How to Register a Company in Dubai

Dubai's tax system is one of the most popular for establishing a business. Dubai is one of the top capital cities to conduct business, and a destination that global investors are looking for. Dubai is a favourite choice of international and local companies due to its high-quality infrastructure, strategic location, and diverse market with low operating costs and logistics. Dubai is home to more than 25 Free Trade Zones, which attract global business owners who register their companies there.

Types of Company Registration in Dubai

Dubai allows the following types of businesses to be set up:

Free Zone Companies/Establishment

The free zone companies/establishments are situated in FTZs, where special laws related to taxation, ownership, customs, etc., are followed, distinct from mainland Dubai. An FTZ can be 100% owned by a foreign investor. In an FTZ, entrepreneurs can create two different types of companies, namely, a free zone company and a free zone establishment. One shareholder can create a free-zone establishment. The shareholders of a free zone company/LLC can be up to five. A natural person and a legal entity can establish a free zone company or establishment. The legal requirements for incorporation of a free zone company/establishment are as per the regulations and rules framed by the respective free zones.

Limited Liability Company

In Dubai, a Limited Liability Company can be established with a minimum of two shareholders. An LLC can have a maximum of 50 shareholders. The shareholders of an LLC are only allowed to contribute up to the amount of capital. An LLC may carry on any business, except for banking, insurance, and monetary investments.

Onshore Company

Onshore companies are those that have their headquarters in mainland Dubai. The directors of the company are located in Dubai. Dubai only allows 49% ownership for foreign entrepreneurs. They must also establish the company with a sponsor or agent. The Dubai government amended this. A foreign entrepreneur is currently allowed to own 100% of a Dubai-based company. This does not include companies that are established for economic activities, which have a strategic impact in seven sectors.

Offshore Company

The business of the company is operated and formed outside the jurisdiction of a country through offshore companies. The company is registered in Dubai, but it has its base in another country. Foreign entrepreneurs own offshore companies at 100%. Branch Office A branch office is a continuation of the parent firm. A branch office can be set up by any foreign company in mainland Dubai or most FTZs throughout Dubai. Establishing a branch in Dubai is an excellent option for companies looking to expand into the local market.

Dubai Company Registration Benefits

Capital and Profits are eligible for 100% repatriation
A clever labour law reduces the cost of recruiting labour
Tax exemptions for individuals or corporations
Physical Infrastructure
Shared and virtual offices are available in some FTZs
FTZs are exempt from the commercial company law.
Import and Export Duty Exemption
Dubai Company Formation
Every entrepreneur/applicant should follow the procedure below to register a company in Dubai: Decide on business structure Before applying for registration, the applicant must first determine their business structure. The applicant can decide whether to set up a free-zone company or establishment in the FTZ. They can also choose between an LLC, an onshore or offshore company, or a branch. The choice of business structure is determined by the number of shareholders and capital requirements, as well as the type of commercial activity. Reservation for the company name The applicant must decide on the name of the company in accordance with the laws of the country. The name should not be identical to any other company's name. The applicant must confirm that the proposed name is available with the Dubai Economic Department (DED) or the respective Free Zone Authority. The company must use its approved name to conduct its business. When choosing a company name, the applicant should consider the following factors:
- The name of the country should not cause public disturbance or harm to the morale of its citizens
- The legal form of the company should be used
- The registration should not have been done previously
- The business plan should reflect the activities that the company intends to undertake
- It should not include the names of any external or governing bodies, religions, or other logos or names.
- The language used should not be offensive, derogatory, or controversial
- Names of entrepreneurs should be chosen based on the full name and not a nicknameHow to apply for a licenseThe applicant must then apply for a license based on the type of business the company intends to conduct in Dubai. Business licenses are legal documents that allow their holders to carry out the business activities specified in the license. The DED issues local company licenses. The following are the types of licenses available:
  - Commercial license: This applies to all entities that engage in trading
  - Industrial license: Entities involved in production and industrial operations are eligible to apply for this license
  - Professional license: This license is required for all professionals, technicians, and artisans.Decide location/jurisdiction of the companyThe applicant must select the location of the office. The applicant can choose to buy or rent the land. The choice of office space is based on the business activity selected, the number and type of employees, as well as the budget of the company. Different free zones in Dubai offer different sizes of offices ranging between 20-30 sq m. The other free zones in Dubai have a range of office sizes ranging from 20-30 sq.m. And beyond. Opening of a Bank Account The company must open a corporate account after obtaining the necessary approvals and registrations from the relevant authorities. This will allow the company to receive and send money related to its affairs.
    Documents required for company registration
    - Copy of passports of shareholders and directors
    - Copies of national identification cards of directors and shareholders
    - Recent bank statement or credit card statement containing the names and residential addresses of the shareholders, directors
    - Articles of Association of the Company and its Memorandum of Association
    - The Board resolution containing the details of the establishment of the branch or sub-branch and appointing an authorized manager
    - Share capital information
    - Contract of Appointment of a Company or Service that is duly authenticate