Dubai being one of the most popular and economically sound destination it is always better and best option to set up a business there. Apart from the economic rise and falls, Dubai still continues to be an international hub of the Middle East. So, setting up a business in Dubai is always a wise decision. Business in Dubai can be established either in Dubai Mainland or Dubai Freezones.
Why Dubai?
- Ease of doing business:
Ranking 16th position on Ease of doing business rankings, owning a business in UAE has become less complex
- Lower Taxes:
Speaking about the regulatory authorities and taxation policies, Dubai is one of the top destinations that permits to hire employees worldwide. Apart from that Dubai is a free trade company which has its most liberalized trade policies.
- World class infrastructure:
Dubai is remarkable for its modernization and its adaptive technology that they offer in various industries which helps to reduce the complexity in functioning.
- Accessibility and Mobility:
Dubai is situated in the heart of Asia. Nearly Eighty-Five airlines offer service to more than one hundred thirty destinations throughout the world along with One hundred twenty shipping lines. Thus, it stands out to be the most ease of access location around the globe.
Business Setup in Dubai
As discussed above, one can start his business in Dubai either in Dubai Main lands or Dubai Freezones. Even though the process is quite simple and easy lack of awareness can lead your workings into turmoil.
Company Formation in Dubai Free Zone
Free zone can be defined as a jurisdiction or geographical area which are prescribed for some set of trading activity in the United Arab Emirates which is regulated by a Free Zone License. Dubai free zones, being offering Cent percent ownership it has become more adaptive and attractive to the investors. Also, the free zones are special economic zones which offer tax free status to the investors.
Procedure for Free Zone Company Formation:
- Identify the Nature of the Company
For starting a business in the free zone, first the investor has to identify the nature of business that he is to perform and the freezone where the investor plans to operate as different free zones have different requirements that are to be fulfilled.
- Choose a Trade Name
Now its time for the investor to choose an appropriate and catchy name for its business.
- Business License:
Once a name is adopted and approved the company should apply for a business license. Different licenses are provided in various freezones for various activities. Once done with the license part, the company has to look for an apt office space which can be either hired or rented.
Documents Required for Free Zone Company Formations
- Application License Form
- Business Card
- Business Plan Brief
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Passport Copies of directors
- Banking Reference and license of the partners exiting business (if applicable)
These documents are to be produced by the entrepreneur and get approved by Gulf Cooperation council or the Arab Embassy.
Company Formation in Dubai Mainland
Mainland companies are well known as the most developed business corporates in Dubai, United Arab Emirates. This is regulated by the Federal Law No.2 of 2015 (the New Commercial Company Law, (NCCL)) which was implemented from 1st July 2015, and replaced the previous Commercial Company Law (CCL) that got introduced in 1984, under Federal Law No. 8 as amended. To open a mainland company, the business must meet the legal structure set by the government and needs to regulatory policies adopted by the Government. The business must be located within the limitation of commercialized geographical areas which are covered under the jurisdiction of the Emirati Government.
Department of Economic Development (DED) is the government body that bears the responsibility to monitor the function and support economic development with the following main objectives:
- Dubai Export Development Corporation
- Mohammed Bin Rashed Establishment for small and medium enterprises
- Dubai Foreign Investment Development Establishment
Business Registration and licensing sector of Dubai Export Development (DED) gives all types of licenses such as industrial, trading etc.
How to Setup Dubai Mainland Setup?
- Identify the local service agents those are required for Limited Liability Company (LLC) or Local business start-up
- Get the proposed name approved from Dubai Export Development Corporation
- Draft the MOA with professional service agent and submit to DED along with license application
- Check Location suitability, accessibility and cost for setting up the business
- Visa eligibility and other statutory requirements
UAE provides the best and better environment which has emerged as an amazing location for mainland business setup due to its geographical location, flexible economic policies and progressive planning and development.
ADVANTAGES:
- Flexibility in doing business
- Less restrictions in processing legal documents
- Free taxation economy
- No limitations in getting employment visas
- Lack of minimum requirement capital
The following are the types of companies that can be formed under Dubai Mainland:
- Limited Liability Company (LLC)
- One Person Company
- Private Shareholding Company
- Public Shareholding Company
- Simple Limited Partnership
- Partnership Company
- Civil Company
Offshore Company Formation
An offshore Company is a legal business entity that is set up with the aim of operating outside its registered jurisdiction or the location of its ultimate ownership. Major benefits of forming an offshore company are as follows:
- An opportunity for market expansion
- Access to a stable, business – friendly legal system and flexible regulatory framework
- Offering tax neutrality and limited tax impositions
- Better access to global funding
The two major jurisdictions offering Offshore Companies in UAE are Ras Al Khaimah (RAK) and the Jebel Ali Free Zone (JAFZA). Both of these are tax free jurisdictions, which means they do not levy income tax or corporate tax and permit 100% foreign ownership. UAE has agreements with over 40 countries on Double Tax Treaties
These companies are free to open multi-currency accounts in UAE and carry out their businesses internationally. UAE offshore companies shall not be confused with free Zone Companies. Free Zone Companies are onshore companies that can carry out business in Dubai but with some restrictions. They also offer 0% Corporate Tax, but their shareholders, directors and employees can obtain residency in the UAE. The main benefits of establishing an entity in one of the UAE’s Free Zones is that there are no foreign ownership restrictions and companies are governed by an independent Free Zone Authority (FZA), which is held responsible for providing operating licences and regulating the activities of companies within the Free Zone.
