Ways to establish a company in Dubai for foreigners

Establishing a company in Dubai for foreigners is a strategic step for many investors and entrepreneurs looking to benefit from the thriving business environment and flexible investment climate in this dynamic city. Dubai, thanks to its distinguished geographical location as a gateway between East and West, has become a global center for business and trade, making it a preferred destination for global and regional companies. The favorable business environment, modern investment legislation and advanced infrastructure are all factors that have made Dubai a leading investment centre. In this article, we will learn about the ways to establish a company in Dubai for foreigners and the costs of establishing a company in Dubai for foreigners.

One of the main factors attracting foreign investors to Dubai is the free economic policy adopted by the emirate, which includes several free zones that provide full ownership of foreign companies, in addition to multiple tax exemptions and advanced logistics services. Establishing a company in Dubai is not only about taking advantage of great business opportunities, but also enjoying a high quality of life and advanced infrastructure.

Dubai offers foreigners many options for establishing their companies, whether they are limited liability companies (LLC), subsidiaries, or sole proprietorships. Each type of company comes with its own benefits and requirements, making it essential for investors to understand the legal and economic systems that govern each type of company. In addition, the Dubai government provides significant support to startups through business incubators and government initiatives aimed at promoting innovation and the spirit of entrepreneurship.

The process of establishing a company in Dubai for foreigners includes several vital steps, including choosing the appropriate business activity, obtaining the necessary licenses, choosing a strategic location, and fulfilling all legal and administrative requirements. Obtaining legal and advisory advice from local experts is an important step to ensure full compliance and successful establishment of the company.

Establishing a company in Dubai for foreigners

I can provide an overview of how to set up a company in Dubai for foreigners. Dubai is considered among the world’s premier business locations, offering an interesting investment environment for startups and large corporations alike. However, foreigners wishing to establish a company in Dubai must adhere to certain local procedures and laws. Here’s a quick introduction:

1. Choosing the type of company: This step depends on the purpose of the company and the planned business activity. The options can be such as Limited Liability Company (LLC), Sole Proprietorship, Public Company, Branch, Representative Office, etc.
2. Determine nationality and ownership: Company ownership and the distribution of shares between foreign and local shareholders must be determined in accordance with local laws and regulations.
3. Choosing a company name and registering: You must choose a unique name for the company and ensure that it does not conflict with any existing company names. An application is then submitted to register the company with the relevant government authorities in Dubai.
4. Determine the headquarters: The company must determine a location for its headquarters in Dubai.
5. Obtaining the necessary licenses and permits: Companies in Dubai may require special licenses depending on their activity, such as a trade license, construction license, or professional services license.
6. Registration in the Commercial Registry: After obtaining the necessary licenses, the company is registered in the Dubai Commercial Registry.
7. Insurance: There may be requirements for property, employee, etc. insurance, according to local legislation.
8. Bank Account: The company must open a local bank account in Dubai to manage financial operations.

Ways to establish a company in Dubai for foreigners

Establishing a company in Dubai for foreigners requires following some basic steps. Here are general steps for establishing a company in Dubai:

• Limited Liability Company (LLC): Foreigners can establish an LLC in Dubai, and this process requires a local partner who owns a minimum stake of 51% in the capital. The remaining percentage of the share owned by the foreign partner is determined.
• Free Zones: Free zones in Dubai provide a suitable investment environment for foreigners, as they can establish companies without the need for a local partner, and they can retain 100% of the company’s ownership. Rules and regulations vary from one free zone to another, so investors should familiarize themselves with the specific conditions of each zone.
• Partnership with an Emirati citizen: Foreigners can establish a company in Dubai through a partnership with an Emirati citizen, where the citizen owns a certain percentage of the company and the foreign partner also owns a percentage.
• Foreign sole proprietorship: Foreigners can establish a sole proprietorship in Dubai, and the foreigner is considered solely responsible for the company.

The cost of establishing a company in Dubai

The cost of establishing a company in Dubai may vary greatly and depends on several factors, including the type of company you wish to establish, the size of the expected business, and the legal and administrative requirements of the project. Here are some points to consider when calculating the cost:

1. Registration and license fees: Registration and license fees vary depending on the type of company and the activity it carries out. These fees usually range from several thousand to several tens of thousands of UAE dirhams.
2. Office and staff costs: If you need an office and staff, you will have costs for rent, health insurance, salaries, and more.
3. Legal and accounting consulting costs: You may need to consult a local lawyer or accountant to assist you with legal and financial procedures, and this may incur additional costs.
4. Visa and residency fees: If you intend to employ foreign employees, you will have additional costs for work visas and residency.
5. Necessary capital: You may need a certain capital to establish and operate the company, and this depends on the type of company and local laws.

