When considering setting up a company in Dubai, you must carefully assess the available entity options.

Dubai offers three main choices: Free Zone, Mainland, and Offshore. Each option comes with its own set of regulations, benefits, and conditions.

It is essential to understand the distinctions between these three entities.

An offshore company is a non-resident entity, meaning that business activities are conducted outside their jurisdiction, thus outside the United Arab Emirates. Offshore companies are particularly suitable for activities that do not involve a physical presence (e.g., consulting, investment, internet, import-export agent…).

Establishing an offshore company in Dubai is an essential choice for businesses seeking tax efficiency, confidentiality, asset protection, and global accessibility. It is essentially a legal entity and offers a range of benefits.

Advantages:

• High confidentiality with strict rules on information disclosure.
• Exemption from corporate and income taxes.
• 100% foreign ownership.

Disadvantages:

• Limitations on domestic activities; cannot do business directly with UAE residents.
• Need to have a registered address in the offshore jurisdiction.

A free-zone company is a company located in one of Dubai’s free zones or in one of the United Arab Emirates. This type of company allows global trade, including within the UAE, without the need to partner with a UAE national.

There are nearly 25 free zones in the United Arab Emirates, all sharing a common legal framework (UAE Free-zone Laws) but restricted to certain types of activities.

Establishing a company in Dubai in a UAE free-zone involves a structured process, including obtaining an operating license, a residence visa, and a corporate bank account. This setup generally takes between one and four weeks.

Advantages:

• 100% foreign ownership.
• Tax benefits, exemption from corporate and income taxes.
• Modern infrastructure, business facilities, and access to foreign labor.

Disadvantages:

• Some restrictions on commercial transactions with the local market.

Also known as a “LLC (Limited Liability Company)” or “local company,” the Mainland company is the most common form of company in the United Arab Emirates. It is a legal status particularly suitable for:

• Local businesses.
• Liberal professions.
• Restaurants.
• Distribution, logistics, and transportation companies.

If your goal is to do business without any restrictions throughout the United Arab Emirates, establishing a Mainland company in Dubai is the best solution.

It is important to stay updated on the specifics related to this legal status. While it was once necessary to have a UAE sponsor holding 51% of your shares, now for many activities, you are the 100% owner of your shares. However, a local service agent is still required for the smooth progress of your procedures. Any UAE national can serve as a sponsor or service agent, but it is advisable to collaborate with a trusted partner.

Establishing a company in Dubai involves setting up a Mainland company approved by the Department of Economic Development (DED) in the respective emirate of the United Arab Emirates. Creating a Mainland company in Dubai offers numerous advantages, including location flexibility, a broad scope of action, and access to lucrative government contracts.

Advantages:

• Full access to the local market and government contracts.
• Diversity of industries and the ability to engage in a wide range of business activities.
• Access to quality facilities.

Disadvantages:

• Local participation requirements in some sectors.
• Subject to corporate taxation.
• Possibility of foreign ownership but often with restrictions.

For company creation:

• Passport
• Proof of residence.

For opening a bank account (required by some banks in Dubai only):

• Business plan (2 or 3 pages, in English).
• Detailed curriculum vitae (in English).
• Bank statements.
• Activity justifications.

There are four main types of commercial licenses available in Dubai, and it is mandatory to hold one to conduct business in the United Arab Emirates (UAE). The initial approval is issued by the Dubai Department of Economic Development (DED), and each emirate has its own processes and procedures. With these Dubai commercial licenses, the government provides business incentives and benefits.

It is crucial to understand the different types of licenses.

Establishing a business entity in Dubai, UAE, requires a trade license applicable to the type of business, industry, and commercial activity. This applies to foreign companies settling in free zones. Here are the four most common types of commercial licenses available for free zone businesses:

• Trade License for General Trading Activities.
• Professional License for Service-based Activities.
• Industrial License for Manufacturing Goods.
• Tourism Permit for Travel and Excursions.

Trade License:

The trade license, also known as the general trading license, is the most widely applied and issued commercial license in Dubai’s free zones. This type of license applies to businesses involved in commercial activities and trading in Dubai and the UAE. These activities usually include importing products, exporting, and trading in goods and products. The trade license serves both as regulation and protection for businesses operating in Dubai’s free zones. This qualifies a company for various industry-specific business support structures such as startup incubators, banking support, as well as specific business incentives.

