Business Setup in Dubai

What you need to know

How to setup a company in Dubai

How to start a business in Dubai? Thousands of people are moving to the UAE every year, mainly due to two reasons:

  • To live in a place considered to be a holiday paradise to most of the world coupled with an extremly high quality of life
  • To open a business and benefit from the tax advantages (zero corporate tax) and entrepreneurial ecosystem that the country provides


100% Tax Free?

Dubai is a city of superlatives and offers another priceless advantage for companies and private individuals: 100% tax exemption - there are currently no taxes in Dubai, neither corporate income tax for companies nor income tax for private individuals. The only exception is the value-added tax (VAT) for mainland companies, which is only 5% and is of course only a pass-through item for local companies. Companies in the free zone are not affected by the VAT unless their income generated with UAE clients exceeds AED375000 per year.

NEWS - Corporate Tax
A Corporate tax of 9% is to be introduced from June 2023. However, there is a tolerance threshold of AED375000 turnover per year. If you stay below, you are exempt from this tax. This only affects Mainland companies, Freezone companies are expressly excluded from this tax.

Is a residenc visa in Dubai necessary?
No, it is not mandatory to be a resident in the UAE to set up a company in Dubai. Depending on the type of company form and the respective license, there are different provisions. In principle, however, one person inthe company needs residency and Emirates ID to set up a company corporate account.

Cost of starting a company?
The costs for company formation depends on the respective activity, the free zone and last but not least on the required visa authorizations. Currently, the prices for founding a Dubai company with 1 visa entitlement starts at around $6500 including all costs for the first year.

How long does it take to set up a company?
Once all the required documents and information has been collected, founding a company usually only takes 3 to 5 working days. You don't have to be physically present during the setup procedure. We are an official Freezone partner and can set up the company with your digital signature.

How long does the visa process take?
The visa process is started after the company is incorporated and the immigration card and e-permit are received and takes about 5 business days. For the issuance of the (digital) Emirates ID, you have to reckon with around 7 working days.

EmiratesSetup, a service provided by The Austrians LLC, is a registered partner of many leading Freezones in the UAE. We have received various awards for best agency.

What company suits me best?

Case studies

EXAMPLE 1

You own several companies or assets in Europe or would like your new company in Dubai to become a shareholder in other companies in the future. But you don't want to move your residence to Dubai. You don't need a bank account either. The company serves the sole purpose of a holding company.

Company form: FreeZone company with 0 Visa


EXAMPLE 2

You run a marketing agency, an ECommerce store, etc. and with this company you mainly look after international customers. Since you can carry out your activities from anywhere, you want to relocate your company and possibly your residence to Dubai, but plan little or no customers in the UAE. A bank account is absolutely necessary.

Company form: FreeZone company with visa


EXAMPLE 3

You want to open a restaurant, beauty salon or any other service business in Dubai. Customers should be greeted on site in a shop or office. You also want to move to Dubai. A bank account is therefore of course absolutely necessary.

Company form: Mainland company with visa


EXAMPLE 4

You work in the financial industry, crypto or NFT sectors and accept foreign funds from others. You need comprehensive advice and a company account. As those activities are strictly regulated they require incorporation in designated freezones such as the DMCC, DIFC or ADGM.

Company form: Regulated FreeZone company with visa

COMPANY FORMS IN DETAIL

1. OFFSHORE COMPANY

This form of company is currently still offered by many agencies. Since it is practically impossible to obtain a bank account for an offshore company, this form of company can actually be ruled out from the outset.

If you nevertheless decide on this form of company, please note the following:

- No residence visa authorization hence no corporate bank account
- No business relationships with companies within the UAE

2. FREEZONE COMPANY
This company form is intended for companies that want to use the tax advantages of Dubai or the UAE but do not plan to conduct business within the UAE.

Freezone companies offer many advantages:

  1. No corporate tax
  2. No withholding tax
  3. No bookkeeping required (in some Freezones)
  4. No income tax for UAE residents
  5. No annual accounts
  6. No data exchange with foreign authorities
  7. 100% ownership
  8. Formation time only 3 - 5 working days

In Dubai there are over 30 free zones (free trade zones) where foreign companies can settle accordingly. In principle, almost all Freezones offer the same activities and it is therefore advisable to pay attention to price/performance and the reputation of the Freezone. Of course, we know exactly which free zone is best for you. You have a clear advantage when founding a company with us.

3. MAINLAND COMPANY
Probably the most popular and common form of company for companies that conduct most of their business within the United Arab Emirates is the mainland company. There are two basic subject areas under which all companies must be classified. On the one hand there is trade and industry (Commercial) and on the other hand there is the area of service and consultancy (Professional).

However, the respective legal form differs significantly here. It is possible to set up an LLC (Limited Liability Company) in the trade and industry sector, in the service and consulting sector a Sole Establishment (comparable to a GbR) is set up and a local service agent is required.

In both types the company is 100% foreign owned.

Activity - Trade and Industry : Commercial
The trade and industry license includes activities related to trade and industry. The license for commercial activities includes, for example, general trading and car rentals. Industrial activities include the production and processing of food. This type of license no longer requires a local partner and is the most common business model to date. The legal form can be an LLC (limited liability company). The company is 100% foreign owned.

Examples: food and beverage trade, e-commerce, car and motorbike rental, business brokerage, food processing, etc.

Activity - Service and Consultancy : professional
If you work in the consulting and service sector, you need a local service agent, but you own 100% of the company. The Local Service Agent receives an annual fixed amount and there are no further payment obligations. The small disadvantage of this form of company is that it is not an LLC, Limited Liability Company, but a sole proprietorship (GBR).

Examples: beauty salon, restaurant, supermarket, architect, construction company, etc.

Advantages of a Mainland Company in Dubai

  1. No corporate tax
  2. 100% ownership possible
  3. No income tax for UAE residents
  4. No share capital deposit necessary
  5. Unlimited Visa Eligibility
  6. Better image with banks and business partners
  7. Business relationships with all Emirati and GCC companies


The shareholders can be both private individuals and foreign companies and an authorized signatory manager or director is required.