Company Registration in Dubai

One of the biggest cities in the Middle East is Dubai, which provides a wide range of business opportunities for the establishment of various types of firms by international investors. To ensure that trade and business in the region continue to grow, this city has increased its opportunities. In addition, Dubai has diversified its economy so that less than 1% of its total GDP comes from oil output.

The speed of Dubai’s diversification and long-term economic growth has quickened. In the first half of 2022, the city issued 45,653 new business licences, a number that is much greater than the 36,647 licences that were issued the year before (2021), indicating a 25% increase in the number of companies registered. Business-friendly government policies and programmes, tax structures, and infrastructure, to name a few, are the key drivers of the expansion.

It is clear from the discussion above that Dubai is a great area to launch a business, and business owners, especially international investors, can benefit much from forming a firm here.

Benefits of Company Registration in Dubai

The advantages of registering a company in Dubai are as follows:

a favourable regulatory climate for business

Technology has been quickly embraced by the Dubai government for business startup in Dubai. The procedure to register a corporation is quick and simple, taking only a few days. Little documentation is required, and the procedures are simple to follow.

Foreign ownership of 100%

In 2021, a few changes were made to the UAE’s Commercial Companies Law, enabling foreign investors to own 100% of their companies there. This permits more than 50% of Dubai’s overall economic activity, where foreign investors are permitted to own 100% of the company.

More than 30 Free Zones are available, giving investors the choice of establishing their businesses both on the Mainland and in Free Zones. For entrepreneurs and investors, Dubai has more than 30 free zones to select from. The investor might take full ownership of the business by establishing it in a free zone. Additionally, it permits the full repatriation of both invested capital and profits. Additionally, it offers the investor the chance to work with other participants in the same sector.

Advantages from Government Taxation:

One of the main advantages of setting up a business in Dubai is that there are no taxes to be paid. In Dubai, there are no business or individual taxes.

Strategic and beneficial Geography location:

Being the crossroads connecting the north, south, east, and west, Dubai is in a strategic and favourable position. One of the largest re-export hubs on the planet is there. Its airports and seaports are among the busiest and most dynamic in the world, and its logistics infrastructure is among the best. It also takes pride in being one of the world’s top tourist destinations.

Developed Infrastructure:

Dubai has some of the best infrastructure in the world and is one of the most developed cities in Central Asia. Its infrastructure is constantly changing and provides first-rate terminals, telecommunication, and public transportation. Also, Dubai hosted Dubai Expo 2020, during which time the city’s infrastructure as a whole underwent major improvements.

Regulatory Authority/ Body for Company Registration in Dubai

The Registrar of Companies is Dubai’s primary regulatory body for business formation. The new applications for company registrations are submitted to this authority. It is the location where businesses must submit their compliance and registration paperwork.

Eligible Business Structures under Company Registration in Dubai

A candidate registering a business in Dubai would need to select an appropriate business structure. The following business models are available in Dubai for entrepreneurs to use:

• LLC – Limited Liability Company

The shareholders’ responsibility to the company under this type of business structure is constrained to the amount of their share capital contributions. The applicant needs sponsorship from a UAE national or a fully owned UAE company to act as a national agent or sponsor in order to establish an LLC in Dubai.

The amount of capital needed has no minimum. The conventional wisdom states that an LLC needs AED 100,000. Corporate income is not taxed unless the corporation engages in highly profitable industries like the production of oil or gas, for example. Its Registration requires a physical office space. There must be at least 1 manager or director. The repatriation of money is not subject to any restrictions. Nonetheless, 10% of the LLC’s net income must be kept in reserve by the business.

• Division Office

The parent firm, which is not a separate legal entity, has a branch office in Dubai. Any company, domestic or foreign, may open a branch office in Dubai, both on the Mainland and in the majority of the Free Zones.

