Company Formation in Dubai
What do you know about the United Arab Emirates (UAE) besides that it is an oil-rich federation of 7 emirates? You might have perhaps heard that the UAE remains one of the most diversified and developed financial centers worldwide. Indeed, launching a business project here is a solid strategic decision that will yield not only profits but also numerous new, unlimited opportunities for you as a foreign entrepreneur. And even the cultural differences, like language, for instance, aren’t barriers as English is commonly used in business within this jurisdiction.
How do you start a company in the UAE and optimize your corporation there? The crucial step is to understand the local regulations and laws of each emirate before establishing your business in one of them. While the UAE attracts millions of international investors and entrepreneurs, it is also known for its precision in navigating and overseeing corporate structures. That’s where we step in, ready to guide you through every step of your business launch in the Emirates. With our personalized Dubai company formation services, your project will come to life efficiently and in full alignment with the local laws.
Contents:
What is Establishment Registration in the UAE?
Once you’ve decided to grow your business in such a prestigious jurisdiction as the UAE, it’s time to dive into the practical part that follows. The essential first step is establishing your company locally in the Emirates’ prominent market. What this means is that you choose whether to set up a company in the Mainland or a Trade Zone. Why is it important? This stage of your registration journey provides your project with the necessary legal recognition and framework so that you can operate smoothly and in full compliance with the local requirements from day one.
You might wonder, what practical steps does the establishment registration involve? While this process can be complex and require cooperation with legal professionals, the procedure generally includes the following key elements:
- Communication with relevant authorities;
- Obtaining the necessary trade permits in accordance with your business model;
- Initial approval fee;
- Registration fees;
- Obtaining the company stamp;
- Securing your virtual office address for one year.
This overview aims to give you a clearer picture of the essential milestones on your journey of setting up your business in the UAE. Additionally, please note that incorporation in a Free Trade Zone may differ slightly from setting up in the Mainland.
Why Choose Dubai for Your Business Registration Today?
Now that you have decided to start a company in Dubai, let’s see how this location will aid your business’s growth in practice. Dubai has been a top-tier startup destination for decades already. Here is what makes it so accessible for existing and new business projects:
1. Fully remote incorporation:
- Register your business, communicate with local authorities, and obtain your license entirely online;
Enjoy a prestigious virtual office address for the first year in the Mainland or your selected free zone;
2. Attractive tax regime and financial benefits:
- 0% personal income tax and zero customs duties on imports and exports;
- Free-zone and Mainland companies can benefit from a 0% corporate tax on qualifying income when they meet substance rules;
3. Total foreign ownership:
- Entrepreneurs retain 100% ownership in a free zone with no local partner required;
4. No minimum capital requirement:
- Most free zones and mainland structures in the UAE no longer require a specific minimum share capital, which makes the setup process much smoother and more accessible;
5. Streamlined setup procedure:
6. Strategic global positioning:
- The UAE’s location provides a number of benefits: convenient Dubai’s time zone, remarkable connectivity, and regulatory clarity.
Quickly select a jurisdiction and register your company anywhere in the world online
Why Choose Us for Company Formation in the UAE
Decided to establish and expand your business in the UAE? Excellent choice! Now it’s time to ensure your registration process goes smoothly and hassle-free. The best way to do that is by cooperating with reliable legal experts from day one of your journey. That’s exactly what we’re here for. We’ll guide you through the entire company establishment procedure in the UAE and take care of everything from choosing the right corporate structure to obtaining the proper license for your project and maintaining your venture fully compliant in the future.
With us, you gain much more than just a legal service. We’re here to become your business partner, wholly committed to your triumph and ready to fulfill your unique company aspirations in the UAE and beyond. Here is what you receive as you choose Fintech Harbor Consulting for your company launch:
1. Personalized end-to-end support
First things first, remember that navigating the intricacies of business formation in the Emirates does not have to be a complicated journey. We transform this procedure into a streamlined experience with our personalized assistance, keeping your best interests in mind. From the initial idea of your project vision to successfully opening your Dubai venture and expanding it further, our dedicated team of legal advisors is happy to be your trusted compass.
