Dubai, United Arab Emirates, is a popular destination for company formation due to its strategic location, strong economy, and pro-business environment.
Setting up a company in UAE and Dubai offers several advantages, including 0% tax benefits, 100% foreign ownership, access to talent, and world-class infrastructure.
If you are an investor or a startup entrepreneur who wants to launch a business in Dubai, this article will guide you completely through the process.
Introduction To Company Formation In Dubai – UAE
Dubai is a rapidly growing business hub not only in the GCC region. It’s now a popular destination for entrepreneurs and investors worldwide. Company formation in Dubai deals with the available options and procedures for launching a new entity or extending an existing one into the UAE.
Like anywhere in the world, starting a new company in Dubai, and the UAE leaves you with many options depending on your company’s goals and objectives.
Legal Forms of Business Setup in Dubai
The UAE government offers local and international business registration options depending on a company’s goal and objective.
The most common legal forms of business in Dubai are:
Limited Liability Company (LLC):
An LLC business is the most common type in the UAE. This is recommended for companies solely for trading within the region.
It is stipulated by the UAE Commercial Companies Law (CCL) for a UAE national to own 51 percent shares at all times in an LLC company in UAE.
Civil Company:
A civil company is a business owned by a professional such as a Doctor, Lawyer, engineer, or accountant.
Though the professional owns 100% of the company, a UAE national, local agent is normally required.
Branch / Representative Office:
A branch office has the same legal identity and carries out the same business activities as its parent company.
On the other hand, a representation office is limited to promoting its parent company’s business activities.
Soles Proprietorship:
A single individual owns and operates a sole proprietorship business. The owner of this form of business bares the responsibility and is liable to all debts by the company.
Joint venture:
Also known as a consortium, a joint venture business is formed by a partnership of at least two UAE nationals.
However, only 1 partner’s name is required to be used as the business name.
Some other Legal forms of Business Setup in Dubai are :
- Limited partnership
- General partnership
- Public shareholding company
- Private shareholding company
Types of Business Jurisdictions in Dubai
Upon setting up a company in Dubai, your choice of jurisdiction depends mainly on your business activities, the ownership structure, and, most importantly, your target customers.
A Company can be formed in the three main jurisdictions in Dubai, UAE.
Mainland Companies:
The Department of Economic Development (DED) issues a business license in Dubai mainland.
A business registered in Dubai mainland can do business anywhere in and outside the UAE without restrictions.
FreeZones Companies:
With over 20+ freezones in Dubai, a business entity established in any freezones offers various incentives, including 100% foreign ownership, tax exemptions, and simplified company registration processes.
Each freezone authority has rules and regulations on a specific business activity within the jurisdiction.
Offshore Companies:
Offshore company formation in Dubai is the ideal option for doing business in the MENA region.
A Dubai offshore company is permitted to register under the operation of the Jebel Ali Freezone Authority ( JAFZA).
Types of Business Licenses in Dubai?
We offer all types of business licenses in Dubai, United Arab Emirates, for both local and international investors who want to start a new business or extent an existing one to the UAE.
The four primary business licenses in Dubai are:
Commercial License:
This license is issued to companies engaged in trading Activities such as buying, selling, or importing goods.
Industrial License:
This license is issued to companies involved in manufacturing or industrial activities.
Professional License:
This license is issued by individuals or businesses that provide Professional services, such as doctors, lawyers, accountants, and engineers.
Tourism License:
This license is issued to companies engaged in tourism-related activities, such as travel agencies, hotels, and tour operators.
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Procedure For Getting A Company License In Dubai -UAE
Getting a company license in Dubai, UAE involves steps that vary depending on the type of business activity and the jurisdiction where the company will operate. Here are the necessary steps for obtaining a business license in Dubai:
- Determine the type of business activity.
These determine the type of business license and regulations that will best suit your business. - Choose a company name and get initial approval:
You need to choose a unique name for your company and get initial support from the Department of Economic Development (DED). - Apply for an Initial Approval Certificate:
You must apply for an Initial Approval Certificate from the Department of Economic Development (DED). This certificate confirms that you have met all the business setup requirements in Dubai. - Get final Approval and Pay the Fee:
Once your application is approved, you will need to pay the required fee for the license to get your business license. - Open a Bank Account:
After getting your business license, you can open a corporate bank account with a reputable bank in the United Arab Emirates and start your business operations.
Documents Required For Dubai Business License Application
Here are the documents that are usually required:
- An Application Form from DED
- Trade Name Certificate issued by DED
- Initial Approval Certificate from the Department of Economic Development (DED)
- A tenancy contract for your rented office space
- A copy of the Passport or Emirate IDs of all company shareholders ( If more than one0
- A No Objection Certificate (NOC) from your sponsor ( No necessary for FreeZones business setup)
- A Memorandum of Association (MOA) outlining the company’s objectives, activities, and legal structure.
- A Power of Attorney (POA) if a representative is applying.
NB: However, the required documents for a Dubai business license may vary depending on the company’s activity and legal structure.