Assisting people in setting up their businesses is not only our job but also a passion. And it was once again, a great experience to hold the ‘Business Setup Webinar’ for our local and international attendees. We hope we were able to answer all your questions, you can write to us at [email protected], and we will be happy to answer more. We also thank our CEO, Lorenzo Jooris and our Business Setup Advisors for explaining the processes and procedures so coherently. If you missed the session, please watch the recording linked in this post.
KEY HIGHLIGHTS – SET UP A COMPANY IN DUBAI
Why Dubai?
The UAE and Dubai, in particular, has always been one of the top cities that people chose to migrate. Connectivity will be key to the growth of all future megacities and is the reason for Dubai’s rise as one of six truly global cities in the world. The large coastline and the global aviation hub eases the transportation and connection of people from all around the globe to come together in one place. The country’s free economy is always open to foreign business and investment, and the government policies are extremely favourable for the business landscape and the SMEs. A range of support is offered by the government for the companies who are looking to set up a business in Dubai. Also, businesses operating in the free-zone have permission to be 100% foreign owners with minimum import duties.
The tax structure of the country is one of its most attractive features. There is no federal income tax and corporate tax is applied only to the banking and oil industry. VAT has been fixed at the nominal rate of 5%, making the UAE’s tax and fiscal landscape one of the best in the world.
What are the benefits of setting up in Free Zone and Mainland?
It will entirely depend on the nature of the business, whether one is conducting some business locally or is it only used for invoices. If the business is mostly conducted outside the country then getting a Free Zone license makes more sense alternatively Mainland license has increasingly become a popular choice ever since the traditional regulations have been lowered. The new FDI laws now allow 100% ownership by the expats.
How competitive is Dubai’s market when it comes to setting up a company.
The amount is determined by the jurisdiction but setting up a company in Dubai can start with as low as around 2000$ in Free Zones and around 5000$ for Mainland.
How many visas can one get by setting up a company in Dubai?
Creative Zone is a one-stop-shop when it comes to setting up in Dubai. The Creative Zone’s team will begin by taking the passports to start the visa process, then comes the medical and once the owner’s visa is processed they can sponsor their wives, parents, children even domestic help. The concierge department of Creative Zone takes care of all the paperwork and ensures that it is aligned with the UAE law, which essentially means that the Birth certificate and Marriage certificate are attested by the Government here and the country where one was born/married, the same then has to be translated into Arabic, all of this is done under one roof by Creative Zone. The process from start to end takes up about 36 days, however, the expat doesn’t need to be in the country for the entire duration they only need to be physically present for 7-8 working days till their visa is stamped.
For more queries please reach out to us by clicking here.
How will Creative Zone help companies open a bank account?
Setting up a company is a very straightforward process, what is tricky is to open a bank account if you don’t know what exactly is to be done. Creative Zone’s concierge team’s main focus is also on opening company’s bank accounts, they maintain relationships with various bankers in the country and can advise which one will suit the company’s needs the best. They do this by acquiring some documents before engaging with the banks and understanding the nature of the business, its overview, where is the funding coming from etc. So, the concierge team will have a confirmation before opening an account.
Difference between Mainland and Free Zone
A Mainland license allows one to carry out business at the onshore part of the city, most Mainland companies have a 49% and 51% ownership arrangement, where the larger portion percentage is owned by a local representative, in some even 100% and in others expats are allowed to own 100% of the business.
Free Zones are a kind of Special Economic Zone (SEZs) spread all across the UAE. There are more than 50 such zones and are dedicated to specialised industries like Shipping, logistics, Media etc.
|
|
Mainland Company |
Free Zone Company |
Offshore Company |
|
Ownership |
An expat can acquire only 49% of the company shares. Remaining 51% must be acquired by a local sponsor |
A free zone company has no such restriction. The foreign expat can hold complete 100% shares of the company. Neither a local partner nor a service agent is needed to start a company |
An expat can have full ownership of the company only if it’s located outside the UAE An offshore company cannot have any physical presence in the UAE |
|
Business Scope |
A company present in the mainland is free to do business anywhere in the UAE. They are allowed to do business inside any free zone in the emirates |
Unlike mainland, a free zone company is not usually allowed to business (manufacturing and selling) outside its free zone. |
They are free to business outside the emirates. They are restricted from doing business inside the UAE |
|
Audit |
The mainland companies must prepare audit at the end of every financial year |
Not all FZ companies are required to audit, except some businesses.This includes free zone companies (FZCO) and free zone establishments (FZE). |
Offshore company does not have to prepare audits. |
|
Visas |
A residence visa is given depending on the size of the office/ work premises |
A residence visa is given depending on the size of the office/ work premises |
Since there is no need of office space, an offshore company is not issued with residency visa |
|
Capital requirement |
Minimum capital requirement for a company on the mainland vary according to the legal form of business |
A free zone company has a minimum capital requirement depending on the emirate it belongs to |
An offshore company in the UAE has no minimum capital requirement |
|
Privacy/Secrecy |
The details of a Mainland company is available to the general public upon request |
The details of a free zone company is available to the general public upon request |
The names and identities of owners, directors and shareholders of offshore companies are not made public |
|
Govt Authorities for Company setup |
They need to take permission from authorities like DED, Ministry of Labor (MIL), Dubai Municipality, Ministry of Interior (MOI) etc. |
Free zones have their own rules for approval of any company inside its jurisdiction and they don’t require approvals from authorities outside of the free zone. |
Ras Al Khaimah (RAK) and the Jebel Ali Free Zone (JAFZA) offer offshore formation. The free zone authorities of that jurisdiction look after their approval |
|
Cost of Company Set up |
High |
Medium |
Low |
