Due to its strategic location and friendly business atmosphere, the UAE continues to attract more companies worldwide. However, to set up a new company in Dubai, UAE, you must follow legal procedures and documents to ensure that your business in Dubai is legally established. After all the legal formalities have been completed, starting a business setup in Dubai will take a maximum of a week.
The UAE is very strict about starting a new business in Dubai, especially regarding legal requirements. Suppose you want to start a business in Dubai or any other place in the UAE. In Dubai, it is imperative to comply with all legal standards before starting a business. So let’s see in detail what legal activities you need to perform.
Company Formation and Tax Laws in Dubai
There are three main reasons for doing business in Dubai:
The corporate tax, withholding tax, value-added tax, import and export tax, and capital gains tax do not apply to companies incorporated in Dubai. Tax Incentives in United Arab Emirates Free Zones.
The UAE has more than 66 international tax agreements with major countries such as China, the USA, and most European Union member states.
With no foreign exchange controls, foreigners can quickly acquire local currency.
With significant business opportunities, Dubai has a large number of investors from all over the world. The city is always abreast of the latest trends and developments. Also, the relatively low cost of doing business in Dubai is an advantage. It’s a foodie’s paradise for those looking to try new cuisines. Dubai is also a shopper’s paradise, as the city does not charge Value Added Tax (VAT). Residents and business people who plan to start new projects in Dubai are exempt from personal income tax.
Why do Entrepreneurs Prefer to Invest in the UAE?
Here are many reasons entrepreneurs worldwide choose to base themselves in the UAE.
- There are no personal or corporate taxes.
- Rapid economic expansion.
- There are no exchange controls.
- Into a diversified economy.
- Modern infrastructure and equipment.
Clear advantages of business set up in Dubai free trade zone.
- Import duties are low.
- Adaptable government regulations.
- Dubai’s industrial boom.
What are the documents and certificates to start a business in Dubai?
Below are the primary documents and certificates for starting a business in Dubai.
Determination of legal form and activities
The first way to apply for a business license is to determine the type of business activity you are ready to start. Additionally, the exact nature of the business must be specified, such as whether this is a corporation, a branch of a foreign corporation, or a limited liability company. Furthermore, the rules, terms, conditions, and fees for setting up a company in the UAE vary depending on the kind & nature of the activity.
Business name registration
After determining activities and legal status, a unique trade name must be chosen for the company to distinguish it from other entities. Remember that the product’s title must reflect the activity’s nature and legal status.
In general, the registration of a trading name must meet the following conditions:
- The trade name must not have been previously used or registered within the same line of business.
- It should match the type of activity and legal status required.
- It must not violate any law or public order.
- It must not be identical to any local or international trade name registered with the Ministry of Economy and must not deceive consumers.
- The Department of Economic Development (DED) reserves the right to cancel a trade title if it finds that it is identical to an existing one or does not comply with the department’s terms and conditions.
What types of businesses can operate in a free zone?
The needs of the type of business mainly determine the legal form. Furthermore, legal form is the basis for deciding applicable laws and regulations. In the UAE, investors can choose from the following legal structures:
- Form a general partnership.
- Formation of a limited partnership.
- A Limited Liability Company (LLC) incorporated in Dubai.
- Establishment of the Public Joint Stock Company (PJSC) in the United Arab Emirates.
- Formation of a private joint stock company (PrJSC).
- Establish a private company.
- Set up a sole proprietorship.
What type of business entity can I set up in the UAE?
Select the legal entity your company will use to conduct business in Dubai. As a new business owner in Dubai, you can open one of three types of businesses:
- Free Zone Company LLC or Free Zone Company.
- Free Zone Corporation (FZC).
- Continental Company Registration (MCE).
The difference is the number of shareholders and whether the shareholders are natural or legal persons. Some free zones may not allow the registration of both types of companies. You should check with the business establishments in Dubai to find out what kind of company they can register. See List of Free Zones and Their Powers for more information.
Preliminary approval by the authorities
After registering a trading name and obtaining a certificate, initial approval from the department is required to obtain all other approvals easily and quickly. Business licenses issued by the Department of Economic Development (DED) help startups set up in Dubai to conduct business online and through social networking accounts. This license aims to steer business people in the right direction as they enter the business world. Dubai Economy seeks to regulate and enhance the ease of doing business electronically through the Department of Economic Development.
If a person wishes to start a business in Dubai, he must first register with the Dubai Department of Economic Development. Entrepreneurs should note that preliminary approval is valid for 3-months from the date of issue. The employer must obtain a new certificate if the certificate has expired before proceeding to the next step. These businesses fall into one of six categories of business industries, each of which requires a different type of Department of Economic Development (DED) license:
- Industrial license,
- Business license,
- Professional license,
- Craft license,
- Agricultural license,
- Tourist license.
Dubai business license
The next step is acquiring a business license after obtaining all necessary approvals. The documents required to obtain a business license depend on the company’s economic and legal status. It is important to note that foreign documents must be translated into Arabic by a legal translator and certified by the Ministry of Justice.
First, you have to make sure you have the correct documentation. In addition to your business license, you may also need the following:
- Company account opening form.
- The decision of the board of directors approving the account opening and its signatories.
- A copy of the certificate of incorporation.
- A copy of your stock bond.
- A copy of the papers of association and memorandum
of the company.
- Copies of passports of all partners in the company.
Dubai Criminal Investigation Certificate
Citizens and residents within the United Arab Emirates can obtain a Certificate of Good Conduct, also known as a Police Check, from the Dubai Police according to the following procedure. A Certificate of Good Conduct certifies that you have a clean record and fall under the UAE’s ‘Good Resident’ category.
In Dubai, the certificate can be applied through the Dubai Police website or its app. To apply, visit the website. You must access your user profile via the MYID link or fill out the form directly to apply.
The service fee for obtaining a customs clearance certificate is AED 100 for UAE nationals and AED 200 for residents. For foreigners trying to get a degree in Dubai, the fee is AED 300.
Documents required to obtain police clearance:
- Original + copy of Emirates ID.
- Passport-size photo.
- Original passport + photocopy.
Approved by the Ministry of Economic Affairs.
It is an important step to clear as the Ministry of Economy must authorize the set up of a representative office in the UAE. In addition, details about the parent company, such as the address of the principal office, nature of the business, shareholding agreement, articles of incorporation, and other corporate documents, must be submitted to the Ministry of Economy (MOE). In some cases, additional approval from government agencies that regulate specific business activities may be required.
Examples of such events organized by the Ministry include:
- Ministry of the Interior.
- Ministry of Justice.
- Local councils.
- Telecommunications and Digital Government Regulatory Authority (TDRA).
- Executive board.
- Ministry of Economic Affairs.
- Local health department.
- Supreme Petroleum Council.
Doing business in Dubai is now easier with VVAS Global.
Are you hoping for a successful business setup in Dubai? But is the legal process too daunting for you? If so, contact VVAS, Dubai International Business Advisor, who has successfully guided thousands of business owners to do business in Dubai. You can rest assured that your business setup is safe as we have a team of experienced professionals with cutting-edge knowledge of Dubai’s business and market culture.