Company registration in Dubai (UAE) – general information
0%Tax rate- 10 daysTime for setting up a company
- N/AMinimum capital needed
Are you interested in company registration in Dubai (UAE)? Running a business in western countries is a challenging task nowadays, primarily due to the unfavorable and complicated tax system for entrepreneurs. Additionally, it is hard to claim that the domestic market operates at a global or even European level, especially in light of the current economic disruptions.
For those seeking an alternative, the United Arab Emirates, led by Dubai, can be an interesting solution. They offer entrepreneurs an extremely friendly tax system and easy access to global markets.
In the following text, you will find a lot of practical information to help you assess whether setting up a company in Dubai is the right solution for you. If you have more questions or need assistance with company registration in the UAE, we encourage you to contact our specialists.
Company registration in Dubai – a brief summary
| Aspect | Details |
|---|---|
| Legal System | Dubai’s legal framework is divided into federal law and emirate-specific law, combining elements of Islamic law and European continental law. |
| Types of Companies | The main types are Free Trade Zone Company, Limited Liability Company (LLC), and Offshore Company. |
| Free Trade Zone Company | Available to foreigners; business operations are limited to free trade zones or activities outside the UAE. |
| Limited Liability Company (LLC) | Requires at least 51% ownership by a UAE national or resident; business operations are restricted to within the UAE. |
| Offshore Company | Accessible to foreigners; cannot conduct business within the UAE; requires opening a bank account with online services; fully remote registration is possible. |
| Tax System | No income tax; VAT at 5% since 2018 with similar mechanics to EU VAT; no corporate tax or withholding tax except in the oil, energy, and banking sectors. |
| Establishment Timeline | The process takes approximately 1-2 weeks. |
| Minimum Capital | No minimum capital requirement, but a capital of 250,000 AED is recommended to facilitate bank account setup. |
| Bank Account | A multi-currency account with online access and a VISA or MasterCard ATM card is provided, with the option to obtain multiple cards. |
| Shareholders | No maximum number of shareholders; at least one partner is required. For LLCs, 51% ownership by a UAE citizen is mandatory. |
| Management | At least one director is required, who does not need to be a resident of Dubai. |
| Office Requirements | Freezone companies must have a physical office within Dubai; virtual offices are not permitted. |
| Accounting Requirements | Maintaining accounting records is mandatory, particularly since the introduction of VAT in 2018. |
| Residency Requirement | Residency is recommended but not always required, depending on the type of company. |
| Registration Process | Involves checking name availability, selecting an office, submitting documents, undergoing medical exams, and obtaining a resident card. |
Company registration in Dubai (UAE): When is it worth establishing a business in the United Arab Emirates?
The United Arab Emirates is a federation of seven emirates: Dubai, Abu Dhabi, Sharjah, Ajman, Ras al Khaimah, Umm al-Quwain, and Fujairah. The UAE is located in the Middle East, along the Persian Gulf and the Gulf of Oman, which provides extensive access to rich oil reserves.
This, in turn, creates excellent conditions for dynamic economic growth. Interestingly, oil revenues are no longer the primary factor influencing the country’s GDP.
Currently, they account for a minority share, estimated at around 18%. Moreover, oil reserves are expected to begin depleting in the coming years. As a result, the authorities of the United Arab Emirates have long been focusing significant attention on developing other sectors of the economy.
The financial sector, modern technologies, and tourism are areas that already play a decisive role in the UAE’s wealth. Those who conduct business in this country also have wide access to cheap labor, primarily workers from India and the Philippines.
The prestige associated with business location is also of great importance. Dubai, the largest of the emirates, is a city synonymous with luxury and the headquarters of many global brands.
It is worth joining this group, especially since Dubai’s legal system, along with the political stability characteristic of the entire United Arab Emirates, creates excellent conditions for running your own business.
Company registration in Dubai (UAE): What are the forms of conducting business in Dubai?
In the United Arab Emirates, the legal system is divided into two main categories: federal law and law applicable only within individual emirates. Each emirate operates under similar legal frameworks, and a common feature of the legal solutions across the UAE is the combination of Islamic law and European continental law.
A good example of this is the matter of establishing companies: while the types of companies are consistent across all emirates, administrative and tax issues are regulated at the level of each emirate. Therefore, when doing business in the UAE, it is essential to consider both federal and regional laws.
The UAE legislature has provided for three main types of companies: Free Trade Zone Company, Limited Liability Company, and the most commonly chosen by foreign entrepreneurs—offshore company.
The first of these, the Free Trade Zone Company, is available to foreigners—its shareholders do not have to be UAE nationals, but business activities can only be conducted within the free trade zones and outside the territory of the UAE.
