We are specialized in company formation in Dubai and in the incorporation of free zone companies in Dubai and UAE. Besides Dubai free zone company formation, we can also set up offshore and Dubai Mainland companies (usually preferred by those interested to invoice local UAE clients). Please see below full info on how to open a company in UAE.
| Quick Facts | |
|---|---|
| Types of companies |
Limited liability company General partnership Limited partnership Joint venture company Private shareholding company Public shareholding company Branches of foreign companies Sole proprietorship |
|
Minimum share capital for LTD Company |
USD 1 |
|
Minimum number of shareholders for Limited Company |
2 |
| Time frame for the incorporation (approx.) |
1-3 weeks |
| Corporate tax rate |
9%, applied after June 1, 2023 |
| Dividend tax rate |
– |
| VAT rate |
5% |
| Number of double taxation treaties (approx.) | 123 |
| Do you supply a registered address? | Yes |
| Local director required | Yes |
| Annual meeting required | Yes |
| Redomiciliation permitted | Yes |
| Electronic signature | No |
| Is accounting/annual return required? | Yes |
| Foreign-ownership allowed | 100% ownership in Dubai free zones |
| Any tax exemptions available? | No VAT and custom duties in Dubai FTZs |
| Tax incentives | For hiring local staff |
New corporate tax rate starting June 2023
The corporate tax rate increased from 0% to 9% starting June 1, 2023 for businesses with profits over 375,000 AED (approx. 100,000 USD). The small businesses with profits under 375,000 AED will still benefit from zero taxation. Through this tax change, the UAE government wants to support the country’s strategic objectives, stimulate its development and enhance its competitive position as a business destination.
There are some exemptions for the new corporate tax rate for small businesses whose total revenue in the previous and current fiscal year does not exceed AED 3 million.
Business setup in UAE
Our company formation specialists in Dubai help local and foreign investors follow the main steps for company formation in the UAE and open the required type of company. Business setup in UAE is not difficult, but many foreign entrepreneurs don’t know the local regulations so it is recommended to contact a local agent for company setup in UAE. He/she will explain to the foreign investor the differences between onshore/offshore companies and those established in the free zones and help him/her choose the one that is suitable for his/her business needs. Then the entrepreneur must prepare the documents for company formation in Dubai and start the incorporation procedure.
UAE is famous for its free zone companies (over 40 free zones are available), offering excellent conditions for different types of start-ups: industrial, technology, auto, etc. Each free zone in UAE is designed for a specific activity and our agents can offer you more details about company formation in Dubai, no matter the free zone you choose.
The best-known example of a free zone is Ras Al Khaimah (RAK), offering a wide range of facilities: 0% corporate tax (if meeting certain conditions), 100% foreign ownership allowed, 100% capital repatriation, etc. for investors interested in starting a business in Dubai.
With a long tradition in offering company incorporation services to foreign investors, our company strives to offer complete business registration and advisory services to those interested in opening a company in Dubai. With a vast experience in company formation in Dubai, our local consultants can assist foreign investors interested in starting a business in Dubai.
Legislation on setting up onshore and free zone companies in Dubai
The main law which provides for company formation in Dubai is the Company Law. It sets out all the regulations which must be complied with before and after the registration of a company.
In the case of offshore or free zone companies in Dubai, each local authority imposes its own registration requirements.
If you need information on the legislation related to opening a company in Dubai and details on starting a business in Dubai, our local advisors can assist you. Also, we can explain the process of company formation in UAE.
Offshore or on-shore company in Dubai?
The procedure for opening an offshore company in Dubai differs very much from the one necessary for incorporating an on-shore company. If you’re not sure at this stage which one you need, please consider the following:
1) – an offshore company (RAK Offshore for instance) does not have any special requirements or limitations regarding the owners/shareholders of the company while
– an onshore company does not allow full foreign ownership (the company requires a local “sponsor”). For more info on the requirements please see: Incorporation of a UAE Onshore Company.
2) – a UAE offshore company pays 0% corporate tax (in certain conditions) while
– an onshore company has tax obligations and filing requirements as per the legislation of the UAE.
3) – an offshore company cannot activate within the UAE;
– an onshore company is designed to do business in the Emirates.
To summarize: if you are not interested in the Dubai market (your clients are not located within Dubai) and you are solely starting your company to take advantage of the tax regime, privacy, and/or offshore banking, then it is advisable to start an offshore company rather than an onshore one.
Starting a business in another country requires thorough research and appealing to the services of professionals. The company formation in Dubai resembles the procedures in most European countries. Our company incorporation agents in Dubai can help you with more details about the main steps if you want to open a company in Dubai.
