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  • clients(at)dubai-lawyers.net
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Company Formation in Dubai & UAE

We are specialized in company formation in Dubai and in the incorporation of free zone companies in Dubai (UAE) such as for instance RAK Free Zone. Besides Dubai free zone company formation, we can also set up offshore companies and on-shore companies for those interested in the Dubai market.

 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

No (except oil & gas, banking)

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

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.

The best-known example of a free zone is Ras Al Khaimah (RAK), offering a wide range of facilities: 0% corporate tax, 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 interested in setting up companies in the UAE, The Corporate Group 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 with the registration of any type of company.

Legislation on setting up onshore and free zone companies in Dubai

The main law which provides for the registration of onshore companies 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 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.

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 requirements please see: Incorporation of a UAE Onshore Company.

2) – a UAE offshore company pays 0% corporate tax while

an onshore company has tax obligations and filing requirements 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 most of the time appealing to the services of professionals. The company incorporation procedure in Dubai resembles the procedures in most European countries provided that the foreign investors have acquired all the information about the business activity they will undertake and know all the business licensing requirements. Our company formation agents in Dubai can help you with more details about the main steps if you want to open a company in Dubai.

Business setup in UAE

Our company formation specialists 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 the UAE and start the incorporation procedure.

 

Shareholders for setting up a company 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. This is because, 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 the 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 setting up a company in Dubai is that the company cannot issue shares, but the shareholders will have ownership interests which imply the right of making management decisions.

No matter the type of company you decide for, 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

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, as you will see in the table below:

  •  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 UAE agents 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.

We invite you to watch a video about starting a business in Dubai in a free zone:

One of the most popular free zones in this country is Ras Al Khaimah (RAK) where investors can benefit from a 0% corporate tax and free repatriation of profits. This is situated in a strategic position for easy access to the markets from Africa, Asia, and the Middle East.

In Dubai, there are over 20 free zones dedicated to a wide range of economic activities, such as Dubai Media CityDubai Healthcare CityDubai Maritime CityDubai Outsource Zone, etc.

For more information about setting up a company in Dubai or other region in the UAE, you may contact our company formation agents.

If you need Dubai freezone 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.

Open an offshore company in Dubai

The law that governs the actions of an offshore company in Dubai is the Federal Law no. 8 from 1984, amended by the Federal Law no. 13 from 1988 (the Commercial Companies Law).

The main advantages of opening an offshore company in Dubai are the following:

  •  there are no personal, corporate, capital tax or VAT (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 for the public. It’s not mandatory for the general meetings of the offshore company to take place in Dubai.

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, establish a real office and have 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 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.

The 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 the 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, benefit from a skilled workforce, etc.

Company formation in UAE steps

The following procedure must be respected when registering a company in Dubai:

  1. choosing the right business form in accordance with your needs and requirements – our local advisors can help you;
  2. reserving a trading name for the company is the first requirement before starting the registration procedure;
  3. drafting and notarizing the company’s Memorandum and Articles of Association must be completed afterward;
  4. the documents will then be filed with the Dubai Department of Economic Development for approval;
  5. the company must then register for employment purposes and obtain a VAT number, according to the latest changes in the legislation;
  6. 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 opening a company in Dubai:

  1. the company registration fee with the Dubai Economic Development is approximately 300 EUR, however, the license fee must also be included;
  2. the virtual office costs start at approximately 200 EUR per month, based on the office building it will be set up in;
  3. the minimum share capital: there are no minimum share capital requirements for opening a limited liability company in Dubai;
  4. our company formation fee starts at around 2,300 EUR, and we invite you to contact us for personalized offer any time;
  5. 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:

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.

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 does not levy corporate taxes to companies which do not operate in the oil and banking sectors, however, the UAE authorities introduced the VAT (value added tax) starting with 2018.

Can I register a company remotely in Dubai?

Yes, you can register a company without having to travel to Dubai through our local agents. All you need to do is 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:

  • Dubai is expected to register a 2.1% increase in its Gross Domestic Product (GDP) in 2019;
  • the International Monetary Fund announced a 1.9% economic growth for Dubai in 2019;
  • 2020 is also expected to register an even higher GDP growth of 3.8%;
  • 2021, however, is forecast to bring a slower increase in the city’s GDP of 2.8%.

If you need to register an offshore company in Dubai or any other type of company, you may contact our specialists in company formation who will handle the entire procedure of company incorporation.