Sitting at the crossroads of Europe, Asia, and Africa, the Emirate of Dubai stands as a premier destination for entrepreneurs worldwide. The strategic location, diverse workforce, and cutting-edge infrastructure benefit those in pursuit of international business opportunities through Dubai company incorporation. However, navigating the process of business formation can be daunting, especially if you are a newcomer.
Hence, in this comprehensive guide, we will explain everything you need to know about company incorporation in Dubai, including the types of business entities and licenses, and the step-by-step process to set up your company in the city.
Entities for Company Incorporation in Dubai
Before diving into the Dubai company incorporation process, it is essential to understand the different types of entities available for company setup: –
Mainland Company Setup – Mainland allows companies to operate and trade within the local market and across the UAE without any restrictions. The mainland companies, also known as onshore companies, are free from any limitations on the number of visas and office locations. Nevertheless, certain activities in the mainland region mandate the involvement of a local sponsor, who will hold at least 51% of the company’s shares, while the foreign investor will own the remaining 49%.
Free Zone Company Setup – Free Zones offer 100% company ownership to foreign investors, along with various incentives like tax exemptions, profit repatriation, and simplified business setup procedures. In addition, each free zone caters to a specific industry, such as Media, IT, Healthcare, Finance, etc. This enables business owners to find a suitable environment for their desired operations.
Offshore Company Setup – International firms looking to establish a presence in the UAE without engaging in local business activities can opt for offshore business registration. Business owners can benefit from tax exemptions, confidentiality, and also asset protection. This, thus, makes offshore a prevalent choice for investment holding, wealth management, and international trading.
Types of business licenses in Dubai
A business license is obligatory for operating a company legally in Dubai. So, let’s look at the different types of licenses issued by the authorities in Dubai –
- Commercial license – Permits trading activities including the buying and selling of goods, import & export, sales, logistics, travel & tourism, general stores, and real estate.
- Industrial license – Covers industrial and manufacturing activities such as transforming natural materials and resources into final products, either manually or mechanically.
- Professional license – Issued to service providers, artisans, or craftsmen who offer specialized services to other individuals and corporations.
Dubai company incorporation: Step-by-step process
Now that you are familiar with the types of business entities, licenses, and structures available in Dubai, it is time to delve into the process of registering your company:-
Choose a business activity
The first step to Dubai company incorporation is determining the business activity you want to engage in. You can choose from the list of over 2,000 business activities permissible by the Department of Economic Development (DED) including trading, manufacturing, consulting, technology, etc. However, make sure your chosen activity aligns with your business goals and expertise.
Another consideration while choosing an activity is product-market fit, whether it has adequate demand in the UAE market. Hence, to ensure this, do thorough research on the feasibility and profitability of your selected activity.
Select a jurisdiction
One of the key decisions you need to make while planning a business setup in Dubai is the jurisdiction you want to operate in. As mentioned earlier, they can choose from Mainland, Offshore, and Free zones as per their business requirement. Nonetheless, weigh their pros and cons before concluding.
Select a suitable structure
Once you have identified your business activity and the jurisdiction you want to register in, choose an appropriate structure for your company. The most common choices are – Limited Liability Company (LLC), Sole Proprietorship, Civil Company, and Branch. Since each structure has its own perks and requirements, business owners must consider them all and choose the one that fulfills their business criteria. This decision needs to be taken during the initial planning stages to apply for your business license.
Reserve a company name Trade name refers to the official business name of the company. Since it is a key requirement for the business and a major step in the incorporation process, the owners need to be prudent
