Company Registration in Dubai - An Overview
Main Regulatory Authority for Company Registration in Dubai
The main regulatory authority for company formation in Dubai is the Registrar of Companies it acts as a unified authority for carrying out different forms of compliance and registrations related to companies.
Jurisdiction of Company Registration in Dubai
The following areas can be chosen for company registration in Dubai.
This jurisdiction is most suitable for investments as the investors can reach out to multicultural audiences and expand their reach to the local markets of UAE, which can be quite beneficial for a company registered in this jurisdiction of Dubai. Here, the company can be registered as 100% expatriate-owned entities.
Registration of a company in this zone is comparatively easier than the company registration in the mainland. The advantages of incorporating a company in this zone are the exemption from VAT along with 100% transfer of profits, exemption from filing audit reports, and 100% ownership, etc.
Offshore jurisdiction refers to the area outside the boundaries of the particular region. Here the company is registered in Dubai, but the base of the company is situated outside the boundaries of Dubai. The main objective of company registration in this jurisdiction is the coordination of international trade.
Types of Company Structures Utilised in Dubai
The following structures would be utilized for company registration in Dubai.
Here, the liability of the shareholders is limited to the amount of their shares. This type of company can be registered in the mainland jurisdiction and provides 100% expatriate ownership.
This type of company is usually formed by the professionals such as lawyers, Chartered Accountants, doctors etc. The company can be registered with the Department of Economic Development of the respective Emirate of Dubai.
Usually, this form of company is formed outside Dubai. However, the office is opened in Dubai to carry out operations. It is just an extension of its parent company and does not exist as a separate legal entity.
A joint stock company is a type of company which is collectively owned by its shareholders There are two types of Joint Stock Companies, i.e. Public and Private. Here the liability of the partners is only limited to their share in the company.
Benefits of Company Registration in Dubai
Following are the benefits of company registration in Dubai.
The courts in Dubai follow the common law system. However, precedents from court cases are handled by lawyers in Dubai with US and UK legal qualifications. In Dubai there is a unique way of regulation.
A company registered in Dubai can avail the benefit of 100% Foreign Ownership. Hence a foreign investor or shareholder can have 100 % equity ownership of the company, which makes Dubai an ideal place to start a business.
Compliance is easier in Dubai as compared to other cities, the reason for this being the relaxed business laws and authorities approach to promote business and trade in the region.
The value-added tax is charged at the rate of 5% on the amount of goods and services which are provided in Dubai. There is no form of individual income tax levied on the employees working in Dubai.
Dubai has been an upcoming hub of the international financial and services sector, where the government of Dubai has been diversifying its economy into a major international financial and service sector.
Dubai is the third largest re-exporter in the world, the reason for which can be derived from the level of infrastructure the city has maintained. Dubai’s infrastructure is world-class which makes it a preferable option for investors worldwide.
Eligibility Criteria for Company Registration in Dubai
The following eligibility criteria are required for company registration in Dubai.
- The applicant should have all the necessary licenses before initiating the company registration process in Dubai. The indicative list of required licenses is as follows.
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Commercial licences covering all kinds of trading activity;
- Professional licences covering professions, services, craftsmen and artisans;
- Industrial licences for establishing industrial or manufacturing.
- Usually, an individual would enter into some form of profit-sharing arrangement with the local profits and agree on some sharing ratio which has to be decided by the parties.
Documents required for Company Registration in Dubai
As there are different forms of businesses in Dubai, there are different documents for each business. The following documents would be required for company registration in Dubai:
- Application form of the Business
- MOA and AOA which are duly notarised by the authority
- Passports copy of the Managers of the Business.
- Passport copy of the Sponsor to prove that the sponsor is a UAE National
- NOC from the Sponsor
- Bank Reference Letter for Each Shareholder
For industry, the following documents must be provided apart from the above documents:
- Copy of the Feasibility Study
- Existing Company Profile
- Information related to the Investor
For Setting up Branch Offices:
- Attested Copy related to the Certificate of Incorporation, MOA and AOA
- Board Resolution of the Company
- Three months bank statement related to the parent company
- Passport Copy And
- Original Power of Attorney
Procedure for Company Registration in Dubai
The next step is reserving the company’s name with the Department of Economic Development. The name reservation can be made by filing an application and paying the requisite fees for a name reservation.
Further, the applicant needs to draft the memorandum of association and articles of association along with a lease agreement of the company, followed by the notarization of the same.
After the notarization of the documents, the applicant is required to submit the documents to the Department of Economic Development and Dubai Commercial for verification.
The authority grants the certificate of incorporation after the verification of the application and documents submitted by the applicant.
The applicant must file an application for obtaining the business licence as per the requirement of the business operations of the company.
The applicant must file an application for obtaining the business licence as per the requirement of the business operations of the company.
After completing the above-mentioned formalities, the business owner needs to open a Bank Account in the name of the business.
Frequently Asked Questions
What are the benefits of company registration in Dubai?
- No Income tax levied on professionals
- Great Talent pool
- Diverse Location
- One of the Largest Financial Centres in the world.
What are the types of companies in Dubai?
- Company which is limited by shares
- Limited Liability Company
- Branch office
- Limited Liability Partnership
- Professional Companies
- Joint Stock Companies
What is DIFC?
DIFC stands for Dubai International Financial Centre, is one of the financial centres started in Dubai to carry out activities.
Do I require a sponsor for the process of company registration in Dubai?
No, the requirement of a local sponsor is not mandatory for the process of company registration in Dubai.
Is it only the public joint stock companies that can invest funds on behalf of a third party?
No, this requirement has been abolished as per the new amendment.
Which authority is responsible for granting the Trade licence in Dubai?
The Trade / Business license is provided by the Department of Economic Development (DED)
Is there a need to pay taxes in Dubai?
The taxes in Dubai are quite negligible. Most companies registered in Dubai don’t need to pay taxes except for some companies that are required to pay a 5 % tax based on the business activity.