Dubai, known because of its ever-changing economy and well-planned location, is one of the best places for businessmen or investors who want to start their companies. Company incorporation in Dubai can be a simple process when done right. This guide will take you through a detailed step by step approach to forming your business in Dubai covering mainland companies, free zone companies as well as offshore companies.
Step 1: Decide on the Company Structure
The first major choice made during company incorporation in Dubai is selection of the most appropriate business structure. Dubai offers multiple alternatives such as mainland companies, free zone firms and offshore entities. Each has unique benefits and regulatory requirements.
- Mainland Companies: These businesses operate all over the UAE and have no limitations on doing business activities. They are subject to UAE corporate tax while maintaining direct access to the local market.
- Free Zone Companies: These firms are situated at specific locations allowing them to enjoy complete foreign ownership, tax exemptions and simplified administrative procedures. However, they are normally restricted to operations within the free zone unless partnering with a local distributor.
- Offshore Companies: These entities are for international businesses and asset protection purposes only; thus enjoying tax exemptions as well as improved confidentiality but cannot carry out business activities within the UAE market.
Step 2: Choose a Company Name
It is essential to select the company name that is unique and compliant. The name should meet the criteria set by the Dubai Department of Economic Development (DED). Avoid names that infringe on any trademark or copyright, a good guideline being that it should be indicative of the business nature.
Step 3: Engage a Local Sponsor or Agent
Mainland companies require a local sponsor who must be an Emirati national. The sponsor holds 51% ownership, while you keep 49%. This requirement is not applicable to free zone companies and offshore companies which can be owned fully by foreign investors.
Step 4: Prepare the Legal Documents
Get all the necessary documents required for Dubai company registration. These typically include:
- Completed application form
- Passport copies of shareholders and sponsors
- No objection letter from sponsor (if applicable)
- Memorandum Of Association (MOA)
- Articles Of Association (AOA)
- Lease agreement for physical office address
Step 5: Obtain Initial Approval
Submit your documents to the relevant authority depending on your preferred company structure. In case of mainland companies, it is DED while there are different regulatory authorities for free zone companies and offshore ones. After considering your papers you will get an initial approval.
Step 6: Trade Name Registration and Licensing
The next thing to do, especially for the mainland companies, is to go ahead and register the trade name with DED. This process involves presenting the necessary papers, paying all the required fees then getting a certificate of trade name reservation. Additionally, apply for various licenses related to your business activity such as commercial license, professional license or industrial license at once. Free zone authorities in free zone corporations handle both registration of trade names and licensing. In addition, offshore firms have unique procedures according to their jurisdiction.
Step 7: Rent an Office Space
Irrespective of your type of company, you must have a physical address in Dubai. For mainland companies it is mandatory that they rent officespace as per DED guidelines. There are different office solutions available in most free zones ranging from flexi-desks to fully furnished office spaces where free zone companies can choose from. Offshore firms do not need any physical office space in UAE but should maintain a registered office address at all times.
Advantages of Starting a Company in Dubai
There are various benefits associated with company formation in Dubai whether it is mainland companies, free zone companies or offshore companies.
- Mainland Companies: These firms can trade directly within the UAE, take part in government tenders and own property on the mainland.
- Free Zone Companies: It will have 100% foreign ownership, exemption from tax, simplified regulatory processes and state-of-the-art infrastructure.
- Offshore Companies: They enjoy tax exemptions, protection of assets, confidentiality enhancement and freedom to do international business unhampered.
Company Incorporation in Dubai is a multi-step process that can be made easier by following regulations closely. The lively economy of Dubai coupled with its friendly business environment creates an excellent opportunity for entrepreneurs to grow their businesses whether they decide on mainland companies, free zone companies or offshore ones. By sticking to this guide you will basically be guided along regarding how best to handle matters pertaining to setting up your company in Dubai as well as where you stand to get the biggest gains if leveraged well.
