Procedures for establishing a company in Dubai for foreigners

Dubai is considered one of the most prominent global destinations for establishing companies, as it enjoys a strategic location linking East and West, in addition to a flexible economic environment that encourages investment. Dubai attracts investors from all over the world thanks to its advanced infrastructure, business facilities, and attractive tax regime. The process of establishing a company in Dubai is transparent and fast, making it an ideal choice for foreigners seeking to expand their businesses in the Middle East. In this article, we will review the procedures for establishing a company in Dubai for foreigners and the steps for establishing a company in Dubai for foreigners, starting with choosing the appropriate type of company, passing through the necessary legal procedures, all the way to estimating the costs associated with the establishment process. Whether you are an entrepreneur looking for new opportunities or an international company looking to expand its operations, in this guide you will find everything you need to successfully establish your company in Dubai.

Procedures for establishing a company in Dubai for foreigners

Establishing a company in Dubai

Establishing a company in Dubai is an important strategic step for anyone seeking to benefit from the dynamic and stimulating investment environment in this global city. Dubai is characterized by advanced infrastructure, flexible economic policies, and a strategic geographical location that makes it a gateway to global markets. To establish a company in Dubai, investors must follow a set of basic steps and comply with local legal requirements.

First, you must determine the type of company and business activity you want to engage in. Multiple options are available, such as limited liability companies (LLC), joint stock companies, or sole proprietorships, as well as companies in free zones. Identifying the business activity is a crucial step as it affects the type of license required and subsequent procedures.

Secondly, a trade name must be chosen for the company. The name must be unique and not previously used, and must be submitted to the competent authorities such as the Department of Economic Development (DED) or the relevant authority in the free zone to obtain approval.

After obtaining initial approval, the company’s articles of association and articles of association are prepared. These documents specify the company structure, the rights and duties of partners, and the authorized capital. These documents must be signed by all partners and shareholders and officially notarized.

Then, you must secure a headquarters for the company. This can be in a free zone or within Dubai, and a certified lease contract for the premises must be obtained. This contract is submitted along with other documents to DED or the relevant body for company registration.

After submitting all documents and paying the required fees, the business license is issued, which is the final step in starting the business. A bank account must also be opened in the company’s name in a local bank to facilitate financial operations.

New companies must also register with the Dubai Chamber of Commerce, if the business activity requires this. After that, you can apply for work and residence visas for investors and employees.

Compliance with local laws and regulations is important to ensure the business runs legally and smoothly. By following these steps and benefiting from the services of consulting companies such as “Itqan”, investors can successfully establish their companies in Dubai and enjoy the promising investment opportunities offered by this leading city.

Types of companies that can be established in Dubai

When considering establishing a company in Dubai , choosing the type of company is one of the most important first steps to take. The types of companies available to foreigners vary based on the legal structure and business needs. Below is an overview of the main types of companies that can be established in Dubai:

• Limited liability companies

Limited Liability Companies (LLC) are one of the most common types of companies in Dubai. This type of company is characterized by the fact that the partners’ liability is limited to the amount of their shares in the capital. Foreigners are allowed to own up to 49% of the company’s shares, while the local partner must own the remaining 51%. However, there are some exceptions in certain business activities and areas that allow full foreign ownership.

• Free zones

Free zones are an attractive option for foreigners wishing to establish their companies in Dubai. These zones offer multiple incentives and benefits, such as 100% foreign ownership, exemption from customs taxes, and easy transfer of profits. There are several free zones in Dubai, such as Jebel Ali Free Zone, Dubai Internet City, and Dubai Media City, each of which specializes in certain fields, allowing companies to choose the area that suits their field of work.

• Foreign companies

Foreign companies can establish branches or representative offices in Dubai without the need for a local partner. This option allows international companies to expand their business in the Middle East and benefit from the thriving UAE market. This process requires obtaining approvals and licensing from the competent authorities, but it provides great flexibility to parent companies in managing their operations.

Choosing the appropriate company type is a crucial step in determining the legal and administrative path of the future company. It is important to consult a legal advisor or expert in establishing companies to ensure that the optimal structure is chosen that is compatible with the objectives and nature of the company’s business.

