Steps to establish a company in Dubai for foreigners

Dubai is considered one of the most prominent global destinations for establishing companies and investments, thanks to its thriving economic environment, advanced infrastructure, and supportive government policies. The emirate is distinguished by being an important commercial and financial center in the Middle East region, making it a major attraction for foreign entrepreneurs and investors. Establishing a company in Dubai requires precise knowledge of the necessary steps and procedures, as well as the choices available to investors regarding the type of company and required permits. Through this article, we will provide you with a comprehensive guide that explains in detail the steps for establishing a company in Dubai for foreigners, starting with choosing the appropriate type of company, through the registration process, all the way to obtaining the necessary permits and licenses to start the business.

Whether you are planning to establish a limited liability company, a public joint stock company, or even a free company in one of the free zones, in this article you will find everything you need to know to turn your business idea into reality in Dubai.

Steps to establish a company in Dubai for foreigners

Types of companies that can be established in Dubai

When considering establishing a company in Dubai as a foreigner, choosing the type of company is one of the most basic steps to focus on. The type of company determines the legal and operational structure of a company, and directly affects how it is managed and complies with local laws. Here is an overview of the main types of companies that foreigners can establish in Dubai:

• Limited liability companies

Limited Liability Companies (LLCs) are among the most popular types of companies in Dubai, due to the flexibility they offer and the legal protection they guarantee to shareholders. In this type of company, shareholders’ liability is limited to the amount of their equity shares, which means they are not at risk of losing their personal money if the company suffers losses.

LLCs require at least two partners, and the number of partners can be up to 50. A certain percentage of the capital must be owned by UAE nationals, unless the company is established in a free zone that allows full foreign ownership.

• Public joint stock companies

Public joint stock companies are another type of company that foreigners can establish in Dubai, but they require more capital and more complex procedures. These companies are suitable for major projects that require raising large capital through offering shares to the public.

A public joint stock company must have a board of directors consisting of a certain number of members, and this type of company is subject to close supervision by regulatory authorities. In addition, publicly traded companies are required to submit periodic financial reports and comply with transparency and accountability standards.

• Free companies

Free companies are another attractive option for foreigners who want to set up a company in Dubai. These companies can be established in the free zones spread throughout the emirate, which provide many advantages such as full foreign ownership, tax exemptions, and flexibility in transferring profits and capital.

Requirements and procedures vary depending on the free zone chosen, but generally the process is smoother and faster compared to establishing a traditional company. Many free zones specialize in specific areas such as e-commerce, media, technology and financial services, making them an ideal choice for companies operating in these sectors.

By choosing the right type of company, foreigners can benefit from the distinguished investment environment in Dubai and achieve success and growth in their businesses.

Company registration in Dubai

Company registration is a crucial step in the process of establishing your company in Dubai. This procedure requires several steps that must be followed carefully to ensure the process goes smoothly and successfully. Below we review the basic steps for registering a company:

Trade name reservation

The first step in the company registration process is to reserve the trade name. The trade name must be unique and not used by any other company in Dubai. The availability of the proposed name can be checked online or by visiting the Department of Economic Development. After confirming the availability of the name, a reservation request is submitted and the required fees are paid. It is important that the trade name reflects the nature of the company’s activity and is compatible with local laws and regulations.

Preparing the required documents

After reserving the trade name, the necessary documents must be prepared to register the company. These documents usually include:

• A copy of the passport for both shareholders and directors.
•  A copy of the entry or residence visa.
•  The company’s incorporation agreement, which includes details about the company’s structure, shareholders, and ownership shares.
•  Policy of the company.
•  Board of Directors decision (if the company is incorporated by another entity).

All documents must be verified and signed by the parties concerned. It may also require that documents be translated into Arabic and certified by the relevant authorities.

Submit a registration request

Once all required documents are prepared, the registration application is submitted to the Department of Economic Development or the competent authority in the free zone in which you intend to establish your company. The registration form is filled out, all required documents are attached, and the necessary fees are paid. You may also need to submit a business plan that explains the nature of the business and the company’s goals.

After submitting the application, the competent authority will review the documents and ensure that all legal conditions and requirements are met. If all things are in order, the entity will issue a company registration certificate, allowing you to officially start doing your business in Dubai.

The company registration process is an essential step to ensure compliance with local laws and enjoy all the benefits and rights that the business environment in Dubai offers. After obtaining the registration certificate, you can move to the next steps to obtain the necessary permits and licenses to operate your business.

The cost of establishing a company in Dubai

Establishing a company in Dubai requires taking into account a range of factors that affect the total cost. Here is an overview of the key components that affect the cost of setting up a company in Dubai:

1. Company type: Costs vary depending on the type of company you wish to establish, whether it is a limited liability company (LLC), a branch of a foreign company, or a free zone company.
2. Location: Location selection plays a big role in determining costs. Establishing a company in free zones may have different costs than establishing a company in Dubai Trade.
3. Commercial license: The costs of obtaining a commercial license include registration fees, license issuance, and special license fees if commercial activities require this.
4. Lease: Renting an office or commercial space is an important part of the cost. Costs vary based on location and size of space rented.
5. Legal advice: You may need to engage legal advisors or consulting firms to assist you in the incorporation process and ensure compliance with all legal requirements.
6. Government fees: Government fees include company registration fees, permit issuance fees, and fees associated with other services such as health and environmental inspection.
7. Management and operating costs: The initial costs of establishing a company include furnishing offices, hiring employees, technology and equipment costs, in addition to monthly operating expenses.
8. Insurance: Some commercial activities may require obtaining certain insurances, such as employee health insurance and property insurance.
9. Consulting Services: Consulting services can be helpful in facilitating the process and reducing complications, but they add to the overall cost.
10. Business-specific requirements: Some businesses may require additional licenses or permits, which can affect the overall cost of starting a business.
11. Legal and administrative requirements: These include the costs of preparing and submitting the necessary documents such as the company’s articles of incorporation, articles of association, and submitting applications to various government agencies.

