What are the basic legal documents required to register your business in Dubai whether as a foreigner or UAE citizen?
Doing business is not the same everywhere and in Dubai, it is a blend of glitz, glamour and success.
What many people don’t know is, Dubai is not only just fertile land to start and expand a business but also a place where the government actively supports businesses with low tax liabilities and 100% expat ownership on the city’s mainland as well as free zones.
In this article, we will reveal all the guides you will need to register your business in the United Arab Emirates (UAE)
Why You Should Consider Starting a Business in Dubai as a Foreigner
Table of Contents
Dubai delivers security and growth acceleration for both local and foreign businesses. The Police sector in Dubai is rich and responsible enough to defend and prosecute those who go against the law.
In the whole of Arab countries, Dubai is known for tourism, luxury shopping, ultramodern architecture and active nightlife. You will experience world-class infrastructure when you register your business in Dubai.
Dubai’s increasing success story makes it one of the most preferred destinations for global expats and budding entrepreneurs. Residents in Dubai enjoy unequaled global connectivity such that they can easily do business with anyone in the world. As a result of this, most young American entrepreneurs are now moving their businesses to Dubai.
Despite being the most populous city in the United Arab Emirates (UAE), the English language is still widely spoken in Dubai. There is an ease of communication to enable foreign investors to approach profitable business opportunities in Dubai.
In Dubai, you can set up your business on either the mainland, offshore or free zones. Free Trade Zones companies are exempted from tax payment and there are over 25 Free Trade Zones (FTZ) in the UAE. Some of these Free Trade Zones in Dubai provide shared and virtual office facilities. There is no value-added tax or sales tax in the UAE.
The government policies in Dubai are favorable to encourage investors to own their foreign investments 100 %. Incorporated companies in the foreign oil and gas or banking sector in Dubai only need to pay income tax.
Dubai offers new business ideas and opportunities, making it a hub for entrepreneurs seeking new business opportunities.
As a diversified economy, Dubai has an easily accessible market. Labor, logistics and operational cost are also minimal due to lenient labor laws. The implication is that you can easily start and grow your business in the United Arab Emirates without having to cut corners.
- How to Create a Successful Vacation Rental Business Plan
- What Are the Benefits of Hiring a Business Consultant in Dubai?
- How to Make Proper and Profitable Property Investment in Dubai
The Step-by-Step Guide on How to Register Your Business in Dubai
Registering your business in Dubai is not hitch-free but following these guides will help you get your business up and running or you contact a reputable company to carry out all the processes for you.
Determine Your Business Structure
The type of business structure is very crucial for you to successfully register your business. Why? Your type of business structure will determine the rules and regulations you are to abide by in terms of ownership, taxation, customs, etc. It is also important you consider your type of business, tax obligations, and nationalities of shareholders and directors before selecting a business structure.
However, there are two basic types of structure in the United Arab Emirates. Off-shore Companies and On-shore Companies.
An offshore company is formed and operated outside the country’s jurisdiction. It is basically a foreign-owned company registered in Dubai but has a base in another country.
Onshore companies are companies established in mainland Dubai with foreign investors having 100% ownership or less depending on the business activity as stated by Dubai Onshore Amended Law. The Onshore companies are further grouped under four basic structures:
- Company (Limited Liability Company, Civil Company or Joint Venture)
- Partnership: (General partnership and Limited Partnership)
- Branch Offices
- Free Zones Companies
Get an Emirate Business Partner
Although the law of partnering with a local sponsor has been amended, some businesses still follow the rule of local partnership.
According to the law before the amendment, you must have a local partnership that is a UAE local and owns 51% of your business to establish an LLC or a firm in Dubai while the foreign entrepreneur owns 49% of the company. All you need to do in this stage is to understand if your business requires a local partnership or not. A company formation consultant in Dubai or a business lawyer can help figure out the basic requirements.
Finalize Your Business Name
The business name should be available with the Department of Economic Development (DED) or the respective Free Zone Authority. The company name should comply with its company form and be in accordance with the intended business activities.
Other factors for finalizing a business name include the use of non-derogatory names or meanings, acceptance to maintain public peace and morale, and no use of individuals’ nicknames for business. etc.
Obtain the Necessary Permits to Register Your Business in Dubai
Permits for businesses in Dubai are commercial, industrial and professional licenses. The licenses are as the name implies. A commercial license is needed for trading business activity. An industrial license is required for industrial or manufacturing companies while a professional license is required for professional fields like legal, medical, media, etc. A Realtor license from Dubai Real Estate Institute IDREI) is a great example.
Decide Location and Company Jurisdiction
You need to decide the location to host your business. Irrespective of your type of business, you will need to hire a Rental Lease Personnel also known as Ejari (in Arabic) to rent a place. One of the most reliable experts that can help you get a nice location for your business in Dubai is Anaqt Al Madina Commercial Brokers, led by Harrison Amogu.
Meanwhile, Dubai Free Trade Zones have different office sizes ranging from 20-30 sq.m. to 2000 sq.m. and beyond. It left for business owners to decide whether to go for lease or buy land for office depending on the company’s purse, business activity and other factors best defined by applicants.
Open a Corporate Bank Account for Your Business
Opening a cooperate business bank account is essential. All available documents and permits will help in the bank account opening process. Depending on your type of business, you might be required to present a Certificate of Good Standing and Certificate of Incumbency before you can open a corporate bank account in UAE.
Apply for a Memorandum of Association (MOA)
The MOA must be prepared before making the final submission for the business registration. It is a document that lists the company’s external activities. The memorandum of association should include the company name, objective, headquarters, and distribution of shares.
- 5 Major Requirements for Registering Your Company in the UK
- How to Register Your New Business in New Zealand as a Foreigner
- The Ultimate Guide for Registering a New Business in the Netherlands
Finalizing the Company Registration/Formation
Before you can set up a company in Dubai, you will have to submit the necessary documents to the authority you choose for your company formation. These documents include your license application, the MOA, the tenancy contract and any other important documents.
The overall documents you will require to meet the registration process in Dubai are:
- Copy of the national identity card of the directors and shareholders
- A copy of the passport of the shareholders and directors is important to register your business in Dubai.
- Recent business bank statement, credit card statement or utility bill containing the name and residential address of the directors and shareholders.
- Company Memorandum of Association and Articles of Association.
- Share Capital Information.
- Details of the Board’s resolution of the formation of the company subsidiary nominating an authorized manager.
- Duly authenticated contract of appointment of a company or service.