Dubai Company Registration: Complete Procedure, Advantages & Tax Rates

Introduction: Company Formation in Dubai

Are you looking to set up your business in the United Arab Emirates? If  yes, then one of the best location for business registration in the UAE is Dubai. Dubai is home to more than 30 Free Trade Zones (FTZ), which is one of the major reasons for international business owners to establish their businesses in such a thriving location.

Dubai company registration is a great decision; it doesn’t matter if it is done through an offline process or an online portal. It is not hidden that Dubai is starting to become a modern business destination, and be it budding start-ups or full-fledged MNCs, all are eventually finding their way to settle their business in the Middle East.

Dubai is ready to offer you a mix of innovation with worthy businesses as competitors. Company registration in Dubai will give you and your business solid exposure as well. There are various investment chances that you will get once you register a company in Dubai.

There recently have been some amendments in the business laws regarding the issue of ex-pats, and that’s why you should take advantage of this time and give it all to register a company in Dubai.

If you are new to this area of work, don’t worry; we at OnDemand International are here to provide you with an A1 company registration service. If you feel the need for some advice, you can easily rely on our experts, who are there to help you 24*7.

Procedure for Company Formation in Dubai, UAE

Company registration in Dubai may seem like a tough job, but it isn’t. Especially when you take the assistance of experts from OnDemand International. 

Here are the key steps for registering a company in Dubai:

Step 1: Determine the Type of Company

The first step is to determine the type of company you want to establish in Dubai. You can choose from several options, such as a Limited Liability Company (LLC), Free Zone Company, Branch Office, or Representative Office.

Step 2: Choose a Business Activity 

After determining the type of company, you should decide on the business activity you want to engage in. It is essential to select the right activity, as certain activities may require special licenses or permits.

Step 3: Choose a Company Name

Choose a unique name for your company that reflects your business activity. It must comply with the UAE’s naming conventions, and you can check the availability of the name on the Department of Economic Development’s (DED) website.

Step 4: Obtain Initial Approval

After choosing a company name, you should obtain initial approval from the DED. You must produce your business plan, company name, and other pertinent paperwork.

Step 5: Draft Memorandum of Association (MOA)

Draft the Memorandum of Association (MOA) for your company, which outlines the company’s objectives, shareholders, capital, and other essential details.

Step 6: Obtain Office Space 

If you plan to establish a mainland company, you need to have a physical office space in Dubai. For free zone companies, the free zone authority will provide office space. 

Step 7: Obtain a Trade License

After obtaining initial approval, you can apply for a trade license from the DED. You must provide your company’s MOA, lease agreement, and other supporting documentation.

Different types of corporate licenses in Dubai are:

• Business License: Organizations related to any trading work need to obtain a business license.
• Professional License: Organizations involved in providing services, technicians, or artisans need to attain a professional license.
• Industrial License: Organizations involved with the manufacturing of any kind of industrial venture require getting an industrial license.

Step 8: Enroll with the Chamber of Commerce 

You should enroll your corporation with the Dubai Chamber of Commerce to obtain a membership certificate.

Step 9: Enroll with the Federal Tax Authority

You must enroll your company with the Federal Tax Authority (FTA) to acquire a Tax Registration Number (TRN) and comply with tax regulations.

Step 10: Register with the Ministry of Human Resources and Emiratisation

You should register your company with the Ministry of Human Resources and Emiratisation (MOHRE) to obtain a Labor Card and comply with employment regulations.

Step 11: Establish a Bank Account

Finally, you should establish a bank account in Dubai for your company’s transactions.

The process for registering a company in Dubai can take several weeks, and you may need to seek assistance from our professional service provider to ensure a smooth registration process

Documents Required for Company Registration in Dubai

The required documents for company registration in Dubai may vary depending on the type of company you want to establish. 