The Limited Liability Company (LLC) is, in simplified terms, equivalent to a limited liability company. In this type of company, at least 51% of the shares must be owned by a UAE national or resident. Business activities under this legal form can only be conducted within the territory of the United Arab Emirates.
Offshore company in Dubai
The offshore company is the simplest and most accessible type of company for foreigners in the UAE. In its capital structure, only individuals who do not hold residency or citizenship in the United Arab Emirates can be involved. The registration of an offshore company can be done entirely remotely, without the need for a visit to the UAE.
One of the conditions for registering an offshore company is the requirement to open a bank account with a bank that offers online banking services. However, it’s important to note that an offshore company cannot employ workers on employment contracts, nor can it sell its products to residents or citizens of the United Arab Emirates.
This legal form is therefore ideal for those who want to take advantage of the benefits offered by the UAE’s legal framework. These benefits are most notably seen in the area of taxation.
Company registration in Dubai: Taxation of companies in Dubai
Companies registered in the United Arab Emirates do not pay VAT, corporate income tax, or withholding tax. These benefits do not apply to corporations operating in the oil, energy, or banking sectors.
It is important to emphasize that using the UAE’s tax system is fully legally secure. The country is on the OECD‘s white list, which effectively ends any debate over the legality of the tax solutions employed there.
Company registration in Dubai: Why Should You Consider Establishing a Company in Dubai?
Given the above, the benefits of establishing a company in Dubai can be categorized into two main areas: tax benefits and image benefits. Dubai offers an extremely favorable tax system—unmatched not only in Poland but in any other European country—characterized by the setting of public dues at a very low level.
Moreover, due to the possibility of avoiding double taxation—provided that the appropriate legal mechanisms are correctly applied—the entrepreneur can be confident that the taxes paid in Dubai will be the only ones incurred.
Company registration in Dubai (UAE) from an image perspective: The prestige of running a business in Dubai
From an image perspective, operating a company in Dubai positions the business among the global business elite. It’s worth taking advantage of these benefits, especially since an offshore company can be established without even leaving your home.
However, it is important to remember that the decision to open a company in Dubai should be preceded by thorough analyses that will allow you to choose the best legal form for your specific type of business.
After making a decision in this regard, it is necessary to complete all the formalities related to company registration and then ensure that its operations comply with the law. Each of these steps must be backed by solid knowledge of the legal framework in Dubai and the practical application of these laws.
Without this, what could be an opportunity for a successful and highly profitable business may become a risk for the entrepreneur.
Company registration in Dubai (UAE): Practical information on setting up a company in Dubai
Dubai, located in the United Arab Emirates, is flourishing economically. The capital of the Emirate is the city with the same name—Dubai.
The country, which has garnered global attention due to its economic development and tourism projects, is known for its extraordinary wealth, creating, among other things, artificial islands like Palm Island shaped like a palm tree, and airports situated on artificial islands in the sea. Thanks to its status as a tax haven, Dubai attracts entrepreneurs with a transparent legal system, the absence of income taxes, and free trade zones.
How to set up a business in Dubai (UAE)
Setting up a company in Dubai is ideal for those considering obtaining residency in the UAE. Since 2018, VAT has been introduced, making accounting mandatory, and annual financial statements must be submitted through a local auditor.
The process of opening a company typically takes 1-2 weeks, although changes in the ownership structure can be time-consuming. This option is recommended for clients who, for example, wish to invest in real estate in Dubai.
Types of companies in Dubai from a practical perspective
In the United Arab Emirates, there are three types of companies, each differing in registration requirements, costs of services, and the possibilities for conducting business.
Offshore company in Dubai
Offshore companies, under international regulations, do not require a visa for residency in the UAE to be established, as they are considered virtual entities rather than residents. However, this means that the company cannot conduct any business within the UAE. The client owns 100% of the shares in the company. The company can open a bank account only with a bank that offers online banking services.
To establish an offshore company in the UAE, the client does not need to visit the country; we can act on their behalf. However, the client must visit the bank in person to open the account.
Offshore companies can also be established in other emirates like Dubai and Ajman, where the client must participate in the registration process and sign the necessary documents. Additionally, an annual report prepared by a resident auditor must be submitted to renew the business license, which adds an extra cost for the client.
Free Zone company in Dubai
Like offshore companies, Free Zone companies are 100% owned by the client. This type of company provides the client with a visa for residency and work in the UAE for 3 years. However, the client cannot remain outside the country for more than six months during this period.
The client can also open a bank account for the company with a checkbook, debit card, and online banking access. It is important to note that the client must visit the UAE both to establish the company and open the bank account. Once the company is established, visa applications can be made.
