Dubai is one of the affluent cities in the UAE and, apart from tourism, it is also known for becoming the business ground of many organizations worldwide. In the process of structuring a company, some fundamental steps need to be properly followed. For the Dubai company formation, it is essential to determine the type of business, its core competencies, and the target market initially.
While talking about business categories, it has a Limited Liability Company, Civil Work Company, Branch system of foreign companies, Free-zone Company, and Offshore Company. So before starting any company, it is important to classify your industry among the following categories.
For the company formation in Dubai and, after determining the type, the next stage comes for shaping ownership. The possession quota generally varies from type to type, but for Limited Liability Company, the division of the shares is classified as 51% national and 49% foreign, hence designating capital shares. Also, the stakeholder of a company can lie between 2-50 persons in number.
Furthermore, due to the intense environment, the government has called it official to register a corporate trademark for a healthy competition. After this comes the plan of drafting the company’s Memorandum and Articles of Association. Then there is the submission of these documents and business license application form to the Department of Economic Development for legal endorsement.
After getting clearance from all authorities, then there is a search for an appropriate spacious office that can full fill all SOPs of starting an office. Compliance of a tenancy contract and then search for hiring employees to start your work. However, to attract overseas investment, there are no direct taxes but, a 5% Vat tax and 4% on custom duties are applicable.
Limited Liability Company
Shortly known as LLC, it is a business that holds commercial and industrial activities, so it generally embraces most types of business activities found there. LLC company formation follows all steps explained above but since it encompasses the industrial sector also so after getting a license, it is essential to register one’s employees with the Ministry of Labor and General Authority for Pension and Social Security purposes.
A limited Liability Company is better in terms of endowing with a variety of access to the UAE economy. Under LLC, no limitations of Capital formation required. Thus investors can manage the business without any intrusion of their local partner on a day to day basis. For the LLC, banks also provide financial counseling and credit facilities.
You can also add more employees to your organization without the hassle of any visa requirement. There are no tariff quotas on imported goods and, even non-resident can purchase land under the name of the business. Furthermore, these companies can participate to take government tenders and can freely trade in the UAE, GCC region, and worldwide market. There is no hidden cost for its formation and only pays for documentation, attestation, business license, visa processing, and Immigration work.
Other Types of Companies
In this, the holder can grasp its shares of organizations that have activities of consulting, legal counseling, financial and medical services. After getting registered with the Department of Economic Development, the company also needs a local service agent to lease with the government system.
Branch office companies
Since Dubai is called the city of dreams, therefore, the tourism industry is at its peak over there with stunning talented working wonders and a lot of rewarding opportunities. Hence by deeming it the hub of tourism, many multinationals focus on setting up their branch in Dubai also. For this, a license for trading, working, and manufacturing is required.
It is for high-end infrastructure and business ecosystems. It is believed to be 100% foreign ownership and is free from taxations.
It is a legal entity for facilitating international trade and is registered by the International Business Company (IBC). They are not bound to follow the UAE’s judiciary laws, customs, taxes, and regulations. Though opening a bank account here would be time-consuming for them but, it is possible to open an account with complex technicalities. However, they do not get any visas for their employees. It is beneficial in terms of saving taxes, getting high returns, and outsiders can also enjoy major shares in the business.