Cost of establishing a company in Dubai – The lowest cost of establishing a company

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٠٤ يونيو Cost of establishing a company in Dubai – The lowest cost of establishing a company

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Dubai is considered one of the most prominent global destinations for business and investment, thanks to its advanced and stimulating economic environment. One of the basic steps that investors take when thinking about entering the UAE market is to estimate the cost of establishing a company in Dubai. This cost varies based on several factors, including company type, business activity, and geographic location. This estimate includes various costs such as licensing fees, rental costs, and administrative expenses, as well as other services that the incorporation process may require. In this article, we will review in detail the costs of establishing a company in Dubai and how to estimate them accurately to ensure that you make the most of the available investment opportunities.

Cost of establishing a company in Dubai – The lowest cost of establishing a company

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The cost of establishing a company in Dubai

The lowest cost of establishing a company in Dubai depends on several factors, including the type of company, commercial activity, and where it is established. In general, there are different options that can help reduce costs:

Free Zone : Establishing a company in one of the free zones in Dubai can be an economical option. Free zones such as “Jebel Ali” or “Sharjah” provide financial incentives and facilities that reduce costs. Licenses there are usually less expensive compared to the costs of establishing companies in non-free zones.
Commercial licensing : Costs can be reduced by choosing the type of license that is most appropriate for the company’s activity. Some licenses can be less expensive than others depending on the type of activity and services required.
Limited Liability Company (LLC) : These companies can be less expensive than other companies such as joint stock companies or limited liability companies. Establishment and licensing costs in these companies are usually lower.
Look for special offers : Some consulting firms and incorporation offices offer special offers or low-priced packages to help with company formation. Taking advantage of these offers can reduce your overall costs.

Of course, you should check all requirements and costs involved to ensure compliance with local laws and not facing any unexpected expenses.

Do I need a local partner to set up a company in Dubai?

The need for a local partner to establish a company in Dubai depends on the type of company and the location you choose to establish:

Limited Liability Company (LLC) outside the free zones : If you want to establish a limited liability company in Dubai outside the free zones, UAE law requires that you have a local partner who owns 51% of the company’s shares. The local partner can be an individual or a local company. This partner does not need to participate in the day-to-day management of the company but has a majority stake.
Companies in free zones : If you are setting up a company in one of the free zones in Dubai, you do not need a local partner. In free zones, you can own 100% of the company’s shares. Free zones provide facilities such as tax exemptions and free movement of capital.
Public Joint Stock Companies : If you are establishing a public joint stock company, it requires that a percentage of the shares be owned by UAE nationals. But these companies differ in their details from limited liability companies.
Sole proprietorships : You can establish an individual company in Dubai without the need for a local partner, provided that the company is registered as a branch of a foreign company or as a sole proprietorship in free zones. So, the choice mainly depends on the type of company and the location you choose to establish.

Are there any tax breaks for companies in Dubai?

Yes, there are several tax exemptions available to companies in Dubai, especially in free zones. Here are some of the key tax breaks that businesses can benefit from:

Exemption from corporate tax : Many companies established in free zones in Dubai benefit from complete exemption from corporate tax on profits. This includes free zone companies such as Jebel Ali and Dubai Silicon Oasis.
Exemption from Value Added Tax (VAT) : Companies operating in some free zones may be exempt from Value Added Tax (VAT) on some goods and services, reducing the overall tax burden.
Exemption from personal income tax : There is no personal income tax in the UAE, which means that individuals who receive salaries from companies do not pay tax on their personal income.
Tax exemptions for foreign investors : Some free zones offer specific tax exemptions for foreign investors, which enhances Dubai’s attractiveness as an investment center.
Double Taxation Avoidance Agreements : The UAE has agreements with several countries to avoid double taxation, which helps companies avoid paying taxes twice on the same income.

These exemptions make Dubai an attractive destination for businesses and investors, contribute to enhancing economic growth and attracting companies from all over the world.

