Dubai is one of the most prominent investment destinations in the world, thanks to its advanced infrastructure and strategic geographical location that facilitates access to global markets. The emirate also provides an ideal environment for business thanks to flexible laws and legislation that encourage investment and facilitate procedures for establishing companies. Whether you are an ambitious entrepreneur looking to start a new venture, or an international company looking to expand its business, establishing a company in Dubai can be a strategic step towards success and growth.

In this article, we will review the different types of companies that can be established in Dubai, the basic steps that must be followed to establish a company, in addition to the costs and financing required. We will provide you with a comprehensive and detailed guide that will help you understand everything you need to establish a successful company in Dubai , allowing you to make the most of the investment opportunities available in this vital city.

Establishing a company in Dubai

Types of companies in Dubai

Dubai is considered one of the most prominent global destinations for establishing companies in Dubai , as it provides a flexible and advanced investment environment that meets the needs of entrepreneurs and investors from different parts of the world. Companies in Dubai can be classified into three main types: free zone companies, local companies, and offshore companies. In this section, we will discuss each type of these companies in detail.

• Free zone companies

Free zone companies are one of the most attractive options for investors, due to the unique advantages they offer. There are free zones in Dubai such as Jebel Ali, Dubai South, and Dubai Media City. These zones allow foreign investors 100% ownership of the company without the need for a local partner. In addition, free zone companies enjoy tax exemptions on income and profits for periods of up to 50 years, with the possibility of renewing these periods. Advanced infrastructure and integrated logistics services are also available that facilitate import and export operations.

• Local companies

Local companies are companies established within Dubai and operating in the local market. To establish a local company, it is necessary to have a local partner who owns no less than 51% of the company’s shares, according to ownership laws in the UAE. However, some economic activities allow 100% foreign ownership under specific conditions. Local businesses are an ideal choice for those who want to tap into the rich and diverse local market. These companies require licenses and approvals from local government departments, and are subject to local laws and regulations.

• External companies

Offshore companies are considered a suitable option for those who wish to establish a company that operates on an international level without conducting business activities within Dubai itself. These companies are registered in designated areas such as the World Islands, and enjoy several advantages, including complete confidentiality in financial transactions, flexibility in business management, and not imposing income tax. Offshore companies are commonly used for asset management, tax planning, and intellectual property protection.

Steps to establish a company in Dubai

Establishing a company in Dubai requires following a set of thoughtful steps to ensure full compliance with local laws and regulations. These steps can be divided into three main stages:

Choose the company type

The first step in establishing a company is to determine the type of company that suits your business activity and needs. There are several types of companies in Dubai, including:

1. Free zone companies: They are characterized by flexibility of laws and tax exemptions, and are suitable for companies targeting foreign markets.
2. Local companies: Allows you to do business within Dubai and other emirates, but requires a local partner who owns a percentage of the company.
3. Offshore companies: They are registered outside the UAE and allow international business to be conducted without local restrictions.

company Registration

After determining the type of company, comes the step of registering it with the competent authorities. This step includes:

1. Choosing a company name: The name must be unique and not used by other companies, and must comply with local laws.
2. Preparing legal documents: including the company’s articles of incorporation and articles of association, in addition to submitting copies of the passports of partners and shareholders.
3. Submitting the application: The company registration application is submitted to the Department of Economic Development or the competent authority in the free zone in which the company is to be established.

Obtaining a commercial license

After registering the company, it is the turn to obtain the commercial license that authorizes you to practice commercial activity. This step includes:

1. Submitting a license application: The commercial license application is submitted to the Department of Economic Development or the competent authority, accompanied by the required documents.
2. Payment of fees: Fees related to issuing a commercial license are paid, which vary based on the type of activity and the size of the company.
3. Obtaining approvals: Some activities may require additional approvals from competent authorities, such as the Ministry of Health or the Environment Agency.

