Business setup in Dubai
HLB HAMT is a renowned business setup advisory firm in Dubai, UAE that has been helping enterprises across diverse sectors to form their company, irrespective of the size of the organization. We have expertise and experience to advise our clients on the optimum corporate structure for business setup in Dubai.
In today’s demanding business environment, a rising number of organizations are choosing to establish themselves in the Emirate of Dubai owing to its strategic location, business-friendly government policies, and open economy. HLB HAMT being a prominent business setup advisory firm in Dubai provides accurate and comprehensive support for business setup in Dubai.
Dubai - The best Location for Business setup
Located at the eastern coast of the Arabian Peninsula on the Persian Gulf, Dubai is one of the world’s most important economic and tourist destinations. It is a major international passenger and freight transit center and is recognized around the globe as an investor’s paradise. Despite the covid19 pandemic, Dubai is speeding up infrastructure and urban landscape development in order to convert its business arena into one of the world’s most successful and engaging marketplaces. The purpose of this transformation is to ensure that Dubai remains a safe haven for investors and entrepreneurs, where their investments may thrive. Let’s look at some of the investment highlights of Dubai:
- Dubai has huge capital appreciation as a result of numerous infrastructural improvements, tourist attractions, and retail spaces.
- According to a study from the Business Registration and Licensing (BRL) sector, there are 17,893 active firms in the emirate of Dubai. Of these 69 percent are commercial and the remainder are related to tourism industry.
- Dubai’s 100 percent tax-free income has always been an attraction for skilled expats from throughout the world.
- Despite the fact that living costs in Dubai have grown significantly over the last decade, the impact of COVID-19, coupled with reduced oil prices, has resulted in a cost of living drop in Dubai in 2021.
- Dubai is regarded as one of the happiest and safest cities in the world, with 15% of its population being native and the rest 85% being expats.
- Dubai’s well-regulated market is governed by robust laws which results in the ease of real estate investment.
United Arab Emirates
The United Arab Emirates situated on the edge of the Arabian Peninsula has developed rapidly and is at the forefront of modernity and 21st-century innovation. Since the discovery of oil in the 1930s, the UAE has become one of the wealthiest nations in the GCC.
UAE is a federation made up of seven emirates – Abu Dhabi, Dubai, Sharjah, Ajman, Umm Al-Quwain, Fujairah, and Ras Al Khaimah. Abu Dhabi, the largest and wealthiest of the seven emirates, serves as the capital and is also the center of its oil industry. The port city of Dubai is one of the region’s most vital commercial and financial centres, housing hundreds of multinational corporations. Sharjah, known as the cultural capital sits immediately next door to Dubai and includes a coastal city. Ajman, the smallest Emirate, clutches a very short length of coastline, whilst Umm Al Quwain is a tiny wetlands coastal strip with a very flat desert terrain. Ras al Khaimah is known for its magnificent coastline and beaches, as well as desert sand dunes and the Hajar Mountains. Last but not theleast, Fujairah is the only Emirate fully on the east coast, with some of the country’s most beautiful scenery and historic landmarks.
In recent years, tourism and a diverse economy have made the UAE a regional hub and a desirable destination for international investors. It has never been more rewarding for Business Setup in United Arab Emirates. Here are a few of the key benefits of business Setup in UAE.
- With state-of-the-art air and marine ports, the UAE is well-positioned to accommodate international trade, serving as an axis point for global trade and commerce.
- The government of the United Arab Emirates provides significant tax incentives to companies conducting business in the nation.
- Top-notch telecommunications and IT networking, along with modern facilities and infrastructure, make it the ideal location for expanding your business.
- The United Arab Emirates has witnessed consistent development in tourism, research, and technology because of its diverse economy.
Business Formation in Dubai
HLB HAMT has the expertise and knowledge to assist clients on structuring their business across UAE, as per their requirements. Dubai business set up destination mainly comprise of:
Before you leap into forming a business in Dubai, you must first choose which type of business structure best matches your interests and objectives. Business set up in the mainland of Dubai comprises of;
- Limited Liability Company (LLC) with multiple shareholders.
- Single owner limited liability company which is fully owned by local Emiratis
- Single owner limited liability company fully owned by expatriate shareholders
- General partnership firm with various business activities
- Professional firms with people belonging to the fields of lawyers, doctors, accountants, and engineers
- Foreign subsidiary companies fully owned by foreign entity
- Branches of foreign entities
- Branches of local companies incorporated in all emirates
- Representative Offices
The UAE Ministry of Economy has recently permitted complete ownership for foreign investors on mainland, which can be seen as a new dawn for the business sector in the country. The new act eliminates the previous required need for onshore firms managed by non-national investors to have a substantial UAE shareholder, which is expected to have a far-reaching positive influence for the UAE’s investment ecosystem. It also repeals a requirement that a company’s board of directors be made up of a majority of UAE citizens and led by an Emirati for certain types of business.
The UAE is on a mission to contain the pandemic, protect residents’ livelihood, and maintain business continuity. The government of Dubai had launched a slew of relief packages and incentives aimed at mitigating the effects of COVID-19. The package included diverse initiatives spanning a variety of industries. The following are some of the business and tourism-related initiatives that were introduced by the UAE government during the pandemic;
- The 2.5 percent market fees charged on all facilities operating in Dubai were frozen.
