COMPANY SET UP in Dubai: A Comprehensive Guide

Dubai is known to be one of the most vibrant and rapidly developing cities in the world. It is a hub for entrepreneurs and investors seeking to establish and grow their businesses. The city offers several incentives and benefits that make it an attractive destination for company set up. In this article, we will guide you through the process of setting up a company in Dubai, including the legal requirements, types of companies, and the benefits of doing business in this cosmopolitan city.

Introduction

Dubai’s strategic location, tax-free environment, and excellent infrastructure make it an ideal location for business ventures. The government has also implemented several initiatives to encourage foreign investment and company formation, which have contributed to the city’s rapid growth. In this section, we will provide an overview of the company set-up process in Dubai.

Legal Requirements for Company Set-Up in Dubai

Before starting a business in Dubai, it is essential to understand the legal requirements for company formation. These requirements include:

Business License

A business license is mandatory for all types of businesses in Dubai. The license can be obtained from the Department of Economic Development (DED) or any of the free zones in Dubai. The license requirements vary based on the nature of the business.

Legal Form of Company

There are several legal forms of companies in Dubai, including:

• Limited Liability Company (LLC)
• Free Zone Company
• Branch of a Foreign Company
• Sole Establishment

Each legal form of company has specific requirements and benefits.

Local Sponsorship

A local sponsor is mandatory for LLC companies in Dubai. The sponsor should be a UAE national or a UAE company, holding at least 51% of the shares in the company. Free zone companies and branch offices are exempted from this requirement.

Office Space

All companies in Dubai are required to have a physical office space. The office space requirements vary based on the nature of the business and the legal form of the company.

Types of Companies in Dubai

Dubai offers several types of companies that cater to different business needs. In this section, we will discuss the types of companies available in Dubai.

1. Limited Liability Company (LLC)

An LLC is the most common type of company in Dubai, where two or more partners can form a company. An LLC requires a minimum of two partners and a maximum of 50 partners.

2. Free Zone Company

A free zone company is a legal entity registered in a free zone in Dubai. Free zone companies are exempted from paying taxes and are allowed 100% foreign ownership.

3. Branch of a Foreign Company

A branch office is an extension of a foreign company in Dubai. The foreign company is required to have a local sponsor to establish a branch office in Dubai.

4. Sole Establishment

A sole establishment is a legal entity owned by a single individual. A sole establishment requires a UAE national as a service agent.

Benefits of Company Set-Up in Dubai

Dubai offers several benefits to businesses that choose to set up in the city. In this section, we will discuss some of the benefits of doing business in Dubai.

Tax-Free Environment

Dubai offers a tax-free environment for businesses, which means that companies do not have to pay income tax or corporate tax.

Strategic Location

Dubai’s strategic location makes it an ideal destination for businesses seeking to access markets in Asia, Europe, and Africa.

Excellent Infrastructure

Dubai offers world-class infrastructure, including airports, seaports, and road networks, making it an ideal location for businesses.

Foreign Ownership

Dubai allows 100% foreign ownership for businesses established in free zones. This means that foreign investors can retain full ownership of their businesses without the need for a local partner.

Ease of Doing Business

Dubai has a business-friendly environment, with streamlined procedures for company set-up and registration, making it easier for businesses to establish and operate.

Dubai offers a favorable business environment for entrepreneurs and investors seeking to set up and grow their businesses. With its strategic location, tax-free environment, and excellent infrastructure, Dubai has become a hub for international business and trade. Understanding the legal requirements, types of companies, and benefits of doing business in Dubai is crucial for any entrepreneur seeking to establish a company in this cosmopolitan city.

What is the minimum capital required to set up a company in Dubai?

The minimum capital required to set up a company in Dubai varies based on the legal form of the company. For LLC companies, the minimum capital required is AED 300,000.

Can foreigners own 100% of a company in Dubai?

Foreigners can own 100% of a company established in a free zone in Dubai. However, local sponsorship is required for LLC companies.

What is the process for obtaining a business license in Dubai?

The process for obtaining a business license in Dubai involves registering the company with the Department of Economic Development or the relevant free zone authority, obtaining the necessary approvals, and paying the required fees.

What are the advantages of setting up a business in a free zone in Dubai?

Setting up a business in a free zone in Dubai offers several advantages, including 100% foreign ownership, tax exemptions, and streamlined procedures for company set-up and registration.

Is it necessary to have a physical office space to set up a company in Dubai?

Yes, all companies in Dubai are required to have a physical office space. The office space requirements vary based on the nature of the business and the legal form of the company.

Disclaimer: The purpose of this publication is to create awareness and has been written in general terms. This publication is not for any specific situation and therefore no opinion should be drawn from it for any particular circumstances. Limitless Consulting recommend that the reader of this publication should refer to the official documents referred in the document, seek appropriate professional advice for any particular situation and accepts no liability for any loss as a result of any information mentioned in this publication.