Setting up a new company in Dubai

What are the regulations for setting up a company in Dubai?

Setting up a company in Dubai is governed by specific regulations aimed at ensuring the smooth running of businesses and maintaining a transparent and stable business environment. Here are some of the key regulations governing the opening and running of a company in Dubai:

1.Regulations related to the type of corporate structure: Different corporate structures (LLC, free zone, offshore company, subsidiary, etc.) have specific regulations regarding ownership, control, capital requirements and activity restrictions.

2 Foreign ownership regulations: In some free trade zones, foreign owners can own 100% of their business. However, in the case of businesses outside free zones, the participation of an Emirati citizen or local sponsor may be required.

3. Business licensing regulations: Business licences are essential to operate legally in Dubai. The types of licences required vary depending on the type of business activity.

4) Business name regulations: The business name of your company must comply with the guidelines issued by the relevant department for the registration of companies. It must not infringe existing intellectual property rights or contain inappropriate terms.

5) Business premises regulations: Businesses must comply with regulations relating to the letting and use of business premises. This may include requirements relating to minimum office sizes and permitted business zones.

6) Tax regulations: Dubai offers attractive tax benefits, but there are specific regulations regarding taxes, duties and levies. Companies must comply with all applicable tax requirements.

7) Employment regulations: Companies must comply with employment regulations, including work visas for foreign employees, employment contracts and labour standards.

8) Intellectual property regulations: The protection of intellectual property rights is crucial in Dubai. Companies must ensure that they protect their trademarks, patents, copyrights, etc.

9) Banking regulations: Opening a business bank account may be subject to specific regulations, including documentation and compliance requirements.

10) Sector-specific regulations: Certain sectors, such as finance, healthcare and the media, have specific regulations that must be complied with.

What is the applicable law?

The law applicable to opening and running a company in Dubai depends on the type of business structure you choose and where you plan to set it up. Here are some key points about the laws applicable to different business structures in Dubai:

• Limited Liability Companies: LLCs are governed by Federal Law Decree No. 2 of 2015 relating to commercial companies (Company Law). This decree law sets out the general rules for businesses in Dubai and the United Arab Emirates (UAE) in general.

• Free Zones: The free zones in Dubai have their own regulatory authorities and specific regulations. The laws and regulations issued by these authorities govern the operation of businesses in the respective free zones. For example, the Dubai FreeZone Authority has its own regulations and laws.

• Offshore Companies: Offshore companies in Dubai are governed by the Offshore Companies Law (Federal Law) No. 19 of 2018. This law sets out the conditions and requirements for the establishment and management of offshore companies.

• Other Structures: Specific laws may apply to other types of business structures, such as subsidiaries or branches of foreign companies. These laws often depend on the sector of activity and the type of business.

What are the advantages of setting up a company in Dubai?

Setting up a company in Dubai offers many advantages for entrepreneurs and businesses. Here are some of the main advantages:

• Favourable Business Environment: Dubai offers an open and favourable business environment, with transparent business regulations and relatively efficient bureaucracy.

• Strategic Location: Located at the crossroads of Europe, Asia and Africa, Dubai enjoys a strategic geographical position, making it an ideal hub for international trade.

• World-class infrastructure: Dubai boasts modern, high-quality infrastructure, including international airports, seaports, extensive transport networks and advanced communications facilities.

• Free Zones and Tax Benefits: Dubai’s free zones offer benefits such as 100% foreign ownership, full or partial exemption from income tax and customs duties, and simplified customs procedures.

• Political stability and security: Dubai is renowned for its political stability and security, creating a favorable environment for business and investment.

• International Workforce: Dubai attracts a talented and diverse international workforce, offering a wide range of skills and knowledge.

• Ease of Travel and Communication: International air links and advanced communication technologies facilitate business travel and international operations.

• Regional Market Access: Dubai offers privileged access to markets across the Middle East, Africa and Asia, enabling companies to reach a wide range of potential customers.

• Sector Diversification: Dubai has diversified its economy beyond traditional sectors such as oil and gas, offering opportunities in areas such as technology, tourism, commerce, financial services, etc.

• High Quality of Life: Dubai offers a high quality of life with modern infrastructure, recreational facilities, shopping malls, beaches and a vibrant cultural life.

What is the procedure for setting up a company in Dubai?

The procedure for setting up a company in Dubai may vary depending on the type of business structure you choose and the specifics of your situation. However, here is a general outline of the common steps involved in setting up a company in Dubai:

Step 1. Planning and Preparation: Clearly define your business objectives, choose the type of corporate structure that best suits your needs and thoroughly research Dubai’s specific regulations and requirements.

Step 2. Choose a Business Name: Select an appropriate business name that complies with the regulations and guidelines issued by the relevant authorities.

Step 3. Select the Area of Establishment: Choose a specific geographical area in which to establish your business, taking into account the advantages offered by different free zones or economic zones.

Step 4. Reserve commercial premises: If necessary, reserve commercial premises or an office in the chosen area for your company.

Step 5. Obtain a business licence: Obtain the appropriate business licence for your activity. Licences may vary depending on the activity, zone and sector.

Step 6. Prepare Documentation: Gather the required documents, such as company articles of association, partnership agreements (if necessary), lease agreements, copies of shareholders’ passports and any other documents required by the authorities.

Step 7. Application for Approval: Submit the required documentation to the relevant authorities to obtain approval to open your business.

Step 8. Capital and Bank Accounts: Deposit the required share capital in the newly created company’s bank account. Set up a business bank account in the name of the company.

Step 9. Legal Registration: Proceed with the legal registration of the company with the relevant authorities. This may involve signing documents and completing all formalities.

Step 10. Issue Work Visas: If you have foreign employees, take the necessary steps to obtain the appropriate work visas.

Step 11: Set up and launch: Move into your premises, start your business activities and make sure you meet all current regulatory obligations.

It is crucial to note that the specific steps may vary depending on the type of business structure and requirements specific to Dubai. Working with legal advisers and business formation experts in Dubai is highly recommended to ensure that you follow all the steps correctly and comply with the relevant regulations. For more detailed advice and personalised assistance, contact us and let us help and support you with our local partners.