13 Feb How to establish a company in Dubai: steps and features
Establishing a company in Dubai represents an important strategic step for ambitious investors and entrepreneurs seeking to benefit from the dynamic and growing business environment in this global city. Dubai, known as a leading business and financial center in the MENA region, offers a wide range of investment opportunities and facilities that make the company formation process smooth and flexible. In this article, we will review the basic steps for establishing a company in Dubai , starting with choosing the appropriate type of company and defining the business activity, through the legal procedures and obtaining the necessary licenses, all the way to reviewing some tips that contribute to the success of your business in this competitive market. Whether you are a local or international investor, understanding how to set up a company in Dubai will be key to achieving your business goals and contributing to the growth of the UAE economy.
How to establish a company in Dubai
How to establish a company in Dubai
How to establish a company in Dubai is not complicated and does not require wasting time and money. You can contact us to help you clear the procedures and legal papers in the fastest time and at the lowest costs. Here are the necessary procedures in detail:
- Prepare the necessary documents in accordance with UAE regulations and laws, then choose a trade name for the activity to be established. The name must be unique and express the company’s activity and not violate general standards and must not be the name of another commercial activity or any government agency in the Emirates.
- The second step on how to establish a company in Dubai is obtaining a citizen sponsor.
- Obtaining initial approval from the competent authorities to start the activity.
- Choosing a workplace for the company, which must meet the necessary conditions and licenses.
- Obtaining the necessary license to start work from the competent authorities.
After learning how to establish a company in Dubai, you must know the advantages that the UAE authorities provide to investors and entrepreneurs.
Advantages of establishing a company in Dubai
The city of Dubai is an important commercial area in the Emirates and is considered the investment center of the country. Dubai has been the largest economic region in the Middle East for years, for the following reasons:
- The UAE contains more than 40 free zones, the most important of which is located in the city of Dubai, making it a great opportunity to establish a company in Dubai.
- It has many equipped commercial centers and business centers and is famous for its skyscrapers and the diversity of industrial areas.
- The facilities necessary to establish a company in Dubai vary, which provides many facilities to encourage investment in Dubai, according to the type of activity to be practiced.
- The city of Dubai is interested in constantly improving infrastructure, and Dubai is famous for the strongest infrastructure in the Arab world, as the UAE has allocated about 230 billion UAE dirhams to develop the infrastructure of road networks and buildings.
- The UAE government provides full tax exemption on companies and personal income. The duration of the tax exemption is up to five years and can extend to a lifetime.
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Types of companies in Dubai
Here is a table showing the types of companies in Dubai with a brief description of each type:
| Type of Company | the description |
|---|---|
| Limited Liability Company (LLC) | A common form of company in Dubai, partners have limited liability to the extent of their equity shares. Requires a local partner to own 51% of the shares. |
| Public Joint Stock Company (PJSC) | Large companies can offer their shares for public subscription. It requires large capital and a large number of shareholders. |
| Private Joint Stock Company (PrJSC) | Companies that do not offer their shares to the public, require significant capital and may be owned by a limited number of shareholders. |
| Branch Office | A branch of a foreign company can do business in Dubai. The parent company must exist and operate legally in its country of origin. |
| Representative Office | It is used to represent the foreign parent company in Dubai without practicing commercial activity. Its role is limited to promotion, marketing and information gathering. |
| Free Zone Company | Companies registered in free zones enjoy tax exemptions and 100% foreign ownership. It can conduct business inside the free zones and outside the Emirates. |
| Civil Company | Used for professional work (eg doctors, lawyers, engineers). 100% foreign ownership is allowed but requires the appointment of a local service agent. |
| Partnership | It is established between two or more partners who bear full responsibility for the debts and obligations. Requires a local partner to own 51% of the shares. |
| Simple Limited Partnership | It consists of general partners and limited partners. The general partners bear full liability, while the liability of the limited partners is limited to the extent of their shares. |
| Sole Establishment | A sole proprietorship in which the owner has complete and unlimited liability for debts and obligations. Used for small businesses and freelancers. |
This table helps in understanding the different types of companies available in Dubai and the main characteristics of each type.
The importance of establishing a company in Dubai for the investor
Establishing a company in Dubai holds great importance for investors, whether local or international, for several reasons that make Dubai an ideal investment destination:
- Strategic location : Dubai is located at the crossroads between East and West, making it a global center for trade and business. Its geographical location facilitates access to the markets of Asia, Africa, and Europe, providing broad business opportunities.
- Stable economic environment : Dubai has a stable and diversified economy, which reduces the risks associated with investment. Government policies also encourage foreign investment by providing an encouraging and transparent legal and regulatory environment.
