There is no denying that the UAE is one of the global leaders in business and trade. As someone who wants to capitalise on this market, you are likely concerned about what type of business setup in Dubai or any other Emirate would be suitable for your business needs?
Currently, you can setup an offshore company, free zone company or a local company registered in the mainland. Each type of company has its own requirements for setting up the business entity and certain limitations in terms of the business activities allowed.
If you want to do business outside the UAE only, but at the same time, want to leverage on the local banking facilities, tax exemptions, and 100% foreign ownership, registering an offshore company will be the best option for you. Here are three important things to consider when setting up an offshore company in UAE:
You are not entitled to have physical office in the UAE.
The only address of the company will be the address of the registered agent.
You are not eligible for visa, which means you cannot become a UAE resident under the sponsorship of an offshore company.
In terms of an offshore business setup in Dubai, you need to know that the application can be submitted only by one of the registered agents and not directly by the investor. Company set up will take about 3-5 working days maximum.
Free Zone Company
A Free zone company provides you 100% business ownership, 0 % taxes, flexible office solutions and possibility to rent/own physical office inside a free zone. In addition, you can obtain UAE resident visas for you and your family members. In terms of operations, you can do business in the UAE (with some restrictions for the local market) and anywhere outside the UAE. Any particular free zone has its own list of activities allowed for the registered companies.
Just in Dubai, there are currently more than 30 operational free zones. For example, Dubai Design District is mainly focused on the activities related to fashion and design, and Dubai Internet City, is mainly for IT, Internet and software related activities. All in all, a free zone company is considered as the best option for expats.
Note that If want to open a trading business, a free zone company is allowed wholesale trading (except for some special cases in certain free zones), but not retail sales. Free zone companies are restricted from selling their products directly to the local market. That however, is not applicable to local companies.
If you want to start a retail business, then a local company in the mainland will be suitable for you. A local company in Dubai must be registered with the Department of Economic Development (DED). If you want a Commercial license, you will need to have a local partner with 51% shares whereas you, as a foreigner, shall have 49% shares. Commercial activities include wholesale and retail trade, construction, transportation, stockpiling, communication, financial intermediation, real estate, and leasing.
However, if you are looking for Professional license, you, as a foreign investor, can be 100% owner of your business. Professional activities include marketing and management consultancy, restaurants, coffee shop, beauty and spa salon, and many more.
One of the requirements of a local company is to have a physical office. Without a physical office, the registration of local company cannot be completed and the license cannot be issued. One of the benefits of local company is that it is allowed to trade across the UAE and international markets. Additionally, you are eligible for UAE resident visas under the local company sponsorship.
Get Started Today
Take the first steps towards business setup in Dubai by getting in touch with My Business Consulting DMCC team of experts. We are an award winning Corporate Services Provider in Dubai that can help you start your business swiftly and smoothly.
Call us today +971 55 147 9576 to book a free initial consultation!