How to open a company in Dubai

Dubai is one of the most prominent global destinations for business and investment, as it provides an encouraging economic environment and a flexible legal system that supports entrepreneurship. Thanks to its advanced infrastructure and strategic location, Dubai has become a major center for trade and finance in the Middle East and North Africa region. Whether you are planning to start a small business or a large international project, Dubai offers you a variety of opportunities and possibilities to achieve your business goals.

In this article, we will review the basic steps and requirements necessary to establish a company in Dubai . We will provide you with detailed information about the different types of companies you can create, as well as the legal and administrative procedures that must be followed to obtain the necessary licenses. We will also highlight the costs and financial requirements associated with establishing companies in Dubai, providing you with a comprehensive overview that will help you plan and make informed decisions about your future investments.

Your full understanding of local procedures and laws will make the company formation process smoother and help you avoid potential obstacles. So, let us begin our journey of exploring how to open a company in Dubai, the city that never sleeps and the gateway to global business.

How to open a company in Dubai

Types of companies in Dubai

Dubai is considered one of the premier destinations for entrepreneurship and investment in the Middle East, offering a flexible and supportive business environment for companies of different sizes and sectors. When thinking about opening a company in Dubai, it is important to have a clear understanding of the different types of companies you can establish. These types can be divided into three main categories: free zone companies, local companies, and international companies.

Free zone companies

Free zone companies are a popular choice among foreign investors due to the many advantages they offer. These companies feature full tax exemptions, 100% foreign ownership, and the freedom to transfer all profits outside the country. In addition, free zones provide advanced infrastructure and integrated services that support companies at various stages of their growth. The most famous free zones in Dubai are: Jebel Ali Free Zone (JAFZA), Dubai South, and Dubai Technology Zone.

Local companies

Local companies are those that are established within Dubai’s borders and are subject to local laws. Establishing this type of company requires a local partner to hold at least 51% of the company’s shares, while a foreign investor can obtain 49%. Despite this requirement, local companies provide full access to the local market and benefit from government contracts. These companies are suitable for investors who want to build long-term business relationships within Dubai.

International companies

International companies are those companies that wish to operate within Dubai but remain subject to the laws of their home country. International companies can establish branches or representative offices in Dubai, allowing them to take advantage of the advantages of the local market without having to change their entire legal structure. This method is ideal for large companies seeking to expand their business in the Middle East while maintaining their international presence.

Registration and licensing steps

Establishing a company in Dubai requires going through several specific steps to ensure compliance with local laws and regulations. These steps include:

Choose the legal form

The first step in the process of establishing a company is choosing the appropriate legal form for the company’s activity. Several legal forms of companies are available in Dubai, such as a limited liability company (LLC), a branch of a foreign company, or a private joint stock company. The choice of legal form depends on the type of business activity, the size of investments, and the desire to bear legal responsibility.

Submit the required documents

After determining the legal form, a set of documents necessary to register the company must be submitted. These documents usually include:

• A copy of the passports of the founders and partners.
• A detailed business plan explaining the company’s goals and activities.
• The company’s articles of incorporation and articles of association.
• Proof of office address or commercial location.
• Initial approval from the competent authorities.

Obtaining approvals

After submitting the documents, the necessary approvals must be obtained from the competent authorities. If you choose to establish a company in a free zone, the approval of the relevant free zone authority is required. For local companies, approvals must be obtained from the Dubai Department of Economic Development (DED). These approvals may include additional approvals from other regulatory authorities depending on the type of business.

Issuing a commercial license

After completing all documents and obtaining the necessary approvals, the trade license is issued. This license is the official document that allows the company to legally conduct its business in Dubai. The validity period of the license varies according to the type of business activity and requires periodic renewal to ensure the continuity of activity.

By following these steps, investors can establish their companies in Dubai easily and conveniently, and benefit from the distinguished investment environment that the emirate provides.

Costs and financial requirements

Costs and financial requirements are essential aspects to take into consideration when opening a company in Dubai. Costs vary based on the type of company and location you choose to set up your business. Here is an overview of the most important costs and financial requirements to consider:

 Company establishment fees

Company formation fees in Dubai vary widely based on the type of company and location. In free zones, fees are usually slightly higher due to the many advantages these zones offer, such as tax exemptions and bureaucratic facilities. Establishment fees typically include initial registration fees, licensing fees, and administrative services fees. For example, the fees for registering a company in a free zone may range between AED 10,000 to 50,000, while the fees for registering a local company are relatively lower.

Annual taxes and fees

Dubai has a flexible tax policy that attracts many investors, as it does not impose taxes on personal income or corporate profits in most cases. However, there are some annual fees that must be paid, such as business license renewal fees and Chamber of Commerce and Industry membership fees. These fees depend on the type and size of the company, and may range from a few thousand to tens of thousands of dirhams annually.

Required capital

The capital required varies establish a company in Dubai varies based on the type of company and legal form. For example, some free zones require a minimum paid-up capital when establishing a company. On the other hand, local companies may not require paid-up capital in some cases, but it is always preferable to provide sufficient capital to ensure business continuity and cover operational costs.

 Additional costs

In addition to the costs mentioned above, there are some additional costs that you may incur when opening a company in Dubai. These costs include the costs of renting the office or commercial space, the costs of outfitting the office with furniture and equipment, staffing and salary costs, as well as marketing and advertising costs.

Learn how to open a company in Dubai

In conclusion, it can be said that establishing a company in Dubai represents an exciting and rewarding opportunity for many investors and entrepreneurs. Dubai is characterized by a dynamic and diverse business environment, offering many world-class facilities and infrastructure, making it an ideal destination for growth and commercial success.

Through our review of the different types of companies and the procedures necessary to register and license them, it became clear that good planning and choosing the appropriate legal form are the basis of success. Investors must ensure that they submit all required documents and obtain the necessary approvals from the relevant authorities to ensure that the incorporation process runs smoothly.

Costs and financial requirements constitute an essential part of the establishment process, so an accurate budget must be prepared that includes establishment fees, taxes, and annual fees, in addition to the required capital. Good financial planning contributes to avoiding financial obstacles and taking advantage of available opportunities in the best possible way.

By following the steps mentioned in this article, investors and entrepreneurs can realize their dream of establishing a successful company in Dubai, and benefit from the vast possibilities offered by this global city.

Frequently asked questions about how to open a company in Dubai