Register your Company in Dubai
Dubai, like the rest of the Middle Eastern cities, has its fair share of business coming from the oil industries, but now they are equipping their economy with growth in diverse fields. In the last year, the city issued around 45,000 business licences. It shows a 25% increase in company registrations. The main reasons for this growth are the policies and programmes and the favourable tax structure.
Benefits of Company Formation in Dubai
Let us look into the different benefits of company Setup in Dubai:
- Business-friendly regulatory environment
Dubai is constantly updating itself in relevant technical aspects in order to become more effective in laying the groundwork for Dubai company formation. There are many companies that are coming to start a business in Dubai because of the favourable conditions the authorities are providing for company setup in Dubai.
In Dubai, forming a company is a relatively simple process that can be completed in a matter of days. The paperwork for company setup in Dubai is also relatively less complicated.
There are two locations in which you can start your company's formation in the UAE: free zones and the mainland. Free zones in Dubai already permitted 100% foreign ownership, and now, thanks to a new amendment to the Commercial Companies Law of 2021, mainland company formation is no longer required and permits 100% foreign ownership by foreigners. It allows foreign owners more control and accountability over their businesses.
- Availability of more than 30 Free Zones
As discussed above, free zones in Dubai provide greater opportunities for company formation in Dubai. There are 30 free zones, which provide investors with great opportunities for company formation in the UAE. Along with 100% foreign ownership, the company set up in Dubai also comes with many other perks, such as tax benefits, subsidies, grants, etc. The formation of a company in a free zone also provides the benefit of 100% profit and capital repatriation. Most free zones in the UAE are also designed for certain types of industries, which makes it easier for new investors to collaborate with other players in the same industry.
- Tax Benefits Offered by the Government
Dubai, along with the UAE, is now moving towards embracing other economic opportunities other than oil production. Hence, to be part of the global economy, they have introduced tax structures like VAT and corporate tax. The corporate tax introduced on companies is based on a specific annual turnover. When compared to the tax percentages of other countries in the world, the UAE’s corporate tax is fairly low. As a result, the majority of the business's returns can be effectively used for the company's growth and development, with the remainder pocketed as profits.
- Strategic Geographical Location
Dubai has a very strategic and practical geographic location that will help in the steady growth of the business. It stands in the exact centre position and shares borders with other Emirates which will help favour the import and export of goods. It is one of the best re-export hubs in the world. It is also home to the best seaports and airports in the world and serves as an intermediate between many ports, thus providing the best logistics infrastructure.
Dubai is famous for its infrastructure, and it is pretty well known for this all over the world. It is also constantly developing and improving the environment to encourage more businesses to visit and explore the opportunities that Dubai has to offer. Recently, they conducted an expo, which helped the whole world realise the potential Dubai has to offer.
Eligible Business Structures under Company Registration in Dubai
An applicant looking forward to company setup in UAE or company formation in Dubai has to be sure about the type of business structure they want to set up their business in.
- Limited Liability Company:
In a limited liability company, the shareholders have limited liability towards the company, and this limitation is up to the amount of contribution they have made to the company. LLC company formation in Dubai is one of the most common types of business structure used in the UAE. There are numerous advantages to choosing LLC such as asset protection and tax reduction. The organisational structure of the LLC is very easy to operate. Another advantage is that subsidiaries of the LLC can easily set up business in other Emirates and commence their business activities. The generally accepted capital requirement for LLCs is AED 100,000. An LLC company in Dubai needs to keep a legal reserve of 10%.
A branch office is simply an extension of the parent company elsewhere around the world. This company formation in UAE doesn’t account for a separate legal entity. Branch Offices can be set in either of the locations both Mainland or Free zones.
The next type of company formation that is seen in Dubai is a Joint Stock Company. In a Joint Stock Company, all the shares are of equal value and the partners in a joint stock company are only limited to the contribution to the share capital. Joint stock companies are of two types: Private joint stock companies and public stock companies. The directors of the joint stock company are selected for 3 years. The minimum number of directors in a joint stock company is 2 and the maximum number of directors is 15. A public joint stock company should have a minimum share capital of AED 10,00,000 and 10 founder directors. A private joint stock company needs a minimum share capital of AED 2,000,000 and should also have a minimum of 3 founders for its incorporation.
Free zones are one of the most prominent spaces in the Emirates to start a business. The free zones give a lot of allowances to businesses in the form of customs, taxation, ownership, etc. There are two kinds of companies that are constituted in the free zones: free zone companies and free zone establishments.