The cost of a resident visa is approximately 7,500 AED (around 700 USD), including the application, immigration card, health card, UAE ID card, fingerprinting, visa stamp in the passport, etc.
Mainland Company in Dubai
Mainland companies, similar to limited liability companies, are established in partnership with a local Emirati, who owns 51% of the shares, while the client holds the remaining 49%. In practice, this is often only on paper. The client can reach an agreement with the local partner and pay a negotiated fee to conduct business using part of the local partner’s shares.
This type of company allows the client to conduct business not only within the UAE but globally. The client can access checkbooks, debit cards, and online banking when opening a bank account. However, the client must visit Dubai for about seven days to establish the company.
The cost is approximately 75,000 AED (around 21,000 USD), covering subscription fees, sponsor fees, administrative fees, professional agent fees, all documents in Arabic, etc. Office space is arranged by the client according to their requirements, although we can assist through our network of real estate agents. The cost of a resident visa is around 7,500 AED (around 700 USD).
Company registration in Dubai (UAE) – FAQs
What are the main advantages of establishing a company in Dubai?
A favorable tax system, global business opportunities, prestige, and modern technologies.
What are the legal forms of companies available in Dubai?
Free Trade Zone Company, Limited Liability Company, offshore company.
Can an offshore company in Dubai conduct local business?
No, an offshore company cannot conduct business within the UAE or employ workers under an employment contract.
How long does the process of establishing a company in Dubai take?
On average, about 1-2 weeks.
Are there any minimum capital requirements for establishing a company in Dubai?
There are no minimum capital requirements, although a capital of at least 250,000 AED is recommended.
Is there an income tax in Dubai?
There is no income tax for most companies, with the exception of firms in the oil and banking sectors.
What is the tax system for companies in Dubai like?
Companies are exempt from VAT, corporate income tax, and withholding tax.
What are the accounting requirements for companies in Dubai?
Maintaining accounting records is mandatory, especially since the introduction of VAT in 2018.
What are the benefits of operating a company in a Free Trade Zone in Dubai?
100% ownership for foreigners, the ability to obtain a resident visa, and the opportunity to conduct business on a wide scale.
Do I need residency in Dubai to establish a company there?
For some types of companies, residency is recommended but not always required.
What documents are needed to establish a company in Dubai?
The documents depend on the type of company, but typically required are: the articles of incorporation, the company’s memorandum of association, identification of the shareholders, and the relevant licenses.
Company registration in Dubai (UAE) – the procedure
Company registration in Dubai (UAE): Registration process for a freezone company and obtaining residency:
- Checking the availability of the chosen company name.
- Traveling to the Emirates.
- Selecting a physical office space.
- Demonstrating relevant qualifications aligned with the company’s license.
- Drafting the articles of incorporation and the company’s memorandum of association. Obtaining a license for the specific type of activity.
- Submitting the required documents to the registry.
- Applying for a placement card to obtain residency in the UAE.
- Undergoing medical examinations for infectious diseases.
- Collecting the resident card after the decision is issued.
Company registration in Dubai (UAE): Shareholders
There are no restrictions on the maximum number of shareholders; at least one partner is required to establish a company. Foreign shareholders are allowed, but in practice, the shareholder must be the client. For a local company (LLC), at least 51% of the shares must be held by a UAE citizen.
Company registration in Dubai (UAE): Management
At least one director is required to manage the company. Directors do not need to be residents of Dubai.
Company registration in Dubai (UAE): Office
A Freezone company in Dubai must have a physical office within the Emirate. Dubai does not allow companies to be registered at a virtual address. The cost of renting office space is often one of the major components of the project’s expenses.
Company registration in Dubai (UAE): Timeline
The time to establish a company is approximately 10 days.
Company registration in Dubai (UAE): Capital
There are no minimum capital requirements. In practice, to facilitate the process of opening a bank account, it is advisable to contribute capital of at least 250,000 AED.
Company registration in Dubai (UAE): Taxes and finances of a company in the UAE
There are no income taxes in Dubai. Taxes are only paid by companies involved in oil extraction. Since 2018, the Emirates have introduced a VAT at a rate of 5%. The mechanics of VAT are similar to those used in the EU, meaning that VAT will not apply if services or goods are provided to companies or individuals outside the Gulf countries.
Company registration in Dubai (UAE): accounting
Maintaining accounting records is mandatory.
Company registration in Dubai (UAE): Additional information
Bank account
A multi-currency bank account will be opened for your company, with online access to the account, and a VISA or MasterCard ATM card (it is possible to obtain multiple cards).