For company formation in Dubai, you will generally need to submit the necessary documentation:

• Passport copies and visa copies of all shareholders and directors
• Address verification for all directors and stockholders
• A copy of the trade name reservation certificate
• A copy of the initial approval from the Department of Economic Development (DED)
• A copy of the Memorandum of Association (MOA) and Articles of Association (AOA)
• A copy of the leasing contract/tenancy contract for the company’s office space.
• A no-objection certificate (NOC) from the landlord or the property owner
• Proof of payment for the initial approval, trade license, and other fees
• Company stamp
• A bank reference letter for all shareholders
• Proof of share capital deposit in a UAE bank
• Board resolution authorizing the shareholders to establish the company and appoint directors
• Power of Attorney for the company’s legal representative
  Statement of Good Standing (if the shareholder is an existing company)

It is crucial to remember that some documentation might need attestation or notarization. Additionally, it may be necessary for some documentation to be transcribed into Arabic by a professional translator. 

It is recommended to seek professional assistance from our experts at OnDemand International to open a company in Dubai to ensure that all required documents are provided and in the correct format.

Types of Legal Entities to Open a Company in Dubai

The most popular legal entity in Dubai is the Limited liability companies and a Branch Office. You can also put up a liaison office, a.k.a, representative office. A liaison office is a kind of legal structure similar to a Branch, but its operations are only to serve as a marketing center and as an administrative center for the main firm.

You also have the option to put up an entity in any one of the free zones in Dubai. The legal entities issued in a free zone come under foreign ownership, and there is no involvement of the UAE in it. The entity in a free zone can exist as an FZ-LLC; a free zone limited liability company, or an FZ-Branch; a free zone branch.

Let’s gain a deeper knowledge about them all:

Limited Liability Company

There can be up to 50 stakeholders in limited liability companies, and each one of them is responsible only for their capital share in the firm. LLCs have the permit to host any kind of consulting service. The consulting service can be industrial but not professional, like auditing, practicing law, or accounting.

The Dubai Nationals must own 51% of the LLCs, and there must be a Dubai-accredited auditor. If the partner on an LLC dies, the shares of that partner are transmitted to the names present in the will.

Branch Office

A branch isn’t counted as an individual entity but is seen as an addition to its parent firm. The branch gets its governmental operations and licensing done with the help of a national agent, at a fixed rate for a fee. This fee is to be paid on the license issue date but this would not create any rights or claims on the entity’s operations.

FZ-LLC

Free zone limited liability company is an individual and different legal entity. There are no limitations on the stakeholder’s nationality. The operations are separate and distinct legal entities with limited liability. No restriction on the nationality of shareholders. Operations are limited to the free zone wherein the business is based and those for which the business has a license.

FZ-Branch

A franchise is recognized as an expansion of its parent corporation rather than a separate organization. There is no need to designate a national representative, as there is with a Branch.

Dual License Branch

It is the unit of an FZ-LLC based in Dubai’s mainland. It’s regarded as an expansion of its parent firm rather than as a different unit. Only in particular free zones is it feasible to open a dual license branch. It could be based in the same location as its parent corporation.

Offshore Company

Offshore corporations in Dubai are those that are established and managed outside the nation’s territory. Despite having a basis in another nation, the corporation is entirely foreign-owned and incorporated in Dubai. Offshore businesses are wholly owned by overseas entrepreneurs.

Advantages Of Company Registration in Dubai

• Dubai is your go-to spot to start a business because of its developing economy, superior facilities, business-friendly legislation, and strategic position.
• The licensing process is simple, and Dubai allows for even more than 2,000 different company operations.
• Investors can form businesses in specialized free working zones that have their legal authority and are tailored to certain commercial activities. The DIFC (Dubai International Financial Centre) is an amazing illustration of a financial planning and analysis free trade zone, and Dubai has over 45 of them.
• Dubai’s tax rules protect you from extra taxation, import duties, and other fees, as well as provide complete immunity from the corporation and expert taxes. There is no hidden fee, and all court proceedings are open to the public.
• In the United Arab Emirates, international investors get to own 100% of their company. They have easy accessibility to all of the free trade zones, and new ex-pat legislation has made it easier for expatriates to set up businesses in Dubai.

