Your Guide to Registering a Dubai Company: An Expert Perspective
by Counseal Team
Updated November 26, 2023
Your Guide to Registering a Dubai Company
Dubai, the land of opportunities, attracts many entrepreneurs and investors from around the world (including Nigeria). Its strategic location, favourable business environment, and tax benefits make it an ideal place to register a company. However, this can be a daunting task for those unfamiliar with the process in the UAE.
In this guide, we will walk you through the steps required to register your business in Dubai and provide you with all the essential information needed to set up your business successfully.
Whether you are planning to start a small enterprise or set up a large corporation in Dubai, this comprehensive guide will help ease your way towards establishing your business entity legally and efficiently.
Company Registration in Dubai, UAE
Registering a company in the UAE requires careful planning and execution. The first step is to select a suitable business activity and legal structure for your company.
You can choose from the available legal entities, which are:
- Free zone companies,
- Offshore firms or
- Mainland companies.
Each type has its advantages and limitations, depending on your business objectives, and the Company Act governs all forms of companies.
Once you have decided on the legal structure of your company, you need to get all the licences and permits from the government authorities. This includes registering with the Department of Economic Development (DED), getting trade licences, office space leasing agreements, visas for foreign employees if required, and more.
To complete the registration process successfully, it is essential to seek professional guidance from experts who understand local regulations in the UAE’s commercial ecosystem.
Overall, company registration is crucial for businesses looking to operate in this flourishing emirate.
Factors to consider before setting up a company in Dubai
There are several factors that entrepreneurs and investors should consider before setting up a company. The legal structure of your business, the nature of the industry you want to operate in, and the requirements set by authorities are some of these factors.
It is essential to have a clear understanding of these aspects, as they can affect how easy or difficult it is to navigate the registration process.
You may also need additional permits and licences depending on your type of business activity, such as obtaining certification from regulatory bodies or getting approvals from relevant government agencies.
Taking care of these requirements beforehand can help ease any potential complications during registration.
Carefully analysing all considerations, such as legalities, sponsorship obligations, industry-specific regulations, and other necessities, will better equip investors with what they need to register their businesses successfully in Dubai’s competitive market environment.
Company Name and Business Activity
A crucial factor in setting up a business is deciding what business activity you want to engage in. The name of your company will also do well in setting your business apart from others.
Your company name, also referred to as the trade name, will have to be approved to begin the registration. This will signify that your registration has begun and, upon completion, you will be legally recognised by the chosen name.
Once registered, you will get a trade licence, which will include details of your business activities.
You will need to carefully analyse what you list as your business activities during the registration process to avoid restricting your business. This is because you are not allowed to conduct any business outside of those listed in the licence
Location of Company
Dubai’s location in the heart of the Middle East makes it an ideal hub for business between East and West. It is strategically at the crossroads of Europe, Asia, and Africa, offering easy access to a vast market of over two billion consumers.
The city boasts world-class infrastructure, with modern airports connecting it to all major destinations in the world. Not having to pay taxes is another reason it is attractive to entrepreneurs around the world. The city has no corporate or personal income tax, no withholding tax on dividends or interest paid out of the country, and no value-added tax (VAT) on exports.
This enables businesses registered in Dubai to maximise their profits by keeping taxes low while enjoying other benefits, like exemption from customs duties on goods imported into free zones for re-export purposes.
This makes Dubai one of the most sought after locations for starting up or expanding your business venture.
You must choose the right physical location for your company in the UAE in order to establish a suitable legal structure. There are three primary locations for setting up a company:
How to Set Up a Company on the Mainland
To set up a company on the mainland, the first step is to choose the appropriate business activity and legal structure. The Mainland is one of the most sought after business locations, as it gives you access to a large market.
The legal structures allowed on the Mainland are:
- Limited Liability Company (LLC)
- Professional Company (civil work company)
- Branch or representative office of foreign companies
Next, you need to apply for a trade name and get approvals from various government departments, including Dubai Municipality and the Department of Economic Development. Once you submit all the necessary documentation and pay the fees, your company will be registered with the Chamber of Commerce and Industry.
You may also need to secure office space or a virtual office address before obtaining your commercial licence.
Another crucial factor to consider is the sponsorship requirements for your industry sector. The recent amendment to the Commercial Companies Law allows for 100% foreign owned companies in some selected industries. Other industries, such as banking, energy, security, and so on, would still need to find a local sponsor who would hold 51% ownership of the company. You can access a full list of business activities that can be fully expatriate owned here.
Overall, setting up a company in the UAE requires thorough planning and compliance with local regulations. It’s recommended that you seek professional guidance from qualified consultants who can assist you throughout every stage of the registration process.
With diligence and patience, registering your new business can be an exciting opportunity for growth and success.