- A 20 percent rebate on customs costs levied on imported items sold in Dubai marketplaces.
- Fees imposed on firms submitting customs paperwork was reduced by 90%.
- Municipal costs, which are imposed on hotel purchases, were reduced to 3.5 percent.
- No fee for tourism and sporting events in case they are postponed or cancelled.
- Costs for the selling of tickets, the granting of licenses, and other government fees connected to entertainment and corporate events were frozen.
Business Setup procedure
There are some procedures to consider in the process of business formation in Dubai:
Type of Business
Your choice of business will decide the sort of license you’ll need, which will establish the foundation of your operations.
Approval from Authorities
An initial approval indicates that the government has no objections to the company’s operation in the country. It also permits the investor to move on to the further phases of the business setup process.
To function, all companies must have a physical address. The company site and premises must meet the standards set by the relevant authorities.
It’s a procedure that includes facts about the property, the name of the rental business, or information about the landlord, such as a copy of his or her passport, as well as the terms and conditions of the agreement.
Attestation is a procedure that involves document verification by a competent authority. Only some administrative and government entities in the UAE have the authority to authenticate documents.
Issue of License
After completing the above processes, investors can get a business license through the economic departments’ service centres or through their websites.
The approximate cost for setting up a Mainland company in Dubai starts at AED 15000/- per annum. If all goes well, we’ll be able to create a company in 2-5 working days, and the Dubai authorities’ quick and proactive attitude makes the city more appealing to the business community.
Business set up in the Free Zones of UAE
Free zones are jurisdictions where businesses are exempt from majority of the taxes. In Dubai’s free zones, business owners enjoy 100 percent ownership of their company.
In the United Arab Emirates, there are over 50 free zones to choose from, giving you the flexibility to choose the ideal location to meet your client’s unique business needs. Thousands of businesses from a variety of industries, including big multinationals and start-ups, have set up their bases in UAE-free zones.
When forming a business in the UAE free zones, a license is required, and the type of license required depends on the type of business. The following are some of the reasons why you should start a business in Dubai Free Zones
- Personal and capital gains taxes are both completely excluded
- 100% repatriation of capital and profits
- 100% foreign ownership
- Import and export tariffs are exempted
- Easy immigration and labour recruitment process
- Activity-based zones help with easy recognition and business networking
- Exemption from thewage protection system
- Scalable business options to match the requirements of clients such as co-working space, dedicated desks, furnished offices etc.
- Low cost start-up solution
Let’s take a look at some of Dubai’s major free zones.
- The Jebel Ali Free Zone (JAFZA) is one of the most service-oriented free zones in the world, with a thriving, dynamic work environment. Jafza, which is home to hundreds of firms from all over the world draws more than 32% of the UAE’s foreign direct investment and is unquestionably the best place to start your company.
- The Dubai Multi Commodities Centre (DMCC) is the UAE’s largest and fastest expanding free zone, located in the heart of modern Dubai. DMCC is home to large multinationals and start-ups, and it links over 14,100 enterprises. It gives simple access to the world’s main commodities markets and delivers a comprehensive range of world-class financial services, trading resources, and investment platforms.
- The Dubai Airport Free Zone (DAFZA) is one of the UAE’s fastest expanding free zones, accounting for 4.7 percent of the city’s GDP. Thousands of companies from all over the world call DAFZA home, with industries ranging from electronics and electrical to information technology and telecommunications, pharmaceuticals and cosmetics, engineering and building materials, aerospace and aviation, logistics and freight, food and beverage.
- With over 1,300 firms registered under the Free Zone, Dubai Media City has become a significant centre for the media sector in the GCC and the Middle East, serving the whole region. It has developed into a regional hub for news organisations, publishing, internet media, advertising, production, and broadcast facilities.
- Dubai Healthcare City (DHCC) is a free zone dedicated to building a Health and Wellness Community of Choice. Healthcare, medical education and research, medicines, medical equipment, wellness, and allied assistance are all available through DHCC.
There are a few procedures to process about before starting a business in the free zones of Dubai:
- Type of business
Your type of business will determine the type of license you’ll require, which will form the basis of your operations.
- Approval from Authorities
An initial approval indicates that the government has no objections to the company’s operation in the country. It also permits the investor to move on to the next phases of the business setup process.
- Review of charter documents
Review of the documents is to be done by the concerned authorities
After successfully completing the processes, investors can get a business license.
The cost of establishing a free zone business in Dubai starts from AED 10,000/- per year. Depending on the intricacy of the activity and the free zone authorities’ facilities requirements, we can process a free zone license in a single day. Apart from Dubai, HLB HAMT aids in the formation of businesses all throughout the UAE. Under the supervision of the various regulatory agencies, all emirates in the UAE provide the simplest and fastest business incorporation procedures.
