The number of foreign companies doing business in Dubai is increasing exponentially each year. Great company market scope and the lucrative Middle East product makes Dubai one of the largest business throbs with a speck of multiculturalism.
The UAE’s economy is one of the world’s open economies, making it Arab’s second-largest economy. This impressive growth of previous years has served to entice. ‘n’ number of budding businesses, the UAE houses a wide range of growing economies that continue to grow and expand, thus offering diverse business opportunities.
Process of company registration in Dubai
While doing business in Dubai, one needs to register the company with the government. Don’t panic; this is simple, short, easy, and follows incentives. The whole registration process is short; moreover, a foreign investor can have 100% control over the company. The Process of Company registration in Dubai is a tedious task if you are new to the business field. There are many types of business that you can tent in Dubai, such as
- Free zones
It registers businesses that operate outside its boundaries. It caters and nurtures those companies that need “tax-relief-invoicing-facility.”
Out of these three free zones are the ones that attract a lot of businesses. Either you can set up a whole new business or open a new branch office. A national service agent plays a pivotal role in the registration process.
- The agent should be a resident of the UAE.
- This agent will act as a link between your company and the local government.
- Without an agent, the registration process is incomplete.
Hence make sure to hire an agent wisely.
If you chose “free-zone,” then you can avail incentives such as
- 0% cooperation and personal tax
- 100% control over the company
- 100% repatriation of profit and capital
- There are no restrictions on currency and 100% tax exemption on imports and exports.
They are luring, aren’t they?
What are the documents required for the registration?
- Certificate of incorporation from the mother country.
- Complete audit accounts of the parent company of the past two years
- Decision made by the board of directors, i.e., the board resolution
- The memorandum and articles associated with the company
- A certificate that shows a bank guarantee
- Issuing of bank guarantee should happen in favour of the Ministry of Economy and planning.
- The bank guarantee should hold a minimal amount AED 50,000 in the account.
- Renewal of guarantee should happen every year on the approval of the Ministry of Economy and planning.
- Power of Attorney (a certificate that gives complete control to the company appointed general manager).
- “Service agent agreement” (agreement with the National agent).
After consolidating all the documents, the procedure to complete your registration will be simple and easy.
- Apply for a business license
The investor has to fill an application regarding the issue of a business licence to MEC. This application should encompass a “Service agent agreement.” The agreement should specify whether the company is native (UAE-based), or the agent is a resident of the UAE.
- Forward application to the Economics Department
Here the Economic Department avails your application. The foreign company should secure the local government’s trust and get its approval. This step is significant because you can not set up a business without consent. Therefore the agent plays a vital role in conveying your ideas to the government.
- Forward your application to the FFC committee
Further, this application goes to the FFC (Federal Foreign Companies). Confirmation of the nature of the business happens here. Justification regarding the company type is necessary. In Dubai, certain activities are illegal and prohibited. So, make sure you carry a thorough check before investing.
- Ministerial licence
After the approval of FFC, the Ministry of the economy will issue a licence. Issuing of this licence happens by verifying the documents. The issued licence will contain detailed information regarding the legal/approved activities.
- Permission for Branch offices
Here the economic department, Commerce register, issues the permission to set up a branch office.
- Registration certificate issue
It is the final step in the registration process. Here, the foreign company’s registration takes place at the Dubai Chamber of Commerce and Industry in Dubai. The government will issue a registration certificate in favour of the foreign company. It justifies the incorporation of a foreign company and can officially start its functioning.
- Completion of one step leads to the next step
Completion of one step leads to the next step. This feature is an attribute of the local government in the UAE. This bureaucracy of UAE ensures strict measures to qualify for any business incorporation.
- Here are some conventions followed in Dubai
- English is widely spoken in UAE.
- Only the oil and gas industry or foreign entities have to pay income tax, and all other corporations are exempt from tax.
- No sales tax.
- No tax on capital gains.
This table covers the rough estimate of the time required to complete the company registration process of your company.
|The registration process for||Time taken|
|Private Ltd||10-15 days|
|Branch office||10-30 days|
|Agent agreement||2-3 days|
|Membership of chamber||3-10 days|
|Bank account||3-7 days|
The fee for the approval and assistance in Dubai
This table covers all the high costs that need to finish the new company registration of your company.
|Services||Maximum fees in AED||Minimum fees in AED|
|BRANCH OFFICE (TOTAL APPROVAL)||50000||35000|
|AGENT AGREEMENT ALONG WITH NOTARY||500||300|
|COMMERCIAL LICENSE FEE||800||700|
|TRADE LICENSE FEES||20000||15000|
|PRIVATE LIMITED (approx)||90000||70000|
|MEMBERSHIP OF CHAMBER||3000||1500|
|ECONOMIC DEPARTMENT FEE||3500||3000|
|LOCAL DIRECTOR SERVICE||10000||7000|
Limited liability Company (LLC)
LLC set-up in Dubai requires approximately AED 35000. It roughly takes around 15-30 days to set-up an LLC.
Conclusion- Why Dubai?
Unlike other countries such as Mexico and Spain, company registration in Dubai is simple and not time-consuming. Though company registration in Dubai is easy, it was not venturing into until past decades. With a lead in the economic growth of 2.5% in 2017, there is a good profit instead of a loss.