2. Assistance in communication with local authorities
One of the essential elements of company formation in the UAE is dealing with governmental procedures and paperwork. This can be a daunting task, especially as you plan to register your business in a foreign country with its specific laws and strict regulations. Fully acknowledging all that, we specialize in simplifying this aspect of the incorporation process for our clients.
With our lawyers’ in-depth knowledge of all the latest, constantly evolving regulatory framework of this jurisdiction, we maintain strong relationships with the relevant authorities in the Emirates. That’s what will allow us to effectively communicate with them on your behalf as you prepare your documentation, apply, and proceed with the other key steps of the journey. Thus, with minimal effort on your side, you’ll enjoy the accurate and complete submissions that will be processed efficiently and stress-free.
3. Easy and efficient licensing process
Worried about the endless and complicated paperwork as part of the business registration in the UAE? With us, you’ll enjoy seamless and precise documentation preparation, with no need to carry all the red-tape burdens alone. Leveraging our expertise in the Emirates’ local regulatory standards and connections with licensing authorities, we streamline every step. As a result, you get faster approval, a clear pathway to launching your company, and no delays along the way.
We’ve got you covered from start to finish and will make sure you get your application’s final approval quickly and with ease. From pinpointing the right license type for your project to maintaining your business fully compliant in the years ahead, we will thoroughly guide you through the licensing procedure with clarity.
Types of Companies in the UAE
As you enter the dynamic market in Dubai, it’s significant to choose the right company type to bring your ambitions to life. Currently, there are five major types of companies in the UAE you can choose from, each with its subdivisions and subdivisions:
- Limited Liability Company (LLC);
- Partnerships (including general partnerships as well as limited partnerships);
- Foreign companies;
- Joint venture companies;
- Liaison or representative offices.
Among the five options, the most popular one is the Limited Liability Company (LLC). Yet, each company type has its advantages, regulatory standards, and specific requirements. Here is a brief overview of all five business types available in the UAE in comparison with Dubai’s mainland:
| Company type / Aspect | Dubai Mainland (e.g., LLC) | DMCC (Dubai Multi Commodities Centre) | JAFZA (Jebel Ali Free Zone) | RAKEZ (Ras Al Khaimah Economic Zone) |
|---|---|---|---|---|
| Primary regulator | Department of Economic Development (DED) in Dubai | DMCC Authority | JAFZA Authority | RAKEZ Authority (Ras Al Khaimah) |
| Target businesses | Businesses requiring direct access to the local UAE market, government contracts, retail, and services with local clientele. | Trading, commodities, media, technology, professional services, consultancies, and businesses targeting both regional and international markets. | Logistics, manufacturing, trading, import/export, large-scale operations, businesses requiring extensive warehousing/land. | Startups, SMEs, and larger businesses seeking a cost-effective setup, diverse activity options, and easy access to both regional and international markets. |
| Market access | Full access to the entire UAE local market. Possibility to trade anywhere within the UAE and participate in government tenders. | Primarily for international trade and business within the Free Zone. Cannot directly trade on the UAE mainland without a local agent/distributor or a mainland branch. | Primarily for international trade and business within the Free Zone. Cannot directly trade on the UAE mainland without a local agent/distributor or a mainland branch. | Primarily for international trade and business within the Free Zone. Cannot directly trade on the UAE mainland without a local agent/distributor or a mainland branch. |
| Ownership structure | 100% foreign ownership allowed in most commercial & industrial activities. | 100% foreign ownership. | 100% foreign ownership. | 100% foreign ownership. |
| Capital requirements | No fixed minimum share capital for most activities. | Minimum AED 50,000. | Minimum capital requirements vary by company type (FZE, FZCO). Generally higher for industrial/manufacturing. | Very competitive minimum share capital requirements, making it accessible for startups and Small and Medium-sized Enterprises (SMEs). |
| Business activities | A broad range of commercial, industrial, professional, and tourism activities. | Diverse activities across trading, service, and industrial licenses. Known for commodities, diamonds, gold, technology, media, and professional services. | Wide range of activities, particularly strong in logistics, manufacturing, trading, general trading, and e-commerce due to its port proximity. | A wide range of licenses (commercial, service, industrial, media, etc.) suitable for various sectors and business models. |
