Dubai serves as the economic capital of the UAE and the Gulf region, attracting investors and entrepreneurs worldwide and earning the title of “The City of Gold.”
As a gateway to the MENA region, Europe, Asia, and Africa, Dubai, UAE has access to a vast consumer market, a better tax regime, a business-friendly environment, and offers 100% business ownership to foreign investors.
As a foreign investor or entrepreneur, Starting a business in Dubai can be a game-changing shot for you.
However, the process might be challenging because you might not be familiar with the market trends, requirements, investment opportunities, and or how to navigate the process of business setup in Dubai.
In this article, we have unpacked everything you need to know about company formation in Dubai.
Ready to start a business in Dubai? You can book a free consultation with our experts for a detailed assessment of your business requirements.
Types of Business Entities in Dubai, UAE
Before starting the process of company registration in Dubai and the UAE, you must understand the different types of business structures in Dubai and what they offer.
Below is a quick rundown of each.
- Limited Liability Company (LLC): The LLC legal structure is the most common type of legal entity in Dubai. It offers you the condition to open a business involving 2 to 50 shareholders, with each liable only to their invested capital.
Depending on your business activity, you may need a local sponsor ( UAE national) who will have a 51% share of the company when setting up an LLC company in Dubai.
You can read more on LLC Company formation in Dubai from our related blog article.
- Sole Proprietorship: A sole proprietorship business will give you the
right to fully own your business without needing a shareholder.
However, you will be liable to bear the company debts and other related expenses and decisions all alone.
- Partnership Company: For registering a business in Dubai involving two or more business partners with a mutual agreement to share profits and losses among parties.
A partnership business structure in Dubai can be either a “General Partnership” for UAE or GCC nationals only or a ” Limited Partnership” for foreign investors.
- Branch/Representative Office of a Local or Foreign Company: starting this form of company in UAE will require you to carry out activities similar to that of a parent company.
This will also require you to conduct business under the name of a parent company.
- Civil Company: This is a special form of business entity for trained professionals like Doctors, Lawyers, engineers, and accountants.
Though a civil company is 100% owned by the expert ( except for engineering civil company), a local service agent is needed.
- Freezone Establishment (FZE): If you decide to setup a business in any of the freezone jurisdictions in Dubai, you can choose an FZE legal form of business where you have 100% share ownership of the company.
- Freezone Company (FZE): For an FZC business setup in Dubai freezone, you may have up to 5 shareholders in the company.
Types of Business Setup in Dubai, UAE
Dubai and the UAE offer investors 3 options for registering a company in the country with the possibility of having 100% ownership of their business.
Yes, you heard that right; Dubai now offers business setup in Dubai mainland without the need for a local sponsor. An option that was only possible for freezones and offshore business setups.
Nevertheless, the types of company formation in Dubai you choose will have an impact on how you do business in the UAE.
- Company Formation in Dubai Mainland: Starting a mainland (onshore) company in Dubai offers you the benefits of having access to do business anywhere in the UAE without restrictions.
Having a mainland business license in Dubai means you can win contracts from government entities and have an office anywhere across the country.
You can read more on Business setup in Dubai mainland here.
- Freezone Business Setup in Dubai: Dubai has over 20+ freezones designed to offer specific business activities. Starting a business in Dubai freezone means you will be restricted to having an office only within the free zone area.
You can start a freezone company in Dubai, UAE, from anywhere, meaning you do not need to be inside the UAE to open a company in Dubai Freezone.
You can read more on freezone company formation in Dubai here.
- Offshore Company Registration in Dubai: An offshore company registration in Dubai is a popular method of doing business out of the UAE and across the MENA region. Dubai offers one option for starting an offshore company – Jebel Ali Offshore Company.
How you can Start a Business in Dubai?
We have covered the types of business entities and jurisdictions for starting a company in Dubai. Now, let’s look at how you can start a business in any of the available options.
Like anywhere in the world, you will need a business license to setup a company in Dubai, UAE.
There are 4 main types of business licenses available in Dubai ( Professional License, Commercial License, Industrial and Tourism).
The type of trade license you choose will determine the type of business activities you will carry in Dubai.
Get a detailed understanding of each type of business license in Dubai in the related blog article.
How can Corporate Business Service(CBS) Assist You?
CBS is an ISO 9001:2015 certified business setup and consultancy company in Dubai, UAE. For Over 16+ years, we have been on the front line of guiding investors and entrepreneurs who want to establish a company in the UAE.
Our expert advisors in Dubai UAE can guide you every step of the way to make sure you have a seamless and cost-effective experience in setting up a company in Dubai.
You can book a free online consultation to begin.
Frequently Ask Questions
What is the Process of Business Setup in Dubai?
To register a company in Dubai, you can follow the below steps.
- Choose a legal structure for your business.
- Choose a business license that aligns with your goals and objectives.
- Decide on the types of business you want to register ( Mainland, Freezone, or Offshore).
- Select a unique and meaningful name for your company and obtain a trade name certificate.
- Compile all necessary documents required by relevant authorities.
- Apply for initial approval
- Get an office space ( for mainland setup)(not necessary for freezone setups)
- Pay the license fee and other extra charges.
- Obtain the trade license and apply for visas
- Open a business bank account in UAE.
What is the cost of starting a business in Dubai?
There is no fixed cost of starting a business in Dubai. However, your business setup cost depends on your needs, such as:
- Types of business activities and legal structure
- Office space requirement
- Number of shareholders involved
- Number of visas required
- Types of Business Jurisdiction
We suggest you get the help of an expert consultant to guide you through so as to analyze your business setup cost.
What is the difference Between DET and freezone authorities in Dubai?
- The Department of Economy and Tourism (DET) is the main government entity responsible for issuing business licenses in Dubai mainland.
- A freezone authority in Dubai only issues business licenses for its designated freezone and its activities.
What types of tax are available in doing business in Dubai?
There are two types of tax regimes for businesses in Dubai.
- Corporate Tax (CT): Dubai and the UAE offer a 9% corporate tax levied on qualifying persons and organizations on their net profits above 375,000Dhs. and a 0% tax rate for profits below the set amount. Read more on corporate tax in UAE.
- Value-Added Tax: This is a tax levied on customers by companies for purchasing goods and services in the UAE. The rate of VAT in the UAE is 5% in the mainland and 0% for transactions within freezones.