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Setting up a Company in Dubai: Step-by-step Guide in Dubai Tax-Free Zone

Jan 18, 2024 | Dubai Tax Free

Are you planning to establish a company in Dubai’s tax-free zone? This blog overviews the essential steps to thrive in this flourishing business hub.

Effectively position your organization for growth in Dubai’s dynamic market; keep reading to learn more!

Step-by-step Guide to Setting up a Company in Dubai Tax-Free Zone

Dubai is a global business hub, attracting entrepreneurs and investors from all around the world. Its strategic location, tax-free zones, and top-notch infrastructure make it a highly desirable business destination.

Whether you’re planning on setting up a company in Dubai or are already in the process, this comprehensive guide will take you step-by-step, ensuring you make the most of the opportunities available in this thriving city.

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Why Setting Up a Company in Dubai?

Dubai is located at the crossroads of international trade, providing a significant advantage for businesses seeking to establish themselves in the region. Being a gateway to the Middle East, Asia, and Africa makes Dubai an ideal location for companies seeking to access these markets.

In addition, Dubai’s diverse and highly skilled workforce, composed of individuals worldwide, provides businesses access to a broad range of talent, skills, and knowledge.

Furthermore, the city’s stable political environment encourages investment and innovation, supporting business growth and development. These advantages have helped Dubai become a prosperous and fast-growing economy in the region.

Lastly, Dubai offers numerous tax-free zones that provide a range of incentives for businesses.

Understand the Different Types of Business Entities

Before setting up a company in Dubai, you must understand the various business entities available. There are three main categories: mainland companies, free zone companies, and offshore companies.

Each has its own set of rules, policies, and benefits, and we will focus on setting up a company in Dubai’s tax-free zones, which offer 100% foreign ownership, tax exemptions, and world-class infrastructure.

Choose the Right Free Zone

When setting up a company in Dubai, choosing the right free zone to suit your business needs is essential. Dubai has over 30 free zones, each catering to specific industries and offering unique benefits.

Consider factors such as the business activity, location, and available facilities before deciding. Some popular free zones include the Jebel Ali Free Zone (JAFZA), the Dubai International Financial Centre (DIFC), and the Dubai Multi Commodities Centre (DMCC).

Determine the Legal Structure of Your Company

After choosing the appropriate free zone, it’s time to determine your company’s legal structure. This will depend on factors such as the number of shareholders, the type of business activities, and the desired level of control.

Common legal structures for setting up a business in Dubai include a Limited Liability Company (LLC), Free Zone Establishment (FZE), and Free Zone Company (FZC).

Register a Trade Name

As you work on setting up a company in Dubai, it’s essential to register a unique trade name that complies with local regulations. In addition, your trade name should reflect the nature of your business and be easily identifiable.

Keep in mind that some words and phrases are prohibited or require special approval.

Obtain Initial Approvals and Licenses

To officially begin the process of setting up a company in Dubai, you’ll need to obtain initial approvals from the relevant authorities.

Depending on your business activities, this includes the free zone authority, the DED or Department of Economic Development, and other specialized agencies.

You will also need to secure the appropriate trade license, which could be a commercial, industrial, or professional license.

Prepare the Required Documents

When setting up a company in Dubai, you’ll need to prepare a set of documents, such as your passport, visa, and business plan. The required documents will vary depending on the free zone and business activities.

Be sure to have these documents translated into Arabic and notarized as necessary.

Open a Corporate Bank Account

Once you’ve obtained the necessary approvals and licenses, it’s time to open a corporate bank account for your company. This is crucial in setting up a company in Dubai, as it allows you to manage your finances and conduct business transactions.

Research the various banks available and choose one that best fits your needs.

Set Up Your Office Space

When establishing a company in Dubai, workspace selection is crucial. In some free zones, virtual offices offer a professional address and meeting rooms without needing a physical office.

For those requiring a physical workspace, Dubai’s free zones offer flexible options, including flexi-desks, shared offices, dedicated offices, and warehouses, catering to different business sizes, natures, and budgets.

Dubai’s free zones provide cost-effective office solutions, regardless of physical presence in the UAE.

Hire Employees and Obtain Visas

Building a solid team to support your business operations is essential to setting up a company in Dubai, even if a physical presence in Dubai is optional. If your employees will work remotely and not within the UAE, they generally do not need visas.

However, if they plan to visit the UAE for business meetings, conferences, or other work-related purposes, they might require short-term business or visit visas, depending on their nationality and the duration of their stay.

Remember that each free zone may have its own set of rules and requirements for hiring and sponsoring employees.

Frequently Asked Questions

Can a non-resident establish a company in Dubai?

Yes, non-residents can establish a company in Dubai, particularly in its free zones. The free zones offer 100% foreign ownership, tax exemptions, and other benefits to attract international investors. Each free zone caters to specific industries, and non-residents must comply with the rules and regulations of the chosen free zone to establish their company.

How much will I spend to set up a company in Dubai Freezone? 

The cost of setting up a company in a Dubai-free zone may vary depending on the chosen free zone, business activity, and office requirements. Typically, costs range from $5,000 to $15,000, including registration, licensing, and office space fees. You may seek professional advice from a business advisor or accountant to find the one that best suits your budget and business needs.

What is the difference between Freezone and LLC in Dubai?

A Free Zone company operates under tax exemptions but is typically restricted to conducting business within their respective Free Zone or overseas. On the other hand, an LLC (Limited Liability Company) can operate anywhere in the UAE, giving them a broader scope for conducting business locally. This freedom, however, comes without the tax benefits that Free Zone companies enjoy.

Conclusion

By following this step-by-step guide, you can confidently navigate the process and maximize your business potential in the Dubai tax-free zone. Both startups and established businesses can take advantage of Dubai’s thriving market and supportive environment.

Consult us at Sterlinx Global to start setting up a company in Dubai tax-free zone.

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