What is the establishment of a company in Dubai for foreigners? Dubai is considered one of the most prominent investment destinations in the world, providing an advanced and prosperous business environment for foreigners wishing to establish their companies. The city is distinguished by its strategic location between the East and the West, in addition to its advanced infrastructure and flexible laws that encourage attracting foreign investments. The legal system in Dubai helps foreigners establish a company in Dubai for foreigners without the need for a local partner in some free zones, which opens up great opportunities for them to grow and expand. With the availability of facilities for registering companies and obtaining commercial licenses, Dubai becomes the ideal choice for those wishing to enter the markets of the Middle East and North Africa.
Steps to establish a company in Dubai for foreigners
Establishing a company in Dubai for foreigners requires following certain steps according to the different types of companies and free zones. The following are the basic steps for establishing a company in Dubai for foreigners:
Choosing the type of company: Determine the type of legal entity, whether it is a limited liability company (LLC), a sole proprietorship, or a branch of an international company. And determine whether the company will be established in the free zone or within Dubai itself.
Choosing a business activity: Determine the activity that the company will carry out, such as trade, industry, or services. The activity must be specified according to the requirements of the Department of Economic Development in Dubai.
Choosing a location: Determine the appropriate location for the company’s headquarters, whether in a free zone or within Dubai. Free zones provide many privileges such as full foreign ownership.
Registration and obtaining a license: Submit an application for a commercial license to the Department of Economic Development or the competent authority in the free zone. Choose a trade name for the company, and ensure that it is available and does not conflict with other names.
Opening a commercial bank account: Opening a commercial bank account in the company’s name in a local bank to deposit the required capital (if the company needs capital).
Obtaining visas: Apply for residence visas for workers and owners, as Dubai allows multiple visas according to the size of the company.
Preparing legal documents: Signing the articles of association and the company’s articles of association. And preparing any other legal documents according to the type of company and activity.
Issuing the final license: After completing the procedures, the commercial or industrial license is issued, after which the company’s operations can begin.
Preparing for operations: Preparing the office or company headquarters, purchasing the necessary equipment, and appointing employees if necessary.
By following these steps, foreigners can easily establish their companies in Dubai and take advantage of the available investment opportunities.
Advantages of establishing a company in Dubai for foreigners
Establishing a company in Dubai for foreigners has many advantages that make it a preferred destination for investment. Here are the most prominent advantages:
Full foreign ownership: In many free zones, foreigners can own the company 100% without the need for a local partner, which enhances control over the business and makes decisions independently.
Tax exemptions: Dubai offers attractive tax benefits such as exemptions from corporate and profit taxes for a period ranging from 15 to 50 years in some free zones, which reduces the financial burden on investors.
Ease of procedures: The procedures for establishing companies in Dubai are quick and easy compared to many other countries, with support from the government and specialized institutions to facilitate the establishment process.
Strategic location: Dubai is a link between the East and the West, making it an ideal global commercial center for accessing the markets of the Middle East, Asia and Africa.
Advanced Business Environment: Dubai has an advanced infrastructure and excellent transportation network, including seaports and international airports, which enhances the ease of global trade.
Access to Finance: Dubai provides a supportive environment for businesses, with access to finance from local and international banks, in addition to the presence of many government programs and initiatives that encourage investment.
Potential for Regional and International Expansion: With its ideal geographical location, Dubai provides great opportunities for companies to expand into new markets in the Middle East and North Africa region, and even globally.
Legal and Economic Stability: Dubai provides a stable legal environment based on modern commercial laws, which enhances investor confidence in continuing and growing in the UAE market.
Advanced Digital Transformation Systems: Dubai provides an advanced digital transformation system that helps facilitate business, from electronic registration to facilitated government procedures online.
Job Opportunities and Human Resources: Dubai provides a multicultural and highly qualified workforce, which enhances companies’ chances of success in obtaining competent employees in various fields.
These advantages are among the main reasons that make Dubai an ideal destination for foreigners to establish their companies and implement their commercial projects.
Documents required to establish a company in Dubai for foreigners
Establishing a company in Dubai for foreigners requires submitting a set of legal documents and papers. These documents vary according to the type of company and commercial activity, whether in a free zone or within Dubai. Here are the main documents required:
Commercial registration application: Submitted to the Department of Economic Development (DED) or the authority responsible for the free zone.
Copy of passport: Copies of the passports of the founders and investors in the company, provided that they are valid.
Personal photos: Personal photos of the founders and investors (usually 2-3 photos).
Identity verification: Submitting the Emirates ID card (if the investor is a resident of the Emirates) or the residence visa (in case of previous residence in the Emirates).
Memorandum of Association and Articles of Association: Signing the company’s memorandum of association and articles of association (in the case of limited liability companies or joint stock companies).
Pledge to provide capital: Submitting documents proving the founders’ ability to provide the required capital (if there is a minimum capital depending on the type of company).
Proposed Company Name: Choose a trade name for the company, and submit an application to verify its availability with the Department of Economic Development or the relevant authority in the free zone.
