Dubai welcomes foreign investment, offering different business models to foreign investors, including direct sale, commercial agency arrangements, branch or representative office, limited liability company and special free zone investment.
Starting your own business in Dubai is complex and local knowledge is vital. You must consult a good lawyer from the start. An experienced lawyer will guide you through the registration complexities and their help will be vital in protecting your future interests.
The first step in forming a company in Dubai is to decide the company type suitable for your business. Forming a company in one of Dubai’s free zones is recommended as these allow foreign investors to retain 100 percent ownership of the company.
A Dubai limited liability company limits foreigners to own up to 49 percent of the company. A UAE national must own the remaining 51 percent of shares. Registering your LLC in a free zone will increase your chance of approval.
Free zones
There are more than thirty free zones specific to each industry sector in Dubai. As well as full ownership, a Dubai free zone company also allows you to send revenues and profits to your home country. Other advantages are an easy incorporation process; fewer restrictions on staff recruitment; no import and export taxes; high quality infrastructure facilities, and utilities at a low price.
Companies with only 1 shareholder can register as a free zone establishment (FZE), though most free zones in Dubai need at least 2 shareholders. Companies with 2 to 5 shareholders can register as a Free Zone Company (FZC).
All Dubai free zones require a minimum paid-up capital. The paid-up capital amount is set according to the free zone and the company structure. The capital amount ranges from USD14 to USD300,000.
A free zone company cannot conduct business activities with UAE residents, unless you appoint a service agent to sell and distribute goods and services under their own name.
Licenses
To register a company in one of Dubai’s free zones, the following items must be submitted to the Dubai Government authorities: a detailed business plan including a description of the proposed business activity; the number and composition of the employees; amount being invested; supplier information; what customers can expect; a lease agreement; a receipt of the deposit of the share capital.
Before incorporation, open a Dubai company corporate bank account to deposit the required paid-up capital. The Government authorities will review your company registration application. After Government approval, you can apply for the necessary licenses and permits.
The type of licenses required will vary according to the type of your business activity. After you receive the licenses, the company registration is complete.