Costs of establishing a company in Dubai Dubai is one of the world’s leading destinations for establishing companies thanks to its stable economic environment and advanced infrastructure. The emirate provides a variety of investment and commercial opportunities that make it the focus of attention of businessmen and investors from around the world. In addition, government policies that support the business sector contribute to facilitating company establishment processes and attracting more foreign investments.

When considering setting up a company in Dubai , it is essential to understand the various legal procedures and tax considerations that may affect the type of company and its line of business. Whether you are considering establishing a limited liability company, a free zone company, or a local company, each type has its own advantages and considerations that must be taken into account.

In this article, we will review the steps and procedures necessary to establish a company in Dubai, from choosing the appropriate type of company to understanding the legal and tax requirements associated with it. Our goal is to provide you with the essential information you need to facilitate the decision-making process and successfully establish your company in one of the most promising markets in the world.

Costs of establishing a company in Dubai

Choose the company type

When considering establishing a company in Dubai , choosing the type of company is one of the most important steps to take. Commercial success depends largely on the type that suits the nature of the business and the goals of the investor. There are three main types of companies that can be established in Dubai: limited liability company, free zone company, and local company. We will review each type in detail below:

A limited liability company

The Limited Liability Company (LLC) is one of the most popular types in Dubai due to its flexibility and ease of management. This type is characterized by the fact that the partners’ liability is limited to the amount of their equity shares, which means that the partners’ personal financial risks are low. This type allows foreign companies to partner with local investors, where the Emirati citizen must own at least 51% of the shares.

Free zone company

Companies in free zones have several unique advantages that make them attractive to foreign investors. Among these benefits are complete exemption from taxes on income and profits, and full 100% foreign ownership. Free zones allow companies to operate in a comfortable business environment without the need for a local partner. However, there are some restrictions on business activity within the UAE itself, as free zone companies must only deal with other free zone companies or outside the country.

Local company

The local company is the traditional choice for companies that want to operate within the UAE market without restrictions. Although this type requires a local partner to own 51% of the shares, there are legal agreements that can guarantee the foreign partner full control over the company’s management and profits. This option is suitable for companies that mainly target the internal market.

Choosing the type of company depends on several factors, including the nature of the business activity, the size of the investment, and the target audience. It is necessary to carefully study each type and consult legal and financial experts to ensure that the most appropriate decision is made that is in line with the company’s future goals.

Legal procedures for establishing a company in Dubai

Establishing a company in Dubai requires adherence to a set of legal procedures that ensure that companies operate in accordance with local laws and regulations. Below we review the basic steps of these procedures:

• Commercial registration

The first step in establishing a company is commercial registration. Investors must submit an application to the Dubai Economic Development Department (DED) to obtain a business license. This application includes specifying the type of business activity, choosing an appropriate trade name in line with local laws, and submitting the required documents such as the passports of the partners and founders.

• Obtaining permits

Once the business license is obtained, the company must obtain the necessary permits to conduct its activity. Some commercial activities may require additional permits from other government agencies, such as the Ministry of Health and Community Protection for medical activities, or the Roads and Transport Authority for logistics activities. Investors must ensure that they meet all legal requirements for their business.

• Capital requirements

Capital requirements vary depending on the type of company being established. For example, limited liability companies (LLC) require a minimum capital set by local authorities. Investors must deposit capital into a temporary bank account until the company is officially established. After that, the capital can be used to operate the company.

Following these legal procedures ensures that new companies in Dubai start their business activities in a legal and orderly manner, which helps achieve success and sustainability in the local and international market.

Tax considerations for establishing a company in Dubai

Tax considerations for establishing a company in Dubai

Tax issues are crucial factors to take into consideration when establishing a company in Dubai . Dubai has a favorable tax system that encourages attracting foreign investments, but it is essential to understand all tax aspects to ensure full compliance and avoid any legal issues in the future.

• Direct taxes

In Dubai, no income taxes are imposed on individuals or companies, making it an attractive destination for entrepreneurs and investors. However, there are some exceptions that include the oil and banking sectors, where taxes are imposed on the profits of these companies. In addition, companies may need to pay annual registration and renewal fees, which vary depending on the type of company and the region in which it operates.

• Indirect taxes

Dubai charges a value-added tax (VAT) of 5% on most goods and services. Businesses are required to register for the VAT system if their annual revenues exceed a certain threshold, which is usually set at AED 375,000. Compliance with the VAT system includes submitting periodic reports and paying taxes due in a timely manner.

• Tax exemptions

Dubai offers many tax breaks to attract foreign investors. For example, companies operating in free zones enjoy complete exemption from taxes on profits and income for periods ranging from 15 to 50 years, with the possibility of renewing these periods. In addition, exports are exempt from VAT, making Dubai an ideal business hub for companies targeting global markets.

In short, tax considerations are an important element that every entrepreneur and business founder in Dubai must understand deeply. Dubai’s tax system offers many benefits and exemptions, but it also requires compliance with legal and administrative requirements to ensure business runs flexibly and smoothly.

Our company’s role in establishing a company in Dubai

In conclusion, it can be said that establishing a company in Dubai provides multiple investment and business opportunities thanks to the flexible and supportive economic environment that the emirate provides. By choosing the right company type and adhering to the required legal procedures, entrepreneurs and companies can take advantage of the many advantages that Dubai has to offer, whether it is related to reduced taxes, advanced infrastructure or a diversified market.

Investors must also consider various tax considerations and ensure compliance with all local regulations and laws to ensure the success and sustainability of their business. Dubai is an ideal destination for business thanks to its strategic location and encouraging investment environment, making it an attractive choice for local and international investors alike.

We hope that this guide has provided you with a comprehensive and practical overview of how to start a company in Dubai , and helped you take the first steps towards starting a successful venture in this dynamic and evolving city.

Frequently asked questions about establishing a company in Dubai