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How to open a company in Dubai

٠١ أبريل How to open a company in Dubai

Opening a company in Dubai represents an important strategic step for many entrepreneurs who seek to benefit from the advanced commercial environment and the strategic location of the Emirate of Dubai in the heart of the Middle East. Dubai offers wide opportunities for new companies, whether local or international, but establishing a company requires a careful understanding of the legal and regulatory steps and requirements. This article will cover how to open a company in Dubai , including the types of companies available, the steps needed for incorporation, and the financial and administrative requirements that must be considered. We will also highlight the benefits that Dubai offers businesses, and how to benefit from specialized services to assist in this process. 

How to open a company in Dubai

How to open a company in Dubai

To open a company in Dubai with the help of Itqan Company, several basic steps can be followed, including:

  1. Choosing a Company Type: The process begins by determining the appropriate company type, whether a sole proprietorship, limited liability company, or partnership, based on business needs and financial strategy.
  2. Choosing a geographical location: Determining the location where the company’s operations will take place, whether it is within one of the free zones or in one of the main neighborhoods of Dubai.
  3. Determine commercial activities: Determine the scope of commercial activities that the company will undertake, which must comply with licenses issued by local authorities.
  4. Local Partnership Arrangements: If a company requires a local partnership, Itqan may provide a solution by using its services.
  5. Submission and Approvals: Submit all necessary documents and applications to the relevant authorities in Dubai, and obtain the necessary approvals to start work.
  6. Establishing the organizational and financial structure: determining the management structure and internal organization of the company, and establishing the necessary financial accounts and human resources.
  7. Registration and Licenses: Conducting the final registration process for the company and obtaining the necessary licenses and permits to start operating.

Itqan Company provides comprehensive services that include legal advice, assistance with licensing, and support during all stages of the company establishment process in Dubai.

Types of licenses required to establish a company in Dubai

To establish a company in the Dubai Free Zone , various licenses are required to suit the type of business activity chosen. These are the basic license types:

  1. Commercial License: Allows the company to practice all its commercial activities within the free zone. This license includes general trading companies, limited companies, partnerships and sole proprietorships.
  2. Industrial licence: allows companies to carry out industrial and manufacturing activities within the free zone, such as production, manufacturing and assembly.
  3. Tourist licence: allocated to tourism and hospitality companies that provide tourism services, such as hotels, tourism agencies, and tourism-related logistics services.
  4. Professional License: Allows individuals and companies to carry out specific professional or professional activities, such as consulting, technical, medical, and legal services.

Each type of these licenses is subject to certain requirements related to economic activity and legal conditions in the free zone. The required licenses vary and the procedures followed may change depending on the type of activity and the free zone in which the company is established.

Documents required to establish a company in Dubai

The exact requirements for the type of company and the free zone in which it is being established should always be checked with Itqan Company, as the required paperwork may vary slightly based on these factors. To set up a company in Dubai , the paperwork required usually includes:

  • Company registration form: contains company details such as its name, legal type, scope of activities, and details of shareholders and directors.
  • A copy of the articles of incorporation: defines the company’s structure and the rights and obligations of shareholders and directors.
  • Contribution instruments: to determine the registered capital of the company.
  • Form for appointing a director or directors: identifies the directors appointed to manage the company.
  • Authorization form if necessary: ​​To appoint an authorized person to manage the company’s legal matters.
  • A copy of the passport or ID card: for both shareholders and directors concerned with the company.
  • A letter from the bank proving the existence of the bank account: to confirm that the registered capital has been deposited in the bank account designated for the company.
  • Subscription fee to the National Social Security and Health Insurance Fund (if any): depends on the employment of workers.

Advantages of establishing a company in Dubai

There are some advantages that an investor gets when starting a company in Dubai , which I have summarized in several points, which are as follows:

  1. Full ownership and independence: Foreign investors have the right to retain full ownership rights to their company without the need for a local sponsor, which provides great freedom in managing the company and making decisions.
  2. Free disposal of profits and capital: Investors have the right to fully dispose of profits and capital without restrictions, which contributes to enhancing the financial flexibility of companies.
  3. Flexible solutions for establishing a business: Dubai provides a flexible investment environment, which facilitates the process of establishing and managing companies effectively and efficiently.
  4. Flexibility in procedures and licenses: Dubai provides easy establishment procedures and flexibility in obtaining the necessary licenses and approvals, making it easier for investors to start businesses quickly and efficiently.
  5. Full tax exemption: Investors in Dubai’s free zones enjoy corporate and personal income tax exemption, which enhances Dubai’s attractiveness as a global investment centre.
  6. Low establishment costs: Investors enjoy relatively low costs of establishing a business in free zones, which contributes to increasing the capital available for investment in business activities and expansion.

Why invest in Dubai?

One of the most important advantages of investing in Dubai is political stability. Dubai has a stable political environment and strong legal institutions, which guarantees investors a safe and reliable environment for doing business. Investing in Dubai is an excellent choice for many important reasons:

  • Strong economic level: Dubai has one of the highest economic levels in the region, which provides great opportunities for growth and expansion for companies and investors.
  • Strategic location: Dubai is located at the intersection of major global trade routes, making it a strategic center for global trade and international investments.
  • Skilled workers: Dubai has skilled workers from all over the world, which makes it easier for companies to attract the talent needed to develop and grow their business.
  • Free Zones: Dubai includes a large number of free zones that provide investment benefits such as tax exemptions, facilitating legislation, and advanced infrastructure, making it an ideal home for new and expanding companies.

