Quick Steps to Register Your Business in Dubai

Business

Quick Steps to Register Your Business in Dubai

Registrationwala

Dubai is one of the best cities in the world when it comes to ease of doing business. It is situated in the United Arab Emirates (UAE) and is widely known for its state-of-the-art infrastructure and advanced technology. 

Many business entrepreneurs from around the world register their companies in Dubai as Mainland or Freezone Companies because of the benefits these business entities carry. 

If you want company incorporation in Dubai, check out this blog post wherein we explain quick steps to register your business in Dubai. 

Why Register a Company in Dubai?

There are many reasons why registering a company in Dubai is an attractive option for entrepreneurs from all over the world. For starters, Dubai offers low tax rates and business-friendly regulations. 

Moreover, the skilled workforce is easily accessible in Dubai. In addition to this, it offers 100% foreign ownership. All of these reasons make UAE a prime destination for businesses that want to minimize their tax burdens, and increase profit while expanding their global reach. 

Business Types in Dubai 

Based on jurisdiction, the primary business types in Dubai are:

Mainland

A mainland business allows the owner to trade directly within the local UAE market and also globally without being subject to restrictions. If you want to target local customers or want to deal with government contracts, then you can choose mainland business as your business model.

Until recently, to establish a mainland business, a local sponsor was required. They’d have to own 51% of the business on the mainland. However, to promote ease of doing business, the UAE government has now permitted 100% foreign ownership in mainland businesses. That being said, certain sectors, such as oil and gas, may still require a local partner to share ownership.

Free Zone

Free zones are special economic areas in the UAE. They are set up to encourage foreign business by providing certain benefits like 100% foreign ownership, no customs duties, exemption from corporate and income taxes and easy repatriation of profits and capital. 

However, there is a catch. Companies that are established in free zones are restricted from trading directly with the local market. In order to sell products or services within Dubai, a free zone business will have to team up with a local distributor or establish a mainland presence. For businesses that want to focus on global markets, online services or consultancy, free zones are appropriate.

Documents Required for Dubai Company Incorporation

The following documents are required for company incorporation in Dubai according to the UAE official website.:

Steps Involved in Dubai Company Incorporation

The following steps are required to incorporate a Dubai company:

Step 1: Decide the Business Structure

The first step of Dubai company incorporation is to decide the business structure before filing a business registration application. An applicant can choose between a mainland company or a free zone company. The right choice depends on the number of shareholders, capital requirements and commercial activities the applicant wants to partake in. 

If you want to register a company in Dubai in a specialized economic business zone, you may choose free zone setup. If you want to start your business on the mainland, you have the option to register as a sole establishment or LLC, depending on the business activities.

Step 2: Company Name Reservation

The applicant must select a company name that is in compliance with the regulations of the relevant UAE laws. The chosen name should not bear resemblance to the name of an existing Dubai company. Before finalizing the proposed name, the applicant must confirm its availability with the Dubai Economic Department (DED) or the relevant Free Zone Authority. 

Once the name is approved, the company is required to conduct its business activities exclusively under this registered name. While deciding on the company name, the applicant must follow certain essential guidelines, including the following:

Step 3: Apply for Business License Based on Business Activities

After the applicant has reserved the company name, they must apply for a business license based on the activities the company intends to partake in in UAE. The business license is a legal document that authorizes its holders to carry out business activities specified within the license. 

In Dubai, the Dubai Economic Department (DED) is the authority responsible for issuing licenses to local companies. Depending on the nature of the business, applicants can choose from the following types of licenses:

Step 4: Select Location of Company

Applicants are required to select a suitable location for their company’s office space. They have the option to either purchase or rent the property. The choice of office space should align with the nature of the business activity, the expected number of employees, and the company’s budget allocated for this purpose. 

Dubai's various free zones offer office spaces in diverse sizes that range from compact units of 20-30 square meters to expansive spaces of 2000 square meters and beyond in order to cater to different business needs.

Step 5: Open a Business Bank Account

Once all necessary registrations and approvals have been obtained from the relevant authorities, the company must open a corporate bank account. 

This account is essential for conducting financial transactions, like sending and receiving funds related to the company’s operations.

Advantages of Registering a Dubai Company

Setting up a Dubai company offers a multitude of benefits due to which UAE has become a popular destination for entrepreneurs and investors alike. Let’s understand the advantages of registering a UAE company in the following points:

Tax-Friendly Policies

Dubai offers a tax-friendly environment for businesses. It is one of the most attractive features of Dubai company registration. Businesses registered with DED or Free Zone authority can maximize their earnings without facing heavy tax liabilities. 

The Value Added Tax (VAT) rates in UAE are among the lowest in the world. This enhances the financial advantages of operating a business in Dubai.

Secured Investment

Dubai provides a secure and transparent investment environment for entrepreneurs from across the world. UAE authorities, such as the Dubai Land Department (DLD),  the Real Estate Regulatory Agency (RERA), and the Dubai Land Department (DLD), enforce laws that are fair and supportive of new-age investors. 

Moreover, there are no hidden fees or surcharges. This ensures clarity in the financial dealings. On top of that, Dubai's zero crime rate and peaceful atmosphere, instill confidence in investors.

Rapid Growth

Dubai’s population has been growing rapidly and its economy has been constantly evolving. These factors make the city a hub for new businesses. The influx of Indian and international investors ensures a constant demand for goods and services and offers businesses a smooth and steady flow of customers/clients. 

This demographic expansion makes Dubai a suitable market not only for established enterprises but also startups.

Easy Visa Management

Managing visas in Dubai is quite straightforward. Entrepreneurs can easily secure visas for shareholders, employees, and family members through the relevant departments. Certain mandatory visas are granted along with the business license. 

For additional visas, the legal process is clearly defined to ensure a smooth and transparent experience for the applicants.

Summary

Dubai is one of the best cities in the world when it comes to ease of doing business. The business industry in UAE is rapidly rising because of the tax-friendly policies and 100% foreign ownership for businesses in certain sectors. If you want to register a company in Dubai, you can follow the steps mentioned in this post. 

If you need assistance with paperwork for Dubai company incorporation, connect with Registrationwala’s Dubai company registration consultants. 

Frequently Asked Questions (FAQs)

Q1. Which authority’s approval is required for registering a Dubai mainland company?

A. The approval of the Department of Economic Development (DED) is required for registering a mainland company in Dubai.

Q2. Which authority’s approval is required for registering a Dubai freezone company?

A. To register a Dubai freezone company, the applicant requires approval from the relevant Free Zone Authority that governs the specific free zone where they want to set up their business.

Q3. Is Dubai tax-free for businesses?

A. No, Dubai is not entirely tax-free for businesses. While businesses with annual taxable profits up to AED 375,000 are subject to a 0% tax rate, profits exceeding AED 375,000 are taxed at a rate of 9%. This corporate tax structure applies to taxable profits. It aligns Dubai with international tax practices.

Q4. Can a free zone company directly operate in the local market in Dubai?

A. No, a free zone company cannot directly operate in the local market in Dubai. To do so, the free zone company has to hire a local distributor or agent.

Q5. Do salaried individuals in Dubai pay income tax?

A. No, salaried individuals do not need to pay income tax in Dubai.

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