouraging investment environment and advanced infrastructure. Setting up a company in Dubai is a strategic step that opens wide doors towards success and growth in the Middle East and North Africa markets. Setting up a company in Dubai requires following specific steps, including choosing the appropriate business activity, choosing the ideal location between free zones or within the city, in addition to fulfilling legal requirements such as obtaining the necessary licenses and registering the company with the relevant authorities. In addition to the procedural steps, Dubai offers many advantages to investors, including tax exemptions, a stable economic environment, and easy access to global markets, making it an ideal destination for establishing businesses.
Steps to establish a company in Dubai
Establishing a company in Dubai requires following specific steps to ensure compliance with local laws and the success of your project. Here are the most important steps to establish a company in Dubai:
- Determine the type of business activity: The first step is to determine the type of activity you intend to carry out, as you must choose the activity that suits the nature of your business and is in line with the activity classifications approved by the Department of Economic Development in Dubai.
- Choosing the type of company: You must choose the type of company that is appropriate for the nature of your activity, such as a limited liability company (LLC), a branch of a foreign company, or a free zone company. Each type of company has its own requirements.
- Choosing a company name: A trade name must be chosen that reflects the nature of the company’s activity and is consistent with the rules and standards set by the Department of Economic Development, including not using prohibited or duplicate names.
- Obtaining initial approvals: Before starting the official procedures, you must obtain initial approvals from the relevant authorities, related to the company’s activity and name.
- Determine your business location: You must determine your business location and rent an office or commercial space in accordance with local laws. Some free zones offer flexible options such as virtual offices.
- Preparing legal documents: Preparing and submitting the required legal documents such as the articles of incorporation and the company’s bylaws. The type of documents required may vary depending on the type of company and the region in which you will operate.
- Obtaining a commercial license: After fulfilling all the previous requirements, the application for obtaining a commercial license is submitted to the Department of Economic Development or the relevant free zone authority.
- Opening a bank account: After obtaining the license, a bank account must be opened in the company’s name to manage financial transactions.
- Register for Tax: Although Dubai offers extensive tax exemptions, you may be required to register for Value Added Tax (VAT) if your business falls within the limits. By following these steps, you can properly set up a company in Dubai and start doing business in one of the most dynamic cities in the world.
Types of companies in Dubai
Here is a table showing the types of companies in Dubai with a brief explanation of each type:
| Company Type | Description |
|---|---|
| Limited Liability Company (LLC) | The most common type of company. A company can have from 2 to 50 partners, each partner is liable to the extent of his/her contribution to the capital. A local partner holding 51% of the shares in a company operating outside the free zones is required. |
| Sole Establishment | A company wholly owned by one person who is responsible for all financial obligations. The owner of the company can be a citizen or an expatriate depending on the business activity. |
| Foreign company branch | A company registered outside the UAE but wants to open a branch in Dubai. The branch can carry out the same activities as the parent company. |
| Free Zones Company | Companies established in one of the free zones in Dubai , where 100% foreign ownership and tax exemptions are permitted. Requires an office or workspace within the free zone. |
| Public Joint Stock Company | A company in which the public contributes through publicly traded shares. This type of company requires a large amount of capital to establish. |
| Private Joint Stock Company | A joint stock company is established by a small group of shareholders, and its shares are not offered to the public. This type is suitable for family businesses or large projects. |
| General Partnership | A company consisting of two or more partners who are liable for the company’s debts without limit. This type is available only to UAE nationals. |
| Limited Partnership | It consists of at least two partners, one of whom has unlimited liability, and the other (or others) who contributes capital without incurring liability greater than his share. |
| Representative office | A foreign company that wishes to represent itself in Dubai without actually conducting business. This office is responsible for promoting the parent company’s business and market research. |
These types of companies provide great flexibility to entrepreneurs and investors in Dubai, as they can choose the most suitable type according to the business activity and nature of the investment.
Advantages of establishing a company in Dubai
Establishing a company in Dubai comes with many advantages that make it an attractive destination for entrepreneurs and investors from all over the world. Here are some of the most prominent advantages:
- Favorable tax environment: Dubai offers a distinguished tax environment, where companies enjoy extensive tax exemptions on income and profits, which helps increase financial returns and reduce operating costs.
- Stable Economy: Dubai has a stable and diversified economy, making it a safe environment for investment. Dubai offers a flexible and advanced business environment that supports innovation and helps achieve sustainable growth.
