Four Important Issues To Consider First

You’re an expatriate and you want to set up a business in Dubai. Where do you start? What are the legal procedures you should pass through? Where is the best location to set up your business? Do you set up in a free-zone or not? What are the Visa requirements for you as the owner of the business? Setting up a business in Dubai requires six procedures that on the average may take eight days to complete. However, prior to beginning the process, consider the following vital information:

Ownership:

If you are looking to have 100% ownership of your company, then it has to be set up in a free zone. This rule does not apply to oil and gas companies with concession agreements, electricity companies, and companies into water treatment, transmission, and distribution.  There are 20 different free zones in Dubai, 46 in the United Arab Emirates (UAE). For a full list of them click on this link. Free zones are also good options because they offer ease in setting up businesses. However, if your business is not set up in a free zone, then it is advisable to set up a locally registered limited liability company (LLC) for which a UAE national will need to have 51% partnership as a “local sponsor”. A sponsor must be paid a negotiable yearly fee and building a good relationship with your sponsor will be to your own advantage.

Licensing:

In order to set up your business,  it must be licensed in the UAE. The type of business you set up will determine the kind of license you will need. Under UAE law, there are five types of businesses that foreign entities can set up: a permanent establishment, a branch office, a civil company (limited to Sharjah and Dubai), a commercial agency agreement, or a UAE free zone entity. E

Taxes:

There are no corporate taxes levied by the federal government on income or wealth of companies and individuals. However, there is an applicable duty levied by each municipality in each emirate at the issuance or renewal of a trade licence equal to 10% of the annual rent (offices and warehouses) and 5% of total salary remuneration to employees. Besides companies set up in free zones, a progressive tax is levied on companies that conduct trade or business through a permanent establishment situated in an Emirate (permanent establishment type of business). For further tax details, visit this link.

Visa Applications:

If the business you wish to startup in Dubai is a local company, it will be important that the UAE national who is your sponsor applies for you as the investor of your business. For staff, the number of visas your business will be able to apply for will depend on the size and type specifications of the business. The application process is not too rigorous and it does not take a lot of time. Business is encouraged in the UAE so business owners are encouraged to come.

These are some of the basic regulations and laws you need to know to set up your business in the UAE. Some specific details must be dealt with during the process as well, such as finding the right free zone to accommodate your type of business and your proposed business size. It is also advisable to hire a business advisory firm to help set up your business as this will simplify the process.