Guide To Establish a Company in Dubai

Dubai, the crown jewel of the United Arab Emirates (UAE), has transformed itself into a global business hub. 

With its world-class infrastructure, strategic location, and tax-friendly environment, Dubai attracts entrepreneurs and investors from all corners of the world. 

If you’re considering how to establish a company in Dubai, this comprehensive guide will walk you through the process, from understanding the legal framework to obtaining your business license.

Establish companies in the UAE

The UAE offers two main options for company establishment: the mainland and free zones. 

The mainland refers to the geographical territory of each emirate, with Dubai being the most popular choice for mainland business setup. Free zones, on the other hand, are designated areas within the UAE that offer specific benefits like tax exemptions, full ownership for foreign investors, and streamlined business regulations. 

The Ministry of Economy (MoEC) of the UAE government provides detailed rules and regulation of establishing companies in the UAE.

Time taken to set up your company in the UAE and worldwide

Compared to many other countries, setting up a company in the UAE is a relatively fast and efficient process.  The timeframe can vary depending on the chosen location (mainland or free zone), the complexity of your business activity, and any additional government approvals required.

However, on average, it can take anywhere between a few days to a few weeks to complete the company registration process. This is significantly faster than the global average, which can range from several weeks to several months.

Choose a location to start your company in Dubai (Mainland or Freezone)

The first step towards establishing your company is deciding between the mainland and a free zone. Here’s a breakdown of the key factors to consider:

Mainland:

• Benefits: Offers greater flexibility in terms of business activities, allows full access to the UAE market, and provides the opportunity to establish a brand with a local presence.
• Drawbacks: Requires a local service agent (LSA) for companies with foreign majority ownership, and may have higher operational costs due to taxes and fees.

Free Zone:

• Benefits: Offers tax exemptions on corporate income and import/export duties, allows 100% foreign ownership, and provides streamlined business regulations.
• Drawbacks: May have restrictions on certain business activities, often limit your ability to directly sell goods and services within the UAE mainland, and may have specific visa requirements.

The Dubai Department of Economic Development (DED) has provided an in-depth comparison of mainland and Freezone.

How to apply for company registration 

The UAE government offers both online and in-person options for company registration. The DED website provides a user-friendly online portal for submitting applications and managing business licenses. Alternatively, it’s better to visit a professional business setup consultant  in person to complete the registration process.

Guide to establish a company in Dubai, UAE mainland

Here’s a breakdown of the typical steps involved in setting up a company on the UAE mainland:

1. Identify your business activity: Clearly define the nature of your business operations and the specific activities you plan to undertake.
2. Choose a legal structure: Select the most suitable legal structure for your company, such as a Limited Liability Company (LLC), a Sole Proprietorship, or a Civil Company.
3. Register your trade name: Reserve your desired company name with the DED.
4. Apply for initial approval: Submit an initial application to the DED to obtain approval for your business activity.
5. Draft the memorandum of association (MOA): This document outlines the company’s structure, governance, and ownership details.
6. Appoint a local service agent (LSA) (if required): If you have foreign majority ownership, you’ll need to appoint a UAE national or a UAE company as your LSA.
7. Secure a business location: Lease or purchase a commercial space for your business operations.
8. Obtain additional approvals (if applicable): Depending on your business activity, you may require permits from other government entities.
9. Submit documents and pay fees: Submit all required documents and pay the necessary registration fees to the DED.
10. Collect your trade license: Once the registration process is complete, you will receive your official trade license, authorizing you to operate your business in Dubai.

Steps to establish your company in the UAE Free Zones 

The process for setting up a company in a free zone can vary slightly depending on the specific free zone you choose. However, the general steps typically involve:

1. Select a freezone: Research and choose a free zone that aligns with your business activity and offers the benefits you require.
2. Choose a business activity: Similar to the mainland, define the specific activities your company will undertake within the free zone.
3. Choose a legal structure: Some free zones offer additional legal structures compared to the mainland. Explore the options available in your chosen free zone.
4. Register your trade name: Reserve your desired company name with the free zone authority.
5. Apply for initial approval: Submit an application to the free zone authority for your business activity.
6. Draft the memorandum of association (MOA): Similar to the mainland, this document outlines your company’s structure and governance.
7. Secure a business location: Choose an office space within the free zone, either a physical office or a virtual office depending on the regulations and your requirements.
8. Open a corporate bank account: Establish a corporate bank account in the UAE to manage your company’s finances.
9. Obtain visas (if required): Depending on your company structure and free zone regulations, you may need to apply for visas for yourself and your employees.
10. Collect your trade license: Upon successful completion of the registration process, you will receive your trade license from the free zone authority.

Additional Considerations to Establish a Company in Dubai

Here are some additional factors to keep in mind when setting up your company in Dubai:

• Visas and work permits: 

Obtaining visas and work permits for yourself and your employees is a crucial aspect of operating your business in Dubai. 

Visa requirements will vary depending on your company structure, location (mainland or free zone), and employee nationalities. Both the DED and free zone authorities can provide guidance on visa applications.

• Taxation:

While the UAE offers tax benefits, there are certain corporate taxes that may apply depending on your business activity and location. It’s essential to understand the relevant tax regulations to ensure proper compliance.

• Banking and financial services

Establishing a corporate bank account is necessary for managing your company’s finances. Dubai offers a wide range of banking options, and it’s recommended to compare services and fees before selecting a bank.

• Accounting and auditing

Maintaining accurate financial records is essential for any business. Consider outsourcing accounting services or hiring a qualified accountant to ensure compliance with UAE accounting regulations.

• Business support services

Numerous companies in Dubai offer business setup support services. These consultants can assist you with navigating the registration process, obtaining licenses, and complying with legal requirements.

Conclusion

Dubai’s business-friendly environment, coupled with its strategic location and world-class infrastructure, makes it a compelling destination for entrepreneurs and investors. By understanding the different options available, the steps involved, and the additional considerations, you can confidently embark on your journey of establishing your company in Dubai.