Dubai, the crown jewel of the United Arab Emirates (UAE), is a thriving business destination. Local and foreign business investors can both start their companies in Dubai. The emirate offers a dynamic environment, world-class infrastructure and a tax-friendly environment for businesses to flourish and foster growth.
But before you take your chance for a company formation in Dubai, you must understand all the essential aspects of the process.
Understanding Your Business Landscape
Business owners can take advantage of multiple jurisdictions in Dubai. There are three main business jurisdictions for a company setup in Dubai.
- Free Zone
- Mainland
- Offshore
Free Zone Company – There are more than 26 free zones in Dubai with specific industry focuses. A free zone offers 100% foreign ownership and various other benefits. However, these Dubai-free zones restrict you from conducting business activities on the mainland. You need to obtain a proper free zone license from the governing authority to conduct any business activities in the free zone.
Mainland Company—Setting up a business in Dubai mainland offers a large number of benefits. The majority of businesses are 100% foreign-owned depending on Business Activity and Location. There are fewer restrictions on business activities conducted in Dubai mainland.
Offshore Company—A Dubai offshore company has complete ownership but is not allowed to perform any business within the UAE. An offshore business formation in Dubai can be used for asset protection and has robust privacy and confidentiality policies.
Everything about Dubai License for Company Formation in Dubai
A business license is mandatory before a company setup in Dubai. The license varies depending on the business activities. Here are the main three types of business licenses:
Commercial License
A commercial trade license is used for Dubai mainland to perform any commercial activities in the UAE.
Here is a list of some commercial business activities:
- Importing
- Re-exporting
- General trading
- Food and beverage
- Trading with goods and commodities.
Professional License
- A professional license in Dubai is designed for all the skilled professionals for their business setup in Dubai.
- A service-oriented company formation in Dubai must obtain a professional license to conduct services.
- Here is a list of business activities that come under the professional license:
- Education
- Consultancies
- Management services
- Printing and Publishing
- Accounting and auditing
- Healthcare and medical services
Industrial License
- An industrial license is appropriate for any business that includes the production and manufacturing of new products.
- Every business that has an industrial license must have a warehouse in the country.
- Here is the list of business activities that come under the industrial license:
- Bread manufacturing
- Meat product manufacturing
- Cement product manufacturing
All about Dubai Visa for Company Formation
You need to obtain a visa to stay or work or for a company formation in Dubai. Check out the different types of Dubai visa here:
Tourist Visa
- If you are not eligible for any visa on arrival or are declined for a visa-free entry in the UAE, then a tourist visa is for you.
- Females under the age of 18 are not eligible for tourist visas.
- Children under the age of 18 visiting UAE with their parents are eligible for a free visa.
- You can apply for a tourist visa through airlines, travel agents and hotels.
Golden Visa
- A golden visa is a long-term residence visa in the UAE which enables you to live, work and study in the country.
- This visa is valid for 5 or 10 years and you don’t require any sponsor for this.
- The requirements for the golden visa vary depending on the residence type, irrespective of investor, talent, or entrepreneur.
Employment Visa
- People interested in working in Dubai must obtain an employment visa.
- The minimum age for getting an employment visa is 18, and the company for which you are hired possess a license.
- You must meet all the requirements of the Ministry of Human Resources and Emiratisation (MoHRE).
Investor Visa
- Foreign investors who want to reside and start a business in Dubai are eligible for an investor visa.
- There are different types of investor visas in Dubai to attract foreign business investors.
- The validity of an investor visa varies depending on the visa categories. Here is a list of different visa:
- Golden visa: 10 years
- Retirement visa: 5 years
- Investor/partner visa: 2 years
- Property investment visa: 3 to 5 years
A Gist about the Company Formation in Dubai
Complying with all the rules and regulations of the jurisdiction for business setup in Dubai is mandatory. Some of the essential regulations are given below:
Taxation
- Dubai offers tax exemptions in certain scenarios. However, businesses that involve natural resource extraction are subject to Emirate corporate taxation.
- The dividends and capital gains coming from the UAE business will be exempted from corporate tax.
- Mainland companies have to pay 9% corporate tax on profits above AED 375,000.
- All Dubai mainland companies fall under the UAE’s VAT regime.
- A Customs duty of 5% is payable for Dubai companies based on the cost, freight and insurance.
Beneficial Owners and Anti-money Laundering
- The company must make an Ultimate Beneficial Owners (UBO) declaration regardless of its jurisdiction. This is part of the UAE’s anti-money laundering policy.
- The UBO must be made within 15 days once you get the business license.
Copyright and Intellectual Property Rights
- Dubai intellectual property rights come under the UAE federal law by the UAE Ministry of Economy.
- Here is the list of things that come under the IP rights in Dubai:
- Patent
- Copyright
- Trademark
- Industrial design
- Trade secret protections
- Enforcement mechanisms
Audit Filing
- All Dubai legal entities must keep financial records and obtain annual audit reports. This report will contain all of your company’s income and expense records.
- The auditor’s report can be submitted in Arabic or English.
- You have to appoint an auditor for Dubai mainland and free zone company formation. The person will be responsible for maintaining audit books annually.
- All the mainland companies in Dubai are licensed and registered with the UAE Ministry of Economy.
- You have to keep records annually for five years for a company formation in Dubai.
Judicial and Courts System
- The judicial system in Dubai is an amalgamation of federal and emirate-level courts which is responsible for resolving disputes.
- There are three main types of primary laws in Dubai:
- Federal law – This law covers the following central UAE’s issues:
- UAE’s national interest
- Foreign affairs
- Federal Finance
- Defence
- Education
- Security
- Law specific to the Emirate – This law covers local matters which doesn’t include the national government.
- Sharia (Islamic law): Sharia applies to specific circumstances. The judicial system is considered the primary foundation for legislation.
Setting up a business in Dubai is a strategic move for your business. Understanding the core regulations, business licenses, visas, and legal frameworks ensures a smooth setup process. Remember, this guide is only for informational purposes. Get professional assistance from a reputable business consultancy like Business Setup Worldwide. We have been assisting investors for setting up their business in Dubai without any hassle.
Interesting Related Article: “Investing in Dubai’s Real Estate Market: Why and How?“