Shareholders for company formation in Dubai
The requirements for starting a business in Dubai are the same as in any other country. The first thing to consider when registering a company here is the shareholding structure of the business. In the case of an onshore company, a local partner is required. UAE shareholders must own at least 51% of the stock in the company, while the remaining of shares can be distributed among foreign shareholders or can belong to a single foreign stockholder.
A new law towards foreign direct investments provides for full foreign ownership in onshore companies in certain industries in Dubai, making the UAE one of the most appealing states in the Middle East when it comes to foreign entrepreneurship.
In the case of offshore or free zone companies, full foreign ownership is permitted.
An important aspect to consider when choosing company formation in Dubai is that the company cannot issue shares, but the shareholders will have ownership interests which implies the right of making management decisions.
No matter the type of company you decide on, you can rely on our company registration specialists for setting up a company in Dubai. They can also offer detailed information on the rights and obligations of shareholders in Dubai companies.
Share capital requirements for opening a company in Dubai in 2023
The Company Law of Dubai contains clear provisions on the share capital requirements for businesses established here. From a share capital point of view, the limited liability company is by far the most appealing type of structure thanks to the fact that there is no minimum amount of money imposed for registering it. However, the investors need to submit proof of sufficient capital for the activities to be undertaken.
In the case of onshore companies registered as private and public joint stock companies, the minimum share capital to be deposited is AED 5 million, respectively AED 30 million.
When it comes to Dubai free zone companies, the share capital requirements are decided by each authority of the free zone. It is also important to note that while some local authorities impose a minimum amount of money as share capital, others do not.
Do not hesitate to reach out to our Dubai company formation agents for complete information on the minimum share capital requirements when you decide to set up a company in Dubai.
Types of companies in Dubai
There are several types of companies available for company formation in Dubai:
- the onshore company – it operates on the UAE market;
- the offshore company – it is registered in UAE, but operates outside the country;
- the free zone company – it operates in one of the many free zones in the UAE;
- branch offices and subsidiaries – available for foreign companies operating in the UAE;
- sole trader – it can be used for activities completed by a natural person.
Our company formation in agents in Dubai can explain the requirements for each type of business form when you decide to set up a company in Dubai or in other region.
How to open Dubai free zone company
Foreign investors who want to benefit from business setup in UAE and especially in Dubai should know that there is a wide range of free zones in this country where they are offered special conditions for performing businesses.
In Dubai, there are over 20 free zones dedicated to a wide range of economic activities, such as Dubai Media City, Dubai Healthcare City, Dubai Maritime City, Dubai Outsource Zone, etc.
For more information about company formation in Dubai or other regions in the UAE, you may contact our company formation agents.
If you need Dubai free zone company formation or any other type of company, you may contact our specialists in company formation in UAE who will handle the entire procedure of company incorporation.
Advantages of company formation in a Dubai free zone
The first and most important benefit of starting a business in a Dubai free zone is the great number of free zones surrounding the emirate. Dubai is now home to more than 30 free zones, however a few others are under construction. It is also worth mentioning the fact the conditions for setting up companies in any of them are pretty much the same.
Companies operating in Dubai mainland have multiple tax advantages, however, these advantages are also present in its free zones. Among these, we mention:
- the 9% rate imposed on the corporate income of locally registered companies;
- one of the lowest value added taxes in the world at a rate of 5%;
- the free repatriation of profits is available in all of Dubai’s free zones;
- access to a wide network of double taxation agreements concluded by the UAE.
Dubai free zone companies also benefit from exemptions on imports and exports. We can assist with VAT registration services in Dubai. Our specialists can help you with company formation in Dubai free zones.
It is easier and quicker to register a company in a Dubai free zone than to set up a business on the mainland. This is because the company incorporation procedure of a business in a Dubai free zone is completed in one step.
Among the facilities offered by Dubai’s free zones are the office spaces, warehouses, and factories which operate within the same areas where the companies are. This way, the time and money spent on such facilities are reduced to a minimum.
One of the greatest advantages of business setup in Dubai free zones is the fact full foreign ownership is permitted. Compared to any free zone, incorporating a company in Dubai implies having a national partner who will own 51% of the shares in the company. The other reasons what make Dubai free zones so attractive are:
- investors can benefit from a 3-year visa and can sponsor their families;
- hire employees without the appliance of the UAE labor legislation;
- quick and easy company incorporation procedures;
- excellent infrastructure for any type of business;
- no taxes.
Depending on the free zone where the company will be located, tax exemption can be granted for a 50-year period of time.
Most foreign investors decide to open free zone companies in Dubai because of the following benefits:
- full foreign ownership;
- quick and simple business registration procedure;
- free repatriation of profits in most free zones;
- a larger variety of business licenses compared to onshore companies;
- each free zone is dedicated to specific industries;
- each free zone has office spaces, industrial parks, and warehouses to cater to the needs of every type of company.