- Dual licence branch office
A dual-licence branch office is an extension of the free zone location. This additional licence possessed by the company helps save a lot of money by reducing the cost of forming a company on the mainland. The office on the mainland is not a subsidiary but a mere extension. There won’t be any additional visas issued for the mainland company, and the only visas issued will be in the name of the free zone registered company.
- Trade Representative Office
A trade representative office is a company formation in the UAE that does not have a separate legal existence. The offices have limited activities, such as acting as marketing and administrative centres and also as an office that collects information needed for projects. This company cannot purchase any property under its name. It also has to pay a non-refundable deposit of AED 50,000, which can’t be used as working capital.
Procedure for Company Formation in Dubai
- Deciding on the legal structure of the company
The decision on the legal structure of the company that you decided to form in Dubai is one of the first and foremost steps to complying with the procedure for company formation in Dubai. The following legal structures are available for company formation in the UAE: LLC, Branch Office, Joint Stock Company, Free Zone Companies, Dual Licence Branch Office, and Trade Representative Office. The legal structure of the business will be determined by the type of business being conducted as well as the number of founders or shareholders present.
- Reserving a name for the company
The next step is to name the company. It is an unavoidable and critical step in the formation of a company in Dubai. The name that must be chosen is determined by some relevant criteria specified by the authorities. The availability of the name has to be checked in accordance with the Department of Economic Development, or DED. The criteria for naming a company in Dubai are as follows:
- It should not violate the public morale of the country
- The name should be according to the type of business
- Should be in resonates with the legal form of the company
- It should not have a similarity with any religion, governing body, or logo of any external body.
- Controversial or derogatory
- No short forms.
- Apply for a business licence
Once after choosing the legal structure and the name of the business, the next step is to apply for the business licence. A business licence is a legal document that allows holders to work in business activities. There are three types of business licences: Commercial, Industrial and Professional. Commercial licences are for trading activities; Industrial licences are for production and industrial activities; Professional licences are for technicians and artisans.
- Deciding the location or jurisdiction of the business
When thinking about company setup in Dubai, location plays an important role. Mainland and free zones have their own perks for setting up your business. The location selection will have to be based on the business activities, number of employees, and budget.
- Obtaining the pre-approvals, business registration and appropriate business licence from the concerned authorities
All forms must be filled out by the business owners in order to complete the company formation. The rules and regulations will differ with respect to the kind of business activity chosen and the location of the business's jurisdiction.
- Opening a corporate account
The last step to company formation in UAE will be getting a bank account for the business. Further financial transactions of the business should be done through this corporate account.
Documents for Company formation in Dubai
If you are looking for company formation in Dubai or anywhere in the UAE, you need to go through certain procedures and submit documents that support your activity. The following documents are required for company formation in Dubai:
Initial Approval
- Application form to be filled in for reservation of name and for business licence approval
- An excellent business plan
- If the company already exists, a copy of the trade licence or registration certificate.
- Audited financial reports of the corporate entity and Board resolution of the company for the last two years.
- Financial records of the shareholder
- coloured copies of the shareholders' passports and those of the newly appointed directors and managers
- Specimen signature of the company’s shareholders of the new company.
- Details of the business to be carried out by the company
- the local sponsor's NOC
- Director/Manager Registry Identification Code (RIC) Form (Original and Notarized)
- Company name (at least three options should be provided).
- visa page or an entry stamp
- passport photocopies
- passport-sized pictures
The freelancers are supposed to submit the following documents:
- filled-out registration application
- Resume of the freelancer
- reference letter from a bank
- Original and notarized RIC
Registration of the company
Once the step of initial approval is done, the next step is to pay the required payments and charges. The fee will depend on the type of business activity.
- Filled out the application form for registration of the company
- Share capital information
The next set of documents that have to be notarized for the registration of a company are:
- The board resolution that is for the appointment of the director of the company
- MoA and AoA
- Passport-size photos of the manager or the shareholder
- Power of attorney is given to the director and manager of the company.
Why choose Kiltons for company formation in Dubai?
Being one of the top business consultants in UAE, we guarantee the best company formation service in Dubai, UAE. We provide a wide range of company formation services. You can select the one you require and discuss it with us. Our distinguishing features include custom-tailored services based on the needs of the client. We will modify the suggestions based on your specific requirements. With our business services, you can enter the world of business right away and begin your dream journey to a business establishment in Dubai.
Our professional team will internally discuss your type of business, the best growth opportunities, and the ideal path forward. Following discussions, the most optimistic possibility will be presented to you. You can also select budgetary options based on your decision. We are one of the leading business setup services in the UAE due to our genuine approach, honest dealings, and dedicated efforts. Our hassle-free services make business setup in Dubai as easy as possible, allowing us to complete the task in the most efficient manner possible.
Know More