| Ease of formation | Moderately complex, involves DED and other government departments; Requires detailed MOA; Generally takes from 2 weeks to 1 month. | Streamlined process, generally faster than the mainland; Online portal available; It can take 1-3 weeks. | Very streamlined for large-scale operations. Strong support infrastructure; Usually takes 1-3 weeks. | Highly efficient and cost-effective setup process; One of the fastest free zones for incorporation; It can take a few days to 2 weeks. |
| Tax regime | 9% Corporate Tax on taxable profits exceeding AED 375,000; 5% VAT on applicable goods/services; No personal income tax. | 0% Corporate Tax on qualifying income (for "Qualifying Free Zone Persons"); 0% personal income tax; No customs duties within the Free Zone. | 0% Corporate Tax on qualifying income (for "Qualifying Free Zone Persons"); 0% personal income tax; No customs duties within the Free Zone. | 0% Corporate Tax on qualifying income (for "Qualifying Free Zone Persons"); 0% personal income tax; No customs duties within the Free Zone; Generally considered cost-effective. |
| Physical presence requirements | Requires physical office space. | Requires a physical office or a shared workspace. | Requires physical office space. | Requires a physical office space or a shared workplace. |
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Process of Incorporation in the UAE
The incorporation journey in Dubai is known as one of the most streamlined and accessible. It is great news for you as you plan for your company launch in this prominent destination. In Dubai, incorporating your business generally takes more time due to increased requests. The setup can take from 2 weeks to 1 month. In other emirates, this process can take as little as just a couple of days. The procedure consists of the six key steps. And yet, keep in mind that there are differences between launching your project in the mainland and one of the free zones like RAKEZ, DIFC, and others. Here are all of the incorporation stages at a glance, with consideration for distinctions between the mainland and free-zone company establishment:
1. Legal advice and developing a strategy
The first thing to do, as you’ve decided to set up your company in the UAE, is to select the right emirate and jurisdiction. We’ll help you determine whether a mainland setup or a free-zone registration best aligns with your goals and needs. For instance, depending on your business aspirations, you can choose the UAQ FTZ or RAKEZ free zone, which are known for their cost-effectiveness and a variety of business activities. Generally, the UAE’s free zones offer a compelling set of benefits, including 100% foreign ownership, tax advantages, a speedy setup process, business-friendly regulation, and dozens of industry-specific ecosystems to choose from. In contrast, you might consider going with the mainland incorporation, which provides unrestricted access to the UAE local market, flexibility in office locations, and more favorable banking conditions.
Besides, we’re here to help you decide on the right company type, create a charter, appoint a director, and more. Our legal professionals will introduce you to the important nuances of each of the following steps of the process and ensure that your business incorporation in the UAE goes smoothly from the very first day.
2. Choosing your company type, name, and appointing directors
After you have decided on the particular emirate for starting your business in the UAE, get ready to choose the right type of company, secure the unique name for it, and appoint the key personnel. All further documentation and regulatory requirements will stem from your choice of the business type. For instance, if you choose the LLC, you get to enjoy 100% ownership over your project, while if you select the joint venture company, it’ll be only a contractual agreement between the parties, with its operational specifications. Also, the taxation policies, physical space obligations, and other key factors vary among the types of companies available in the UAE.
Whether you go with an LLC on the mainland or a free zone establishment (FZE) within a free zone like Jebel Ali Free Zone (JAFZA) or Dubai Multi Commodities Centre (DMCC), your choice will further dictate subsequent documentation, compliance, tax policies, and requirements for the local office space. Not sure what business type aligns with your goals best? Not a problem, we’re glad to guide you towards the right decision and inform you about all important nuances associated with each company type and how it will affect your operations in the future.
Regarding your company name, it must be unique and meet the business name standards in the UAE. You’ll be asked to propose three options in order of preference for that. We’ll also assist you through this step so that your project carries a unique, relevant, and professional name. Finally, when it comes to appointing a director of your company, it’s important to know the specifics of the ownership structure that apply to the type of company you choose. Depending on that, you’ll need to appoint one director, one shareholder, or both.
3. Document preparation
Next comes your document preparation and submission. This step requires close attention to detail and precision in order to collect the complete set of documents and submit them to the local authority. We’ll also assist you at this stage and ensure that all paperwork is taken care of efficiently and with the utmost accuracy and transparency.