Open an offshore company in Dubai
The law that governs the actions of an offshore company in Dubai is Federal Law no. 8 from 1984, amended by Federal Law no. 13 from 1988 (the Commercial Companies Law).
The main advantages of opening an offshore company in Dubai are the following:
- there is no personal or capital taxes (except for the foreign banking branches or oil producers);
- anonymity and privacy protection are guaranteed by the Company Law in the UAE;
- there is no obligation to deposit a share capital in a local bank;
- full foreign ownership is allowed 100% in the case of offshore companies;
- there is no minimum share capital requested in the free zones;
- it’s not necessary to submit the company’s account; these accounts are only presented to the shareholders.
An offshore company in Dubai can be formed by at least one shareholder and it can have a maximum of 50 members. This type of company must be managed by at least two directors and a secretary. Their names are kept in the register of directors from the Dubai Registered Office, but their details are not available to the public. It’s not mandatory for the general meetings of the offshore company to take place in Dubai.
More about offshore company formation in Dubai can be explained by one of our company incorporation agents in Dubai. The formalities of offshore companies in Dubai are straightforward and can be handled by our agents.
An offshore bank account in Dubai
The offshore company formation in Dubai requires a bank account in Dubai. There are plenty of financial institutions to choose from in UAE and the formalities are straightforward, offering complete confidence to owners of offshore companies in Dubai. Plus, there is also the possibility of opening a bank account outside UAE, yet you should discuss these aspects with one of our specialists in offshore company formation in Dubai who can smooth the entire process.
Advantages of offshore company in Dubai
Investors interested in operating outside the registered company jurisdiction can set up offshore companies in Dubai. This is a legal business entity that offers tax neutrality, access to international market development, and a friendly legal system among other benefits. Jebel Ali Free Zone and Ras Al Khaimah are two principal jurisdictions where international investors can register offshore companies in the UAE. These jurisdictions are tax-free and allow businessmen to enjoy 100% ownership. Here are other important advantages of offshore company formation in Dubai:
- Multi-currency accounts are permitted with offshore companies, in order to carry out operations on an international level.
- One can have properties in Dubai through offshore companies.
- The entity can have international corporate shareholders.
- The offshore company can have at least two directors who benefit from confidence. Their names won’t be displayed publicly.
- There are no minimum share capital requirements for offshore companies.
- The offshore company formation in Dubai can be concluded in just a few days, in most cases, no longer than a week.
Set up an onshore company in Dubai
Compared to offshore companies which are used by investors interested in servicing clients outside the UAE, the onshore company is used to cater to the clients in this country. Another difference between the two types of companies is related to the licensing requirements: the onshore company will need a business license, while the offshore will not.
You also have to pay the corporate tax, have an office, and be a local (UAE) shareholder. The procedure for incorporating an onshore company is more difficult than for an offshore one and the costs are higher. Even so, the onshore company offers several types of benefits, among which are a large and wealthy market and various tax incentives and breaks.
There are a few types of onshore companies and the most common are:
- the limited liability company, which can be private or public and is subject to very few incorporation requirements,
- the private shareholding company which can be set up by foreign investors in partnership with a local company or entrepreneur,
- the public shareholding company, also known as the joint stock company;
- the sole proprietorship which can be used by accountants, lawyers and other categories of professionals.
Foreign entrepreneurs who want to establish a limited liability company should know that they are required to have at least one UAE partner who will hold a minimum of 51% of the paid-up capital.
Exactly like many European jurisdictions, for example, Switzerland, Dubai offers the possibility for foreign companies to open branches or subsidiaries.
For onshore companies in Dubai, there is an obligation of obtaining a license, according to the type of activity to be performed.
The entrepreneurs who choose to open an onshore company in Dubai will have the possibility of purchasing real estate properties, benefiting from a skilled workforce, etc. Talk to us for more details about company formation in Dubai.
Company formation in UAE steps
The following procedure must be respected when registering a company in Dubai:
- choosing the right business form in accordance with your needs and requirements – our local advisors can help you;
- reserving a trading name for the company is the first requirement before starting the registration procedure;
- drafting and notarizing the company’s Memorandum and Articles of Association must be completed afterward;
- the documents will then be filed with the Dubai Department of Economic Development for approval;
- the company must then register for employment purposes and obtain a VAT number, according to the latest changes in the legislation;
- the last step to be completed is applying for one of the licenses which will enable the company to start operating.
