Company registration in Dubai
Company registration in Dubai

Dubai is certainly the most renowned and popular emirate of the United Arab Emirates. Its advanced infrastructure, numerous tourist attractions and high-profile airport has made it the famous gem and keystone of the UAE with limitless opportunities for investment in the real estate, leisure and service industries. Though Dubai may not be the most attractive corporate jurisdiction of the United Arab Emirates like Ras Al Khaimah (RAK) for example, it definitely has a lot to offer for the right type of business structure. There are more than 20 free zones in Dubai, each designed for a specific business activity such as technology, trade, media, health, science and many others. Regardless of the type of business a free zone company can be an excellent financial vehicle for regional manufacturing or as a distribution base for foreign entrepreneurs. Free zone companies benefit from full tax as well as import and export exemption, absence of currency regulations, repatriation benefits and the possibility of foreign labor recruitment.

One major factor that differentiates Dubai from the rest of the emirates is the access to the accustomed English common law regulatory framework. The complex legal system based on Islamic Sharia law and civil law that governs the UAE may seem unfamiliar and intimidating for many foreign investors which is why the local government has created a world-class financial hub, the Dubai International Financial Centre (DIFC). The DIFC is a common law based independent legal system created on the finest practices of the world’s major financial jurisdictions and incorporate the best of international financial and commercial law. The DIFC is also home to a leading international stock exchange referred to as NASDAQ Dubai that offers a trading platform for listings of shares, equity derivatives and structured financial products in the Middle East.

WHY DUBAI?

WHY NOT?

  • No Corporate tax (except oil and gas exploration and production companies which are taxed up to 55% and branches of foreign banks are taxed at 20%)
  • No personal income tax for non-residents
  • No withholding tax on dividends, royalties and interest paid to non-resident shareholders
  • No capital gains tax 
  • No surtax
  • No wealth or inheritance tax
  • No stamp duty 
  • No foreign exchange control
  • 100% repatriation of profits and capital
  • Possibility of obtaining a tax residence certificate for both corporate entities and physical persons
  • OECD whitelist jurisdiction
  • Double tax treaties with over 100 countries worldwide
  • 5% VAT (certain goods and services are exempt)
  • A free zone and offshore company can be incorporated with 100% foreign ownership
  • The share capital of the company does not have to be fully paid up at the time of incorporation (except some specific entities)
  • Investors and employees can obtain a residence visa in just 5 days 
  • Free Zone companies have no standardized regulations, each zone has its own structure, incorporation, share capital and financial reporting requirements
  • Offshore and free-zone companies are not permitted to operate/trade on the local market unless they employ a local agent or obtain a No Objection Certificate (NOC) from the Department of Economic Development (DED)
  • Limitations and restrictions on some business activities, for onshore companies some specified business activities require 51% local ownership
  • VAT registration is mandatory for all Dubai companies
  • Beneficial owner information is submitted to the Registrar of Companies but is not accessible to the public and is kept strictly confidential
  • Local laws and business practices favor UAE nationals in the case of corporate disputes
  • A branch of a foreign company is required to deposit a bank guarantee of AED 50,000 upon registration which cannot be used for business operations and will remain blocked until de-registration
  • Islamic mentality and customs differ from the Western world and may take time to get accustomed to and understand

Company formation in Dubai

In general, the incorporation process of a legal entity in Dubai is a fairly quick and transparent procedure, which usually takes no longer than 7 working days and does not require a personal visit to Dubai, provided that you have a licensed registered agent, like our firm, assists you with the process. However, having said that, there are many important factors that one must take into account when setting up a business in UAE, such as the need of special pre-approvals for some business activities, licensing, trade name registration, substance and office space requirements as well as possible immigration procedures.

The specific requirements, time frames and procedures vary depending on the type of entity that is being registered. Formation of an onshore company, for example, is a slightly more complicated and time taking procedure than that of an offshore company, and the registration requirements of a free zone company will somewhat differ depending the policies of the specific zone’s authority. Moreover, most legal entities in Dubai, and UAE in general, will also require a business license to operate. There are currently more than 2000 license types available split among various sectors and business fields.

