Company Formation

• Opening a business in Dubai

A mainland company is an onshore company licensed by the Department of Economic Development (DED) of the related emirate which is allowed to do business in the local market as well as outside UAE without any restriction. When it comes to Opening a business in Dubai, Mainland is the most popular and pragmatic choice as it has the maximum benefits that the country has to offer in setting up businesses. However, there are certain regulations that one has to follow in the process, one of them being – One UAE national has to mandatorily hold at least 51% of the total equity in any commercial company, except in the following cases:

• Business activities that permit 100% Foreign Ownership

• Businesses located in Free Zones

• Partnerships between GCC companies and UAE National

• Business activities that permit 100% Local Ownership

The type of license will determine if one needs a local partner (Commercial and Industrial license) or a Local Service Agent (Professional License), Professional license is required when an individual or a group individuals provide their expert service, and the business is 100% owned by the expatriate. The local Service agent act as representatives in administrative dealings with government departments of Opening a business in Dubai. The local service agent does not hold a stake in the business and is instead paid an annual fee for their service.

• Dubai free zone company registration

Dubai Free Zone Company Registration Incorporation has its own advantage, particularly in terms of costs. However, one has to understand that there are numerous free zones and the cost of incorporation will differ in each of them. Apart from the location, the cost of the business will depend on many different factors such as business structure, nature of business, infrastructure requirement, number of visas required by the business, accessibility to suppliers and raw materials, etc. 

Some of the most sought after Free Zones in which the people prefer to incorporate a business are the Dubai Creative Clusters Authority (DCCA) and the Dubai Multi Commodities Centre Authority (DMCC). These both are located in the emirate of Dubai. Apart from these, there are also free zones in other emirates for instance Jebel Ali Free Zone, Dubai Free Zone Company Registration and Dubai Silicon Oasis Free Zone.

Location plays a very big role during the incorporation of a business. Most people prefer to set up a business in a Free Zone in the United Arab Emirates. This is because of the various benefits which the free zones provide such as infrastructural benefits, access to Air, Water and Land transport and assistance during the incorporation and growth of the business.

For all those planning to migrate their business to Dubai, the costs of setting up a business can be a big deterring factor. Having a clear idea of how much it may cost to set up a business in Dubai can make the going easy for businesses aspiring to have a presence in Dubai.

• Business formation in UAE

It’s no surprise that there was a lot to think about when choosing the best free zone or mainland which fits your individual Business formation in UAE, such as location, pricing, business type, adjustable or workspace possibilities, audits, bookkeeping, and share funding costs, to name a few. We’ll take you through it step wise, pointing you in the correct way, saving your cash, and beginning the process as tension free as possible.

Dubai’s status as a global commerce and trade center has been cemented in past few years. The Emirates is now placed 15th in a new poll of international business hubs. The state’s worldwide significance is attributed to a very well transport systems, the lack of taxation, and the growth of Dubai’s financial industry, according to the report. It’s an excellent site to set up a Business formation in UAE because it’s situated amidst Europe’s and Asia’s existing economies, even those coming from Africa.

You can choose to start your own business on the Mainland or even in a Freezone in Dubai. Setting up a business in Dubai free zone is advantageous since entrepreneurs can now have entire ownership of their organization. Moreover, profits and cash invested can be repatriated in their whole. Starting up the business in a free zone also allows you to connect with others in your field.

• How to set up business in Dubai free zone

The free zones of Dubai are independent entities with their own unique set of rules and regulations. Each free zone comes with its own category, such as healthcare, to which prospect companies must adhere to in setting up their businesses. Since Dubai and UAE laws do not generally apply to them, 100% foreign-owned businesses may be established, but direct trading with the local market is prohibited. Nonetheless, conducting business in this location has the following benefits:

• Having complete control over the business for foreigners;

• Corporate tax exempt, considering that it is governed by its own regulatory authorities;

• Exemption from import and export fees without payment of custom duties.

• Company registration in Dubai

Ownership of mainland/onshore companies in UAE was a vital concern for foreign investors primarily on account of having to partner with UAE nationals. This partnership is quite tilted, as an Emirati partner had to own at least 51% of the company shares, whereas foreign investors could only own a maximum of 49% of the company shares. The minority stake did not allow the foreign investors to independently run the affairs of their Company registration in Dubai. Even in some company forms (sole establishment and civil company), the foreign investor was required to appoint a local service agent (a UAE national), who would charge compensation for his appointment without owning any company shares. These aspects made every foreign investor think twice before setting up a Company registration in Dubai mainland.

To attract foreign investment and to boost the confidence of foreign investors, the United Arab Emirates amended the UAE Commercial Companies Law to permit 100% foreign ownership of onshore companies incorporated in the country. This law was implemented with effect from 1^st June 2021.

100% foreign ownership is permitted for companies that are carrying on certain business activities mentioned in the UAE’s ‘positive list’. This list consists of more than 1,100 activities across multiple sectors. Pursuant to this decision, the Dubai Economy released guidelines explaining the procedures for full ownership of Dubai mainland companies. Below are the key takeaways of the Dubai Economy guidelines:

• Start a business in UAE

One of the most significant economic and travel hubs in the world is Dubai. It is a significant hub for international passenger and freight travel and is renowned as an investor’s haven all over the world. Dubai is accelerating infrastructure and urban landscape development despite the covid19 pandemic.

