How to open a company in Dubai? Dubai is one of the most prominent economic destinations in the world, offering a thriving investment environment that encourages business growth. With advanced infrastructure and significant government support, Dubai has become a global hub for businesses, startups, and investors. Opening a company in Dubai requires following a set of legal procedures and steps that ensure compliance with local laws. From choosing the type of company and determining the business activity, to obtaining the necessary licenses and registering with the competent authorities, these steps are crucial to ensuring that the business starts legally and successfully. Investors have multiple options to establish their companies, whether in free zones that offer tax benefits and government facilities, or within the emirate where there are greater opportunities to access the local market. Through this article, we will talk about how to open a company in Dubai .

How to open a company in Dubai

How to open a company in Dubai

Establishing a company in Dubai requires following a set of legal and regulatory steps that help establish the company properly. Here is the basic method for opening a company in Dubai:

1. Determine the type of company: You must determine the type of company you wish to establish, whether it is a limited liability company (LLC), a branch of a foreign company, or a sole proprietorship. You can also choose between establishing the company in the free zone or outside it.
2. Choosing the business activity: Determining the business activity that the company will carry out is important to submit the appropriate application, as special approvals must be obtained according to the type of activity.
3. Trade Name Reservation: A trade name must be chosen for the company and it must be ensured that it is available and complies with local laws. A request to reserve a trade name can also be submitted through the Department of Economic Development.
4. Obtaining initial approvals: Submitting an application to obtain initial approval to start establishing the company from the relevant government authorities.
5. Preparing legal documents: Preparing the articles of association and legal agreements depending on the type of company. In some cases, you may need to sign a contract with a local sponsor.
6. Determining the location of the company: Renting an office or headquarters for the company is an essential step. The location of the company must comply with the legal requirements.
7. Obtaining a commercial license: Submit an application for a commercial license from the Department of Economic Development or the selected free zone authority.
8. Company Registration: After obtaining the commercial license, the company is registered with the competent authorities.
9. Opening a bank account: To officially start business, you will need to open a bank account in the company’s name.
10. Obtaining Work Visas: If you need employees, you can apply for work visas after completing the company registration. Following these steps will help you set up your company in Dubai legally and effectively.

What types of companies can be established in Dubai?

Several types of companies can be established in Dubai, depending on the needs of investors and the nature of the business activity. The following are the most prominent types of companies that can be established in Dubai:

1. Limited Liability Company (LLC): This is the most common type, where foreigners can own 49% of the company, while the local partner or sponsor owns 51%. This type is suitable for companies that want to do business within Dubai and the Emirates.
2. Free Zone Company: Companies established in free zones enjoy 100% foreign ownership, without the need for a local partner. Free zones offer tax and administrative facilities and a competitive business environment for companies.
3. Branch of a Foreign Company: Foreign companies can establish branches in Dubai to carry out the same activities as the parent company. This type does not require a local partner, but the branch must operate under the same name as the parent company.
4. Sole Establishment: This type is suitable for individual entrepreneurs who want to establish their own business. Foreigners can establish a sole proprietorship in free zones only, while they need a local sponsor if it is outside the free zones.
5. Civil Company: Civil companies are for professionals such as doctors, engineers, lawyers, and other professional professions. These companies can be fully owned by foreigners, but a local agent is required.
6. Public Joint Stock Company (PJSC): This type of company is intended for large projects, where the capital must be larger and the shares must be offered for public subscription. There must be at least 10 founders, and the government or large companies can participate in it.
7. Private Joint Stock Company: Similar to public joint stock companies, but the shares are not offered to the public. The capital must also be larger, and this type is used for large private projects. Choosing the appropriate type of company depends on the size of the investment, the nature of the activity, and the desired location for establishing the company, whether within Dubai or in one of the free zones.

Advantages of opening a company in Dubai

Opening a company in Dubai offers many advantages that make it a leading investment destination. Here are the most prominent advantages of establishing a company in Dubai:

1. Strategic Location: Dubai is located at the heart of the world between Asia and Europe, making it a global business hub with easy access to international markets.
2. Flexible business environment: Dubai offers advanced infrastructure and ease of business procedures, allowing investors to start their businesses quickly and efficiently.
3. No personal and corporate income taxes : Dubai is characterised by no individual or corporate income taxes in many sectors, which enhances profitability and attracts more investors.
4. Multiple Free Zones: Dubai has several free zones that allow foreign investors to own their companies 100%.

Documents required to open companies in Dubai

To establish a company in Dubai , there are a set of papers and documents required that vary slightly depending on the type of company and its location, whether it is in a free zone or within the emirate. Below are the basic papers required to open a company in Dubai:

1. Company Registration Application Form: Submit the company registration application form to the relevant authority, such as the Department of Economic Development or the Free Zone Authority.
2. Copy of Passport: Certified copies of passports of all shareholders and directors.
3. Personal Photographs: Recent passport size photographs of shareholders and directors.
4. Memorandum of Association: The Memorandum of Association sets out the structure and internal rules of the company. It must be signed by all parties and notarized.
5. Security Approval: In some cases, it is required to obtain security approval from the competent authorities for individuals participating in the company.
6. Proof of trade name reservation: A copy of the trade name approval from the Department of Economic Development or the competent authority in the free zone.
7. Approval from the authorities concerned with the business activity: Some business activities require additional approvals from certain government authorities (such as the Ministry of Health, the Ministry of Tourism, or others) depending on the type of activity.
8. Office or company headquarters rent: A certified lease contract (Ejari) for the office or company headquarters in the event that the company is established within Dubai, or proof of allocating an office in the free zone.
9. Emirates ID or Residence Visa: If one of the partners is a resident of the UAE, a copy of the Emirates ID or residence visa will be required.
10. Power of Attorney (if applicable): If you are using a legal representative or lawyer for the incorporation procedures, a certified power of attorney is required.
    These documents form the basis of the company incorporation process in Dubai and must be submitted to the relevant authorities depending on the chosen location for company incorporation.

In conclusion, starting a company in Dubai is a strategic step that opens up vast horizons for growth and success in a thriving global market. With its advanced infrastructure and continuous government support, Dubai provides a flexible and attractive investment environment for investors and entrepreneurs of various nationalities. Following the right legal steps and choosing the right type of company and the optimal location can ensure business success and facilitate future expansion. Whether you are looking to start a small business or a large investment, Dubai has everything you need to achieve your business goals in the best possible way.

Frequently asked questions about how to open a company in Dubai