Forming your Company in Dubai: A Guide by WaterandShark

Forming Your Company in Dubai: A Guide by Water and Shark

Dubai is one of the most flourishing emirates in the UAE, booming with business opportunities and offering an ideal standard of living for residents and expat professionals. The process of incorporating a business in Dubai is fairly simple, with more than 20 operational free zones to choose from. This article will guide you through the process and benefits of incorporating your company in Dubai.

Perks of Registering a Company in Dubai

Dubai is one of the most established emirates in the UAE. Registering your company in Dubai will provide numerous benefits and open new prospects for your employees and the company as a whole. Here are the key perks:

• Free Economy: Dubai does not interfere with business activities. There are no taxes on personal or corporate profiles, and companies can employ individuals from anywhere in the world, facilitating smooth operations.
• Ease of Doing Business: Dubai is considered an advanced destination and a favorite spot for entrepreneurs. Businesses can be set up quickly, offering 100% foreign ownership, tax concessions, and various profits.
• Smooth Logistical Operations: Dubai ranks high in terms of infrastructure, with top-notch airports, seaports, advanced telecommunication networks, and other amenities, ensuring efficient work across all sectors.
• Higher Standard of Living: The expat population in Dubai is high, with many entrepreneurs setting up due to the high standard of living, safety, and commercial opportunities. Foreign Direct Investment (FDI) significantly boosts Dubai’s economic growth.
• Ease of Location: Situated between the Commonwealth of Independent States (CIS) and Africa, Europe, and the Far East, Dubai serves as a hub for more than 80 airlines and is connected to over 120 shipping lines.

Types of Company Formation in Dubai

There are primarily two types of company formations accessible to business owners in Dubai. Understanding the basic differences between these types can help you make an informed decision:

Mainland Company

A Mainland Company is an onshore company that can be established by obtaining a license from the Department of Economic Development (DED) based on the emirate. Mainland Companies have no restrictions on doing business in the local UAE market or anywhere outside the country.

Free Zone Company

A Free Zone Company is established within a specific jurisdiction of an emirate in the UAE and is allowed to do business within the same Free Zone or outside the country. However, it is limited in terms of commercial licenses and trading of physical goods. A distributor must be hired as a Mainland agent to do business in the local market, with a 5% duty on local market invoices.

How to Start a Company in Dubai

Once you decide on the structure that suits your business needs, you can proceed with incorporating your company in Dubai. The process is straightforward and quick. Consider the following factors:

• Ownership of Your Company: Decide on the ownership structure based on the type of business you choose.
• Choose a Trade Name: Select a trade name that reflects the nature of your company. Follow specific rules if it is a subsidiary of a parent company elsewhere.
• Allotment of Shares: Determine the shares owned by each partner. A proposed Memorandum of Association can outline the capital distribution, though no minimum capital is required.
• Choose an Office Location: Decide on an office location once all legalities are approved.
• Hire Your Employees: Appoint a manager before the official registration of your company to oversee operations.
• Hire a Local Representative: Expat professionals need to hire a local agent or representative to obtain a license from the DED.

Water and Shark UAE can assist you in setting up your company in Dubai. Contact us for a free consultation to establish your new business or a subsidiary.