- Setting up Limited Liability Company (LLC)
Limited liability companies (LLCs) are a popular legal structure option for entrepreneurs who want to limit their personal liability while receiving tax benefits.
LLCs offer the flexibility of being able to choose how they’re taxed, as they can either pay as a sole proprietorship or partnership or elect to be taxed as an S corporation or C corporation.
To register an LLC in Dubai, you must have at least two partners and appoint a local service agent to process the company registration. You must adhere to specific legal procedures and get licences and permits from government authorities to enable you to run your business smoothly.
You can choose to register as a private or public shareholding company. You can use this structure for a myriad of business activities, such as commercial, manufacturing, etc.
If you plan on registering your company in Dubai as an LLC, it’s essential that you seek professional guidance from local lawyers and consultants with expert knowledge about the process.
Having proper help will ensure your compliance with the UAE’s commercial regulations and safeguard your investments against any potential legal issues in the future.
- Setting up a Professional Company (Civil Work Company)
If you are looking to set up a professional company in Dubai, UAE, that offers strictly professional services such as medical services, accounting, and the like, there are several steps you need to follow.
Foremost, you will require a professional licence from the Dubai Department of Economic Development (DED), which would permit you to operate your business within your chosen profession.
Once you have the licence for your professional company, it’s important to identify and define various aspects of your business, such as its legal structure or ownership type.
Among others, opening a professional company offers you the benefit of 100% ownership of the company.
- Setting up a Branch or Representative Office of Foreign Companies
One option for foreign companies or companies in the Free Zone looking to establish a presence in Dubai is to open a branch or representative office on the mainland.
A branch office is an extension of the parent company and can engage in business activities similar to the parent, while a representative office can only perform promotional activities and cannot engage in revenue-generating operations.
To register a branch or representative office, companies must submit several documents, including the parent company’s incorporation certificate and memorandum of association.
The registration process also involves getting approvals from various government departments and paying fees.
While establishing a branch or representative office offers several advantages, such as easy access to local markets and customers, it also comes with certain limitations. For example, these offices are not considered independent legal entities; thus, liabilities incurred by them may extend to their parent company. They may be subject to specific regulations imposed by authorities overseeing their respective industries.
How to open a Company in Offshore Jurisdiction
Setting up a company in an offshore jurisdiction involves taking certain steps to ensure compliance with the laws of the chosen location. The first step is to conduct thorough research on the legal and tax requirements of that jurisdiction. This includes identifying relevant tax codes, getting licences and permits, establishing a registered office address, and appointing local directors or agents where applicable.
Companies formed offshore are primarily for international trade. They are registered as International Business Companies (IBC). The UAE customs and VAT regulations do not apply to these companies as they fall outside the business and legal jurisdiction of the UAE.
You should, however, consider that as an IBC, you cannot trade in the local UAE market or apply for a residency visa for employees. It is more suited for international companies that will benefit from the incentives offered, such as foreign ownership, full profit repatriation, and other tax incentives.
How to Open a Company in a Free Zone
Free Zones in Dubai offer a strategic location, tax benefits, and a favourable business environment for entrepreneurs and investors to start their own company. They are also easier to form.
The Free Zone offers several business incentives, such as
- Full profit repatriation
- Exemption from VAT
- Availability of standard warehouses for trading/manufacturing companies
- Easy transfer of ownership
- Minimal running expense
To open a company in a Free zone, the first step is to select the desired Free zone based on your business activity as each Free zone caters to specific industries. The next step is choosing the legal structure of the business, which can be:
- a Limited Liability Company (LLC) or
- a branch of an international parent company
Once you have selected the legal structure, it’s time to choose a trade name for your business that complies with UAE laws and regulations.
Next comes getting necessary licences from government authorities such as the Department of Economic Development (DED), Customs authorities, and the Ministry of Human Resources & Emiratisation (MOHRE) based on your industry requirements.
After obtaining all essential documents and approvals from relevant governmental bodies, submitting them online through the Dubai Business Registration Portal and paying associated fees completes your registration process.
Finally, upon completing this entire process successfully and getting an establishment card, you will get permission to carry out commercial activities within that free zone.
Cost of Company Registration in Dubai
With registering a company in Dubai, one of the key considerations is the cost involved. While the exact fees depend on various factors, such as business type and location, there are some general guidelines to keep in mind.
For example, expect to pay around AED 10,000 – AED 45,000 (US$2723.39 – US$12,255.24)for a mainland company registration and at least AED 35,000 (US$9531.85) for setting up a free zone entity. Besides these costs, there may be additional expenses, such as visa fees and office rent.
While the initial cost of registration may seem high, setting up a company in Dubai can offer many benefits, including access to global markets and tax incentives. The process has become streamlined over recent years with efficient online portals, enabling entrepreneurs from around the world easy accessibility when handling their business matters.