Benefits of obtaining a commercial license for trading activities in Dubai mean:

• A license holder can conduct up to ten commercial activities under one commercial license.
• A business owner can choose from various business setup and registration types.
• License holders can apply for residence visas for employees and company management under the commercial license.
• It is easier to open corporate bank accounts with a commercial license.
• Cost-effective commercial license renewals in the UAE.

Professional License:

The professional license is designed for qualified professionals to conduct business in specific fields of expertise. This type of commercial license is intended for service-oriented businesses such as business consultancy, operational management services, education and training, IT services, engineering skills, legal, medical, and other health services, accounting and auditing service providers, and more.

Benefits of a professional license include:

• Fixed annual fees for business activities.
• Transparent information for clients for specific services and sectors.
• Professional license holders can apply for visas for employees.

Industrial License:

The Industrial License is for businesses involved in the production and manufacturing of new products from natural materials or raw materials. This includes product manufacturing, food industries, textile manufacturing, engine and equipment manufacturing, and more. A prerequisite to benefit from this type of commercial license is that a business must operate from a physical office address, such as a physical office space, warehouse, or industrial complex in a Dubai free zone.

When the Department of Economic Development (DED) grants your industrial license, you also benefit from operational, tax, and customs privileges based on certain criteria:

• Your business produces goods intended for domestic consumption.
• Your products can be exported outside the UAE to compete with foreign products as a new business.
• The company is established in specific industrial development zones.
• The business uses local raw materials for manufacturing.
• Your business has a positive impact on the UAE market.

Tourism Permit:

The tourism permit allows businesses to operate in all tourism sectors in Dubai. The most popular types of tourism businesses established in Dubai are foreign tour operators, foreign travel agencies, and travel agents. This type of commercial license is issued by the Ministry of Tourism and Commerce (DTCM) and the Dubai DED.

Choose the business type: Decide if you want an offshore, free-zone, or mainland business.

Select the legal structure: Choose the appropriate legal structure for your business, such as LLC, subsidiary, etc.

Name reservation: Submit your business name for approval and reservation.

Document preparation: Gather required documents like shareholders’ passports, address proofs, etc.

License application: Submit a commercial license application to the relevant department based on the business type and chosen zone.

Document signing: Sign necessary legal documents like the company’s articles and lease contract.

Visa acquisition: If necessary, apply for visas for shareholders and employees.

Timelines: The process may take weeks to months, depending on the business type and compliance.

Euro Accounting assists you throughout these administrative procedures to facilitate the process and ensure total compliance.

Creating a Free-Zone company in Dubai provides the opportunity for the director, their family, and employees to obtain a residence visa. To maintain visa validity, the holder must be present in the UAE for at least one night every 6 months.

This type of company automatically grants an investor visa to the shareholder, with the company being the visa sponsor. The shareholder doesn’t need a personal address in Dubai. The Free-Zone company also allows obtaining visas for employees, known as employee visas.

Family visas (for spouse and children) can be requested once the shareholder’s visa is obtained. In this case, the shareholder becomes the visa sponsor for the spouse and children. This type of visa requires having a personal address in the United Arab Emirates.

The location of your business is a crucial success factor, and choosing wisely is essential. We’re here to advise you, and some of the most popular free zones with excellent connectivity are:

• JAFZA (Jebel Ali): Ideal for import-export businesses.
• DMCC: Offers up to 6 different activities under one license.
• IZFA: The most versatile free zone; no need for physical offices to start your business.
• DAFZA (Dubai Airport): Modern facilities and close proximity to the international airport.
• MEYDAN: No requirement for physical offices, and it’s the most cost-effective free zone in Dubai.

Outside Dubai, there are numerous Emirates where you can establish your company. Some recommended zones include:

• CCFFZ (Fujairah): Ideal for entrepreneurs in the media industry.
• AJMAN: Near the port of Ajman and Dubai airports.
• Sharjah (Shams): Simple and fast setup process with cost advantages.
• SPCFZ (Sharjah): Ideal for businesses in publishing and printing, offering up to 5 activities under one license.
• RAKEZ (Ras Al Khaimah): Strategically located near a port.
• KIZAD (Abu Dhabi): Cost-effective and close to a port.

We provide guidance on all aspects of company creation: choosing legal status and company structure, selecting the business zone, obtaining licenses, advising on bank account opening, legal matters, jurisdiction, taxation, administrative procedures, and ensuring long-term growth for entrepreneurs and businesses.