Step by Step Creating your company in Dubai

What do you need to know before setting up?

Free Zones vs Offshore

Prior to establishment, it is crucial to determine whether you prefer to operate within a Free Zone or Offshore. Depending on your prerequisites, each option presents unique advantages and specifications. 

Offshore

While offshore companies can be registered in a free zone and reap similar advantages, they cannot serve as a complete substitute for a free zone company. The primary distinction between a free zone company and an offshore company lies in their business operations. Offshore companies are permitted to engage in business activities beyond the UAE, whereas they are prohibited from operating within the country. Furthermore, they do not have any stipulations for a minimum amount of capital to be deposited before incorporation.

Nevertheless, unlike operating as a free zone company, offshore companies necessitate a sponsor, which restricts foreign ownership to a maximum of 49%.

Freezone

If you wish to retain complete ownership of your business, consider acquiring a license and establishing a location in one of Dubai's free zones. The Dubai government introduced the free zone concept to pique foreign interest in setting up enterprises in the city. Essentially, it is a designated economic zone where business owners can benefit from complete ownership, a corporate tax rate of 9% (applicable to UAE businesses on profits exceeding AED 375,000), and no personal income tax.

Nevertheless, a significant limitation of operating a company in a free zone is the prohibition on conducting direct trade with the local market in the UAE.

Dubai has several free zones, each with its own specific focus and regulations. Some of the popular free zones in Dubai include Dubai Airport Free Zone (DAFZA), Dubai Multi Commodities Centre (DMCC), Dubai Silicon Oasis (DSO), Dubai Media City (DMC), and Dubai International Financial Centre (DIFC). Each of these free zones caters to specific industries, such as technology, media, finance, and logistics, and provides a range of facilities and services tailored to the needs of businesses operating in those sectors.

Creating a company in Dubai involves several steps, which include:

1.           Determine the legal structure of your company: Dubai allows several types of legal structures for companies, including Limited Liability Companies (LLCs), Sole Proprietorships, Free Zone companies, and Branch Offices.

2.           Choose a business activity: You must select the business activity that your company will be involved in. This is an essential step, as it will determine the licenses and permits you will need.

3.           Choose a trade name: You must choose a unique name for your company, which must comply with the naming guidelines provided by the Department of Economic Development (DED).

4.           Apply for a trade license: You will need to apply for a trade license from the DED. The type of license you require will depend on the nature of your business activity.

5.           Register your company: You must register your company with the DED, along with the required documents, which will include your trade license, passport copies of shareholders, and the Memorandum of Association.

6.           Obtain approvals and permits: Depending on the nature of your business activity, you may need to obtain approvals and permits from various government departments and authorities.

7.           Open a corporate bank account: Once your company is registered, you must open a corporate bank account in Dubai.

8.           Rent office space: If your company requires physical office space, you must rent a suitable office space that meets the legal requirements.

9.           Obtain visas: If you plan to hire employees, you must apply for visas and work permits for them.

These are the basic steps involved in creating a company in Dubai. However, the exact requirements and procedures may vary depending on the legal structure and business activity of your company. It is advisable to seek professional advice from a local business consultant or a law firm to guide you through the process.

Ready to setup your business in Dubai?

Although it may appear to be a lengthy process, it can be completed in a matter of weeks with the proper procedures.

Contact us at legal@law-rence.ch to assist you in creating your business. We will guide you through every step of the process, from document drafting and submission management to translation assistance, bank account establishment, approval acquisition, and general advice and consultation. Reach out to us today to learn how we can support you!