Establishing A Foreign Invested Business In Dubai

There are numerous options when it comes to setting up a business in Dubai. These largely depend on your expected scope of business, and are impacted by type of work and where you wish to be. Dubai is zoned and only certain types of businesses are permitted to be established in certain areas. We provide a brief guide to your establishment options.

Entering the Local Market: Setting Up a Local Company

Most of these activities involve a local partner. For some types of business, it is necessary that the owner is a citizen of the United Arab Emirates and has at least 51% of the equity. However, these do give access to the local UAE market and are suitable for example for selling to UAE consumers. The procedures vary depending upon the scope of business, but include:

• Determining the field of activity.
• Determining the structure of the company.
• Choosing the legal structure:
• Sole Establishment, or a Liability Limited Company.

Choosing a name: When opening a company in the UAE, at least three name options should be offered for consideration. The name of the company must be clear and understandable. It must meet a number of criteria – have nothing to do with religion, nor imply it is related to any UAE state investor and so on.

Submission of application for preliminary approval at the Department of Economic Development

Preparation of Memorandum of Articles and Local Service Agreement.

Choice of location: In order to complete the registration of a company in the UAE, a lease agreement should be submitted. In order to do this, you need to rent or purchase the pertinent real estate within the UAE.

Obtaining additional permits: In some cases, in order to register a company in Dubai, you may need additional permits from the state authorities regulating certain types of activities. For example, to register the following businesses requires the following liaisons:

• Construction, catering, food: Dubai Municipality;
• Insurance and financial services: the Ministry of Economy
• Education: the Ministry of Education
• Legal services: the Ministry of Justice;
• Health care: the Ministry of Health;
• Public transportation and automotive: the Route Transport Authority

And so on.

Obtaining an immigration card: The holder of an immigration card is eligible to apply for an investor visa and gives certain additional rights of interest to specific investors.

Obtaining a visa: Please see our Dubai Visa articles about Virtual work visas here and Work and Residence Visas here.

Opening a bank account: Existing protocols are well established for most nationals and foreign investors; and are becoming easier for Russian investors. We can help you open bank accounts in the UAE.

Obtaining a license: After completing the required steps, investors can obtain their business license from the various UAE Economic and industrial departments. Much of this is now digitized, making the application process detailed, yet efficient.

Processing & Exports: A Free Trade Zone Company

When registering a company in the UAE free zone, business opportunities are limited as production can take place in the zone itself, or outside the state. These are ideal for foreign investors wishing to take advantage of Dubai’s lower corporate taxes yet produce products for sale and export throughout the region.

Dubai has several Free Trade Zones and these cater for different levels of production and export markets. We will be happy to provide advice.

Please also refer to our comments on Dubai’s DMCC Free Trade Zone here.

Services

For the services industry, a Representative Office may be a solution. These are also pertinent for businesses wishing to look for clients for their parent company and act as a liaison office. They are typically operated as cost centres and many not invoice locally. Please see our article concerning setting up Representative Offices in Dubai here.

Dezan Shira & Associates can assist foreign investors establish operations in Dubai. We provide market and business intelligence, corporate establishment, tax advisory and regulatory compliance assistance throughout the Emirates and has over 30 years experience in assisting foreign investors into Asia.  Please email us at dubai@dezshira.com or visit us at www.dezshira.com

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