Thinking about starting a company in Dubai as a foreigner?
Dubai is an attractive destination for entrepreneurs and companies. Here are some reasons why you should consider starting a business in Dubai:
Foreign businesses can consider setting up their companies in two different economic zones - free zones and offshore.
Free zones are special economic areas where business owners can have a 100% ownership of their company, a 9% corporate taxation (on profits above AED 375,000), and 0% personal income tax. There are a total of 30 free zones in Dubai.
List of free zones in Dubai:
Other benefits of setting up a business in Dubai include customs duty exemptions, capital and profit repatriation, independent laws and regulations, and no extra charges for transfer of funds. Some limitations to note for setting up a company in a free zone are:
If a free zone company desires to do business in Dubai Mainland, it must acquire licenses and documentation from the Dubai DED, or conduct business in Dubai Mainland through a civil company, a limited liability company, or by establishing a branch office.
While offshore companies can be registered in a free zone area and enjoy many of the same benefits as companies in the free zone, it is not an equivalent to a free zone company.
Offshore companies can have business activities outside the UAE, and have no minimum capital that needs to be deposited before incorporation. However, this means that a sponsor for the company is required, reducing your foreign ownership to 49%. It is important to note that some zones do not require a sponsorship, and this includes free zones like DMCC.
Here are some of the benefits setting up an offshore company offers:
Both offshore companies and free zone companies have their advantages and disadvantages, so take into consideration your business needs before setting up a company in Dubai.
Besides deciding on whether to set up a free zone or an offshore company, you’ll also be required to identify the type of licence needed.
The Department of Economic Development (DED) issues business licenses and there are 3 main types you can apply for:
This licence allows for trading activities, import & export, sales, logistics, travel & tourism, and real estate businesses.
This licence is suitable for businesses engaged in manufacturing activities like textiles, metal, and paper manufacturing manually or mechanically.
This licence is for service providers, artisans, and craftsmen such as medical services, beauty salons, and repair services.
Choose from over 2,100 business activities available, categorized into industrial, commercial, professional, and tourism sectors. The full list is on the DED website. Click on "Request for initial approval", and you will see a "Business Activities List" on the right of the screen.
Select a free zone based on proximity to businesses in the same sector and your business requirements. Find out more about the different free zones in Dubai under the Ministry of Economy - UAE site.
Ensure your business name conforms to UAE's naming conventions, avoiding offensive language or references. Reserve your company name here.
Obtain the initial approval from the Dubai Department of Economic Development (DED) to start your business in Dubai. The initial approval is a service prior to obtaining the trade license through which the legal form of the company, the economic activities, and the license parties (partners) are determined. The initial approval can be obtained before or after the trade name reservation.
Documents needed for the initial approval include: Business registration and licensing form; a copy of your passport or IDA copy of your residence permit/ visa; your company's articles of association; feasibility study of the project. This will be dependant on the nature of your business.
The initial approval allows you to:
Apply for Initial Approval on the DED website yourself here, or hire a lawyer to help you.
Once you've obtained the above approval, you need to open a corporate bank account.
Choose from a range of local and international banks to open your corporate bank account. Some banks that you can consider for a corporate bank account include: HSBC, Citibank, Barclays, Abu Dhabi Commercial Bank, Commercial Bank of Dubai.
All businesses in Dubai needs to have a physical address. As such, you need to ensure you have a physical address for your business, which can be facilitated by the free zone.
Prepare all necessary documents, your location addresses, and relevant legal information to submit for final approval.
The necessary documents include:
Once you are done, you can pay for the license through approved payment channels.
Choosing a business structure will determine the paperwork you need to submit, as well as the business management structure. Here are the several business structure options available:
To start the registration process of your offshore company, you need these documents:
This process will take about 4-5 working days, with an express registration option of 48 hours available. The above requirements may vary depending on jurisdiction and free zone, so you have to check with relevant authorities beforehand.
The last step is to open an offshore bank account, which will typically require you to prepare the following documents:
Do note that the specific requirements may vary depending on the bank and the regulations pertaining to offshore companies in Dubai. In addition, do note that offshore companies can only conduct business outside the UAE, and cannot trade within the local market.
That's all you need to know for setting up a business as a foreigner in Dubai!
Bluente is the world’s first business language services platform. We built a document translation tool where you get your translated documents in less than 2 minutes, retaining the same format of your file. Try it now at https://translate.bluente.com. We also we teach business languages (CN, ID, EN, ES) tailored for professionals through our mobile and web app. Find out more here: https://app.bluente.com/home/.
.svg)
.svg)
.svg)
.svg)