Commercial Activities: Specify the commercial activities that the company will carry out, according to the list approved by the Department of Economic Development or the relevant authority.
Proof of Address: Submit a document proving the address of the office or commercial headquarters of the company in Dubai, such as an office lease contract or ownership agreement.
Approval of the competent authorities (in some cases): Some activities require approval from the competent government authorities (such as health, education, or financial activities).
Legal Power of Attorney (if required): In the event that there is a legal agent acting on behalf of the founders or investors, an official power of attorney must be submitted.
Payment of fees: Pay the fees required to register the company, which vary according to the type of company and location.
Once these papers and documents are submitted, they are reviewed by the relevant authorities, and then the commercial or industrial license is issued to the company.
Cost of establishing a company in Dubai for foreigners
The cost of establishing a company in Dubai for foreigners is affected by a number of factors, including the type of company, business activity, location, and the legal benefits offered by the free zones. Here are the main factors that affect the cost of establishing a company:
Type of company: Costs vary depending on the type of legal entity of the company. For example, the cost of establishing a limited liability company (LLC) in Dubai is higher than establishing a company in one of the free zones, where foreigners can own 100% of the company in the free zones.
Location (free zone or inside Dubai): Free zones You can establish a company in a free zone, which is usually less expensive than establishing it in Dubai itself, as the free zones allow full ownership for foreigners with tax exemptions. Within Dubai, companies established in Dubai need a local partner with 51% of the shares if it is a limited liability company (LLC), which increases the cost of establishment.
Business activity: The cost of licensing depends on the type of business activity you choose. Some activities require special approvals from government agencies, which may increase costs, such as health, legal, or financial activities.
Company size: Number of employees, number of branches, and office space or business premises affect the cost of incorporation. Companies that require larger offices or a larger number of employees may face higher costs.
Capital requirements: Some companies require a minimum amount of capital to establish. For example, some free zones may require a certain amount of capital, or may require the company to open a bank account with a certain amount to prove its financial capacity.
Government licenses and fees: The cost of obtaining commercial licenses from the Department of Economic Development or the competent authorities in the free zones. These fees vary depending on the type of license and location.
Trade name approval: A trade name must be registered for the company, and if the name requires special approval, additional fees may be incurred.
Rent or purchase of property: The cost of renting an office or purchasing property in Dubai is an important factor in determining the cost of incorporating a company. In some free zones, there may be an option to use virtual offices at lower costs.
Visas and residency: Companies need to apply for residency visas for investors and employees. The cost of visas depends on the number of employees or partners.
Legal Consultations and Services: In the event of hiring a legal advisor or a specialized services company such as “Atqan”, costs may increase, especially if there is a need for legal consultations or support in preparing documents.
Digital Systems and Technology: In the event that digital systems or certain technology are used to increase efficiency or facilitate procedures, additional investments may be required. Based on these factors, the cost of establishing a company in Dubai for foreigners varies from one case to another.
Foreign Investment in Dubai
Foreign investment in Dubai is one of the most prominent factors that contribute to the growth of the city’s economy and make it one of the leading destinations in the world. Dubai is distinguished by its distinctive investment atmosphere, as it provides an attractive business environment for foreign investors from all over the world. This is due to many facilitating factors, such as the stability of the legal system, flexibility in financial systems, as well as the great facilities provided by free zones. In Dubai, foreign investors can own 100% of companies in many free zones, which enhances the opportunities to establish their companies independently and without the need for a local partner.
Dubai also enjoys a strategic location, making it an ideal commercial hub that connects the East and the West, facilitating access to vast markets in the Middle East, Africa, and Asia. Moreover, Dubai offers tax exemptions for companies and many commercial activities, which encourages investors to enter the local market. Dubai also provides high-quality infrastructure, including modern ports and airports, which contribute to facilitating the movement of trade. In addition, Dubai offers various government support programs and initiatives to encourage foreign investment, making it an ideal environment to attract investors in various economic sectors. In conclusion, Dubai is one of the best investment destinations for foreigners wishing to establish their companies, as it provides a flexible legal environment, diverse business opportunities, and great facilities for investors. With its strategic location, advanced infrastructure, and tax exemptions, Dubai has become a global center that supports commercial growth and expansion. The city offers multiple options for establishing companies, whether on-site or in free zones, allowing foreign investors to own their companies 100%. The UAE government also supports this trend by facilitating procedures and providing incentives to support the business environment. Setting up a company in Dubai is not only a strategic step towards entering global markets, but also an opportunity to benefit from the growth and innovation potential that the city offers.
Frequently Asked Questions about Company Formation in Dubai for Foreigners
Can foreigners own a company in Dubai?
Yes, foreigners can own 100% of a company in many of Dubai’s free zones. However, if the company is to be established outside of the free zones, there must be a local partner with 51% ownership if the company is a limited liability company (LLC).
What documents are required to establish a company in Dubai?
The required documents usually include: passports of the founders, personal photos, articles of association, proof of address, business activity approvals, and sometimes initial capital.
Are there tax exemptions for foreign investors?
Yes, Dubai offers long-term tax exemptions to investors in many of its free zones, making it an ideal business environment.
