A Compaq Guide to Starting a Business in Dubai
Dubai is one of the fastest growing business centers with state of the art facilities available for local and international business. Dubai is an integral part of the business world and leads innovation. Dubai is politically stable and has a strong economic culture and the Dubai government offers friendly business regulations that attract investors from all over the world. This article will provide you with a guide from Compaq on starting a business in Dubai. Before starting your business in an unbeaten economy like Dubai, you must first get to know the culture of it. Dubai is an international city, it is a multicultural city, people from all over the world are present in Dubai. After familiarizing yourself with the culture, you should be aware of the rules and regulations and the type of business you can start.
The legal structure of company formation in Dubai is in accordance with the UAE Federal Law No. 8 of 1984 and, following the amendment of the Federal Law No. 13 of 1988, the Business Companies Act and its statutes regulate the role of foreign companies in Dubai. , United Arab Emirates. Broadly, the requirements of these regulations are: Federal Law requires a total local share of not less than 51% in any commercial business and outlines seven categories of commercial organizations that can be established in the UAE. This regulation explains the requirements in terms of shareholders, directors, minimum capital requirements and company incorporation processes. This law also establishes the requirements that govern the conversion, merger and dissolution of companies and businesses.
In Dubai, you have many opportunities; you get the benefits of the best economy based on solid administrative foundations. The Dubai authorities have divided the city into different economic jurisdictions. You can start different types of businesses in Dubai depending on the type of business and the location; The rates are divided into three main categories which are inland, free zone and offshore. Another thing to remember is that Dubai welcomes foreign investment, but there are rules and regulations that must be followed. In order for you to enter Dubai, UAE, you must have a sponsor, a sponsor will take your responsibility. The importance of a sponsor can be determined by the fact that for any purpose, whether it is business or just visiting, you must have a sponsor. When it comes to starting a business in Dubai you must have a sponsor, any type of business needs a sponsor or service agent. In the mainland, a local resident or UAE based company acts as a sponsor, for professional service you need a service agent as a sponsor and to set up a free zone business you also need a sponsor, in this case, the free zone acts as its sponsor. .
Business setup in mainland Dubai requires you to have a valid license issued by the administrative authority. The name of the authority is Dubai Economic Development (DED); is a government agency responsible for issuing business licenses. License renewal, cancellation and upgrade are also handled by Dubai Economic Development (DED). To facilitate investors, Dubai Economic Development (DED) operates for different localities, the application scrutiny process is strict, but the department ensures prompt processing of the application. In mainland Dubai, Dubai Economic Development (DED) issues four types of licences, business, professional services, branch and industrial licences.
To set up your business in mainland Dubai under a business license, you are required by law to enlist the help of a local UAE resident, who is also called a local sponsor. The local sponsor by law owns 51% of the shares in your business and you will only have 49% of the shares. However, you are granted full administrative rights. You can take out contracts with local sponsors and assign an annual fee for being a sponsor. Local sponsors sometimes function as silent partners. The local sponsor can be an individual or it can be a UAE-based company or group.
However, if you are setting up a business that involves professional services, you do not need to have a local sponsor, in which case you only need a service agent. The service agent works on your behalf and helps you deal with local administrative authorities to start your business. You are allowed to keep 100% of your professional business and the service agent will only be paid once for the service they provided.
Free zones are special economic zones in Dubai that are specially designed to attract foreign investment. Free zone based businesses are wholly owned by the investor and there are many options to choose from. Each free zone in Dubai has a government authority or free zone authority. To set up a company in Dubai, you will need to deal with the free zone authority. The authority may ask you to provide different legal documents before you finally give the go-ahead in the form of a license from that authority.
The free zone offers different attractive options for foreign investors such as being granted 100% ownership of your business. There are many tax-free options that you can take advantage of, such as personal income tax exemption, corporate tax exemptions. There are different types of business setup options in Dubai free zones, like you can start your business venture as a limited liability company or service provider organizations, there are different licensing options. Commercial establishments in free zones are authorized to carry out international trade. When the time comes, you can easily liquidate your business. There is less paperwork involved when it comes to closing your business from a free zone.
Offshore is another type of business establishment that is offered in Dubai and has been very famous. Offshore means a business entity established outside the country of residence in an offshore jurisdiction. Dubai’s offshore jurisdiction offers a number of benefits for your business in terms of asset protection, tax optimization and business expansion. Companies established in the offshore jurisdiction of Dubai must comply with the rules and regulations of offshore companies and are not allowed to trade within the offshore jurisdiction.
In short, after making a decision on the type of business you are willing to start in Dubai, you need to deal with the relevant authority. The best way is to hire a professional help. You will be able to find several consulting firms that are willing to help you deal with the paperwork and the authorities. Regulatory authorities will ask you to provide different documents and submit paperwork.
Here are some steps you can take, firstly do your research and decide the type of business you are willing to start, choose the jurisdiction and move on. It is recommended to get the help of a professional when it comes to setting up a business in Dubai. Prepare your license paperwork and get a guide on the terms and conditions of the license, as there are certain activities you can do and others you can’t do. There are licenses you can choose from that allow for multiple business activities.