Regardless of the financial climate, foreign investors are increasingly attracted to Dubai. This commercial hub of the oil-rich United Arab Emirates has become a top location for the setting up of offshore companies which enjoy numerous financial and tax benefits. Although it is relatively simple to set up a company in Dubai, it is important to follow the correct procedures in order to guarantee success.
The easiest and most cost-effective route is to open a company in one of the Free Zones created by the government to attract foreign investment. A company set up here can be 100% foreign owned and all of its profits can be repatriated to one’s country of origin. There is no corporate or income tax to be paid and client confidentiality is taken very seriously.
COSTS AND PROCEDURE
First of all, it is important to research the region and the particular industry you are going to invest in. This will help you target the right people to contact who can give you advice on how best to proceed.
A deposit of between $10,000 to $50,000 in a Dubai bank is a clear way of showing the Ministry of Commerce that your company has adequate resources and can absorb any possible liabilities. This deposit, proof of which should be sent to the relevant authorities, does not need to remain there and can be withdrawn later once the business is running.
The next step is to reserve a company name and make an application for registration at the Department of Economic Development (DED)
This will allow you to obtain preliminary approval from the Licensing Section of the Dubai Department of Economic Development (DED) on the business activities, trade name, and identity of partners. Conveniently, the name availability check, reservation, and payment can now be done online at the website of DED. This should only take a day and costs around AED 110 for initial approval + AED 210 for name reservation (as a rough guide, according to current exchange rates, 100 AED is equivalent to $27).
After this, you will need to notarize the company’s Memorandum of Association at the DED, a process that will take no more than one day. If your lawyer can obtain an initial approval, it is likely that you will arrive and have the documents notarized without any delay for a fee which is typically under AED 10,000 and various small admin charges.
The next step is to file company documents with the DED and obtain a trade license and register for membership at the Dubai Chamber of Commerce and Industry (DCCI).
If all the documentation meets the requirements, the company name will be entered into the Commercial Register. The DED then forwards the following documents to the Federal Ministry of Economy to arrange for publication:
- Notarized memorandum of association (copy).
- The application for entry of the company name in the Commercial Register (copy).
- Extract of the entry of the company name in the Commercial Register.
Even though publication can take several months, it will not delay the application as the authorities will accept a copy of the Ministry's receipt of publication fee payment.
The next part of the process is to apply for a trade license. After the notary public at the Commercial Registry notarizes the memorandum of association, a license application form is completed in Arabic, signed by the authorized company signatory and filed with the DED in duplicate. The DED files one copy and forwards the other to the UAE Federal Ministry of Economy.
This will take around 3 days and cost the following: 5 % of the value of the lease agreement + AED 1,000-3,000 waste fees + AED 480 for company registration + AED 350 fees for nameboard + AED 1,200 for Chamber of Commerce membership registration
The final steps have to do with the workers of the company and their registration. An establishment card at the Ministry of Labor will set you back AED 2,000.
Any native workers need to be registered with the same Ministry and the General Authority for Pension and Social Security, a process which should only take a day and for which there is no charge.
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