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.
Dubai has become the world business hub nowadays. Thousands of people come daily for travel purposes and more than hundreds of them for doing 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.
Business people and entrepreneurs have a huge interest in opening a business set up in UAE as it provides a huge customer base. People from all over the world come and settle in the UAE. It is overcrowded, and people used to migrate here with the growing opportunity for business development and the open job market.
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 mainly managed outside the country. It is the most popular business set up, which the companies from 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 the 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
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. 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.
- The partnership limited by shares: 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 start their businesses in Dubai. For any further assistance, please get help from Vakilsearch.
Read more:
- Online Company Registration in Dubai
- Cheapest Company Registration in Uae
- Company Registration in Dubai Cost
