The How-To: Forming A Company In Dubai
There has never been a better time for company formation in Dubai. That's a statement that would probably have held true at any time in the past decade or so, but right now the signs are particularly promising.
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There has never been a better time for company formation in Dubai. That's a statement that would probably have held true at any time in the past decade or so, but right now the signs are particularly promising. Barely a week goes by without the announcement or delivery of another ambitious project and the UAE's growth projections suggest that it's a bandwagon worth jumping on right now. According to the IMF, the UAE is expected to lead economic growth in the Arabian Gulf in 2017, increasing by 2.5%, significantly ahead of the region's biggest economy, Saudi Arabia, which is forecast to grow at 0.4%.
These figures, along with impressive growth in previous years, have served to attract an ever increasing number of businesses to the country. If you're thinking of joining them, the good news is that company formation in Dubai is a relatively simple and speedy process with strong incentives, notably in the form of the UAE's free zones.
There are other options as to the type of business you can set up in the UAE, onshore or offshore, but free zones are particularly popular with foreign entrepreneurs and with good reason. Among the incentives they offer are 0% corporation and personal tax, 100% company ownership, 100% repatriation of capital and profits, no currency restrictions and 100% import and export tax exemption.
Tempted? Who wouldn't be? So how do you go about it?
UAE free zones: A step-by-step guide
While the technical, administrative and financial aspects of company formation in Dubai can seem daunting, by following a simple step-by-step process with the right support, it is far more straightforward and affordable than you might think. We have helped numerous companies establish themselves in various free zones and can break the process down into the following six steps.
1. Choose your business activity
The nature of your business can have a bearing on which free zones you can or should set up in. For example, some free zones only allow certain types of activity, such as media, medical or transport, and aside from the restrictions, it often makes sense to set up in close proximity to businesses in the same sector. Look at transport links too. If your business relies heavily on import and export, you will probably want to choose one of the free zones situated near an airport or port.
The final decision can be taken later in the preparation process, but establishing your business activity will certainly give you a steer and can help to eliminate some options early on. However, there is no need to pigeon-hole your business, as it is possible to have multiple business activities listed under one trade licence.
2. Choose your company name
The UAE has some strict naming conventions, so before you commit to a company name, make sure it conforms. Any names that include offensive language are forbidden, as are any company names that refer to Allah, Him or indeed any other religious, sectarian or political groups, such as the FBI or Mafia. If you choose to name your business after a person, that person must be a partner or owner of the company and their full name must be used – no initials or abbreviations.
A business set-up expert will be able to give you chapter and verse on all the naming conventions. You can save a lot of time and effort by running your proposed name past them to check whether it passes and if it doesn't they can help you come up with something that does.
3. Finalise all incorporation paperwork
You will be required to complete an application for your chosen company name and activity, to be provided along with copies of shareholders' passports to the relevant government authorities. Some free zones will require additional documentation, such as a business plan or Non-Objection Certificate (NOC) – a letter from a current sponsor confirming that you are allowed to set up another business in the UAE. While perhaps the most arduous of all these steps, the paperwork does not have to be too taxing providing it is undertaken with expert help. Your business set-up partner can advise you on the paperwork required and help you complete it.
4. Receive your license notification
This is the easiest step of all. Once your application has been processed, the government will issue you with your company licence. At Virtuzone we notify our clients when their documents are ready to be collected.
5. Open a bank account
Once your paperwork has been returned, you will have all the documentation you need to open your corporate bank account. The UAE is home to many banks, both local and international, including Emirates NBD, Abu Dhabi Commercial Bank and the Commercial Bank of Dubai, along with global names, such as HSBC, Citibank and Barclays. You can either approach the bank of your choice or ask your business set-up partner to arrange meetings with a number of institutions to help you choose the most suitable option.
6. Process your visa
And so to the final step of company formation in Dubai. As well as applying for your own visa, many free zones allow you to put in applications for staff and dependants – the exact number you can submit will depend on which free zone you choose to set up in. So, if you are looking to obtain visas for a spouse, child, maid or driver, it is best to seek expert advice to ensure that firstly, it is possible to do so in your chosen free zone, and secondly, that both you and anyone you are hoping to sponsor for a visa meet all of the entry criteria. Assuming this all checks out, the process is made up of four simple stages: entry permit, status adjustment, medical fitness test, then Emirates ID registration and visa stamping.
That's it! With these six steps completed, you're good to go and do business in your chosen UAE free zone.
Make it easy with a business set-up partner
Company formation in Dubai is not only simple, thanks to the accommodating conditions of the free zones, but with the right experienced support, the process can be completed in just over one week.
Of course, I've simplified it somewhat. Each step can throw up complications that could derail the inexperienced applicant, and that's where a business set-up partner like Virtuzone comes in. A little local knowledge goes a long way, and we can guide you through all six steps, as well as liaising with UAE government authorities on your behalf along the way and spotting potential problems before they arise.
Related: Offshore Company Formation: A Springboard To Success