• Joint Stock Corporation

A partner of the firm is only liable to the extent of their contribution to the company’s share capital in a joint stock company in Dubai, which has capital divided into negotiable shares of equal value. In Dubai, there are two different kinds of joint stock corporations: private joint stock businesses and public joint stock companies.

In Dubai, a JSC must have two to fifteen directors who are chosen at large and serve three-year terms. UAE citizens must make up the majority of the board, including the chairman. A public joint stock company must be incorporated with at least 10 founders and a minimum share capital of AED 10,000,000. On the other side, a private joint stock company must be incorporated with a minimum of 3 founders and 2,000,000 AED in share capital.

• Free Zone Companies –

Distinct from mainland Dubai, the Free Zone companies are located in an area with unique rules governing ownership, taxation, and other matters. Free Zone Business and Free Zone Establishment are the two types of businesses that can be founded there.

LLC or Free Zone Company: A Free Zone LLC may have up to five shareholders. Such a firm can be incorporated by either natural or legal individuals. The laws and regulations established by the relevant Free Zone serve as the legal prerequisites for incorporation.

Free Zone Establishment: A Free Zone Establishment, on the other hand, has a single stakeholder with restricted liability. Such a firm can be incorporated by either natural or legal individuals.

Branch office with a dual licence – A branch office with a dual licence is an outpost of a free zone business on the mainland. These offices have a shorter time and lower cost to incorporate a new company since they hold an additional licence in addition to the free zone licence.

The free zone company’s office on the mainland is a branch location rather than a wholly owned subsidiary. Hence, selecting a local sponsor is not necessary. This office is ineligible to provide labour cards or licences since it cannot be registered with the UAE Ministry of Labor. Employees of the company have resident visas for free zones.

• Office of the Trade Representative

A trade representative office is not a distinct autonomous business but rather a branch of the parent corporation. It is allowed to carry out a few specific tasks, such gathering data for projects the business has accomplished and serving as the administrative and marketing hub for Dubai. A UAE national agent or an entirely owned UAE company must be chosen in order to open a representative trade office.

Under no circumstances may this office acquire any real estate in the UAE. A non-refundable deposit of AED 50,000 must be made to open a trade representative office; this money cannot be utilised for operating capital.

Procedure for Company Registration in Dubai

Each applicant must adhere to the steps listed below in order to register a corporation in Dubai:

• selection of the company’s legal form
• Selecting and reserving the business’s trade name
• Get a business licence.
• Choosing the company’s jurisdiction and location in Dubai
• acquiring a workspace for the business
• obtaining from the relevant authorities the necessary business licence
• opening a business bank account in the company’s name

• Choosing the company’s best business structure –

The applicant must first choose the best legal structure for the business. An LLC, branch office, joint stock company, free zone company, or trade representative office are among the legal forms that may be used. The number of shareholders, the commercial operations carried out, and the amount of cash required by the company all play a role in choosing an appropriate business structure.

• Choosing and reserving a name for the company-

The following action is to reserve a name for the business. The corporation will conduct its business operations under this name. The applicant should check with the relevant Free Zone Authority or the Department of Economic Affairs of the UAE to see if the chosen name is available. The applicant must confirm that the name they have selected is available and has not previously been registered by another business.

• While selecting a name for the business, the name ought to:

not disrupt the nation’s public peace and undermine public morale

Be in accordance with the company’s legal structure.

1. Not previously registered Must be compatible with the type of commercial activity carried out by the company
2. Neither includes the names of any religions, the names of the ruling bodies, or the logos of any other organisations.
3. Not be contentious, offensive, or disparaging.
4. When the names of the entrepreneurs are chosen as the trade name for the business, it should reflect their complete names rather than their nicknames.

• Apply for a business license –

The applicant should apply for a business licence in accordance with the commercial activities the company wishes to engage in in Dubai after selecting and reserving the name with the relevant government. The business licence is the legal instrument that entitles its owners to engage in the specified commercial activity. The various licencing kinds are as follows:

Commercial licence: Companies that conduct business must obtain a commercial licence.