Generally, the list of required documents includes the following:
- Know Your Customer (KYC) procedures;
- Valid proof of address;
- A recent copy of a bank statement;
- Passport copies of directors and shareholders;
- Business plan;
- Trade name reservation certificate;
- Memorandum of Association (MOA).
In order to get the most accurate list of the necessary documentation, make sure to consult with our legal experts.
4. Obtaining the license for your business
Once all your documentation is ready and compliance assessments are completed, you can submit your paperwork along with the application and wait for its approval. It’s important to note that the regulator may ask for additional documents on the revision stage if needed. Thus, the duration of reviewing your paperwork mainly depends on the completeness of your documents. It typically varies between a couple of weeks and a few months. Got your license approved? Great! Now, with proper licensing, you can hire your employees now as well as get a resident permit for shareholders.
5. Bank account opening
As the final step in your business’s incorporation process, you’ll need to open your corporate bank accounts. Securing your bank accounts is crucial for further managing your smooth business operations and finances. We provide personalized assistance with this task, so you are confident in launching your project seamlessly and efficiently.
6. Company startup and maintenance
Your incorporation journey does not end soon as you officially register your project in Dubai or free trade zone and obtain the license. Rather, it’s significant to keep your company fully compliant with the local regulations from day one and in the years ahead. In particular, it means proceeding with the mandatory annual reporting and license renewals. Also, most entities are required to submit audited financial statements regularly. Navigating the ongoing maintenance can have its challenges, but our dedicated team is here to assist you with this step, too, and keep your company in good standing so that you can fully focus on its long-term growth.
Taxes and Business Regulations in the UAE
Dubai remains one of the most dynamic and quickly developing global markets and constantly refines its business regulation with a high level of innovation. You already know that this jurisdiction is known for its straightforward and business-friendly landscape. And yet, before you register your project here and officially begin your company’s operations in the UAE, make sure that you obtain a clear understanding of this country’s regulatory nuances. Here is what you need to know about Dubai’s business regulations and taxation laws.
Regulatory framework
One of the key things to know before you step into the UAE market is its two distinct frameworks: the mainland Dubai and the renowned free zones. Each of these structures provides different licensing pathways and has different regulatory requirements. Moreover, the choice between these two will be among the most fundamental decisions for your business setup in Dubai. Here’s a brief overview of the major distinctions between the mainland and free zone frameworks:
Mainland Dubai
This framework is governed by the Department of Economic Development (DED) and federal laws. By choosing this model, you get unparalleled access to the wide UAE market and can directly engage with local customers. This structure also provides a larger variety of permitted activities for your business and offers greater flexibility in terms of your office space location anywhere within Dubai. Moreover, for most mainland business activities, 100% foreign ownership is permitted. To sum up, this framework is a highly attractive choice for global entities that prioritize market accessibility and flexibility.
Dubai free zones
Dubai hosts more than 30 free zones that are designed to cater to specific industries. Each free zone provides a special ecosystem, with distinct infrastructure, licensing, and industry-specific regulatory framework. Here are the most prominent Dubai free zones to choose from, each with its own benefits and primary focus:
- Dubai International Financial Centre (DIFC): Ideal for financial services and fintech, it offers a robust and independent regulatory framework;
- Abu Dhabi Global Market (ADGM): Innovative regulatory environment, which is ideal for financial services and digital assets;
- Umm Al Quwain Free Trade Zone (UAQ FTZ): The most cost-friendly free zone with a fast and streamlined setup process, perfect for startups;
- Dubai Multi Commodities Centre (DMCC): Known for its top global ranking and its comprehensive ecosystem;
- Jebel Ali Free Zone (JAFZA): The top-tier trading and logistics hub with remarkable connectivity to various global markets;
- Dubai Internet City (DIC): Leading free zone for innovation and technology, particularly among IR, e-commerce, and software companies;
- Dubai Media City (DMC): Provides an ideal environment for media, advertising, and creative industries;
- Dubai Silicon Oasis (DSO): Enhanced ecosystem for technology, provides a supportive community for startups, tech companies, and R&D.