- Advanced infrastructure : Dubai provides world-class infrastructure, including modern airports and ports, advanced road networks, and integrated logistical facilities. This infrastructure facilitates business operations and makes it easy to run a business.
- Tax exemptions and financial incentives : Dubai offers a range of tax exemptions and financial incentives to investors. In many free zones, companies are exempt from income tax and value-added tax for specific periods of time.
- Flexible and diverse labor market : Dubai provides a flexible labor market with the availability of diverse and qualified talent from different nationalities. This helps investors find the right workforce for their projects with ease.
- Outstanding lifestyle : Dubai offers a high quality of life, making it an attractive place to live and work. From modern infrastructure to advanced health and education services, Dubai is considered one of the best places to live in the world.
- Ease of procedures : Dubai provides a business environment characterized by ease of procedures and administrative processes for establishing companies. The system is characterized by transparency and speed in completing transactions, which makes it easier for investors to start their projects without complications.
Establishing a company in Dubai is not just an economic step, but rather a strategic decision that can open up broad horizons of business opportunities and sustainable growth to investors.
Establishing a company in Dubai
Conditions for establishing a company in Dubai
Establishing a company in Dubai requires adherence to a set of legal conditions and procedures that ensure compliance with local laws and commercial regulations. Below are the most important basic conditions for establishing a company in Dubai:
- Determine the type of business activity : The investor must determine the type of business activity he wishes to practice, as requirements and licenses vary depending on the activity.
- Choosing the legal form of the company : Limited liability companies (LLC), joint stock companies, subsidiaries, or representative offices can be established. The legal form that best suits the nature of the business activity must be chosen.
- Choosing a trade name : A trade name for the company must be chosen that complies with local regulations and does not conflict with other registered trade names. An application for trade name approval must be submitted from the Department of Economic Development (DED).
- Obtaining initial approvals : Initial approvals must be obtained from the relevant government agencies, including the Department of Economic Development and other regulatory bodies related to the specific commercial activity.
- Preparing the Memorandum of Association and Articles of Association : The Memorandum of Association and Articles of Association of the company must be prepared and notarized by a notary. This includes determining the rights and duties of partners and contributed capital.
- Determining the company’s location : A lease contract for the company’s location must be provided and documented with the Land Department. The location must be suitable for the desired business activity.
- Obtaining the necessary licenses : The necessary licenses to practice commercial activity must be obtained from the competent authorities. These licenses may include a commercial license from the Department of Economic Development, a license from the municipality, and other activity-specific permits.
- Registration in the Chamber of Commerce : The company must be registered with the Dubai Chamber of Commerce and Industry to obtain Chamber membership, which allows you to benefit from the Chamber’s services and support.
- Opening a bank account : A bank account must be opened in the name of the company to manage financial operations and submit the necessary documents to the chosen bank.
- Registration in the value-added system (VAT) : If the company’s revenues exceed the minimum required for registration in the value-added system, the company must be registered with the Federal Tax Authority.
- Compliance with Local Laws and Regulations : You must comply with all local laws and regulations related to the business, including labor and employment, environmental, and health laws.
Establishing a company in Dubai requires adherence to all legal conditions and procedures to ensure proper establishment and start practicing business activity in a legal and orderly manner.
In conclusion, establishing a company in Dubai represents a great opportunity for investors and entrepreneurs aspiring to succeed in the Middle East region. Thanks to the supportive business environment and attractive investment incentives provided by the Dubai Government, the previously mentioned steps provide a clear path towards establishing a successful company in the Emirate of Dubai.
By following these guidelines and with the help of local experts, investors can take advantage of the opportunities that Dubai offers and achieve their investment and business goals. Given the continued growth and economic prosperity witnessed by the emirate, the future outlook looks very promising for those who choose Dubai as a destination to establish their business.
Frequently asked questions about establishing a company in Dubai
Can foreigners establish a company in Dubai?
Yes, foreigners can set up a company in Dubai, especially in free zones where 100% foreign ownership is allowed. Outside the free zones, a local partner with 51% of the shares is required.
What are the financial requirements to establish a company in Dubai?
Financial requirements depend on the type of company and location. Costs typically include licensing fees, rents, and company registration fees. Costs can be higher in free zones compared to the mainland.
Do new companies need an office in Dubai?
Yes, new companies must provide a lease contract for the company’s location and have it documented with the Land Department. The location must be suitable for the desired business activity.
How long does it take to establish a company in Dubai?
The time required ranges from a few days to several weeks, depending on the type of company and the procedures required. In free zones, the procedures are usually faster compared to the mainland.