Establishing a company in Dubai for foreigners is an important strategic step for those wishing to enter the world of business and invest in one of the most vibrant cities in the world. Thanks to its distinctive geographical location, the diversity of its economy, and the ease of legal procedures, Dubai has become a favorite destination for investors from around the world. Whether you are looking to exploit opportunities in international trade, or want to expand your business, Dubai provides a suitable business environment that helps you achieve success. By taking advantage of the facilities available to foreigners, investors can easily establish their companies and take advantage of the thriving local and regional markets. Through this article, we will learn many details about how to establish a company in Dubai for foreigners .

Establishing a company in Dubai for foreigners

Steps to establish a company in Dubai for foreigners

Establishing a company in Dubai for foreigners requires following specific steps to ensure the process runs smoothly and successfully. Here are the basic steps:

• Determine the type of business activity: You must determine the type of activity that you intend to practice in Dubai, whether it is commercial, industrial, or service, because this affects the type of license required.
• Choosing the legal form of the company: You must determine the appropriate legal form of the company, such as a limited liability company (LLC) or a branch of a foreign company, as each type differs in legal and administrative requirements.
• Determine the company name: Choose a distinctive trade name that is compatible with Dubai laws, and must not contain prohibited words or be similar to the name of another company.
• Applying for initial approval: After determining the type of activity, legal form, and company name, you must apply for initial approval from the Department of Economic Development in Dubai.
• Preparing the articles of incorporation and the founding agreement: Depending on the type of company, it may be necessary to prepare the company’s articles of incorporation and the partners’ agreement and have them documented with the relevant authorities.
• Choosing a business location: You must choose a suitable location for the company, whether it is an office, a store, or a factory, and obtain a lease contract approved by Dubai Municipality.
• Obtaining additional approvals: Some commercial activities may require additional approvals from various government agencies, such as the Health Authority or Civil Defense.
• Registration and obtaining a license: After completing all requirements, the final application is submitted to obtain a commercial license from the Department of Economic Development.
• Opening a bank account : Once the license is obtained, a bank account can be opened for the company in one of the approved banks in Dubai.
• Registration with the Chamber of Commerce: Registration with the Dubai Chamber of Commerce and Industry is essential to legally start business operations.

After following these steps, you can start practicing your business in Dubai legally and effectively, benefiting from the great investment opportunities provided by the emirate.

Conditions for establishing a company in Dubai for foreigners

Establishing a company in Dubai for foreigners requires several conditions to be met to ensure compliance with local laws and regulations. Here are the basic conditions:

• Local partner: If a company is established outside the free zones, UAE law requires a local partner (Emirati citizen) who owns 51% of the company’s shares. However, there are some activities that can be 100% foreign-owned in free zones.
• Determine the business activity: You must determine the type of business activity you wish to practice, as each activity has its own conditions and requirements. Some activities may require additional approvals from competent government agencies.
• Minimum Capital : Capital requirements vary based on the type of company and the region in which you intend to establish it. In some cases, there is no minimum capital, especially in free zones.
• Government approvals: Initial approvals must be obtained from the Department of Economic Development in Dubai or the relevant free zone authority, in addition to approvals from other parties depending on the type of activity.
• Location: The company must have a physical address in Dubai. This requires obtaining a notarized lease contract for the company’s location (office, store, factory).
• Legal contracts: Foreigners must prepare and document the company’s incorporation contracts and the partners’ agreement (in the case of a local partner) with the relevant authorities.
• Obtaining a commercial license: After meeting all previous conditions, an application must be submitted to obtain a commercial license that enables the company to practice the activity legally.
• Registration with the Chamber of Commerce: The company must register with the Dubai Chamber of Commerce and Industry to ensure its legal recognition in the emirate.
• Opening a bank account: The company must open a bank account in one of the approved banks in Dubai to manage financial operations.

By fulfilling these conditions, foreigners can establish their company in Dubai and benefit from the thriving business environment in the emirate.

Do foreigners have the right to ownership in the entire company?

Yes, foreigners in Dubai have the right to 100% ownership of their company, but this depends on the location of the company and the type of activity it will undertake. Here are the details:

1. Free Zones: In free zones such as Jebel Ali Free Zone (JAFZA), Dubai South, and Dubai World Trade Zone, foreigners can own 100% of their company without the need for a local partner. Free zones provide a business-friendly environment with tax exemptions and other privileges.
2. Companies inside Dubai: Outside the free zones, UAE law previously required a local partner (Emirati citizen) to own 51% of the company’s shares. But in 2020, the UAE made legal amendments that allow foreigners full ownership of companies in a number of sectors within the country. However, this may still depend on the type of activity and location.
3. Restricted activities: Some activities may require a local partner or there may be restrictions on foreign ownership, so you should check the regulations for the activity you wish to engage in.

Thanks to these laws, Dubai has become an attractive destination for foreign investors, where they can freely establish and manage their companies while benefiting from the encouraging investment climate in the emirate.

Advantages of establishing a company in Dubai for foreigners

Establishing a company in Dubai for foreigners comes with many advantages that make it one of the most prominent global destinations for investment and business. Here are some of these features:

• Full Ownership: Foreigners can fully own 100% of their company in free zones and some sectors within Dubai, giving them full control over their business.
• Advanced business environment: Dubai provides advanced infrastructure, including means of communication, transportation, and modern facilities that support rapid business growth.
• Tax exemptions: Companies in free zones enjoy tax exemptions on personal and corporate profits, which increases profitability and reduces operational costs.
• Strategic location: Dubai has a distinctive geographical location that makes it a trade gateway linking the Asian, European, and African markets. This location facilitates access to global markets.
• Legal and administrative facilities: The government in Dubai provides great facilities to foreigners, including company establishment procedures, which are carried out quickly and effectively through electronic channels.
• Economic Diversity: Dubai has a diverse economy that includes many sectors such as trade, tourism, technology, and finance. This opens wide doors for investors in various fields.
• Freedom to transfer funds: Foreign investors can transfer profits and funds outside the country without restrictions, which provides them with great financial flexibility.
• Multicultural environment: Dubai includes an international community of different nationalities, which creates a work environment rich in cultural and intellectual diversity, and enhances global cooperation and partnerships.
• Political and economic stability: Dubai provides a politically and economically stable environment, which gives investors confidence in the long-term sustainability of their businesses.
• Advanced banking and financial services: Dubai provides an advanced banking and financial system that supports international and local business operations efficiently and easily.

Thanks to these advantages, Dubai is considered one of the best destinations for foreigners who want to establish their companies and benefit from opportunities for growth and success in a supportive investment environment.

In conclusion, establishing a company in Dubai is a golden opportunity for foreigners to take advantage of the thriving economic environment and advanced infrastructure that the emirate offers. Dubai is not just a city, it is a global business and trade center that allows foreign investors to achieve their business ambitions with ease. With numerous perks such as full ownership, tax breaks, and strategic location, companies can thrive in an open and multicultural market. Taking a step towards establishing a company in Dubai is an investment in a bright future characterized by stability and success.

Frequently asked questions about establishing a company in Dubai for foreigners