 How to obtain permits in Dubai

Obtaining the necessary permits and licenses to establish a company in Dubai is a crucial step to ensure compliance with local laws and regulations. The types of permits and licenses required vary based on the nature of the business and the location of the company. In this paragraph, we will discuss the main types of permits and licenses that foreign companies may need to establish their business in Dubai.

• Commercial permit

A trade permit is the basic document that allows a company to legally conduct its business in Dubai. To obtain a commercial permit, an application must be submitted to the Dubai Department of Economic Development (DED). This request requires submitting a set of documents, such as the articles of incorporation, the company’s articles of association, partners’ passports, and any additional documents that may be requested by the competent authorities. After reviewing and approving the application, a commercial permit will be issued specifying the type of commercial activity permitted.

• Health declaration

If the company provides health or food-related services, such as restaurants, health centers or pharmacies, obtaining a health permit from Dubai Municipality or Dubai Health Authority (DHA) is considered necessary. Obtaining this permit requires submitting detailed plans about the site and sanitary facilities, in addition to conducting periodic inspections to ensure compliance with health and hygiene standards. These standards may include kitchen equipment, food storage, and employee health.

• Environmental permit

Companies whose activities affect the environment require an environmental permit from the Dubai Municipality Environment Department. This permit includes assessing the environmental impact of the business and ensuring compliance with local and international environmental standards. Obtaining this permit may require submitting detailed environmental studies and developing waste management and pollution control plans. The aim of an environmental permit is to ensure that business activities do not harm the environment and contribute to sustainable development.

In short, obtaining permits and licenses is a vital step to ensuring the success and sustainability of businesses in Dubai. By complying with local legal requirements and regulations, foreign companies can establish a strong base for their business operations and achieve success in the UAE market.

Advantages of establishing a company in Dubai

Establishing a company in Dubai comes with many advantages that make it an attractive destination for investors and entrepreneurs from all over the world. Here are some of the key advantages of setting up a company in Dubai:

• Stable economic environment: Dubai has a strong and stable economy, which provides an ideal environment for business growth and sustainability.
• Tax breaks: No personal income taxes and low corporate taxes in many cases, in addition to tax breaks for companies in free zones.
• 100% foreign ownership: In free zones, foreigners can fully own companies without the need for a local partner.
• Advanced infrastructure: Dubai provides advanced infrastructure that includes modern facilities, an excellent road network, and international ports and airports.
• Strategic location: Dubai is located in a distinctive geographical location linking the East and the West, which facilitates access to global markets.
• Easy access to financing: Dubai provides many financing options for new projects and companies through local and international banks and financial institutions.
• Administrative facilities: The government provides advanced electronic services to facilitate establishment processes and administrative procedures, which reduces the time and effort required.
• Free trade environment: Free zones in Dubai provide a flexible business environment with easy laws and simple procedures for establishing companies.
• Investment incentives: Dubai offers a range of incentives to investors including grants, financing and logistical support.
• High-quality life: Dubai provides a high standard of living that includes advanced educational and health services, diverse entertainment facilities, and an international lifestyle.
• Advanced labor laws: Dubai has flexible and advanced labor laws that protect the rights of employees and employers and help create a balanced work environment.
• Diverse investment opportunities: Dubai provides investment opportunities in various sectors such as trade, tourism, real estate, technology, and financial services.
• Global Business Centers: Dubai includes a group of global business and trade centers that facilitate access to international business networks.
• Political and security stability: Dubai enjoys a high level of political and security stability, making it a safe place for investment and work.

In conclusion, establishing a company in Dubai for foreigners may seem like a complicated task initially, but with good planning and understanding of the steps and procedures required, this can be achieved efficiently and easily. By choosing the appropriate company type, whether it is a limited liability company, a publicly traded company, or a free enterprise, investors can determine the legal structure that aligns with their business objectives.

Company registration is a vital step that includes reserving the trade name, preparing the required documents, and submitting the registration application. Once this step is completed, the investor will have come a long way towards achieving his dream of establishing his own company in Dubai.

Obtaining the necessary permits and licenses, such as a commercial permit, health permit, and environmental permit, is a final step but no less important than the previous steps. These permits ensure that the company operates within legal frameworks and adheres to the standards required in Dubai, which contributes to the sustainability and success of the business in the long term.

By carefully following these steps and dealing with the competent authorities directly or through legal advisors, foreign investors can establish their companies in Dubai easily and legally, which opens the doors to success and promising business opportunities in one of the most dynamic and innovative cities in the world.

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