Steps to establish a company in Dubai

Establishing a company in Dubai requires following a series of steps to ensure compliance with local laws and achieve business success. Here are the basic steps to establish a company in Dubai:

Determine the type of company and activity : Choose the type of company (such as limited liability company, public joint stock company, sole proprietorship) and determine the business activity you will undertake.
Choosing a location for establishment : Decide whether you will establish your company in a free zone or outside it. Free zones offer benefits such as tax exemptions and 100% foreign ownership, while companies outside free zones need a local partner.
Preparing a business plan : Prepare a detailed business plan that includes a description of the activity, target market, marketing strategy, and financial projections.
Choosing a company name : Choose a company name in line with naming laws in Dubai. Make sure the name does not conflict with existing company names and does not contain prohibited words.
Obtaining initial approvals : Apply for initial approvals from the Department of Economic Development (DED) or the relevant authority in the free zone, according to your company’s website.
Signing the lease : Obtain a lease for the company’s headquarters. This contract is required to submit a license application and can be for an office within a commercial building or a space in a free zone.
Preparing legal documents : Prepare the necessary legal documents such as the articles of incorporation, the partners’ contract, and proof of identity for the company’s founders.
Submitting a license application : Submit the license application to the Department of Economic Development (DED) or the relevant authority in the free zone, and pay the required fees.
Opening a bank account for the company : Open a bank account for the company in its name. You will be required to deposit the capital allocated to the company, depending on the type of company and its requirements.
Receiving the final license : After reviewing all documents and paying the fees, you will receive the final license that allows you to start business activities.
Registration with government agencies : Register the company with other government agencies such as the Social Insurance Authority, the Ministry of Labor, and other competent bodies depending on the activity.
Apply for work visas : If you need to hire employees, apply for work and residence visas for company employees. By following these steps, you can establish your company in Dubai legally and orderly.

Conditions for establishing a company in Dubai

Establishing a company in Dubai requires meeting a set of conditions and requirements that vary based on the type of company and the location you choose to establish. Here are the basic conditions for establishing a company in Dubai:

Type of company : You must specify the type of company you wish to establish, such as a limited liability company (LLC), a public joint stock company, a sole proprietorship, or a company in free zones.
Business activity : Determine the business activity you will undertake, as this affects the type of license required.
Companies outside free zones : If you are establishing a limited liability company outside free zones, you must have a local partner who owns 51% of the company’s shares. This partner does not need to participate in the daily management of the company.
Free Zones : If you are establishing your company in a free zone, you do not need a local partner. Free zones offer benefits such as 100% foreign ownership and tax exemptions.
Outside the free zones : Establishing a company outside the free zones requires compliance with additional requirements such as having a local partner.
Articles of Association : The Articles of Association must be prepared, including details of the partners and the company’s activity.
Personal documents : Submit passports of the company founders, personal photos, and proof of identity.
The company name must be compatible with naming laws in Dubai. Avoid names that contain prohibited words or are similar to the names of established companies.
Obtaining a lease contract for an office or work space, as this is required to submit a license application.
Initial approvals : Apply for initial approvals from the Department of Economic Development (DED) or the relevant authority in the free zone.
Licenses : Obtaining the appropriate commercial or industrial license for the company’s activity.
Open a bank account in the name of the company and provide proof of the required capital deposit.
Register the company with the competent government authorities, such as the Department of Economic Development or the competent authority in the free zone.
Apply for employee work and residence visas if you intend to employ individuals.
Ensure compliance with all local laws and legislation such as registration with the Social Insurance Authority and the Ministry of Labor if necessary. Each step requires adherence to documents and legal requirements to ensure the success of establishing the company in accordance with local laws in Dubai.

Establishing a company in Dubai represents a strategic step towards achieving success in one of the most prominent global business markets. Dubai is characterized by a dynamic business environment, which provides various benefits to investors, including tax exemptions, investment incentives, and advanced infrastructure. By following the right steps and meeting the necessary conditions, investors and institutions can have the opportunity to achieve their business goals effectively and successfully. By choosing the right type of company, identifying the ideal location, and complying with legal requirements, you can create a sustainable and growing company. Benefiting from specialized consulting services can contribute significantly to facilitating the establishment process and avoiding obstacles. In conclusion, Dubai offers endless opportunities for entrepreneurs and investors, and through careful planning and compliance with local standards, one can make the most of this ideal business environment. Establishing a company in Dubai is not just a business move, it is an investment in the future and global expansion.