Difference between Mainland & Freezone
The primary difference between the mainland and free zone is that the mainland allows for 49 percent foreign ownership of companies, whereas the free zone allows for full ownership, and the firms operate as separate legal entities with their own set of rules and regulations. Mainland and free zone companies are permitted to do business both within and outside the UAE. Free zone business cannot operate in a non-free zone without the assistance of a local agent, but a mainland company can freely operate its business activities from anywhere. VAT is applied in both the mainland and the freezone, with the annual cost being higher in the mainland and lower in the freezone. Customs tax is paid at 5%, but it is not charged in the freezones, if not transported onto the mainland. The mainland businesses are allowed to work with government agencies, whilst the freezones are limited. In the mainland, office space is cheap and readily available, but in the freezone, it is limited and costly.
In Dubai, there are several free zones. Foreign investors choose free zone ventures for a variety of reasons, including access to world-class infrastructure, asset protection, and tax incentives. There are no visa requirements for a mainland license. While each free zone license includes two visas as part of the smart office package,but different free zones in the UAE allow for 3-6 visas.A mainland firm must get regular government approval, such as from the Department of Economic Development, in order to obtain a license. On the other hand, majority of free zone firms are not required to obtain approval from an external authority before providing a license.
An offshore company is a type of foreign corporate entity that offers no tax or very little tax. They also provide the best solutions for business management, wealth management, foreign investment strategies, and flexibility of corporate operations.
Offshore companies are enterprises that are registered in Dubai and RAK but are allowed to have their headquarters in areas outside of the city. Limited liability corporations, limited companies, and limited partnerships are all options for forming an offshore business in Dubai.
Company formation in Dubai offshore is simple and the process starts with filling out an application that includes documents which are as follows:
- Valid passport copies of shareholders
- Proof of residency of shareholders
- Preferred company name
- Details about type of business that will be conducted
There are certain advantages for a Dubai offshore entity which includes
- An offshore business setup in Dubai is legally exempt from corporate tax
- Exemption of annual accounting and tax obligations for offshore companies
- Multi-currency bank accounts are permitted for offshore corporations, facilitating international commercial transactions and ensuring money security.
- Provides confidentiality as the details of company owners are not disclosed during the formation process
- Foreign investors will have 100% ownership in their assets
Dubai International Financial Centre (DIFC)
DIFC is a leading autonomous free zone in Dubai which is controlled by a strong regulatory agency and a common law framework. The Dubai International Financial Centre (DIFC) is a major financial centre that brings together global financial exchange, inspirational architecture, powerful and enabling infrastructure, support services, and a thriving business community to form one of the world’s most successful financial industry ecosystems. With over two decades of enabling regional trade and investment flows spanning Asian and African countries, DIFC is converting the UAE into a worldwide financial powerhouse.
DIFC authorities issue various licenses for different activities/companies which are as follows:
- Financial regulated activities like banking and insurance
- For regulatory services, such as investment fund management, are also available.
- Non-regulated activities
- Professional and trading activities
- Holding companies and foundations
Dubai Financial Services Authority (DFSA)
The Dubai Financial Services Authority (DFSA) is an independent regulatory agency responsible for overseeing financial services performed in the Dubai International Financial Center (DIFC). Mutual Funds, commodity futures trading, asset management, securities, banking and credit services, Islamic finance, insurance, International stock exchanges and derivatives exchange of commodities are all covered by the DFSA’s regulatory authority.
The DFSA is responsible for overseeing and implementing Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) laws applicable in the DIFC, in addition to regulating financial and other additional services.DFSA has also received authorization from the DIFC Registrar of Companies (RoC) to probe the affairs of companies in DIFC.
The DIFC and the DFSA were established by a number of laws. The DFSA’s regulatory authorities, functions, and objectives are based on DIFC Law No. 1 of 2004:
- Gives the DFSA the power to make Rules
- Sets out the powers and functions of the Board and the Chief Executive
- Establishes the Financial Markets Tribunal
- Sets out the criteria and process for authorizing firms and individuals
- Sets out the powers for supervising and investigating Persons as well as the enforcement of DFSA-administered legislations
- Gives the DFSA the power to impose restrictions, suspensions and sanctions, including financial penalties
- Sets out various disclosure requirements to the DFSA
- Sets out the decision making process that the DFSA must follow to issue certain types of decisions
Business Setup Guidance & Advisory
HLB HAMT’s advisory services assist clients in guaranteeing legal compliance and providing required recommendations on financial on legal structure, reporting procedures and accounting operations. We create and provide customized, creative, and complete solutions that help businesses achieve their goals. Among the services we provide are:
- Recognize the activity
- Become familiar with the business model.
- Advise on the budget requirements
- Advisory report of suitable options with benefits
- Assistance on annual compliance requirements
- Advise on officers’ requirement
HLB HAMT, a Leading Business setup advisory firm in UAE
HLB HAMT can assist you with the formation of your business. We guarantee to offer you accurate and fast services since we have extensive knowledge of the country coupled with years of expertise in the business. We provide the following business setup services:
- Choosing a name and approving an activity
- Notarization of documents in Dubai
- Preparation of memorandum and articles of association
- Assistance in identifying office spaces
- Ejari procedures
- Coordinating with all authorities up to finalizing the licensing procedures
- Assisting in identifying a suitable banker for the client
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