Company Incorporation in Dubai


Over the last few years, Dubai has become the hub of international business and trade, and eventually, several business communities around the globe float their business operations in the city. It is vital to note that, before plunging in head first into the process of company incorporation in Dubai, investors should have some local knowledge regarding the region, business environment and procedures first.

While new business ventures are boosted by the regional government, keep in mind that businesses in Dubai must have a local partner who holds a majority share, namely 51%. The partner can be an individual or a company, and they are not obligated to contribute financially to your business. Also they will receive a regular fee for agreeing to become your sponsor. The next step in company incorporation in Dubai is to register the company. When this is done, you will also have to show proof of funds to the Ministry of Commerce. These funds may be withdrawn once you have shown that you have the money needed to set up the business.

There are two categories of company incorporation in Dubai. The first is to set up an establishment in one of the free zones. A company set up in the designated free zones is owned totally by the person who sets it up. This means there is no need for a local partner. This type of incorporation has many advantages including, the freedom to carry out multiple activities, no tax, lower charges on renewals, may be formed by one person, easy to liquidate and you can carry out international activities. But be warned that free zone companies are not allowed to conduct business locally. So if you are considering a business like retailing, government supplies, or tourist related services like a restaurant, you will be better off registering as a local company.

The second type of company incorporation in Dubai is known as Offshore Company. In this category, , the business operates outside the boundaries of Dubai, but maintains a sub-office in Dubai. This facility is essentially utilized by companies looking for regional “tax relief- on invoice .” The benefit here is that it does not require any minimum capital; what’s more there is even no need for an actual office. However, according to the new international standards, such companies must appoint one director, maintain financial accounts, and produce financial reports that have to be audited by a professional approved by the free zone. Additionally the company must hold annual meetings. All company regulations have to be within anti-money laundering guidelines.

When starting a new company, it is best to get professional help. While this may involve certain cost , keep in mind that substantial percentage of new ventures lose track in the first five years due to lack of professional guidance. Even if you think you know your business, professionals can help by checking the market size against your potential offerings, aiding in how to deal with the competition or how to benefit from their weak points and a host of other ways.

Considering that a majority of the business in Dubai begin as small units with equity funding collected from family and friends, because bank funding is not available in the country for initial years; it is best to ensure that your business does not fail on account of finance.

Before going ahead with company incorporation in Dubai, understand your strengths, and weaknesses, find out about the opportunities and possible threats, do your homework regarding the laws of the land. Taking these precautions will ensure that your new venture starts off on the right foot and stands a better chance of success.

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