How to form a company in Dubai

How to form a company in Dubai?

Dubai, “The city of gold” is a city with unending opportunities and has been steadily climbing the ranks as a global commercial capital and with aggressive legal reforms to boost foreign investment. 

The emirate is famed for its minimal bureaucracy, its key global position, and, of course, its incredibly attractive tax rate – still at 0% on both personal and corporate incomes.

As the city’s status as a commercial, trade, and tourism hub goes from strength to strength, and with Dubai introducing more and more reforms to make it easy for foreigners to do business here, Dubai has to be one of the best places to set up a business now.

Establishing and running a business in Dubai has long been an appealing proposition for entrepreneurs, business owners, and investors. 

The government has come up with many exciting amendments and new laws to help and support businesses of all kinds over the years especially during 2020. With the advancement and adaptation of technology in different fields, Dubai has become one of the strongest and most suitable places for business. 

If one is planning to do business in Dubai, it is crucial to know about the jurisdictions to set up the company and the laws of the country. There are 3 main jurisdictions in UAE to form a company:

·         Mainland

·         Free zone

·         offshore

Mainland: Mainland companies are onshore companies that are licensed by the Department of Economic Development (DED). Numerous business types can be set up on the mainland.

·         Limited Liability Company (LLC)

·         Joint Venture

·         Public and Private Joint Stock Company

·         Civil Company

·         Branch of a local or GCC company

·         Branch of a foreign and free zone company

·         Sole Establishment

Free Zone:

Free Zones provide 100% business ownership and functions on their regulations of the framework. There are more than 40 free zones in the UAE that offer special tax and customs, which makes it one of the most preferred locations for business.

The benefits of setting up a business in the Dubai free zone are; it provides the luxury of 100% foreign ownership, 100% direct tax -free and even 100% repatriation of profit and capital. Free zones have great infrastructures providing the perfect work atmosphere and even have the availability of skilled and experienced labour. They neither impose personal income taxes nor have any currency restrictions.


Offshore companies are the ones established in a different jurisdiction with their parent corporation based in another country. It may not be a physical entity, but is a registered company that serves the purpose of legally minimizing tax payments. Offshore companies offer the benefits of tax saving, asset protection, privacy and confidentiality, and even security of property rights to the investors.

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UAE has favorable laws for foreign direct investments and invites foreign investors to set up businesses in Dubai or anywhere in the country. The government had recently come up with an amendment to the company law allowing expatriates 100% ownership. Earlier only free zones offered 100% ownership to foreign investors but now this has been extended to the mainland businesses as well. You no longer require a sponsor in the country to set up a business.

To do business in UAE, it is mandatory to have a trade license which is issued by the UAE Economic Department. There are three types of licenses in the UAE:

  • Commercial license: Every business that involves in trading activities falls under the commercial license category.

  • Professional license: Any professional offering services of their field; craftsmen and artisans are included in the professional license.

  • Industrial license: It covers all industrial and manufacturing activities.

It is illegal for any business entity to function without a trade license and it must be renewed every year.

Here are important factors to be considered in the process of forming a company in Dubai:

1.       Determine the type of business: Determine the type of entity you wish to incorporate in Dubai. The type of business depends on the business activity that you choose.

2.       Select a trading name for your business: The name of the company should reflect the nature of the business. Necessary research needs to be done to make sure that the name isn’t already in use.

3.       Determine ownership: You will need to first obtain a license and location in one of the many free zones of the UAE if you want 100% ownership of your company.

4.       Designate share capital: The memorandum of association (MOA) of your proposed company decides the minimum share capital. The MOA includes the details of shareholders and the company. The MOA needs to be notarized with the Department of Economic Development.

5.       Secure premises: Depending on your business needs you can choose to rent an office space or opt for a co-working space.

6.       Tenancy contract and Ejari: A tenancy contract is a contract between the company and the real estate agency whose office space or co-working space you intend to rent. Ejari is the online registration system initiated by Real Estate Regulatory Agency and requires all Dubai rental or lease contracts to be recorded on this portal.

7.       Department of Economic Development paperwork: Apply for registering a business in Dubai at the Dubai company register. Documents need to be filed with the DED for approval. Our team at Concept can advise you on the paperwork required and help you complete the formalities.

For a person who is new to Dubai, the rules and regulations of setting up a business can seem quite complex and hectic. This is where a business consultant steps in. Business Consultants are updated about all the rules and regulations of setting up business in the UAE and they will make your work easier.

Concept Advocates & Business Consultants has a team of experienced professionals who can assist you from advising the best location to set up your business to commence the operations.

Contact Concept Advocates & Business Consultants by calling at + 971 4 353 0020. You may also drop an email to;