Company incorporation costs in Dubai
The following costs must be considered when choosing company formation in Dubai in 2023:
- the company registration fee with the Dubai Economic Development is approximately 300 EUR, however, the license fee must also be included;
- the virtual office costs start at approximately 200 EUR per month, based on the office building it will be set up in;
- the minimum share capital: there are no minimum share capital requirements for opening a limited liability company in Dubai;
- our company formation fee starts at around 2,300 EUR, and we invite you to contact us for personalized offer any time;
- the accounting services, if you need such services, start at approximately 130 EUR per month, however, they can be tailored to your needs.
Licenses for companies in Dubai
The licensing procedure of a company in Dubai is completed at the same time with the incorporation process. The following types of licenses are available when registering a company in Dubai:
- the trading license;
- the industrial license;
- the commercial license;
- the professional license.
These are general licenses which need to be obtained no matter where the company is registered. Apart from these, for other activities, such as import and export, special licenses must be obtained.
In the case of free zone companies in Dubai, it is important to note that in each of them, specific activities must be conducted. For some of them, special licenses are imposed by the authorities governing them.
Our Dubai company formation agents can help you apply for the necessary licenses when starting a business.
If you are interested in company formation in Dubai and you want to relocate to this country we can help you. Immigration to Dubai is a straightforward process that can be supervised by one of our specialists. If you are interested in a tourist visa, family reunification, study, or work visa, feel free to discuss all the aspects with our local agents. Relocation can also be an option for those who want to open a business in Dubai. Thus, a business visa will be needed for which you must fulfill some important formalities, including certain investments.
Obtaining a professional license for an IT company in Dubai
Before setting up the Dubai IT company, one must obtain a professional license that will allow him/her to engage in business activities. The professional license is issued by the Department of Economic Development (DED) in Dubai. The first step for receiving the license is to hire the services of a local agent who will deal with obtaining the employment visa, the license, and any other required documents.
The steps for obtaining the professional license are the name reservation and the approval for the activity to be undertaken with the Department of Economic Development in Dubai. IT companies in Dubai can be registered as professional firms with full foreign ownership or as sole proprietorships.
Civil companies are also allowed when the owner has one or more partners. There is no minimum share capital for civil companies in Dubai, but the amount must be stated in the articles of association of the IT firm.
Requirements to register a Dubai limited liability company
Besides the shareholding structure, there are other requirements to set up a limited liability company in Dubai. Among these, the company must have at least two shareholders and a maximum of 50. There are no minimum share capital requirements to register a limited liability company in Dubai, except for the sufficient capital test enabled by the Department of Economic Development (DED). In this case, DED decides if the capital subscribed by the founders is sufficient for the undertakings they intend. Another requirement for a Dubai limited liability company is the managerial ones. Under the Dubai Company Act, the company must have between one and five managers.
Our company registration agents in Dubai will offer you information about the new Commercial Code.
Steps to register a limited liability company in Dubai
There are five steps to follow when registering a limited liability company in Dubai. These are:
- the reservation of the company with the Department of Economic Development,
- drafting and notarizing the company’s Memorandum and Articles of Association,
- submit the documents and business license application form with the Department of Economic Development,
- registration with the Dubai Commercial Register.
Once the company is incorporated, it must also register its employees with the Ministry of Labor and General Authority for Pension and Social Security.
Questions on business setup in the UAE
Why should I open a company in Dubai?
Dubai is the most prolific emirate in the UAE and it offers many tax advantages to foreign investors. Apart from this, Dubai is also one of the most important business hubs in the region.
Can I be the only shareholder in a Dubai company if I am a foreigner?
This is possible in all Dubai’s free zones, but if you plan on setting up a business in the emirate of Dubai, you will need a local partner who must own 51% of the company.
What are the taxes applied to companies in Dubai?
Dubai levy a corporate tax of 9% starting 2023 and certain execeptions apply for companies set up in free zones.
Can I register a company remotely in Dubai?
Yes, you can register a company without traveling to Dubai, through our local agents. All you need to do is to grant us power of attorney to represent you.
Dubai is one of the most appealing emirates in the UAE specifically for the great number of free zones, however, those opening companies in a free zone must offer their services or complete their activities in the specific free zone alone. Compared to free zone companies, onshore companies can offer their services or sell goods outside the country.
From an economic point of view:
- The value of the FDI (foreign direct investments) to the UAE was USD 20.667 billion (AED 76 billion) in 2022, according to the World Investment Report 2022 issued by the United Nations Conference on Trade and Development (UNCTAD);
- the UAE’s economic growth is estimated to remain robust, at an average of 4.6% from 2022 to 2024, according to the Arab Monetary Fund (AMF);
- The UAE’s gross domestic product (GDP) is expected to grow by 4.1% in 2023, an estimate made by the World Bank, while the UAE Central Bank has a lower one – 3.9%
If you need to register an offshore company or any other type of company, you may contact our specialists in company formation in Dubai who will handle the entire procedure of company incorporation.