Setting Up A Business In Dubai | Options For A New Business Entity

Setting up a business in Dubai: Local, free zones, offshore, costs in brief, how should you choose

There are many benefits in setting up a business in Dubai. The United Arab Emirates have a growing and diverse economy and Dubai’s infrastructure is second to none.

Please invest 2 minutes of your time to watch the setting up a business in Dubai video below. It spells out how you can benefit. Or if you prefer to read, then feel free to skip the video and go straight to the text below:

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It leads in the cargo and re-exports markets because of the size and sophistication of its two ports and Dubai is home to two major and many smaller airlines. Manpower is readily available, as is government support and promotion.

Dubai is ranked as the top middle eastern city for quality of life and has become one of the world’s most preferred expatriate locations.

A fascinating heritage is combined with world-class shopping and entertainment facilities and lets not to forget the year-round sunshine!

Setting up a business in Dubai: What are your options?

There are three ways to start setting up a business in Dubai. These are Local, Free Zone or Offshore.

Local business in Dubai

If your company will be located outside of designated free zones, it must be at least 51% owned by a local UAE national, unless the business is a branch office of a foreign company. Certain professionals are also exempt from this rule. Your UAE partner must be paid a yearly fee, which can be negotiated.

Operating in this way means that you will have a wider choice of locations and can pick one that is appropriate for your budget.

Starting a local business in Dubai is better suited to the following:

• Import and distribution within UAE
• Retail businesses
• Restaurants
• Cafeterias
• Hotels
• Contracting businesses
• Manpower supply services
• Logistics service providers

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About free zones for business in Dubai

Free zones are special economic areas set up with the goal of offering tax-free, duty-free benefits to expatriate investors. Each one is designed around one or more business categories. An example is the Dubai auto zone.

A free zone authority offers business licenses to foreign-owned businesses. If you do business in a free zone:

• You are allowed 100% ownership
• Tax exemption
• Property ownership
• Fair renewal fees
• You are allowed to open a bank account in Dubai
• You have no restrictions on activities
• You can wind up your business at your own discretion

Companies operating in free zones aren’t allowed to trade goods with the local UAE market directly. They must use authorized local agents and pay a moderate customs duty of about 5%. However, services and products may be purchased from and within the UAE market without an agent.

More than 20 free zones are in operation and are available for setting up a business in Dubai.

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Understanding offshore business in Dubai

An offshore business lets you form a company to engage in international business without having a physical presence in Dubai. An offshore company can be used as an investment company, a holding company or a real estate holding company.

A Dubai offshore company offers the following advantages:

• Tax optimization
• Asset protection
• Asset holding
• Succession planning
• Ship and aircraft registration
• High-risk trading
• Trade financing
• Security

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Costs in brief

Each of Dubai’s free zones has different startup procedures and fees. You may also be required to have a minimum amount of capital if you are establishing a new company as opposed to simply opening a branch of an existing company.

The approximate cost for offshore registration is $5,997  which includes:

• Certificate of Incorporation
• MOA
• Share Certificate
• Attestation by authority
• Registered office address
• Bank account in Dubai

Setting up a business in Dubai: Choosing the right option for you

Before you do anything, it’s important to get sound advice from people in the know. Businesses of all types must obtain a license to operate in the UAE.

Consult with a reputable business agent who specializes in registrations in Dubai. He or she will listen to your business requirements, suggest the three best options for your business based on your objectives and, should you choose to proceed, do all of the groundwork for you.

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