Dubai has countless benefits and facilities to offer to business owners and aspiring investors. Tax-free atmosphere, central location, and business-friendly policies are some of them. Moreover, the process of starting a company in Dubai is also quite simple. However, there are certain important things that you should know about, such as selecting the right business structure, obtaining the necessary licenses and permits, and more.
In this article, we will explore how to start a business in Dubai and the various aspects associated with this process.
Benefits of starting a company in Dubai
Starting a company in Dubai comes with ample benefits and opportunities, making it an attractive destination for entrepreneurs and investors. Here’s why setting up a business in Dubai can be advantageous:-
- Easy business setup – The incorporation process in Dubai is streamlined in mainland, free zones, and offshore, making it efficient to set up a company.
- Expat-friendly – Dubai has a welcoming atmosphere for expatriates which makes it easy to attract international talent.
- Government support – Dubai offers robust support and assistance to new businesses through various incentives, resources, and a proactive approach to legal frameworks.
- Corporate tax exemption – The UAE government imposed a corporate tax of 9% on taxable profits exceeding AED 375,000. This means many small and medium-sized businesses can enjoy tax-free status.
- Foreign ownership – Free zone entities and Mainland companies operating in many sectors in Dubai can enjoy 100% foreign ownership.
- Growing consumer market – Dubai has a large and affluent population that provides a large consumer base for businesses.
- Advantageous tax framework – Dubai is globally renowned for its favorable tax conditions that eliminate personal income taxes and capital gains taxes, thereby offering ample financial benefits to businesses.
- Business-centric climate – The favorable tax environment, simplified procedures, and pool of talented professionals create an ideal setting for businesses.
How to start a business in Dubai: Step-by-step process
Starting a company in Dubai involves several key steps and requirements. The specific details may vary depending on the type of business and selected jurisdiction:
Business plan –
The first step in the process is drafting a comprehensive business plan that outlines the business activities, the suitable location to carry out the business activities, potential competitors in the market, the nature of the business, and the operational strategy. The DED (Department of Economic Development) has established a list of over 2000 business activities from which entrepreneurs can choose their preferred one and submit them along with their business registration application.
Choose a business jurisdiction –
Dubai offers several options of jurisdictions for entrepreneurs to set up their business:
- Mainland – Allows entities to operate within the UAE and engage in trade with both local and international markets.
- Freezone – Businesses can operate within a designated free zone with tax benefits and 100% foreign ownership.
- Offshore – Ideal for holding assets and tax planning; permits limited operational activities within the UAE.
The choice of location will solely depend on the choice of business activities.
Choose a company name
The name chosen for the company must align with the naming conventions of the UAE government. The business owners must also ensure that the selected name is unique, memorable, and available for registration.
Obtain initial approval
The initial approval or preliminary approval needs to be obtained from the Department of Economic Development (DED) or the relevant free zone authority. The general requirements are passport copies, visa copies, and a business plan.
Secure an office space
Business owners must find a suitable office space to carry out their business operations. Further, they need to secure the property papers or prepare a lease contract as required. Certain free zone authorities provide office space options within their designated zones.
Obtain a business license
There are different types of business licenses issued to companies based on their primary activities – professional, commercial,andindustrial. Hence, business owners must apply for necessary licenses and permits and obtain mandatory approval from government officials.
Arrange for visas and a corporate bank account
Once the license is issued, obtain appropriate visas such as investor visas, employee visas, family visas, etc. Also, select a suitable bank to start a corporate account to manage business finances and transactions.
Comply with the regulatory requirements
Once the business is successfully established, make sure to dutifully adhere to UAE labor laws, tax regulations, and other legal frameworks. Maintain proper books of accounts and records. For more accurate and up-to-date information, it is advisable to seek consultation from the experts of Shuraa.
Types of business licenses in Dubai
The business licenses in Dubai are tailored to different operational activities:-
- Commercial license – for businesses engaged in trading activities including buying and selling goods.
- Industrial license – for manufacturing or industrial ventures that are engaged in the production, fabricating, or processing of goods.
- Professional license – for service-oriented businesses, professionals, artisans, and craftsmen who offer services based on their expertise or skills.
Legal Corporate Structures in Dubai
There are a variety of legal structures available in the Mainland, Free Zone, and Offshore for business setup –
- Free Zone Limited Liability Company (FZ LLC)
- Free Zone Company (FZ Co.)
- Free Zone Establishment (FZE)
- Limited Liability Company (LLC)
- Sole Proprietorship
- Civil Company
- Branch or Representative Office
- Partnership Company
- Public Joint Stock Company (PJSC)
- Private Joint Stock Company (PrJSC)
- Offshore Foundation
- Offshore Trust
- Limited Liability Company (Offshore LLC)
- International Business Company (IBC)
Each business structure serves specific business models, scales, and objectives.
Documents required for starting a company in Dubai
The general list of essential documents required for this process includes the following:
For business registration
- Passport copies and visa copies of company shareholders and company directors
- Business plan outlining the objectives, operations, and financial strategies of the company
- Memorandum of Association (MOA)
- No Objection Certificate (NOC) from the sponsor
- Lease agreement
- Bank reference letters for shareholders
For license application
- Completed application form
- Initial deposit as required by the licensing authority
Post setup documents
- Emirates ID for shareholders and company managers
- Establishment card
- Business License
- Tax Registration Certificate
Professional business setup experts of Shuraa can assist you in arranging the essential documents.
Cost of starting a company in Dubai
The exact cost of starting a business in Dubai varies based on different factors:
- The legal structure of the business
- Business activity
- Office location
- Number of visas
Free zone business setup offers more flexibility with lower setup costs. Nevertheless, the specific fees may vary depending on the free zone you choose. Hence, it is always best to consult with business setup consultants of Shuraa for accurate estimates for your specific business requirements.
Build your business in Dubai with Shuraa!
Starting a company in Dubai is an exciting opportunity that comes with a plethora of benefits, such as a great location, tax incentives, top-notch infrastructure, a business-friendly environment, and more. Overall, Dubai provides a perfect surrounding for companies to grow and expand.
However, the process of business establishment can be a bit complex especially if you are unfamiliar with the local rules and procedures. That’s why getting help from the consultants of Shuraa Business Setup can be a smart move. Shuraa has an experience of over 23 years. Hence, they know how to handle all aspects of the incorporation process, making it smooth and stress-free at each step.
From company registration to mandatory paperwork, their experts will take care of everything for you. So, without any further delay, connect with Shuraa today.