Documents required to establish a company in Dubai

Establishing a company in Dubai requires a set of basic documents to ensure the process runs smoothly. The required documents may vary slightly depending on the type of company and location you choose, but in general, they include the following:

• Copy of Passport: A valid passport must be present for all shareholders and directors.
• Personal photo: A recent photo is usually required for both shareholders and directors.
• Director Appointment Letter: A formal letter appointing the director in charge of the company.
• Articles of Association and Articles of Association: Legal documents that define the company’s structure, purposes, rights and obligations of shareholders.
• Trade name reservation certificate: A document confirming the reservation of the company’s trade name from the Department of Economic Development or the competent authority.
• Local address: Proof of address for the company’s headquarters in Dubai, such as a lease contract or ownership document.
• Initial license: A license issued by the relevant government authorities that allows the company establishment procedures to begin.
• Regulatory approval: If the company operates in a sector that requires additional approvals (such as healthcare or education), you may need to submit approval documents from the relevant regulatory authorities.
• Financial Statements: In some cases, financial statements may be required for the founders or shareholders.
• Certificate of incorporation: Issued by the local authority after reviewing and approving all documents.

Costs and financing of establishing a company in Dubai

Costs and financing are vital aspects to take into consideration when setting up a company in Dubai. Costs vary based on the type of company and location you choose, as well as many other factors that can affect the budget required. In this section, we will review the costs of establishing a company in Dubai , the financing options available, and the operational expenses that must be considered.

Establishment costs

Dubai incorporation costs include many expenses that must be planned in advance. Among these costs:

1. Registration Fees: Company registration fees vary based on the type of company and location. For example, registering a company in a free zone can be more expensive than registering a local company.
2. Licensing costs: These costs include obtaining the business license required to operate in Dubai. Fees vary based on the business chosen.
3. Rentals: If you plan to rent office or commercial space, rental costs need to be taken into consideration. Free zones often provide ready-to-rent offices.
4. Legal consultation costs: You may need to consult a lawyer or legal expert to ensure that all incorporation procedures are conducted legally and properly.
5. Administrative costs: These costs include preparing documents, translating them, and having them certified by the competent authorities.

Corporate finance

There are many options available to finance your new company in Dubai. Among these options:

1. Self-Finance: Using personal capital to start a company can be a suitable option if you have sufficient funds.
2. Bank Loans: Many banks in Dubai provide business loans on favorable terms to entrepreneurs. It is best to review the available options and choose the most suitable one based on the interest rate and requirements.
3. External investment: You can search for external investors or strategic partners who will contribute to financing the company in exchange for a share of equity.
4. Crowdfunding: Crowdfunding has become a popular option for startups, as funds can be raised through online crowdfunding platforms.

Operating expenses

In addition to the costs of establishment and financing, new companies in Dubai must take into account the operational expenses that will be incurred in daily operation. These expenses include:

1.  Salaries and wages: The cost of employees is one of the largest operating expenses. A salary budget should be determined based on the number of employees and positions required.
2.  Logistics costs: These costs include transportation, warehousing, and shipping if the company is in the business of trading or manufacturing.
3.  Marketing and advertising: It is necessary to allocate part of the budget to marketing and advertising to attract customers and build the brand.
4.  Utilities and Services: These costs include electricity, water, internet, and phone bills.
5.  Administrative expenses: such as office supplies, maintenance, and legal and accounting services.

Establishing companies in Dubai represents an important strategic step that can open broad horizons for growth and success in the global business market. By understanding the types of companies available whether they are free zone companies, local companies, or offshore companies, entrepreneurs can choose the structure that best suits their needs and future plans.

Following the basic steps for establishing a company, from choosing the type of company and registering it to obtaining a commercial license, ensures that the process runs smoothly and efficiently. In addition, it is necessary to take into account the costs and financing required to ensure business sustainability and achieve the desired goals.

The initial costs of establishing a company, including legal and administrative fees, are a necessary investment that must be planned carefully. Entrepreneurs can turn to multiple sources of financing to support their operations and ensure stable cash flow. Of course, operating expenses must be calculated accurately to avoid any unexpected financial surprises.

In general, Dubai provides a stimulating and attractive business environment for investments thanks to government facilities and a favorable tax environment. Making the decision to establish a company in Dubai can be an important turning point in the career of any entrepreneur, as they can benefit from the many opportunities and competitive advantages that the emirate offers.

The most frequently asked questions about establishing a company in Dubai