Corporate Tax (CT)
Since June 2023, the federal corporate tax (CT) has applied to the companies’ net profits across all the emirates. The official portal of the UAE government defines CT as a direct tax that is imposed on the net income of all corporations from their operations. This form of tax is regulated by the Federal Decree-Law No.60 of 2023. What is the key objective of CT? The introduction of the CT is the Emirates’s attempt to reaffirm the country’s strong dedication to meeting the international standards on taxation transparency as well as to prevent the potentially harmful tax-related activities. This is who the CT applies to:
- All individuals and organizations that conduct business operations under the UAE commercial license;
- Businesses in free zones;
- Foreign entities that conduct business within the UAE continuously or regularly;
- Banking operations;
- Companies are involved in brokerage activities, agency, real estate, construction, and development.
Corporate tax rate
According to the UAE Ministry of Finance, the CT rates are as follows:
- 0% for income under AED 375,000;
- 9% for incomes over AED 375,000;
- Not yet specified tax rate for larger multifunctionals that meet the criteria established according to the OECD Base Erosion and Profit Shifting Project.
Value Added Tax (VAT)
The value-added tax, or VAT, is a form of tax that is applied to the consumption or the use of goods and services. Companies collect this tax on behalf of the government, and its rate at the point of sale is 5%. VAT was introduced in the UAE in January of 2018 and aimed to reduce the country’s dependence on oil as well as other hydrocarbons as the main source of revenue. The local Ministry of Finance and the Federal Tax Authority provide more detailed information about the taxation and VAT treatment for particular sectors.
Implications of VAT
As a general consumption tax, VAT applies to most transactions in goods and services, with only a few granted exemptions. How do you know if your business must register for VAT in the UAE? There are 2 cases when it’s required:
- VAT registration is mandatory if the UAE-based company’s taxable supplies and imports exceed AED 375,000 per year;
- If the non-UAE-based company makes taxable supplies in the UAE and if there is no other person who’s obliged to pay the due tax in the country. In this situation, VAT applies regardless of the supplies’ value.
Keep in mind that VAT applies to both individuals and businesses at a rate of 5% on services and goods at every stage of the supply chain. What does it mean for your company in the UAE exactly? First of all, you’ll be responsible for thoroughly documenting all your business income, costs , and associated VAT charges. In practice, it means that your VAT-registered company:
- Must charge VAT on taxable services and goods it provides;
- Can reclaim any VAT it has paid on business-related services and goods;
- Must keep the business records that will enable the government’s checks of your company’s operations in the UAE.
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FAQ
What is the minimum office space required to open a company?
The minimum office space for company registration in the Dubai mainland is 20 square meters. Meanwhile, in the free trading zones (FTZ), the virtual addresses typically suffice.
What is the cheapest free zone?
Umm Al Quwain is the cheapest business opportunity in the Emirates.
What is the price of company formation in the UAE?
If you want to register business in Dubai, you can find out the cost from our consultants. To do this, leave a request on the site or contact us using the contacts listed.
Can a foreigner set up a firm in the UAE?
Foreign individuals can register a company in the Emirates under the current legislation.
Required documents to register a company in the UAE
The list of documents depends on various factors. This is the number of shareholders, and their legal status, whether they are individuals or legal entities. If the shareholders are legal entities, their corporate documents must be legalized when registering a subsidiary or branch of the company. You need different documents depending on the company’s type (branch, new company, or subsidiary). Also, the requested documents may differ from emirate to emirate and free zone.
If you set up a firm for an individual, a minimum set of documents includes a passport, a 3×4 cm color photograph, and a utility bill in English. This will indicate which country you are a resident of. In some free economic zones, a business plan is demanded, and you cannot register an enterprise without it. Each specific free zone has its own list of required documents, which our lawyers will clarify.
How long does it take to set up a legal entity in the UAE?
The time for registering your company varies depending on the selected emirate. In Dubai, registering a company requires more time due to increased requests. Opening a company can take 2 weeks to 1 month or a couple of days in other emirates.
The term for registering a company may increase to several months if the type of activity of the company requires additional permits from local authorities (Ministry of Defense, Ministry of Health, etc.).
Should I be present in the UAE to register my business?
Our experts will help you establish a new company remotely with the help of a power of attorney for registration actions. Experts will issue a tax resident certificate and coordinate all business processes in the UAE. To open an account, you must be present in person, which you can do only in local banks. International financial institutions do not provide account opening services to non-residents.
