02 Jan Cost of establishing a company in Dubai – The lowest cost of establishing a company
The cost of establishing a company in Dubai – the lowest cost of establishing a company. Dubai is one of the most prominent global destinations for business and investment, as it combines an advanced infrastructure and an organized legal framework, in addition to its strategic geographical location that connects the Asian, African and European markets. Establishing a company in Dubai opens wide doors to commercial and economic opportunities, and provides access to a competitive and stimulating business environment for growth.
In this article, we will discuss the steps and procedures necessary to establish a company in Dubai, starting from choosing the appropriate type of company, through the required legal procedures, to the costs and financing available. We will also review the different types of companies that can be established in Dubai, including local companies, freelancing companies and offshore companies, to give you a comprehensive understanding that can help you make the right decision for your business venture.
This guide aims to provide you with the basic information necessary to successfully establish your company in Dubai, focusing on the challenges and opportunities you may face during this process. Whether you are an entrepreneur looking for a fresh start or an established business looking to expand, this article will provide you with clear vision and practical advice to achieve your business goals in Dubai.
Dubai is considered one of the most attractive destinations for investment and trade in the world, thanks to the advanced business environment and legal facilities it provides to investors. Establishing a company in Dubai requires following a set of legal steps to ensure compliance with local regulations and facilitate the incorporation process. Here’s a look at the basic legal steps to follow when setting up a company in Dubai to ensure the business starts smoothly and in accordance with local laws. Legal steps to establish a company in Dubai
- Choose a business activity
Determining the business you want to engage in is the first step in the company formation process. The business must be clearly defined and compatible with permitted activities in Dubai. Ensure that the activity complies with local laws and regulations.
- Choosing the legal form of the company
Determining the legal form of the company is one of the crucial steps. You can choose one of the following legal forms:
- Limited Liability Company (LLC).
- Private joint stock company.
- Branch of a foreign company.
- Sole proprietorship.
Each legal form has its own requirements and responsibilities, so it is important to choose the most appropriate for your type of activity and business objectives.
- Choose a trade name
A trade name must be chosen that reflects the nature of the business, is non-duplicate, and is compatible with local regulations. The trade name must be compatible with the laws relating to trade names in Dubai.
- Obtain initial approval
Submit an application to obtain initial approval from the Department of Economic Development (DED) or the competent authority. This step includes submitting documents such as the founders’ personal ID and the initial lease contract for the office.
- Submit a registration request
Submit a registration application with all required documents to the Department of Economic Development or the responsible authority in the free zone. This includes legal documents, registration application, and rental contract.
- Receiving the commercial license
After completing all procedures and paying the fees, the commercial license is issued. This license is an official document that allows the company to begin practicing its legal activities.
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Company registration for work visas
The company can start issuing work visas to investors, managers and employees according to its needs. This requires submitting applications for visas from the Ministry of Human Resources and Emiratisation.
By following these legal steps, you can establish a company in Dubai in an organized and legal manner, ensuring compliance with local regulations and contributing to a smooth start-up of business.
Costs and financing for establishing a company in Dubai
Costs and financing for establishing a company in Dubai
Costs and financing are two of the most important aspects to consider when setting up a company in Dubai. Costs vary based on the type of company, location, and legal procedures required. These costs can be divided into several categories, including set-up fees, bank financing, and government assistance.
Establishment fees
Company formation fees vary based on the type of company and location chosen. In free zones, fees may be slightly higher compared to local areas due to the privileges offered by free zones. The basic fee usually includes:
- Registration fees: vary depending on the type of company and location, and range from a few thousand to tens of thousands of dirhams.
- License fees: vary depending on the business activity and company size.
- Visa fees: Includes investor and employee visas, the cost of which may vary based on the number of employees.
- Service fees: Includes fees for legal, consulting, and other administrative services.
Bank financing
Bank financing is considered one of the most important sources of financing for startups in Dubai. Local and international banks offer a variety of financing solutions that suit the needs of companies. These solutions can include:
- Business loans: Business loans are one of the most prominent options available, as companies can obtain short-term or long-term loans to finance their business.
- Credit Facilities: Credit facilities provided by banks include immediate cash facilities or letters of credit.
- Islamic Finance: Islamic banks in Dubai offer Sharia-compliant financing solutions such as Murabaha and Musharaka.
It is important for startups to conduct a financial feasibility study before resorting to banks to ensure the ability to repay loans and the associated interest.
Government aid
The government in Dubai provides a range of initiatives and assistance to support startups and enhance the business environment. This aid includes:
- Tax incentives: The government provides some tax incentives for startups in some strategic sectors.
- Financial support programs: These include financial support programs provided by government institutions such as the Mohammed bin Rashid Fund for Innovation and the Khalifa Fund for Enterprise Development.
- Support and guidance services: The government also provides advisory and guidance services to startups to help them achieve success and growth.
Dubai is considered an ideal environment for establishing companies thanks to the great facilities and various assistance available. It is important for startups to take advantage of these opportunities to achieve sustainable success and continued growth.
Our company’s role in establishing a company in Dubai
In conclusion, it can be said that establishing a company in Dubai represents a strategic step with multiple benefits, both locally and internationally. By understanding the options available for the type of company, adhering to the required legal procedures, and securing the necessary financing, entrepreneurs can achieve great success in a thriving and supportive business environment. Dubai is not just an economic center in the Middle East, but rather a gateway to the world thanks to its advanced infrastructure and attractive investment incentives.
Good planning and adherence to legal requirements are the key to success in establishing any company. It is essential to have a clear vision and a well-thought-out business plan, and to cooperate with trusted legal advisors and financiers to ensure the process runs smoothly. Investing in Dubai is not only an opportunity to make financial profits, but it is also an opportunity to contribute to the growth of a prosperous and diversified economy.
Finally, every investor must stay up to date with legal and regulatory changes in Dubai to ensure the continuity and prosperity of his business. By adhering to these principles and guidelines, any company, large or small, can carve out a distinguished place for itself in the dynamic and promising Dubai market .
Frequently asked questions about establishing a company in Dubai
Can foreigners open a company in Dubai?
Yes, foreigners can open a company in Dubai. There are free zones that allow foreigners to own 100% of a company, while companies on the mainland may require a 51% local partner.
How long does the process of establishing a company in Dubai take?
The process of setting up a company in Dubai usually takes two to four weeks, depending on how quickly documents are completed and approvals are obtained.
Do companies in Dubai need a local partner?
If the company is registered on the mainland, a local partner may be required to own 51% of the company’s shares. As for companies registered in free zones, foreigners can own 100% of the company.
Can a company in Dubai work in several activities?
Yes, a company in Dubai can practice several activities, but this requires obtaining a license that includes all the required activities or obtaining an additional license for new activities.
What are the taxes imposed on companies in Dubai?
Companies in Dubai enjoy broad tax exemptions, as there is no corporate income tax. However, companies must comply with value added tax (VAT) if their activity is subject to this tax.
Can companies in Dubai obtain work visas?
Yes, companies in Dubai can issue work visas to investors, directors, and employees according to their needs and the requirements of the Department of Economic Development.
What are the conditions for renewing a trade license in Dubai?
To renew a business license, you must submit a renewal application with the required documents, including an updated lease contract, renewal of insurances, and payment of late fees.