Dubai is the most populous city in UAE. Forming a company in Dubai is very simple if you find and follow the correct process. The first step to starting a business in Dubai is to decide on your commercial endeavour and the kind of investment required.
Overview
Dubai has become the world business hub nowadays. Thousands of people come daily for travel purposes and more than hundreds of them for do business there. Earlier it was not that populous, but with the growth of infostructure and building development of hi-rises, people used to migrate here in huge numbers for business purposes.
Online Company Registration in Dubai
According to the Company Laws in the UAE, private joint-stock companies can not trade their shares in the stock market. However, under certain circumstances, they can be converted into public joint-stock companies and are allowed to trade their shares.
There Are Mainly Three Types of Companies One Can Open in Dubai:
Off-Shore Company
These types of companies are usually developed in the UAE but are mainly managed outside the country. It is the most popular business setup, which the companies from the rest of the world prefer. The reason behind the increasing popularity of this type of business is that they do not have to pay corporate taxes, and they do not have to pay any licensing fees.
On-Shore Company
These companies are located in the UAE and operate from there. To set up such a business, getting a license from the government is a basic necessity. They must set up a corporate office in the UAE by paying corporate tax to the government, which leads to high expenses at the start of the business.
Free-Zone Company
These types of companies can operate inside and outside the UAE. To begin with, Free-Zone company, a legal license is a must. Though you do not have to pay any corporate tax here, the initial setup cost is moderate to in Dubai.
The Minimum Share Capital Required to Set up a Business in Dubai
The share capital is the monetary contribution that the shareholders, or the owners or the directors of the company usually make at the beginning of the company setup. The UAE Company Laws require a business to have one or more national shareholders who own 51% of the business share capital. Not all types of businesses need a minimum share capital in Dubai. It mainly applies to limited liability companies (LLCs), public and private joint-stock companies, and partnerships limited by shares. Below is the type of companies for which The Company Laws fix a minimum amount of money for registration:
The Limited Liability Company
It is the most preferred business form of foreign investors that requires a minimum of two and a maximum of fifty shareholders. The liability of the shareholders is limited to the extent of their participation in the share capital of the organisation. It is the most commonly registered type of company in Dubai.
The Public Joint-Stock Company
According to Company Laws in the UAE, a public joint-stock company in Dubai needs a minimum of 10 shareholders and 10,000,000 AED (UAE Dirham) as minimum share capital. Foreign investors who want to set up a public joint-stock company in Dubai need to sign their articles of association. They are considered to be the founding members. They are held responsible for any unforeseen situation.
The Private Joint-Stock Company
This type of company needs a minimum of 3 shareholders along with 2,00,000 AED as the minimum share capital, which the company owners must submit at the time of incorporation of their
The Partnership Limited by Share
This type of company must have at least two partners, one of whom is a general partner and the other a limited partner. The general partner is held responsible for any obligations in the company, including debts, whereas the limited partner will be held accountable to some extent for his share capital.
What Are the Taxes to Pay in Dubai to Set up a Business?
The Dubai Taxation System is considered to be one of the most excellent taxation systems. Here the government imposes very few taxes which helps to attract more entrepreneurs. Below is the list of taxes charged by the government of the UAE.
- The corporate income tax is imposed on the oil and gas companies and the banking sectors.
- The rental tax: It is imposed on the rental of real estate properties.
- The tourist tax is usually imposed on tourism-based companies at a fixed rate of 10%.
Apart from these, there are neither any personal income taxes nor any withholding or capital gains taxes charged in Dubai.
Steps to Set up a Business in Dubai
Dubai is the most desirable place for starting up any business. It helps any entrepreneur with a tax-free environment, flexible laws, world-class infrastructure, access to the global market, and a strong support network.
To become an entrepreneur in Dubai, you need to follow the five simple steps:
Partner With Trade License Zone
To become an entrepreneur in Dubai, you must partner with a local business setup agency. Dubai has a strict business structure and regulations for the formation of your business. You need to follow all these which you can do easily with the help of any local business set up agency.