Industrial licence: Organizations that engage in manufacturing and other industrial operations must acquire an industrial licence.

Professional licence: Technicians, artists, and professionals that provide services should all have one.

• Deciding the jurisdiction/location of the company in Dubai-

The choice you make about the office’s location could completely alter the course of your company. As a result, the location of the company’s office space must be carefully considered. The business owner might decide between purchasing the office space and leasing the land. The type of business activity selected, the number of personnel hired, and the budget earmarked for the same all influence the choice of office space.

Office sizes in Dubai’s various free zones range from 20 to 30 square metres to more than 2000 square metres.

• obtaining the necessary business licences, registrations, and pre-approvals from the relevant authorities –

Businesses that are registered anywhere are subject to the laws of the respective jurisdictions in which they are situated. In order to receive pre-approvals, business registration, and the proper business licence from the relevant authorities, enterprises must apply with the appropriate paperwork. The documentation is based on the company’s location, corporate structure, and the type of commercial activity it engages in.

• establishing a bank account

The business must run a corporate bank account in its name to receive and transfer money to continue its business endeavours provided all necessary registrations and approvals have been received from the relevant authorities.

Documents for Company Registration in Dubai

To Begin Approval

• Application for initial licence approval and name reservation
• An excellent business plan
• a copy of the current trade licence or registration certificate (if the company already exists)
• A board resolution and the corporate entity’s audited financial records for the previous two years.
• documents corporate of the shareholder
• coloured copies of the shareholders’ passports and those of the newly appointed directors and managers
• sample signatures of the new business’s directors and managers as well as the shareholders of the company
• Information on the activities the firm NOC will do from the local sponsor Registry Identification Code (RIC) form for Directors and Managers (Original and notarized)
• Name of the business (at least 3 options should be given)
• entry visa page or stamp
• copies of passports
• passport-sized pictures

The following documents must be submitted by Freelancers:

• a completed application for registration, a freelancer’s CV, and a bank reference letter
• Original RIC with a notary

For Registration of the company

The next step is to pay the registration and licence fees when the initial approval has been received. The cost is based on the type of licence that is needed and the business activity that is engaged in. Hence, the following paperwork must be submitted:

• filled out company registration application
• Information about share capital

When submitting an application for a company’s registration, the following documents must be notarized and certified.

• Board Resolution for Designating the Director/Manager Articles of Association (Articles of Association) and Memorandum of Association (MoA) (AOA)
• Power of attorney granted to the company’s director or manager
• passport-size images of the director or manager

Visa and licencing procedures

• The organisation draughts leasing contracts.
• A business permit is granted.
• Visa processing gets underway

Frequently Asked Questions

What are the advantages of registering a business in Dubai?

The following are some advantages of registering a business in Dubai:

• There is no income tax for professionals.
• Excellent talent pool Diversified setting
• One of the World’s Biggest Financial Centers

What kinds of businesses are there in Dubai?

An applicant may choose from the following categories of businesses:

• Company Limited Liability (LLC)
• Company Branch Trade Representation Office Free Zone
• Joint Stock Businesses
• Describe DIFC.
• Dubai International Financial Centre, or DIFC, is one of the financial hubs established there to conduct business.

Do I need a sponsor in order to register a company in Dubai?

It is not necessary to have a local sponsor in order to register a business in Dubai.

Only publicly traded joint stock firms are permitted to invest money on behalf of third parties.

No, the new amendment has eliminated this requirement.

Whose agency is in charge of issuing trade licences in Dubai?

The Department of Economic Development provides the Trade / Business licence (DED).

Taxes must they be paid in Dubai?

In Dubai, taxes are incredibly low. Apart for a few companies that must pay a 5% tax dependent on the economic activity, the majority of companies incorporated in Dubai are exempt from paying taxes.