Streamline Your Business: Dubai Support
The streamline business operations culture of Dubai continues to draw startups and entrepreneurs and consolidates itself as a top-ranked international business hub. Dubai business setup process is facilitated by some of the most critical factors such as low-level bureaucracy, strategic positioning, and effective regulation.
These are the reasons why the city is a perfect place for international startups and companies to expand their operations. It is easy to start a business here with the help of business setup consultants in Dubai. There are many advantages of starting a business here. First of all, the geographical location of the city makes it a good place for international markets, primarily in the Middle East, Asia, and Africa.
Dubai is a tax-free emirate with no income tax or company tax. It therefore reduces the cost burden of companies. Aside from that, the city’s business-friendly legislation and strong infrastructure provide access to global markets with ease, thereby making global investment and trade easy. Some of the upcoming and best businesses to invest in Dubai are finance, tourism, real estate, and technology.
One of the three chambers under the umbrella of Dubai Chambers is the Dubai Chamber of Digital Economy. It has recently released the Dubai Startup Guide, a guide for starting entrepreneurial business and companies in Dubai. It covers legal procedures, funding opportunities, and prospects of setting up a business.
Understanding Dubai’s Business Landscape
It is necessary to understand Dubai’s business environment if you want to go ahead with the Dubai company formation. It is essential that you are familiar with free zones, principal free zones, and mainland companies before you establish a business in Dubai.
Dubai Free Zone company setup provides 100% foreign ownership, while mainland companies require local ownership and increased Dubai company setup expense. Both above choices have their own traits and benefits.
Free Zone vs Mainland Dubai
Both of these two choices have their advantages. Whether you need to pursue mainland company formation in Dubai or freezone, it all boils down to your business profile and needs. Free Zones are ideal for international trade and specialty businesses while Mainland setups offer greater market access and high flexibility. Let us first discuss the advantages of establishing a business in the Dubai Free Zone.
Advantages of Free Zones:
The business setup process in Dubai in the Free Zones involves a number of attractive advantages as detailed below. Unlike mainland companies that require local sponsors, Free Zones allow 100% foreign ownership by investors.
If you are planning to establish a business in Dubai in Free Zones, then you will have the advantage of zero corporate tax and income taxes. Moreover, no customs duties are charged on imports and exports during Free Zone business setup in UAE.
The process of company formation and business setup in Dubai UAE is well-organized and streamlined. Zones support various industries. Free Zones offer diversified support services such as visa processing, licensing, and administrative assistance.
Advantages of Mainland Business:
A Mainland business setup Dubai offers a few superior advantages as discussed below:
- This type of business has full access to the local UAE market, allowing them to trade directly with consumers and even companies.
- Mainland businesses are eligible to bid on government contracts. Such an eligibility favors them with stability and profitability.
- Mainland companies are free to set up their businesses anywhere in the UAE with no geographical restrictions.
- Mainland companies can open several branches in the UAE as well as Dubai, promoting business growth.
Types of Business Licenses in Dubai
Different corporate pro services in Dubai cater to business activities. Here’s a section discussing each of these important types.
Commercial License:
It is for companies carrying out trading activities. Whether you are selling, importing, or exporting goods/services, this license involves a broad scope of commercial activities.
Professional License:
It works for customer-oriented businesses such as IT services, legal services, consultancy, and many other professional services. It supports 100% foreign ownership, but you must employ a local service agent. Ensure you understand how to obtain a professional license in Dubai if you find this type of license appropriate for your type of business.
Industrial License:
It is applicable to businesses involved in manufacturing or any form of industrial activity. It requires additional approvals from the concerned authorities based on the nature of the activities to be carried out. To obtain an industrial license, the first step is to seek the services of a business setup consultant to efficiently handle the business setup process.
Tourism License:
It is appropriate for companies involved in the tourism industry (such as hotels, tour operators, and travel agencies). It enables a company to sell the travel & tourism packages outside UAE through a network of offline agents, e-commerce, etc. Apart from that, the license enables the company to operate as a vendor for booking and ticketing services, offered on behalf of the agents.
Legal Structures for Business Set Up in Dubai
Prior to company formation in Dubai, you need to learn about various legal forms in order to select the best suited one. A brief description of the features of major legal forms that are found in Dubai is given below.
Limited Liability Company (LLC):
In Dubai LLC company setup, the liability of the members is limited to their investment. 2 and 50 are the minimum and maximum shareholders respectively. Earlier, the local partner was required to own 51%, but with new regulations, 100% foreign ownership is necessary in some sectors.
Sole Proprietorship:
In this legal form, one person owns and runs the company. The owner is subject to unlimited liability, and his/her personal assets are at risk.
Civil Company:
It is appropriate for professional specialists providing specialty services. It is typically used by consultants, lawyers, doctors, and engineers.
Branch Office:
It suits best international companies who want to extend their activity in Dubai but do not intend to form an independent legal person. It shares no independent personality with the parent company.
Free Zone Company:
It is applied in describing legal entities that are established in Free Zones and provide tax incentives and advantages. One of the major tax advantages in conducting business in Dubai under this legal framework is that it avails 100% foreign ownership.
Visa and Residency Requirements
Dubai offers several residency possibilities to workers and business entrepreneurs. Each of the Dubai residency visas for investors meets different needs.
It is mandatory to visit a legal/immigration specialist prior to proceeding with the Dubai business set up and comply with the requirements for Dubai business visa. You could also look for visa services Dubai. Following is the list defining some of the standard residency visa choices:
- Green Visa
- Golden Visa
- Employment Visa
- Real Estate Visa
- Retiree Visa
- Remote Worker Visa
- Self-Sponsored Visa
- Investor/Partner Visa
- Family Sponsorship
Overview of the tax system in Dubai:
Personal Income Tax:
There is no personal income tax imposed on individuals in Dubai, as of June 2023.
Corporate Tax:
Starting January 1, 2024, the UAE implemented a 15% minimum top-up tax on large multinational enterprises with consolidated global revenues of at least €750 million, aligning with international tax standards.
VAT (Value Added Tax):
Implemented on 1st January 2018, 5% VAT is applicable.
VAT Registration Requirements
A company with taxable supplies and imports exceeding AED 375,000 in the previous 12 months must be registered for VAT.
How is VAT applied?
In the first place, VAT is charged at the point of sale on goods/services. Companies charge VAT to be paid by the government and remit it through regular VAT returns. Companies can get back the VAT they paid already on their inputs and should charge VAT on the price of what they sell.
Conclusion
Dubai, strategically positioned between Europe, Africa, and Asia, is a global business hub that provides easy access to a massive market. It has come with enticing tax rebates, world-class infrastructure, state-of-the-art transport, and facilitates smooth trade operations.
Different best Free Zones in Dubai offer tax relief, 100% foreign ownership, and easy business setup procedures to suit different types of industries. All these factors support the advantages of the business setup in Dubai.
Future investors/entrepreneurs can take advantage of different incentives and a facilitative business environment to succeed in your business. Furthermore, the government has established policies to develop innovation and growth to facilitate your business growth.