Documents for establishing a company in Dubai for foreigners

When setting up a company in Dubai for foreigners, you usually need to submit the following documents:

1. Copy of foreign shareholders’ passport: Certified copies of foreign shareholders’ passports must be submitted. Copies must be valid.
2. Copy of residence visa: If you have a valid residence visa in Dubai, you must submit a certified copy of it. If the company requires a new residence visa for foreign shareholders, the visa applications and documents required for this must be submitted.
3. Certificate of Partners/Shareholders: Certificates of incorporation of foreign partners/shareholders must be submitted proving their shares in the capital and their responsibilities in the company. You may also need to provide certified certificates proving the necessary experience and qualifications of foreign shareholders in the field in which the company operates.
4. Partners/Shareholders Agreement: A Partners/Shareholders Agreement must be prepared and submitted that defines the rights and duties of foreign shareholders and regulates the company’s work.
5. Company address: A clear address for the company in Dubai must be provided, including details of the office or commercial space that the company will use.
6. Business Plan: You may need to submit a detailed business plan that outlines the company’s goals, activities, future plans, and financial projections.

Types of companies that can be established in Dubai for foreigners

Foreigners can establish several types of companies in Dubai and in the UAE in general. Here are some common types:

• Local Company: A local company requires a partnership with an Emirati citizen who owns a share of no less than 51% of the capital. This type of company is suitable for various business activities.
• Free Zone Company: Foreigners can establish companies in free zones such as Dubai Technology and Internet Park (DIC) or another free zone. These companies offer advantages such as 100% foreign ownership and no taxes on profits.
• Limited Joint Stock Company (LLC): Foreigners can establish a limited joint stock company with joint capital with an Emirati partner. The percentage of ownership and responsibilities are specified in the founding agreement.
• Sole Establishment: Foreigners are allowed to establish a limited liability company in the form of one person, but the founder must be a resident of the Emirates.
• Public Joint Stock Company: This company requires a number of shareholders and a large capital, and is subject to the supervision of the Federal Securities and Exchange Commission.

Taxes applied to companies in Dubai

In Dubai, and in the UAE in general, there is a different tax system than that applied in many other countries. Here’s an overview of the taxes that apply to companies in Dubai:

1. Value Added Tax (VAT): VAT has been implemented in the UAE as of January 2018 at a rate of 5%. This tax includes most goods and services offered in the local market.
2. Income Taxes: In the UAE, there is no income tax on companies and individuals, except for some specific sectors such as oil and gas and banks. Therefore, corporations are not subject to income tax on profits.
3. State and local fees: These fees relate to business licenses and other government services such as license renewals and business registration. These fees can vary based on the type of activity and location of the company.
4. International Taxes: UAE companies must commit to promptly providing financial information to their foreign and non-UAE national employees, and adhere to international reporting requirements such as FATCA and CRS.
5. Real estate taxes: Real estate taxes apply in Dubai and in other emirates, and these taxes vary based on the type of property and its value.

Advantages of establishing a company in Dubai for foreigners

Establishing a company in Dubai for foreigners carries many advantages and benefits, including:

• Strategic location: Dubai is an important global business centre, providing companies with great opportunities for growth and expansion, especially with excellent transportation facilities and modern communications.
• Supportive Business Environment: Dubai offers an encouraging and flexible business environment, which facilitates conducting business and accelerating business operations.
• Foreign Ownership: In Dubai free zones, foreigners can fully own their companies without the need for a local partner, ensuring full control of the business.
• No taxes on profits: In most cases, there is no income tax on companies in Dubai, which increases profitability and makes it an attractive destination for business.
• Advanced Infrastructure: Dubai has advanced infrastructure, including roads, airports, ports and technological facilities, which facilitates efficient business management.
• Multicultural Labor Market: Dubai’s labor market attracts many experiences and skills from all over the world, allowing companies to easily access talented employees.
• Easy access to regional markets: Businesses in Dubai can easily access the markets of the Gulf region and the Middle East, providing great opportunities for growth and expansion.

At the conclusion of this article, which discussed ways to establish a company in Dubai for foreigners, it can be said that Dubai remains one of the most attractive destinations for investors and businessmen around the world. The dynamic economic environment, advanced infrastructure, and encouraging government policies make Dubai an ideal place to establish and develop businesses.

Foreigners who want to set up a company in Dubai face a variety of options and opportunities. They can choose between establishing a company on the mainland or in one of the free zones, each offering unique advantages. Establishing a company on the mainland provides the opportunity to deal directly with the local market and local customers, while establishing a company in free zones offers advantages such as full foreign ownership and tax and customs exemptions.

By understanding the basic steps and requirements, such as choosing the appropriate company type, submitting the necessary documents, and obtaining the required licenses, foreign investors can successfully establish their companies in Dubai. It is necessary to conduct careful research and consult legal and financial experts to ensure compliance with local laws and regulations and avoid any problems they may encounter in the future.

The most important frequently asked questions about establishing a company in Dubai for foreigners