Business Setup in Dubai – How to Form a Company

Company setup in Dubai depends completely on the legal jurisdiction selected. In general, from the Free zones, the Low-cost Company set up begins at approx. 11,500 / $3133. The additional fee increases with the inclusion of other facilities available. The annual cost of an offshore non- Resident company in Dubai is AED 7500/USD 1950.

There are many reasons why companies from Freezone prefer to setup Company in Dubai. First and foremost, the legal system in Dubai are comparatively much better than other emirates. There are no corporate tax or franchise tax applicable in Dubai. Companies have to pay only the local rate and no value-added tax. Company formation in Dubai is easy. Most of the entrepreneurs prefer the Company formation channels offered by the governmental departments.

However, there are certain channels that are not preferred for company setup in Dubai. Company formation in Dubai requires the application for a license and registration with the Dubai Regulatory and Licensing Authority (DRLA). Companies have to pay the prescribed penalty – fine, penalty or expulsion – if they fail to register and file the annual return.

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Company formation in Dubai is possible only if the shares of the applicant are owned by the body corporate or by a nominee. If the individual is not a natural owner of the shares, he can apply for the exemption status and can be granted permission to operate through a limited liability company. This is necessary for individuals who do not wish to share their ownership of the business setup in Dubai. However, if one wants to avail the benefit of the corporate shield, he has to pay the annual fee and comply with the other corporate rules.

There are some vital requirements that are related to the ownership and share capital requirement of the business activities in Dubai. Company formation in Dubai does not require the minimum capital stipulated in the law. The share capital requirement is higher in free zones than in the rest of the cities. Companies are also not allowed to own more than twenty percent in the free zones.

The above mentioned regulations and requirements are applicable to all entrepreneurs wishing to set up a business setup in Dubai. However, business owners can enjoy these benefits only if they incorporate themselves in the free zones. For those who are not resident of the emirate and do not own any shares or bonds, they cannot incorporate themselves in the business setups in Dubai. In such cases, they can opt for the services of the offshore company formation firms in order to file for the required papers and to get registered as a Company.

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Business owners should check with the company formation firms in Dubai before registering their new business in order to avoid paying heavy administrative charges at the end of the process. These companies also provide legal assistance in case of personal, business, corporate, and office removals in Dubai. Companies that want to establish a new business in Dubai should contact the firms that offer this service free of cost.

Companies in Dubai are not allowed to trade in the currency of the country they are emigrating to. They are not allowed to carry out financial transactions in their name. This is one of the many legal stipulations that restrict the emirates from opening up new branches and offices in their name. If you are planning to start a new business setup in Dubai, you should get complete information about the above mentioned regulations and know whether you are eligible for the free business set up in Dubai.


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