The cost of establishing a company in Dubai for Saudis

Dubai is considered one of the most prominent economic destinations in the world, as it is distinguished by its strategic location, advanced infrastructure, and flexible laws that facilitate the process of establishing companies in Dubai . For Saudis, Dubai represents an attractive option for investment and business expansion given the cultural and economic ties between the UAE and Saudi Arabia. In this article, we will review the cost of establishing a company in Dubai for Saudis, focusing on the types of companies available, the financial costs required, and the necessary legal and administrative procedures. If you are thinking about starting a new venture or expanding your existing business to Dubai, this guide will provide you with the essential information you need to make an informed decision.

The cost of establishing a company in Dubai for Saudis

Types of companies available in Dubai for Saudis

When considering setting up a company in Dubai , it is important to understand the different types of companies available and the unique features of each type. Saudis can choose between several options that suit their needs and business ambitions. Here is an overview of the main types of companies available in Dubai:

•  Free zone companies

Free zone companies are attractive options for foreigners, including Saudis, due to the many advantages they offer. These companies feature full tax exemption on profits and personal income, as well as full 100% foreign ownership. Free zones also provide advanced infrastructure and modern facilities that contribute to facilitating business operations. Some of the most popular free zones in Dubai include Jebel Ali Free Zone (JAFZA), Dubai Internet City, and Dubai Media City.

• Local companies

Local companies provide the opportunity to benefit from the local market directly and reach all sectors of the UAE economy. However, establishing a local company requires an Emirati partner to own 51% of the shares, while a foreign investor can own the remaining percentage. Despite this limitation, many Saudis find this option an opportunity to achieve strategic partnerships and benefit from local expertise.

• Branches of foreign companies

Saudi companies that want to expand their business in Dubai can open branches of their foreign companies. This option provides great flexibility as the parent company in Saudi Arabia can retain full ownership of the branch. However, foreign branches must comply with local laws and regulations, including appointing an authorized local service agent.

The financial costs required to establish a company in Dubai

When considering establishing a company in Dubai , Saudis must take several financial costs into consideration to ensure an accurate and comprehensive budget is prepared. These costs include several aspects, including registration and licensing fees, operational costs, and local taxes and fees. We will review each of them in detail in this section.

1.  Registration and licensing fees: The journey to establish a company begins with paying registration and licensing fees, which vary based on the type of company and the region in which it is established. For free zone companies, depending on the chosen free zone and the nature of the business activity. As for local companies, fees may include the cost of obtaining a commercial license and may increase based on the size and type of activity.
2.  Operational costs: Operational costs include all expenses associated with managing and operating the company after its establishment. These costs include rent for office or commercial space, which varies greatly depending on location and size. In free zones, the annual rental cost can range from 15,000 to 100,000 AED. In addition, the costs of hiring employees, salaries, health insurance, and the costs of communications and utilities must be taken into account.
3.  Local taxes and fees: Dubai is characterized by tax policies that encourage investors, as it does not impose taxes on personal income or business profits in most cases. However, companies must pay some local fees such as municipal fees, and fees for various government services. Companies registered in free zones must also comply with annual license renewal fees and other obligations related to operation within the free zone.

Legal procedures for establishing a company in Dubai for Saudis

Establishing a company in Dubai for Saudis requires following a set of precise legal and administrative procedures to ensure compliance with local laws and achieve success in the business environment. These procedures include a set of basic steps that must be followed carefully. In this section, we will review the required documents, registration procedures, and obtaining the necessary licenses.

Required Documents

The first step in establishing a company in Dubai is to collect the required documents, which vary depending on the type of company. Generally, these documents include:

1. Company registration application form.
2. A copy of the passport of partners and shareholders.
3. A copy of the UAE residence visa (if the partners are residents).
4. A detailed business plan explaining the type of business activity and the company’s objectives.
5. The company’s articles of incorporation and articles of association.
6. Approval of the competent authorities if the commercial activity requires it.

Registration processes

After collecting the required documents, comes the company registration stage, which includes the following steps:

1. Choosing a trade name: You must choose a trade name that complies with local laws and regulations, and does not conflict with previously registered trade names.
2. Submitting a registration application: The company registration application is submitted to the Department of Economic Development in Dubai or to the free zone authority if the company will be established in one of the free zones.
3. Payment of fees: You must pay the required registration fees, which vary according to the type of company and geographical location.
4. Application review: The competent authorities review the registration application and attached documents, and this process can take several days.
5. Issuance of a license: After approval of the application, a commercial license is issued that authorizes the company to begin practicing commercial activity.

Obtaining licenses

The licenses required vary depending on the type of business and the geographic location of the company. The basic steps to obtain licenses include:

1. Determine the type of license: The type of license required varies based on the company’s commercial activity (commercial, industrial, service, professional).
2. Submitting a license application: The license application is submitted to the competent authority such as the Department of Economic Development or the Free Zone Authority.
3. Fulfilling the requirements: Some commercial activities may require additional approvals from various government agencies such as the Ministry of Health or the Roads and Transport Authority.
4. Payment of fees: You must pay fees associated with obtaining licenses, which vary depending on the type of license and business activity.
5. Receiving the license: After all requirements are met, a license is issued that authorizes the company to begin practicing its commercial activity legally.

By following these legal and administrative steps, Saudis can easily establish their companies in Dubai, allowing them to benefit from the encouraging investment environment that the emirate provides.

In conclusion, Dubai is one of the most important investment destinations in the region, and provides a favorable environment for establishing companies, including Saudi companies. Dubai offers a variety of options for establishing companies, whether they are companies in free zones, local companies, or branches of foreign companies, giving investors great flexibility in choosing the most appropriate structure for their business.

It is important for the Saudi investor to be aware of the financial costs, which include registration and licensing fees, operational costs, and local taxes and fees. These costs may vary based on the type of company and industry in which it operates, but they are considered a necessary investment to achieve success and sustainability in the UAE market.

The legal and administrative procedures for establishing a company in Dubai are clear and organized, but they require submitting a set of documents and completing some administrative steps to obtain the necessary licenses. Investors can benefit from the services of legal consultants and specialists to facilitate this process and ensure compliance with all legal requirements.

Ultimately, establishing a company in Dubai is a golden opportunity for Saudi investors looking to expand their business in a prosperous and stable economic environment. With good planning and an understanding of the costs and procedures required, success and growth can be achieved in this vital market.

The most frequently asked questions about the cost of establishing a company in Dubai for Saudis