Thanks to these key factors, investing in Dubai is an attractive option for companies and investors looking for a dynamic and advanced investment environment in the Middle East region.

Types of licenses required to establish a company in Dubai

Cost factors for opening a company in Dubai

The cost of opening a company in Dubai depends on several key factors. Here are some factors that affect the cost of setting up a company in Dubai:

  • Type of commercial license: The cost of a commercial license varies based on the type of commercial activity to be practiced (commercial, industrial, service, professional).
  • Location: Costs vary depending on whether the company will be located within Dubai itself or in one of the free zones. Free zones offer various incentives such as tax exemptions and lower establishment costs.
  • Type of legal entity: Company formation costs vary based on the type of legal entity (limited liability company, free zone company, branch of a foreign company, etc.).
  • Required capital: Some types of companies require a minimum registered capital, which may affect the overall cost.
  • Rental costs: The cost of renting an office or commercial headquarters varies based on the location and space required.
  • Licenses and Approvals: You may need additional approvals from certain government agencies depending on the type of business.
  • Government fees: include government fees for registration, obtaining a business license, and costs of other legal procedures.
  • Professional Services: Costs of legal and accounting consultations and other services that you may need when establishing the company.
  • Insurances: Some commercial activities require specific insurances (such as accident or civil liability insurance).
  • Labor and visa costs: The cost of hiring employees and obtaining work visas.
  • Other costs: These costs include any additional expenses that may arise during the establishment process, such as furnishing offices, purchasing equipment, marketing and advertising.
    These costs vary based on each company’s individual circumstances. Therefore, it is useful to cooperate with specialized consulting companies such as Itqan to provide an accurate estimate of costs and help facilitate procedures and reduce potential costs.

Conditions for opening a company in Dubai

To establish a company in Dubai , there are several conditions and procedures that must be followed. Here’s an overview of the basic steps and conditions:

  • Determine the type of business activity: Choose the business activity you want to practice, as the business activity affects the type of license you need.
  • Choose a legal entity: You can choose a legal entity type for the company, such as a limited liability company (LLC), a free zone company, or a subsidiary of a foreign company.
  • Choosing a company name: Make sure that the company name is compatible with the regulations and laws of Dubai. The name must be unique and not conflict with other company names.
  • Registration and obtaining approvals: Submit a registration application with the Department of Economic Development (DED) or the relevant free zone authority. Obtain initial approvals from the relevant government agencies.
  • Preparing the articles of incorporation and legal agreements: Prepare the articles of association and the partners’ agreement (if necessary) and have them approved by the competent authorities.
  • Renting an office or headquarters for the company: Make sure that there is a physical office for the company and rent a headquarters that is compatible with the requirements of the business.
  • Obtaining a commercial license: After completing all procedures and approvals, you can obtain a commercial license from the Department of Economic Development (DED) or the free zone authority.
  • Registration with the Ministry of Labor and Immigration: Register your company with the Ministry of Labor and Immigration to ensure the company’s ability to hire employees and issue work visas.
  • Opening a bank account: After obtaining the commercial license, open a bank account in the name of the company in a local bank.
    The procedures vary slightly depending on the type of activity and the location chosen to establish the company (within Dubai or in one of the free zones). Therefore, it is preferable to cooperate with specialized consulting companies such as Itqan Company, which provides full support in the process of establishing companies and facilitating legal and administrative procedures.

What is the time period to obtain a commercial license in Dubai ?

The time required to obtain a commercial license in Dubai varies depending on the type of activity and the legal form of the company. Some commercial activities require approval from several government agencies, however, the procedures generally do not take long thanks to the facilities provided by the government for opening businesses in Dubai. If you need more information on how to open a company in Dubai, we are here to help with our long experience in the field of investment in Dubai.

In conclusion, opening a company in Dubai represents an important strategic step that gives investors the opportunity to access a dynamic and internationally advanced market. Thanks to its thriving economic environment, facilitating legislation, and complete tax exemptions, Dubai is among the top global destinations for business and investments. The UAE government provides great facilities that help simplify procedures and speed up the process of establishing companies, making Dubai an ideal destination for those wishing to build their economic future.

Frequently asked questions about how to open a company in Dubai

What are the tax benefits of establishing a company in Dubai?

Companies in Dubai enjoy full corporate and personal income tax exemption in free zones, making it an attractive investment destination.

What are the expected costs of establishing a company in Dubai?

Costs vary based on the type of company and region, and include registration fees, service fees, and capital required for the company.

How long does it take to establish a company in Dubai?

This depends on the type of company and the free zone, but in general, the incorporation process can take approximately two weeks to two months after completing all procedures.

What are the free zones in Dubai and what are their benefits?

They include free zones such as Jebel Ali, Jebel Ali Logistics, Dubai Marine Industries, and others, and offer benefits such as tax exemptions and facilitating legislation.

Do I need a local sponsor to establish a company in Dubai?

In free zones, the foreign investor usually does not need a local sponsor, giving him full ownership rights to the company.

What are the basic steps to open a company in Dubai?

The basic steps include determining the type of activity, choosing the legal form, registering the trade name, obtaining the necessary approvals, choosing the business location, and obtaining the trade license.