Setting up your business in Dubai? What should you know?

Dubai is the most popular place to start a business in the Middle East. Before deciding to set up a company office or a business branch of your company in Dubai, you should be aware of the steps and procedures involved in the process of company setup and registration.

Dubai has been ranked 23rd in the list of Easiest places to do business in 2014, and the 9th best country for expat living in 2013. That means that starting a business is relatively easy for foreign companies, with proper help and guidance. Most of the difficulties of starting a company in Dubai have been attributed to the stringent measures that the government bureaucracy has established. While Dubai seems to have the cash flow, geographical access, and economical policies that promise double digit growth figures, setting up your business can still prove to be an uphill task for various reasons.

If you are keen on opening an office in the Dubai, then the emirate offers you a solution from the legal hassles through its Free Zones. Dubai operates a total of 22 Free Zones currently, with the numbers increasing each year. Each Free Zone is developed for specific sectors such as media, finance, health care, ICT etc. Each free zone promises 100% foreign ownership with no restraints on recruitment or sponsorship along with exemption from corporate tax, customs duty and export/import levies.

First and foremost, it is important to understand that Dubai Free Zone is not a single entity, but rather made up of more than 20 individual freezones with company formation procedures that differ from free zone to the other. The company formation steps required for most free zones are given below with minor changes between free zones

Steps involving Free zone company formation in Dubai:

1. Licence Type determination: Most free zones offer the following types of licences

  • Free zone Trading licence
  • Free Zone General Trading License
  • Free Zone Consultancy/Service License
  • Free Zone Industrial License
  • Free Zone Commercial License

2. Confirm Business Activities: Free zones have limitations on the business activities allowed in each zone. It is important to confirm that the business activities that you need are permitted in your chosen free zone.

3. Form the legal structure of the company: You have to formulate the legal structure of your company including the number and nature of partners. This will determine the documents required and the costs for the setup.

4. Confirm necessary facilities: Before registration, check if all the facilities that you need for running your business are available at your chosen location.

5. Confirm registration fees and charges: Dubai Free zones offer many packages that can be tailored to your requirements. You have to take into account the cost of company formation and the yearly renewal charges when you calculate the total startup costs.

6. Application submission: Along with your Free Zone application form, you may need to submit a passport copy, visa copy, business plan, bank statements and no objection certificate from your current sponsor.

7. Procure Preliminary Approval: Prior to company formation, you may need approval from other regulatory bodies, including the Immigration Department, Environment Department and Ministry of Health.

8. Fee Payment: Dubai free zones have many options for payment including paying in multiple instalments. But be aware, that paying in instalments may end up much more expensive in the long run.

9. Signing of agreement: Once the payments are made, you will be asked to sign on the relevant legal documents in the presence of a free zone official.

10. Obtaining Free Zone License: Once the documents are signed, it is time to receive your Free Zone Business license, along with associated documents.

If you find the process of setting up your office in the Dubai Free Zones too overwhelming, talk to our investment advisors who have years of experience in setting up new businesses in Dubai. We are always ready to help you through the stages of company incorporation, registration and setup.

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