Dubai keeps getting more and more foreign investors because it has great services and infrastructure and is considered a tax-free country. But if someone wants to start a business in Dubai, they need to pay close attention to every step and hire a local agent to handle the company formation process.

Entrepreneurs from Dubai and other countries can choose the kinds of businesses they want to start and register them according to the laws in place there. It’s important to note that these rules are slightly different for local investors and investors from other countries who want to do business in Dubai.

Below, our company formation experts in Dubai explain the main requirements for setting up different types of businesses.

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Table of Contents

The Company Law in Dubai

The Company Act, which covers a wide range of business types, has rules about how to start different kinds of companies in Dubai.

If a foreign investor wants to start a business in Dubai, they should know that the requirements for a certain business form will change depending on whether the business is in central Dubai or in one of Dubai’s free zones.

If a foreign business owner wants to start a company in Dubai, he or she will need a local partner or investor. When it comes to a free zone business, foreigners can own it all.

When it comes to foreign investors who want to set up businesses in Dubai, our local experts can tell you more about what the Company Act requires.

Keep reading : Dubai Mainland Company Formation

Types of business licenses in Dubai

Foreign investors can set up different kinds of businesses in Dubai based on what they want to do with their businesses. Before choosing what kind of business to start, they have to choose which kind of business license to get. The Dubai Department of Economic Development oversees three different kinds of business licenses. These are:

The commercial license is open to all kinds of companies that do business, such as sales. The industry license is for businesses that make things, process things, or package things. The professional license is for people in Dubai who work as sole proprietors and provide services like consulting.

If the individual wants to start a business in one of Dubai’s free zones, he or she will need the same kinds of business licenses.

The types of companies available in Dubai

Before you can start a business in Dubai, you need to choose the right type of business entity. In Dubai, there are four main types of companies, but each type has its own subtypes. In Dubai, the following kinds of businesses can be registered:

Companies,
Partnerships,
Branch offices,
Free zone companies.

The Dubai limited liability company is the most common type of business. The other kinds of businesses that can be registered in Dubai are:

the civil company,
the joint venture company,
the private shareholding company,
the public shareholding company.

There are three types of partnerships: general, simple limited partnerships, partnerships-en-comandite, and partnership businesses. Partnership businesses, on the other hand, are usually only open to people who live in Dubai.

There are three kinds of branch offices in Dubai:

branches of foreign companies,
of civil companies,
of Dubai and UAE companies,
of GCC companies,
of free zone companies.

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Requirements for opening a limited liability company in Dubai

In Dubai, limited liability companies are the most common type of business. It can be a private or public company, and it has to meet different rules. Whether the company will be formed in Dubai or in one of its free zones determines how the shares will be held.

If you want to start a limited liability company in Dubai, you must meet the following rules:

If the company is listed in Dubai, it must have at least two shareholders. If it is set up in Dubai free zone, it must have at least one shareholder.
A business based in Dubai doesn’t need a minimum amount of share capital. However, in a free zone, each free zone authority sets the required amount of money.
For a limited liability company to be registered, the memorandum and articles of association need to be written.
The business must have a registered home in Dubai or in the free zone where it will work;
The business will also need a bank account with a local bank;
The business license needs to be obtained based on the actions that will be taken.

No matter what kind of business is chosen, a local agency must be chosen so that the company can be registered with the Dubai Department of Economic Development. Representatives from our Dubai company formation service can do this properly.

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Setting up sole traders and partnerships in Dubai

The simplest type of business in Dubai is a sole proprietorship, which doesn’t require anything special other than a residence permit for a foreign national. The owner of a sole proprietorship can run the business, and he or she will get all of the profits. However, the owner will be fully responsible for all of the company’s debts and responsibilities.

The partnership can be a great way for certain types of foreign businesses that want to move to Dubai to do so. A partnership, whether it’s a general or restricted partnership, is formed by writing up a partnership agreement. In Dubai, a sole proprietorship or partnership does not need to have any share capital.

Since these are the easiest companies to set up in Dubai but don’t offer full safety to their owners, they aren’t used very often.

Keep reading : Company Registration in Dubai

Business forms are available for foreign companies in Dubai

Both the branch office and the subsidiary are options for foreign companies that want to set up shop in Dubai. While the first type of company will have to do the same things as the parent company, the second type, called a subsidiary, has more freedom in what it can do.

Both branches and companies can be set up in the main part of Dubai and in Dubai’s free zones. Most of the time, the subsidiary will be set up as a limited liability company.

The contact office is another type of business that lets foreign companies look into the Dubai market. To do business, however, this must be turned into a branch office or a separate company from the parent company.

Our company registration agents in Dubai can tell you more about what you need to do to start a business.

If you want to start a business in Dubai and need help picking the right type of business, our local consultants can give you more information. You can count on us for a wide range of company incorporation services in Dubai, such as preparing and filing the papers for incorporation, getting a license for your business, opening a bank account, and doing your accounting.

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