Though all the formalities may look overwhelming at first glance, they are in fact very wisely set up by the local government to be quick, cost-effective and most importantly ensure maximum protection and ease of business for entrepreneurs and investors in various professional sectors.

We strongly recommend that you contact us for a free consultation, and our corporate team will gladly guide you through the necessary steps for smoothly setting up your enterprise in Dubai and can provide you with a tailored package based on your specific business model.

As mentioned above, there are several types of legal entities that can be incorporated in Dubai depending on the purpose of the company and the market outreach of its operations. Below is a brief overview of some of the general entity types with a short description of its particularities, structure and annual requirements.

Free Zone Company

A free zone company needs to be incorporated in its particular free zone and may only operate within this free zone and solely in the business activity that is prescribed to that zone. However, all business operations within the zone are exempt from all types of taxation such as VAT, customs, income and corporate tax. The structure, incorporation, share capital and financial reporting requirements of the company vary depending on the particular free zone that it is being incorporated in. However, all free-zone entities do have some things in common, they can all be incorporated with 100% foreign ownership, must apply for relevant licensing and have to rent or buy an office in the selected free zone.

Offshore Company

An offshore company is an entity whether private or public registered in the UAE but operating outside the United Arab Emirates. This type of entity is not permitted to do business on the local market, but does, however, benefit from full tax and VAT exemption, has no minimum share capital deposit and annual accounts requirements

Onshore Company

An onshore company, regardless of the entity form, can freely operate in the entire UAE and can benefit from the local market and own property anywhere in the emirates. Moreover, an onshore company has very few restrictions in relation to the business activity it can operate in and unlike offshore or free-zone companies can obtain an unlimited number of visas for its management and employees. Following the new business setup rule introduced in 2018, an offshore company can now be wholly owned by foreign individuals without the need for a local sponsor unless it intends to engage in certain specified business activities that require 51% local ownership such as medical retail, insurance, banking and financing, oil exploration, road and air transport among a few others. Contact our corporate team for a more detailed information on the affected business activities and to obtain more information on the particularities of company formation in the United Arab Emirates.

Corporate Features of a Dubai Offshore and Onshore Companies

GENERAL

Offshore

Onshore

Incorporation Time

One week

6 – 8 weeks

Local Registered Agent Required

Yes

Yes

Local Registered Address Required

Yes

Yes

Migration of Domicile Permitted

Yes

Yes

SHARE CAPITAL

Minimum Share Capital

No Minimum

Private : AED 5,000,000

Public:    AED 10,000,000

Minimum Paid Up

No Minimum

100%

Maximum Share Capital

No Maximum

No Maximum

Bearer Shares Allowed

No

No

SHAREHOLDERS

Minimum number

One

Private:  Two

Public:    Ten

Maximum number

Fifty

Fifty

Publicly accessible records

No

No

Corporate shareholder allowed

Yes

Yes

Annual General Meeting Required

Yes

Yes

DIRECTORS

Minimum Number

One

Two

Maximum Number

No Maximum

No Maximum

Local required

No

No

Publicly accessible records

No

No

Corporate directorship allowed

No

No

COMPANY OFFICIALS

Secretary Required

Yes

Yes

Local Secretary Required

Yes

Yes

Other Officials Required

No

Manager

COMPANY ACCOUNTS

Requirement to Prepare

Yes

Yes

Requirements to File Accounts

No

Yes

Audit Required

No

Yes

OTHER ANNUAL REQUIREMENTS

Government Renewal Fee

The annual Business License renewal fee will vary depending on the authority, license type and number of employees

Annual Return

Yes

Yes

Tax Return

No

No

Submission of Economic Substance Report  (ESR)

Yes

Yes

Please feel free to contact our corporate team for any queries you may have relating to company formation in Dubai. Furthermore, if you are considering about moving your business to the UAE, we would also highly recommend for you to read about the benefits that a RAKICC, RAKEZ and the Ras AL Khaimah Premium Product have to offer as well as the advantages of banking in the UAE. Our consultants are always at your disposal for any clarifications and individually tailored solutions for your particular business.

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  • 2Submit documents
  • 3Get registration documents
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