Dubai is seen as one of the world’s most glamorous and luxurious cities. The focus from the Government of Dubai on trade and investment and allowing business setup in Dubai with as less red tape as possible is attracting many foreign investors. We have put together the following guide to help anyone looking to start a business in Dubai.
Firstly, let’s discuss the types of business licenses that can be acquired in Dubai.
Three main types of licenses can be obtained:
A mainland license includes all business entities that bracket commercial, professional, and sole establishments registered under the Dubai Economic Department (DED). A mainland license allows for maximum freedom and flexibility to grow and operate your business.
Advantages of acquiring a mainland license:
- A company with a mainland license is exempt from corporate tax.
- Mainland companies are able to trade with other mainland companies.
- Mainland companies are equipped with many more business activity opportunities as there are no restrictions; businesses operating in the Free Zones, such as Dubai Media City, must be closely related to the media and news industry. This is not the case with mainland businesses; they can access the wider UAE economy, which provides ample opportunities.
- Mainland companies are able to designate any location within Dubai for their office space. This feature allows them to not only trade with the local market but also to open multiple company branches as well as establish a strong presence in the UAE.
- Mainland companies are authorized to work for the government.
- With a mainland license, there are no restrictions on the number of visas that can be obtained. However, the ability to obtain visas is contingent on office space availability. The more office space you have, the more visas you may be able to get.
- Capital and profits can be remitted back to your country of origin in their entirety.
- The registration procedure for mainland enterprises is simple.
- No annual audit
Free Zone License
A Free Zone Establishment (FZE) is a single-shareholder limited liability corporation that can be established in any of the UAE’s Free Zones. This makes financial transactions easier. Import and Export duties do not apply to the UAE’s free zone jurisdictions. This helps in promoting international trade.
Advantages of acquiring a free zone license:
- Free zone licenses allow a person to have 100% ownership of their business.
- Favors you in import and export tax exemption.
- Grants you corporate tax exemption for a certain period of time.
- Approves lease options of up to 25 years.
- Accredits free transfer of funds.
Another type of business setup in Dubai is an off-shore company is slightly different as they are limited as they cannot initiate business activities inside the UAE and are not permitted to have physical office space in the country. Owners of offshore companies are also ineligible for UAE residency visas.
Advantages of acquiring an off-shore license:
- Offshore companies are also not required to pay share capital. Now that we have established the different types of licenses and their advantages, you may be thinking; this sounds easy; I can just do this myself. It takes a lot of time to set up a company and handle the tasks and jobs needed for it, so you definitely should not rush it. Establishing a company can be considered an uphill task requiring much documentation.
- The most appealing feature is confidentiality. Investors in offshore corporations can remain anonymous.
- Unlike free zone arrangements, the identities of offshore firm owners and shareholders are not publicly disclosed.
- Offshore businesses also provide a number of tax benefits.
- Finally, an offshore company creation can be a cheap choice due to the UAE’s very low tax policy, which remains at 0% on corporate and personal income. Overheads are modest because no premises are permitted, and reasonable licensing and registration are required.
How can Business Setup Consultants in Dubai help?
When setting up a business, it can feel like there are so many things to consider and not enough time to get it all done. In order to help you navigate this complex environment and ensure you are getting the right advice and knowing which license to apply for is key, as this can have long-term implications.
Thus, we recommend hiring professional business setup consultants as they have a number of services to get you started in setting up your business in Dubai and be your trusted partner on an ongoing basis. One of the key services that they offer is Public Relations Officer (PRO) service.
So why not let an expert team of business setup consultants and PRO service professionals help you? They work to keep us well-informed of the legislation, rules, and regulations, as well as the documentation needed to get your business set up quickly and avoid any unexpected challenges. Using their assistance can ensure that you stay within guidelines and legislation, thus avoiding legal penalties, fines, and other damaging consequences to your business.