According to the best geographical location, Dubai is considered as one of the rapid-growing capitals in the world. As the most important business and economic hub of UAE’s, it is a best-suited place for various company startups. Among other unique facilities of Dubai, rapid expansion, steady economic condition, promising tax choices are the main attractive features.
The Dubai government offers a great business environment for entrepreneurs from all around the world. Being the world’s best corporate center Dubai attracts more investors and businessmen than others. It is also a city known for providing the best opportunities for new company setups across different sectors. Hence for investors and foreigners opening a company in Dubai will not only be profitable but also be prestigious.
Though the company setup procedure in Dubai is a bit lengthy yet relatively hassle-free. Before beginning to set up any company in Dubai one must have a clear vision of the type of company they want to start. There are various company options are available for the businessman and foreigners in Dubai.
- Limited Liability Company (LLC)
- Free Zone Company
- Offshore Company
- Joint Partnership
- Representative Offices
Common types of company in Dubai
Limited Liability Company (LLC):
- Most common type of company in Dubai.
- Allow a foreign company to become a shareholder.
- Legal liability is limited.
- Need highest of 50 partners to register company.
- A client doesn’t need to travel.
- Local and global trade and services are permitted.
- Need to elect a least of one manager and the highest of five managers for the company.
- Approximately 2 months needed to set the company.
- Must need to collect Trade License and Commercial Registration Certificate.
- Allowed to rent an office in Dubai.
- 5 weeks require to open a bank account for the company.
Free Zone Company:
- Can have full foreign ownership.
- Can enjoy 100% cent import and export tax privileges.
- Doesn’t have any currency restrictions.
- Limited legal liability.
- Can get UAE residence visas.
- Can conduct all kinds of businesses including trading, service and industrial enterprises.
- Cost Effective and affordable company type.
- Can lease an office in Dubai.
- Need to file the yearly tax return.
- The time needed to set up the company is Approximately 2 months.
- Can issue sales invoices in Dubai.
- To open a bank account, need 5 weeks.
- Also recognized as a non-resident company.
- A perfect tax and cost-effective corporate structure.
- Can have 100% foreign ownership.
- Limited Legal Liability Company.
- Can easily control multi-currency Bank accounts in the UAE.
- Can own UAE property.
- Don’t need to file an annual tax return.
- Can’t lease an office in Dubai.
- Can do trade internationally.
- Isn’t allowed to import or export assets.
- Residence visa aren’t allowed.
- Needed 2 weeks to complete the setup.
- Not permitted to issue sale invoices in Dubai.
- Can open a corporate bank account in 6 weeks.
Short briefing on the requirements of Common company types to setup in Dubai
|Requirements||LLC||Free Zone Company||Offshore Company|
|Required least shareholders||1||1||1|
|Need local shareholder?||YES||NO||NO|
|Needed least share capital||US$1||varies||US$1|
|Least allowed directors||1||1||2|
|Need annual financial statements?||YES||YES||NO|
|Need any resident director?||NO||NO||YES|
|Corporate shareholders acceptable?||YES||YES||YES|
|Need any local sponsor?||YES||NO||NO|
|Individual shareholders acceptable?||YES||YES||YES|
|Require statutory audit?||YES||YES||NO|
Types of Licenses available for the company in Dubai
According to the chosen company type investors need to select a suitable license for the company. Dubai Chamber of Commerce and Industry (DCCI) offers the following types of licenses for a company:
Trading & Commercial License:
- Can be a common or particular trading.
- Includes import, export, re-export, and distribution etc. of particular products.
- Can do particularized professional services.
- Can also do activities like promotion, event or display organization, washing services, etc.
- Needs a consultation with the sales administrators.
- Issued to function any investment activity.
- Provide permission to import raw materials, production of specified products and trading the complete goods.
- Permits the owner the equal status as a local inside the UAE.
Basic requirements to setup a company in Dubai
- Among various available legal company type, choosing one type is the 1st task for company setup.
- According to the chosen company type businessman need to determine which company activity will be suitable to obtain. Multiple business activities are permissible for one trade license Holder Company.
- An investor can choose their company activity according to the list from the Department of Economic Development (DED).
- In accordance with the activities, one needs to select a legal form.
- Next, a suitable and non-offensive company name or trade name needs to be selected. The chosen name should be unique means not used by other company.
- Investor will need to collect a Primary Approval Certificate allotted by the Government of Dubai.
- A Memorandum of Association (MoA) needs to be prepared based on the company type.
- It’s a must to select a physical location in Dubai.
- One must acquire and approve a suitable company license depending on the company type.
- Finalizing other necessary documents. Such as, non-Objection Certificate (NOC), copies of passport (shareholders and directors), business plan summary etc.
- Must open a corporate bank account for the company setup process.
- Lastly, need to obtain visas for completing the company setup process in Dubai.
Estimated short costs chart to set up a company in Dubai
|Registration and License||2,000 AED|
|Trade name approval||720 AED|
|Address Services||9,500 AED|
|Flexi Desk||16,000 AED|
|E-Channel Registration Deposit||7,150 AED|
|Residence Visa for one person||4,000 AED (approx.)|
|Global Resources Professional Fees||6,000 AED|
|Initial approval from economic department||220 AED|
Dubai is one of a well-recognized country with a business-friendly environment to do business easily. It provides a state-of-art infrastructure and a very simple company setup process for both local and foreign investors. Setting up a company in Dubai will surely bring numerous opportunities for the businessman to flourish.
Q: How much does it cost to set up a company in Dubai free zone?
The cost depends upon the free zone that you choose for your business. Usually, the licensing of a company in a free zone starts from 10000 AED.
Q: How much does it cost to register a trade license in Dubai?
It will cost around 15000 AED to obtain a trade license in Dubai.
Q: Can a foreigner open a bank account in Dubai?
Foreigners are only allowed to open a savings account in Dubai. However, if a foreigner has a registered company in Dubai, he/she is permitted to open a corporate bank account. To open a current account, a foreigner must have a permanent resident in Dubai.