Dubai presents many investment opportunities for those wanting to open a company. In the IT industry, many large enterprises have opened subsidiaries in Dubai, but the city also offers plenty of choices for smaller IT companies as well. The incorporation process is quite simple once all the requirements are met.
Below, we explain the main requirements to comply with when setting up an IT business in Dubai. With the help of our company formation agents in Dubai, the opening of an IT company can happen very quickly.
Requirements to open an IT company in Dubai
The IT sector has started becoming quite popular among local and foreign investors looking to open companies in Dubai. Among the reasons this industry is so popular is because the UAE is one of the most technologically developed countries in the Middle East, the government of the country being itself quite advanced from this point of view thanks to the online services offered to the population and companies in the country.
In order to start a business in the IT field in Dubai, there are a few aspects which need to be considered first. Among these:
- decide if the company will be set up in Dubai mainland or in one of the city’s free economic zones;
- choose the legal entity under which the company will operate (the limited liability company is preferred most of the times);
- start the company formation procedure by reserving a trading name and having the Articles of Association chosen;
- the company registration process will be completed with the Trade Register in Dubai or the free zone authority, depending on where the business will operate;
- starting with 2018, all Dubai companies are required to register for VAT, so this is a mandatory step when opening an IT company;
- the license will be issued by the Dubai Companies Register or by the free zone authority of the respective economic zone.
It is good to know that most Dubai free zones allow companies to undertake IT-related activities, however, there are also free zones that have dedicated licenses for such activities. If you need support in choosing the best free zone for starting an IT business, our Dubai company formation consultants can guide you.
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.
You can find out from the video below the main steps to open an IT company in Dubai:
What documents are required in order to open an IT company in Dubai?
The documents to be submitted with the Department of Economic Development (DED) in Dubai are the following:
- passport copies of the person and his/her partners’ requesting the license.
- proof of payment of the initial approval fee,
- copy of the local partner’s naturalization book,
- a no objection letter for expatriate partners from their sponsors,
- partners in a professional license are required to pay 20,000 Dirhams each as a security deposit; a single investor must pay 10,000 Dirhams,
- the partnership agreement must be signed in front of a notary.
The IT company must have a registered office which is why the owner is also required to add a tenancy contract when applying for the professional license.
Where can one start an IT business in Dubai?
The IT industry benefits from the support of the Dubai government and foreign investors can find many opportunities here. However, the development of the Dubai’s free zones allows for the creation of IT companies in dedicated free trade zones in the emirate, such as Dubai Media City, Dubai Internet City or Dubai Silicon Oasis which is considered the UAE’s “Silicon Valley” – hence the name of the free zone.
Before deciding on the location of the IT company, there is one a foreign citizen must consider: in order to register an onshore company in Dubai, one will need a local sponsor or partner who will own 51% of the company’s shares, while in the case of free zone companies, the foreign citizen will fully own the company. Our Dubai company formation agents can assist with the incorporation of IT companies in the Emirate and in any of its free zones.
If opening the IT company in Dubai implies obtaining the business license with the DED, the free zone authority will issue the license for an IT company established here.
Investment opportunities in the IT sector in Dubai
Dubai is one of the most sought emirates when it comes to starting a business in the UAE, this is because the local government is very involved in offering support to local and foreign investors who want to do business here. This is why Dubai is now home to the largest number of free zones in the Middle East.
Among the free zones which are dedicated to IT activities, Dubai Silicon Oasis is one of the most prolific. Following the footsteps of the famous Silicon Valley in the USA, Dubai Silicon Oasis offers impressive business conditions over 77 million square feet and integrates not only office spaces, but also housing spaces for business owners and employees. Dubai Silicon Oasis is one of the most important IT hubs in the Middle East and provides advanced technological facilities. When adding the fact that the free zone authority offers tax exemptions when repatriating profits, starting an IT company in this free zone becomes even more appealing. It is also worth noting that at the level of 2015, 20% of the companies established in Dubai Silicon Oasis were European businesses.
Another important free zone or better said one of the first free zones in the world dedicated to IT activities is Dubai Internet City which opened its gates in 2000. In the beginning, large American IT companies set up branches in Dubai Internet City; later the free zone became appealing for startup companies in Dubai.
Among the benefits offered by Dubai Internet City is full foreign ownership where the shareholders of the company are international investors and tax-free incomes.
If you want to open a company in Dubai or in any of its free zone, you can let our local agents handle the entire business registration procedure.
Why open an IT business in Dubai?
Among the main reasons a foreign investor should open an IT company in Dubai is the lack of corporate taxes and the free repatriation of profits if the company is established in a free zone. Apart from the tax matters, foreign investors have access to a large pool of talented workers who have moved to Dubai from all over the world and one of the most developed Internet infrastructures in the region. Our company incorporation representatives in Dubai can offer more information on the incentives available for the IT industry in the UAE.
Dubai as an international IT hub
Foreign investors looking to set up IT companies in Dubai can also look for options in mainland Dubai even if here they will need a local sponsor. The greatest advantage which can be obtained when starting an IT company in Dubai is the possibility of offering services to clients all over the world. This is because Dubai is very trusted from a business environment point of view.
If you need help in setting up an IT company, our company registration representatives in Dubai can help you.
According to a report issued by the World Economic Forum, digital technology has contributed to the development of Dubai and will continue to do so, as:
- the city’s population which is made of more than 2,5 million people benefit from one of the highest information and communication technology adoption levels in the region;
- by 2021, the government wants to cover 90% of the daily needs of the population through digital services;
- by 2021, the city municipality also plans on relying on an autonomous transportation system where 12% of the city trips will be completed through such a system;
- the usage of public transportation is also bound to increase by 20% by 2021 with the help of digital technology.
Establishing an IT company does not take long and our company formation agents in Dubai can provide you all the details necessary to set up the company. You can contact us for any questions related to business registration in Dubai.