Everything you need to know about starting a business in Dubai
For many investors, the acquisition of a property in Dubai is also synonymous with the creation of a business in the country! You are in this case, you want to create your company in Dubai? But you still doubt, the fault of the prejudices which die hard; the real estate market, like the entrepreneurship market, in Dubai is sometimes wrongly criticized! Thanks to the many tax advantages, the United Arab Emirates, and especially Dubai, are the perfect place to set up your business and expect prosperous returns. But you don’t know how to start this new adventure, don’t worry, we have concocted a perfect installation guide for you. Above all, Dubai is the city where everything is possible, and creating your business is no exception, it will be simple, fast and without the need for a lot of capital at the start. Let yourself be guided, we explain everything to you!
Why start a business in Dubai?
Entrepreneurs from all over the world and large companies have not chosen Dubai by chance, here are the main reasons for their establishment in the country:
First, taxation is particularly favorable and advantageous: tax regime with tax and VAT exemption on your company
The administrative procedures for setting up a business are simplified compared to France
Depending on your wishes, you can make a choice of status for the different structures
The laws are repealed in favor of companies, and you benefit from a registration creation quickly
Dubai is located at the crossroads of Asia, Africa and Europe, it is a strategic geographical placement
Dubai’s economic development is exponential
Prerequisites before you start
First of all, you need to know a few essential prerequisites to make sure you start off on the right footing, and launch your new business with confidence:
No minimum capital contribution will be required to set up your business
You will be required to rent a physical office in Dubai for domiciliation before setting up a business. You do not have the right to use your home address, whether in Dubai or France, as the address for your company’s registered office.
You do not have to be a permanent resident in Dubai, however you will be asked to obtain a permanent residence permit, which you will have to renew every 6 months.
For full ownership of the company, i.e. 100%, you will have to choose to establish yourself in a free zone
In Dubai, there are 3 different licenses, the commercial license, the industrial license which is used for manufacturing and the professional license for artisans, or the sale of services. These licenses are essential to start any lucrative activity.
They are valid for 1 year, and you must repeat this process each year. To give you an idea, a commercial license is worth between 3700 € and 6500 €.
If you opt for an LLC, a limited liability company, or a public/private joint stock company, you will be subject to sponsorship, this company must own 51% of your company.
You will need to be able to present the following documents to the organizations that will ask you for them: a business plan, the administrative application form, the duplicate of your license and your passport, and a CNO if you have an LLC and a sponsor.
Creation of companies: the solutions available to you
An offshore company
In case you do not wish to reside in Dubai, you have the possibility of opting for the creation of an Offshore company. It is the best solution for doing business in Dubai while continuing to reside in France.
However, you will need to pay attention to a few points, because the opening of an Offshore company does not grant you all the rights in Dubai. Indeed, this implies that you will not have the right to have an employee, or an office, or any supplier in the country! In addition, be aware that it remains very complicated to open a professional bank account in Dubai with this kind of company. We advise you to be sure that you have a bank that accepts you before starting the rest of your steps.
But there are significant advantages. If you make your choice on an Offshore company, you will own it up to 100%, and will not have to pay any corporate tax.
Don’t forget that you can create your company in the free trade zones, but if you stop at another zone, then you will have to find a sponsor!
Choosing an Onshore Company
The other solution being, of course, direct establishment in Dubai and to do this you will have the choice between a freezone or non-freezone organization.
1. Free zone companies, also called freezone
Creating a freezone company in Dubai has multiple interests. Thanks to this, you will be in possession of 100% of the capital of your company, which will not be the case outside these areas. You will automatically be given a residence and work visa, and again you will not have to pay any taxes. Another notable benefit, all your import-export exchanges, outside the Emirates, will not be taxed by customs.
The activities accepted for the creation of a company in a free zone are as follows: industrial manufacturing activities, service activities or advice to a third party, sales of goods or import-export.
We have listed the 30 freezones currently available in Dubai:
Dubai World Trade Center Free Zone,
Dubai Internet City,
Dubai Knowledge Village,
Dubai Multi Commodities Centre,
International Media Production Zone,
Dubai Production City,
Dubai World Central,
Dubai International Financial Centre,
Dubai Media City,
Dubai Gold and Diamond Park,
Dubai Studio City,
Dubai World Trade Center Free Zone,
Dubai Airport Free Zone,
Dubai Design District,
Dubai Healthcare City,
Dubai Silicon Oasis,
Dubai International Academic City.
2. Companies located in non-free zones
Outside the free zones, your company will be able to practice all the activities you want, there is no more obligation to respect on this side.
But, because there is a but, you will have to find a local partner, a sponsor, to create your company. He will own 51% of your business, but don’t worry, that doesn’t mean he will get that percentage of your profits.
Steps to get you started
1. The project
First of all, you will have to define your project, because competition is severe in Dubai. This is why you need to think carefully, in advance, about what you want to do. Where are your direct competitors located, what type of clientele do you have, will you need commercial premises or employees, and will the latter be French or Dubai?
These questions correspond to the implementation of your business plan, and you will also have to think about other things such as: Is it necessary for you to establish a financing plan, will you set up in a free zone or not?
Take the time you need to draw up your provisional business plan as close to reality as possible. It is crucial that it is effective in considering your business creation project and that it is profitable. In addition, be aware that it will be requested by banks and when you claim your registration.
2. The legal form
In order to ensure fair profitability, you will have to decide on the choice of the legal structure of your company. In addition, it is essential for obtaining your commercial license.
Among the type of company that are most used, there are:
Branch of foreign company,
Company branch in a free zone,
Local Business Branch,
Limited Liability Company,
3. An attractive name for your company
In Dubai, you don’t give your company whatever name you want, there are fairly restrictive rules. Prohibited, for example, all names with a religious, political or sectarian connotation. You also won’t be able to use any coarse-sounding vocabulary. Prohibited also, the names of companies composed of initials, the name must be displayed entirely and the person must work in the company.
Once you have made your choice, you will drop it off at DOEDD. It may be that the organization refuses your name, it is then a waste of time and money, so think carefully before presenting yourself!
4. Your company registration
To register your company quickly, prepare all the required documents and present yourself at the Dubai company registration office. The process is simple and quick.
Once your company is registered, you will be able to move on to the next step: the formalities of the appropriate license.
5. Your business license
As we have explained to you, this business license is required and mandatory to establish in Dubai. After choosing what type of license you want, you can go to the DED office, if it is a non-freezone company, or to the chosen free zone. Bring all the required documents and this is when you will have to pay the fee for the year of your license which is between 15000 and 25000 AED.
You now know everything there is to know to set up a business in Dubai. We can never repeat it enough, the most important thing is to have a solid business plan in place. Indeed, it is the guarantee of a serene and prosperous activity! Lucrative activities are very numerous in Dubai and you will have to succeed in making your place in this flourishing financial market. We wish you great success!