- Easy access to global markets: Dubai’s strategic geographical location makes it a gateway to markets in the Middle East, Asia, and Africa. Its advanced transportation and logistics infrastructure also provides easy access to global markets.
- Specialized Free Zones: Dubai has several free zones that offer additional incentives to investors, such as 100% foreign ownership, customs exemption, and easy repatriation of profits. Each free zone is dedicated to specific business activities such as technology, media, and logistics.
- Flexible Business Environment: Dubai offers a flexible business environment with supportive policies and legislation that make it easy to set up and run businesses. The government provides comprehensive support to investors, from providing advice to facilitating legal procedures.
- Advanced Infrastructure: Dubai has a world-class infrastructure that includes advanced transportation networks, high-speed communications, and modern facilities. This infrastructure facilitates business operations and provides an ideal environment for business.
- Skilled Workforce: Dubai offers a multicultural environment that attracts talent from all over the world. You can benefit from a diverse and highly skilled workforce to support your company’s growth.
- High quality of life and lifestyle: In addition to the economic benefits, Dubai offers a high quality of living with world-class educational, healthcare and entertainment facilities, making it an ideal destination for entrepreneurs and their families.
- These features make establishing a company in Dubai a strategic step for entrepreneurs seeking to achieve success in a stimulating and growth-supportive business environment.
Documents required to establish a company in Dubai
To set up a company in Dubai , you will need to submit a set of documents to ensure compliance with local laws and complete the formalities. The required documents vary depending on the type of company and the area in which the company is being set up (whether in a free zone or within the city). Below is a general list of required documents:
- Copies of Passports: Provide copies of passports for all partners, shareholders and directors. The copies must be clear and recent.
- Personal Photos: Passport size photographs of all partners and directors.
- Copy of Residence or Visit Visa: If you are a resident of the UAE, a copy of your current residence visa must be submitted. If you are a visitor, you can submit a copy of your visit visa.
- No Objection Certificate (NOC): If one of the partners or directors is a resident of the UAE and works for another company, a No Objection Certificate (NOC) may be required from the current sponsor.
- Selecting a trade name: Submitting a trade name selection application form and obtaining approval from the Department of Economic Development (DED) or the relevant free zone authority.
- Business Plan: In some cases, you may be asked to submit a business plan that outlines the company’s activities and future plans.
- Articles of Association and Memorandum of Association: Prepare and submit the company’s articles of association and memorandum of association, which detail the company’s capital, share distribution, and partners’ rights. These documents may need to be certified by a notary public.
- Office Lease Agreement: Submit a copy of the lease contract for the office or commercial space that the company will use as its headquarters. The contract must be certified by Dubai Municipality or the competent authority.
- Approval from the competent authorities: If the business activity requires special approvals from other government agencies, these approvals must be obtained and submitted.
- Previous Business License (if applicable): If you wish to transfer or renew an existing business license, a copy of the previous license may be required.
- Proof of Capital: In some cases, you may be required to provide proof of capital transfer to the company’s account.
- Once you have submitted all these documents and met the requirements, you can complete the company formation procedures and obtain the trade license to start the activity in Dubai.
In conclusion, establishing a company in Dubai represents a unique opportunity for entrepreneurs and investors to benefit from the dynamic and advanced business environment that the emirate offers. Dubai combines advanced infrastructure, encouraging policies, and a strategic location that makes it a gateway to global markets. With a wide variety of company formation options, every investor can find the perfect formula that suits their needs and ambitions. Making the decision to establish a company in Dubai is a step towards achieving growth and success in one of the fastest growing economies in the world.
Frequently asked questions about establishing a company in Dubai
What types of companies can be established in Dubai?
Several types of companies can be established in Dubai such as a Limited Liability Company (LLC), a Free Zone Company, a Branch of a Foreign Company, a One Person Company, a Public or Private Joint Stock Company, a General Partnership Company, and a Limited Liability Company.
What is the cost of setting up a company in Dubai?
The cost of establishing a company varies depending on the type of activity, type of company, and location (within the city or in free zones). The cost includes licensing fees, office rent, registration fees, etc.
Can I establish a company without a local sponsor in Dubai?
Yes, it is possible to establish a company without a local sponsor in the free zones, where full foreign ownership is permitted.
Does setting up a company in Dubai require a physical office?
Yes, setting up a company in Dubai requires a physical office or workspace in most cases, and a certified lease agreement must be submitted as part of the licensing process.
