Options Other Than Free Zones For Company Formation In Dubai

Dubai is referred to as the Middle East’s business capital and rightfully so. It was once merely a compact pearl-fishing community, but today it is one of the world’s most rapidly growing cities, the credit for which goes to all the topnotch business leaders there.

While still a small city, Dubai now thinks big. It is one of the seven emirates that make up the federation known as the UAE. When it comes to company formation in Dubai, the city offers a plethora of options in various sectors, such as construction, banking and industry services, leisure, retail, technology, and more.

Much like the rest of the UAE, Dubai’s free zone system is providing entrepreneurs and small businesses innovative and straightforward solutions for complicated challenges. If you are a foreign investor, it is completely understandable (for whatever reason) if you want to do not wish to do business in one of the free zones.

In that case, you have four other potential options.

1. An Overseas Setup

If you already have a foreign company and your business involves trading, you will be able to do so without having a physical setup in Dubai. Of course, you can fly in and out of the city as desired.

However, the products or services you are offering must be specialized in order to be eligible. While operating overseas, you may also find it challenging to expand your business since establishing the required business relationships will be more difficult.

Under the UAE’s law, you will also have to acquire a license from and register your company with the relevant local authorities. This option may seem convenient, but there can be a lot of hassle involved in it.

2. A Physical Local Setup

It is relatively more uncomplicated to establish a physical setup in Dubai and apart from the free zones; there are two other options available.

·        Onshore (LLC) company: If you wish to operate your business in Dubai, one of the two options is to establish a Limited Liability Company (LLC). You will have to hire a manager for the daily management of your company. You will also have to hire a locally accredited auditor and have a Local / National Service Agent (NSA) for successful company formation in Dubai.

·  International / Offshore company: Dubai also has a regulatory system for companies that do not conduct local business dealings and commercial activities. In other words, your company will only qualify if it will not be engaging in any business within the city (or even the country).

3. A Joint Venture

This option may prove to be worthwhile if you wish to further develop your existing operation and expand it into Dubai’s market. You may look into potential local entities, and ultimately take up an equity role and stake in managing and operating it.

In other words, you will be teaming up with a local partner who may contribute in any of several ways. For instance, the partner may impart their professional expertise and skills, offer their local connections, and/or provide financial support.

Ultimately though, you may end up needing to have an LLC company, whether in a free zone or not, in order to set up a joint venture. Fortunately, you will not have to apply for a license, nor will you have to publish your agreement for the venture.

4. Acquiring Or Investing

Somewhat of an additional, bonus option that you may consider is simply acquiring or merging with an existing company by investing into it. In Dubai, you can both the assets and shares of existing companies and businesses.

Conclusion

All four of the above options, even the free zones, have their own distinct pros and cons that you should consider looking into. Make sure you proceed diligently to avoid legal problems in the future. Ultimately though, what kind of company you set up and where you set it up will depend on the kind of business you wish to do or are already doing and your immediate and long-term goals.