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The United Arab Emirates is the federation formed in December 1971 with Dubai, Abu Dhabi, Sharjah, Fujairah, Ajman, Ras al Khaimah and Umm al-Quwain.

Dubai, as the largest city in the Middle East, offers numerous opportunities for foreign investors to establish various types of companies. Furthermore, the city presents a wealth of opportunities and undergoes constant development. Besides these, the Middle East is the largest oil exporter of the world. No taxes are levied indirectly or directly on individuals and citizens living in Dubai. Therefore, this attracts people to register a company in Dubai.

Dubai has established a designated area for various registration activities with a strong emphasis on compliance, known as the Dubai International Financial Centre (DIFC). Moreover, across the Middle East, various financial centers serve to facilitate a diverse range of activities in Dubai. When it comes to foreign ownership of a company, Dubai imposes no restrictions. As a result, shareholders and directors of companies registered in Dubai enjoy complete ownership rights. According to the regulations outlined in Law No. 2 of the Federal Commercial Companies in 2015, foreign companies are compelled to operate within the jurisdiction of DIFC to meet the requirements for foreign ownership. As a result, this requirement dictates that an individual who is a UAE resident must hold a minimum of 51% ownership.

Ownership pertaining to a company is typically categorized according to the citizenship of the stakeholders. In this framework, UAE nationals are mandated to maintain a controlling stake of at least 51%. Such ownership structure is applicable to entities governed by UAE nationals. Notably, these foreign investment restrictions were gradually lifted in various sectors starting from 2018.

Looking at the taxation aspect, it’s important to note that Dubai imposes indirect taxes, such as VAT. Specifically, the value-added tax (VAT) is levied at a rate of 5% on goods and services in Dubai. Additionally, it’s worth mentioning that there are no individual income taxes imposed on employees working in Dubai. Collectively, these tax advantages present a compelling proposition for investors considering company registration in Dubai.

Main Regulatory Authority For Dubai’s Company Registration

As for the regulatory aspects of Dubai company formation, it’s important to note that the Registrar of Companies serves as the central authority. This registrar plays a key role in overseeing various registration and compliance processes related to companies. When applying for registration with Dubai’s company registrar, you direct the application to the Registrar of Companies.

Areas For Company Registration In Dubai

Select the following areas for Dubai’s company registration:

  • Inside DIFC – This is the best option for an investor to form a company. There are various benefits to choose this area such as the inclusive company registration process or an ease of compliance. No restrictions happen for the foreign ownership of the company. The shareholders and directors of Dubai’s registered company can have 100% foreign ownership.
  • Outside DIFC- It is the jurisdiction that is outside of DIFC. It’s worth noting that the company can choose to incorporate itself outside of DIFC. Law No. 2 of the Federal Commercial Companies in 2015 specifies that companies operating beyond the DIFC jurisdiction must adhere to the criteria for foreign investment.

In terms of the ownership aspect related to a company, it historically entailed categorization based on citizenship, with the stipulation that UAE nationals must have control of a minimum of 51% ownership. These restrictions were applicable to entities controlled by UAE nationals. However, it’s worth noting that several sectors saw these restrictions lifted in 2018.

Benefits To Register A Company In Dubai

Following are the added benefits for Dubai’s company formation:

Regulatory Environment

Dubai courts have the common law system. But the precedents of court cases get handled by the Dubai’s lawyers who have UK and US legal qualifications. Dubai has a unique style of regulation.

Complete Foreign Ownership

Foreign Ownership of a company registered in Dubai DIFC can be 100%. So the shareholder or a foreign investor has 100% equity ownership in the company.

Ease Of Compliance

Less compliance for Dubai as compared to other jurisdictions.

Less Tax Burden

Direct tax is levied on an individual that is less if compared to the indirect tax amount. Indirect taxes like VAT can be present in Dubai. It is considered as the value added tax that is charged for 5% on services and goods that are provided at Dubai. No kind of individual income tax is charged on Dubai’s working employees.

Kinds Of Company Structure In Dubai for Business Registration

Use these structures to register a company in Dubai:

  • Company gets limited by shares – this form of company is called a private limited company having specific shares.
  • Limited Liability Company- this limits the shares amount.
  • Branch Office- this kind of company is located outside of Dubai. The office opened at Dubai can carry out operations.
  • DIFC transferred Company- It is transferred from non-free zone to a free zone. For instance, the transfer of non DIFC centres to a DIFC centre.
  • Limited Liability Partnership- called as LLP has the Partnership entity that is managed by many partners. Liabilities of partners can be limited.

Foreign Limited Liability Partnership

Shareholders, primarily foreign citizens, control this partnership entity of a foreign-owned company.

Eligibility Criteria For Dubai’s Company Registration

The most important are:

Licensing Requirement – the company that forms a basic purpose to carry few activities. A company register in Dubai receives three types of licenses. They are:

Free Zone Company Registration in Dubai

Entrusting the task of company registration in Dubai to a local sponsor is a fundamental requirement. Selecting a suitable local sponsor is crucial for the registration process. Additionally, with assistance from business consultants at Blackswan, you can establish your business in a Dubai free zone. These experienced professionals can provide you with assistance in formulating profit-sharing agreements, wherein negotiations between the involved parties are instrumental in determining local profits and specific sharing ratios.

Select The Form Of Business Structure

If the applicant opts to register a company in Dubai, they can utilize this business structure, which offers a range of advantages and disadvantages for the applicant to consider.

Protocol For Dubai’s Company Registration

The applicant can select a sponsor from the UAE. It is essential to satisfy the Law No 2 of Federal Commercial Companies of 2015. The UAE national can control the 51% ownership, when the applicant likes to set up the outside company from DIFC.

To set up an office within DIFC, the applicant doesn’t need any sponsor. But it can be beneficial to find the sponsor. Then the applicant can transfer the company. To initiate the company registration process, the applicant is required to reserve the company name with DED. Subsequently, a necessary fee must be paid to secure the company’s name. Following this, the applicant is responsible for drafting the articles of association and memorandum of association, which can be downloaded from the Companies Registry. Once the drafting is completed, the next step involves forwarding the application and associated documents to both the DED and the Companies Registry. These authorities then proceed to process the submitted documents. The company then receives the incorporation certificate for carrying out the mentioned activities in Dubai. Then they can choose the license form for carrying out their business. They are:

  • Commercial license for many types of trading activities
  • Professional license to cover artisans, professions, services and craftsmen
  • Industrial License to manufacture and establish industries.

Application Form For Company Registration

  • Business plan of AOA and MOA duly notarised by their authorities
  • Business managers passports
  • Sponsor’s passport (either UAE national)
  • National NOC from Sponsor
  • Bank’s reference letter for every shareholder

For Industry License

  • Copy of Feasibility Study
  • Company’s existing profile
  • Information of the investor

Know more about Industrial Licence in Dubai

For Branch Offices Set Up

  • Incorporation Certificate attested copy
  • AOA and MOA
  • Board Resolution Of Company
  • Three months bank statement of parent company
  • Original Power Of Attorney and Passport Copy.