BASIC FAQS ABOUT STARTING A BUSINESS IN DUBAI

Often termed as the ‘City of Gold’, Dubai is the central hub that unites three continents of the world. It is the commercially affluent port that offers technologically advanced measures, financial growth, foreign investment, and a world of opportunity to ambitious entrepreneurs.

All these factors drive in a stream of potential businessmen and investors from all over the world, promoting growth like no other place in the world. Furthermore, with the emphasis on technology advancement, like crypt currency and artificial intelligence, the innovation-based business ideas are more in trend.

Startingup a business in Dubai is a relatively easy process if one knows where to begin. Dubai aims to promote cost-effective business setup opportunities with simple legal procedures. Once the legal procedures are sorted out, the actual business setup process does not take more than a week.

But before making the big decision, a lot of research has to be done. Most people have a lot of confusions and questions that create hurdles in their path towards successful company formation. To ease up the process a bit, we are compiling a list of most frequently asked questions and their answers:

What are the different kinds of company structures in Dubai?

There are primarily 5 different company structures depending upon the category of business setup:

• Offshore company

•  Professional Services

• Freezone Company

• Branch Office

• Mainland Business

What are the different categories of Business Setup?

You need to determine the type of legal entity your company is going to form. For that you have seven options:

• Limited Liability Company in the free-zone (can have single or multiple shareholders)

• General Partnership Company

• Limited Liability Company as a wholly owned subsidiary

• Joint Venture Company

• Branch of a local or foreign company

• Public shareholding Company

• Share Partnership Company

The thing you need to keep in mind is that not all free-zones will register all types of companies.

What is a free-zone?

Free-zones are a cheaper option as compared to mainland with limited taxes and a relatively easier, less complicated legal procedure. Free-zone offers 100% foreign ownership and boosts international business. There are 7 free-zones in Dubai, each having its own set of requirements in terms of business activities allowed and industry permits. The only drawback being that companies settled in free-zones are only permitted to trade within their own free-zone and nowhere else.

What is Limited Liability Company?

Mainland or Limited Liability companies are allowed to trade locally or internationally without any restriction. The companies are exempted from all kinds of taxes and can set up an office anywhere, without any geographical limitations. However, to setup a business in Dubai mainland, one needs a UAE national registered as a partner.

Does one have to reside in Dubai to startup a business there?

Setting up a business in free-zone allows 100% foreign ownership so one doesn’t have to be a resident of Dubai. But, most free-zones require companies to have a UAE resident General Manager of such companies.

Does one have to rent an office space for every kind of business setup?

Yes, every business setup requires the owner to submit a proof of physical presence in UAE at time of company registration. Governmental license is only approved when the agency is sure of the validity of your lease agreement. However, this compulsion is not expected of Offshore Companies. 

How long does the company formation process take?

The duration depends on the category of business setup, whether it’s a LLC or a Freezone company. It also depends on the Free-zone you setup your business in and the shareholders of the company. Although most people state that the process takes only 48 hours – 1 week, in reality it can get prolonged to 3-6 weeks.

Does one need a PRO or services of a business startup company?

No, one does not need services of anyone if it’s a Limited Liability Company or if it’s a Free Zone Company having a local partner with at least 51% share in the company. 

If that is not the case, one needs to consider acquiring services of a local agent or business startup solutions.

Conclusion

These were only the basic questions most entrepreneurs have about starting a business in Dubai. For more detailed and comprehensive guide, please look into How To Start A Business in Dubai Free-zone.