Procedures for establishing a company in Dubai for foreigners

Establishing a company in Dubai for foreigners requires following a set of procedures and complying with local legal requirements. Dubai provides a distinctive investment environment for foreigners, but there are specific steps that must be followed to ensure the successful establishment of the company. Below are the basic procedures for establishing a company in Dubai for foreigners:

1. Determine the type of company and business activity:  Foreigners can choose different types of companies in Dubai, such as limited liability companies (LLC), joint stock companies, sole proprietorships, or companies in free zones.
   Determine the business activity you wish to practice, as this affects the type of license required.
2. Choosing a trade name: Choosing a trade name for the company and submitting several suggestions to the competent authorities, such as the Department of Economic Development (DED) or the relevant authority in the free zone.
   Ensure that the proposed trade name is not already in use and complies with local naming standards.
3. Obtaining initial approval: Submit a request to obtain initial approval from the Department of Economic Development or the relevant authority in the free zone.
   Provide personal documents such as passport, details about business activity and future plans.
4. Preparing the articles of incorporation and articles of association:  Preparing the articles of association and articles of association of the company, and specifying the terms of the partnership and the rights and duties of the partners.
   Signing of documents by all partners or shareholders.
5. Securing the company’s headquarters:  Finding a suitable headquarters for the company, whether it is in a free zone or in Dubai.
   Obtain a certified lease contract from the headquarters leasing office.
6. Submitting documents and registering the company: Submitting all required documents, such as the articles of incorporation, lease agreement, and passports, to the Department of Economic Development or the relevant body.
   Pay the necessary fees to register the company and obtain a commercial license.
   Obtaining a commercial license
7. Receiving the license: After reviewing and approving the documents, receive the business license that allows you to start a business in Dubai.
8. Opening a bank account:  Opening a bank account in the name of the company in a local bank.
   Submit the required documents such as the commercial license and articles of association to the bank.

Costs of establishing a company in Dubai

The costs of establishing a company in Dubai are vital matters that foreign investors must take into consideration when planning to launch their business in the emirate. These costs vary depending on the type of company, location, and required procedures. Below we review the most important costs that must be taken into consideration:

• Commercial license fees

The business license fee is one of the first costs that an investor must pay. These fees vary based on the type of business and company selected. For example, trade license fees for limited liability companies differ from those for companies established in free zones. Additionally, fees vary based on the scope and size of the business. It is important to check with the relevant authorities to obtain exact details about the commercial license fees required for the specific type of activity.

• register fees

Company registration fees are another essential step in the incorporation process. These fees include the cost of registering the company with the relevant authorities such as the Department of Economic Development (DED) or the chosen free zone authority. Fees vary based on registration requirements and company type. It is advisable to consult with a legal advisor or business consulting firm to obtain accurate information about the expected registration fees for the type of company being established.

• Additional fees

In addition to business license fees and registration fees, there are a range of additional fees that investors may have to pay. These fees include the costs of opening a company bank account, office or commercial facility rental fees, as well as fees for legal and consulting services. Other costs may also be added, such as insurance and administrative expenses. It is important to develop a comprehensive budget that takes into account all of these costs to ensure solid and successful financial planning.

Documents required to establish a company in Dubai

Establishing a company in Dubai requires submitting a set of essential documents to ensure compliance with local laws and regulations. Here is a list of required documents:

• Establishment Application Form: The establishment application form provided by the Department of Economic Development or the relevant free zone must be completed and signed.
• Passport copies: Certified copies of passports must be submitted for all partners, shareholders and directors.
• Personal photo: Recent personal photos of all concerned parties, conforming to passport specifications.
• Company Articles of Association: The Company’s Articles of Association (or Memorandum of Understanding and Articles of Association) must be submitted, signed by all partners and shareholders.
• Business Plan: Submit a detailed business plan that explains the nature of the business activity and the company’s objectives.
• No objection certificate: If the partner or shareholder works in another company within the Emirates, a no objection certificate from the current employer must be submitted.
• Office lease contract: A copy of the commercial office lease contract certified by the local authorities must be submitted (confirmation of the contract).
• Capital Statement: Submit a statement of the company’s allocated capital, including depositing the amount into a local business bank account if necessary.
• Special Licenses: If the company requires special licenses to practice a specific activity, copies of these licenses must be submitted.
• Emirates ID: For individuals residing in the UAE, a copy of the Emirates ID must be presented.

In conclusion, establishing a company in Dubai for foreigners is a strategic step that can open doors to many business and economic opportunities. With the variety of options available such as limited liability companies, free zones and foreign companies, each investor can choose the structure that best suits his needs and future plans. It is also necessary to adhere to the required legal procedures, from obtaining a trade license and registering the company to opening a bank account.

Establishment costs vary based on company type, location and additional needs, but investing in Dubai can be rewarding due to the advanced infrastructure, active market and business-friendly policies. Although the process may seem complicated at first.

Foreigners planning to establish companies in Dubai can benefit from the vibrant business environment and promising opportunities that the emirate offers. With good planning and adherence to formal procedures, success and growth can be achieved in this dynamic market.

The most frequently asked questions about establishing a company in Dubai for foreigners