Cost of Company Registration in Dubai

The cost of registering a company in Dubai varies depending on the chosen business model and the specific activities to be undertaken in the UAE. It is a little difficult to give a single fixed price to determine the registration cost. Standard business activities for LLC company registration in Dubai cost around AED 25,500, while the cost in free zones is slightly lower. 

In addition to that, there are various additional expenses that are incurred while registering a company in Dubai. Such costs include the expenses associated with acquiring licenses and permits, office spaces, business incorporation documentation and so on. 

At OnDemand International, we would provide you with a clear idea of the expenses that will be necessary to register a company in Dubai.

Corporate Tax Rates In Dubai

According to the Ministry of Finance, Dubai will introduce a nationwide corporate tax upon company profits from June 1st, 2023, for the first time.

This is a huge move for a nation that has long drawn firms from all over the world due to its reputation as a tax-free trade hub. Starting from June 1, 2023, companies will be liable for tax.

To help small enterprises and entrepreneurs, the nation’s legal tax rate would be 9% for tax liability over 375,000 UAE dirhams ($102,000), and nil for tax liability up to that level. The corporation tax policy in the United Arab Emirates will become one of the most powerful in the universe.

People will continue to be exempt from taxation on earnings from work, real estate, stock funds, and other sources of earned income not tied to a UAE trade.

Looking for the best places to grow your business in Dubai? Read our blog today.

Dubai Free Zones

Popular free zones in the Emirates, also called as free trade zones, comprises economic areas in which you can trade services and goods at advantageous customs and tax charges. They were established to provide benefits such as 100 per cent foreign corporate ownership and, as a result, to increase international trade in the area.

In Dubai, forming a business in a free zone is simpler than establishing a company on the mainland. Stakeholders want Dubai’s Free Zones because of the simplicity with which they can start a firm, as well as the great business and service environment.

Among the most significant benefits of forming a company in a certified free environment is the VAT relief (Value-Added-Tax). A Free Zone Firm’s operating costs are also low because all expenditures for office buildings, services, and amenities are made in advance on a yearly basis.

The Free Zone firm forming in UAE comes with a slew of advantages for businesses, including VAT exemption, audit dispensation, 100 percent profit return, fast ownership transference, and access to foreign warehouses, among others.

List of Free Zones For Company Registration in Dubai

• Dubai Biotechnology & Research Park
• Dubai Airport Free Zone
• Dubai Auto Zone
• Dubai Car and Automotive City Free Zone
• Dubai Gold and Diamond Park
• Dubai Design District
• Dubai Flower Center
• Dubai Industrial City
• Dubai Healthcare City
• Dubai International Financial Centre
• Dubai International Academic City
• Dubai Knowledge Village
• Dubai Internet City
• Dubai Media City
• Dubai Logistics City
• Dubai Outsource Zone
• Dubai Multi Commodities Centre
• Dubai Science Park
• Dubai Silicon Oasis
• Dubai Techno Park
• Dubai Studio City
• Dubai Technology and Media Free Zone
• Dubai Textile Village
• International Humanitarian City
• International Media Production Zone
• Jumeirah Lakes Towers Free Zone
• Jebel Ali Free Zone
• Dubai Production City
• Dubai South or DWC

Conclusion

Dubai is the biggest business hub for investors, especially for people looking to form a trade in the Middle East. Investors these days look forward to making use of the opportunities Dubai has to offer in terms of resources, visitor traffic in the country, infrastructure field, and import and export of possessions.

At OnDemand International, we bring a wealth of experience and expertise to help businesses in Dubai build their company. Our professional team has in-depth knowledge of local laws, procedures, and requirements to ensure a simple and efficient system. 

We offer comprehensive services to meet your business planning needs, from initial consultations to company registration, visa assistance, office space solutions, and ongoing compliance support. With a deep understanding of the local business environment, we provide valuable insights and guidance, staying abreast of market trends, regulatory changes, and industry best practices. So speak with our business formation experts from OnDemand International and register your business in Dubai today.