The right support system can also make all the difference when managing your start-up costs. To ensure you get accurate pricing information based on your specific circumstances, it is helpful to engage with an experienced UAE corporate service provider who has knowledge of navigating local laws. This will save time and resources during this phase.
When registering a company in Dubai, there are several documents that you must prepare and submit to the relevant authorities. First, you will need to provide copies of each shareholder’s passport photographs (2 copies with a white background), a copy of their passport, and their visa page if they are residents of the UAE.
Second, a memorandum of association (MOA) is required, which outlines the objectives, activities, and shareholding structure of your company. A public notary in Dubai must notarize this document.
You will also need to get an initial approval certificate from the Department of Economic Development (DED). This certificate confirms that your chosen business name is available for registration and is valid for six months from issuance.
You should prepare proof of leasing physical office space, or an Ejari Certificate, among other documentation, depending on your licence activity category at the Dubai Municipality Office. These documents, along with payment fees, will facilitate the quick completion of procedures so that you can soon launch operations successfully.
You can plan for the preparation and submission of these documents with your local agents in your absence.
Residency Visa and Emirates ID
Getting a residency visa and Emirates ID is essential for anyone planning to live and work in Dubai. The process requires submitting an application along with relevant documents such as passport copies, proof of employment or business ownership, medical reports, and biometrics.
Once approved, the applicant will receive a stamped visa in their passport and can then apply for an Emirates ID card. The residency visa allows individuals to stay in Dubai for extended periods, while their Emirates ID acts as an official identification document recognized by both the private and public sectors.
It is mandatory to carry the Emirates ID at all times when living or conducting business in Dubai. Failure to get these essential documents can cause fines, restrictions on travel, or even deportation.
Overall, getting a residency visa and Emirates ID may seem like just another hurdle to jump through when registering your business in Dubai, but being aware of these required steps beforehand can ease the process significantly. One of these steps is opening a valid corporate bank account for your business.
Following proper guidelines ensures you avoid unnecessary complications during your time spent living and working in the UAE.
Opening a Corporate Bank Account
Opening a corporate bank account is one of the key steps in registering a company in Dubai. To open a corporate bank account, you will need to provide certain documents, such as your trade licence, memorandum and articles of association, and passport copies of all shareholders and directors.
You will also need to submit your business plan, financial statements, and details about your source of funds. It’s important to choose the right bank for your business needs. Some factors to consider include banking fees, services offered (such as online banking), customer support quality, and the reputation of the bank.
Once you have chosen a bank that meets your requirements, it can take several weeks for the account to be set up because of compliance checks by local authorities.
However, taking time out from setting up can avoid unforeseen blunders or issues with regulations regarding monetary transactions that may arise if you are not patient during the setup process.
Opening a bank account might also require your physical presence, unlike the company registration process.
By following these steps carefully and selecting an efficient banking institution, you ensure that setting up operations flows smoothly. It will also enable correct practices from day one, which can play pivotal roles when encountering challenges crucial to growth for any entity striving globally today!
Online Company Registration in Dubai
Online company registration in Dubai offers a quick and convenient way for entrepreneurs to start their businesses. The process involves three simple steps:
- Getting initial approval from the Department of Economic Development (DED)
- Registering the trade name
- Getting the final licence
You can complete the whole procedure within a few days by following the guidelines provided on the official government website.
One advantage of online registration is that it allows you, as a business owner, to save time and avoid unnecessary bureaucracy. You can get all the required approvals and documents electronically without having to visit different offices or hire local agents.
You can choose from several legal structures, such as a sole proprietorship, partnership, limited liability company (LLC), or free zone entity, depending on your needs and objectives.
In conclusion, online registration has made starting a business in Dubai simpler and more accessible for both locals and foreigners. However, it is essential to seek professional advice before embarking on any entrepreneurial venture to ensure compliance with local regulations and laws.
Frequently Asked Questions (FAQs)
Can a foreigner start a business in Dubai?
Yes, a foreigner can start a company in Dubai and the UAE at large. Dubai highly encourages foreign participation, with a lot of enticing business incentives in place for foreigners.
Can I open a company in Dubai without a sponsor?
Not necessarily; this depends on your business sector. There has been a recent amendment to the laws that allows full ownership of companies in certain business sectors.
How long does it take to register a company in Dubai?
You can complete company registration in seven working days, depending on your local agent and the availability of the required documents.
Is it difficult to register a business in Dubai?
No. You can currently begin and complete your company registration in Dubai online from any part of the world. You can engage the services of a local agent to enlighten you on the process and conduct other post registration requirements.
Can I start a company in Dubai on a visit visa?
Yes, but you would need to get a business visa as soon as possible to begin the business registration process.
Can I own 100% of a company in Dubai?
Yes, if your company falls under the business sectors that are permitted full foreign ownership.