Plan and Organize Your Business and Choose Your Company Name
Planning and organizing your business is the prime key to setup your entrepreneurship. Through market research, you can decide upon the line of your business. Also, consider the location of your business, staffing solutions, necessary funding, and your company’s advertising before the final setup takes place.
When choosing your company name, you need to consider the rule of the UAE government where you should not include the name of any religious icon or God’s name. Try to keep it simple without using any offensive words.
Finalising All Incorporation Paperwork
If you are thinking about incorporating your business in Dubai, you can do the same in Dubai FreeZone at the end of the day! However, while you need to furnish important documents like a copy of visa and business incorporation details, experts suggest that, you can also deploy professional agencies.
Receiving License Notification
If you plan to launch your business in the free zone, you can receive the license from the nodal authorities within three days.
Opening Bank Account
Dubai is famous for its financial and financial sectors. It provides complete privacy for SME owners and business people who want to open a corporate bank account. It helps by providing a quick and easy currency exchange program. A business account allows tracking cash flow and other account-related functions.
Conclusion
The booming economy of Dubai can give the best opportunity for an entrepreneur. Dubai promotes an excellent infrastructure wherein the entrepreneur can have tax exemption. Vakilsearch helps start-ups and other SMEs with all legal information before setting up brands in Dubai. Here we are extending our help to those young entrepreneurs who want to make company formation in Dubai. For any further assistance, please get help from Vakilsearch.
Frequently Asked Questions:
What are the typical costs involved in starting a company in Dubai?
The typical costs involved in starting a company in Dubai will vary depending on the type of company you are starting, the location of your business, and the size of your operation. However, some of the common costs include Business license fee, Company registration fee, Visa costs, Office space rental , Utilities and Salaries.
Can foreign entrepreneurs easily start a company in Dubai, and what are the requirements?
Yes, foreign entrepreneurs can easily start a company in Dubai. The requirements are relatively straightforward and include: Choosing a business name and legal structure Obtaining a business license Opening a corporate bank account Obtaining visas for yourself and your employees
Is it possible for Indian nationals to establish a company in Dubai?
Yes, it is possible for Indian nationals to establish a company in Dubai. In fact, India is one of the largest sources of foreign investment in Dubai.
How challenging is the process of opening a company in Dubai for newcomers?
The process of opening a company in Dubai is relatively straightforward through Vakilsearch. However, it is important to be aware of the different types of business licenses and to choose the right one for your business. Talk to our experts about opening a company in Dubai.
Are there options for 100% ownership of a company in Dubai for foreign investors?
Yes, there are options for 100% ownership of a company in Dubai for foreign investors. However, this is only possible in certain industries and in specific free zones.
Is running a business in Dubai generally considered profitable?
Yes, running a business in Dubai is generally considered profitable. Dubai is a vibrant economy with a growing population and a high standard of living. However, it is important to choose a business that is in demand and to operate efficiently.
Can I initiate the company formation process in Dubai without assistance?
Yes, you can initiate the company formation process in Dubai without assistance. However, it is advisable to seek professional help to ensure that the process is completed correctly and that you are meeting all of the requirements.
What are some of the most profitable business sectors to consider in Dubai?
Some of the most profitable business sectors to consider in Dubai include Tourism, Hospitality, Real estate, Financial services, E-commerce, Logistics, Healthcare, Education and Technology.
How can one pursue UAE citizenship while owning a business in Dubai?
There is no direct path to UAE citizenship through business ownership. However, there are a few ways that business owners may be eligible for citizenship. For example, business owners who invest a significant amount of money in the UAE or who create a large number of jobs may be eligible for citizenship.
Are there any specific government incentives for startups in Dubai?
Yes, there are a number of government incentives for startups in Dubai. These incentives include Tax exemptions, Reduced visa fees, Access to government funding and Mentoring and support programs.