The corporate world in the Emirate of Dubai is managing a wide range of interconnected problems, such as ensuring the safety of its clients and employees, building up capital and liquidity, and realigning operations. The current organizations needs to become more flexible and resistant to handle disruptions and keep up pace in a turbulent and volatile business climate.

The objectives of the Government are to maintain Dubai as a secure destination for businesspeople and investors, where their investments may prosper. Let’s examine some of Dubai’s investment highlights:

• How to open a business in Dubai free zone

Located along the coast of the Arabian Gulf, Dubai was earlier renowned largely for its oil industry, but the scenario has changed in the last 2 decades. Dubai is now a global city and a popular business hub at par with western nations, due to its diverse business model that drives the economy in the region. In order to attract foreign investment and empower the economy, free zones have been set up in Dubai that reward foreign nationals with lucrative incentives for setting up their business in the Emirates.

The Free Zone Authority in Dubai is the government organization that handles registration formalities and issues business licenses to non-resident companies or foreign-owned businesses for company formation in Dubai free zones. Business setup in Dubai free zone brings a sea of opportunities for networking, collaborating and extensive growth in the business. The appealing tax regime and many incentives offered by the free zone authorities make Dubai the most preferred nation by an investor for company formation.

• Open company in Dubai

The United Arab Emirates (UAE) is a federation of the 7 emirates of Dubai, Abu Dhabi, Sharjah, Ras al-Khaimah, Ajman, Fujairah, and Umm al-Quwain. In the Gulf Cooperation Council (GCC), the economy of the UAE is the most diversified. A country that was once reliant on the export of its abundant oil reserves to run its economy now draws merely a minority of its GDP from the same, having taken to business and tourism for its economic progress. So much so, that the UAE is one of the biggest business hubs in the world, with its most populous city Dubai acting as a premier global city and a preferred destination for entrepreneurs, investors and tourists alike. All this has been possible as a result of the market-friendly economic policies of the UAE government over the last 3 decades, fostering foreign investment, sustainable development, innovation, and research.

UAE is a developed economy that offers a favorable business environment, world-class infrastructure, nifty amenities, flexible government norms, and efficient quality services to all incoming businesses, irrespective of their country of origin. Business setup in UAE is a futuristic and insightful business decision for the following reasons:

• The UAE is a growing and diversified market with high global demand for imports and exports, and vast opportunities for suppliers

• The country bears a strategic geographic location in a resource-rich region

• The UAE has easy access and global connectivity with over 90 airlines and 170 shipping lines

• Above all, the commerce in the UAE is based on free trade barriers (no quotas or exchange controls)

• The country levies no tax on personal, capital or corporate income, and allows 100% repatriation of capital and profits

• The real estate and freight charges are competitive

• There are no currency restrictions on the exchange of money

• The energy supply is abundant and low-priced

• The populace in the country is educated and skilled, so the place is favorable from the standpoint of hiring workforce – not that there are any restrictions on hiring foreign nationals

• The transportation system throughout the UAE is well developed

• The infrastructural advancement in the UAE is no secret – its plush real estate, state-of-the-art telecommunication systems, and dependable power supply & other utilities are a fertile breeding ground for business entities

• There is top-notch accommodation for residential and office purposes, with cutting-edge venues for exhibitions and conferences

• The financial and services sector in the UAE is remarkably developed, especially suited to complement the business milieu in the region

• The nation has a cosmopolitan lifestyle with first-rate educational institutions, medical facilities, hotels, and shopping complexes

• Starting business in Dubai

Starting up a business in the UAE is a relatively quick and hassle-free procedure. However, many business-people are hesitant about setting up a business in the UAE. This is because incorporating a business in the UAE requires a citizen of the UAE to own 51% of the company, who is generally referred to as a partner or sponsor, among a plethora of other reasons such as hiring policies, immigration policies, higher freight charges etc.

After selecting the kind of business entity you want to establish, it is pertinent to decide on the business activity you wish to carry out. Many free zones in Dubai allow for multiple business activities. Hence, as an entrepreneur, you have diverse areas to set up a business in. Choosing a business activity is the earliest decision you have to make, and it is also the most important of all the other decisions.  This is because the next two steps are reliant on the type of business activity you choose.

• Company Formation in Dubai

Founded in the year 2007, the Dubai International Academic City (DIAC) is a member of TECOM Investments. Its vision is to be a global center for higher education providers to support and develop the United Arab Emirates. Currently, it is the largest higher education free zone in the world. The intention for Academic City is to be a base for colleges, schools, and universities, while the Knowledge Village will have training institutes and educational services organizations. The free zone will create a global academic destination that provides all institutions housed in it with opportunities for communication, experience-sharing to utilize the latest technologies and processes.

DIAC currently has 21 of the UAE’s 37 International Branch Campuses (IBC’s), from 11 different nationalities, which is the highest number in any one location in the world. It is a host to a large student community from 137 nationalities and has access to over 400 Higher Education programmes.

DIAC offers a unique cluster environment where businesses across all sectors can share a work campus committed to their business and can interact and collaborate effectively. The procedure of registration business, as listed above, is simple and streamlined with business-friendly company laws and regulations. A one-stop-shop service that provides businesspeople with licensing, traffic, and postal service, 24-hour visa service, quick access to knowledge workers due to the fast-track immigration process. Apart from these, listed below are few business setup advantages offered by DIAC.