Company formation in Dubai

female entrepreneur

The list of reasons to start a business in Dubai is long and varied. That’s why the emirate is home to wide range of thriving industries from tech and travel to medical and manufacturing.

The country’s low tax environment is a major factor behind this, as is its ideal location at the heart of the Middle East and its low barriers to doing business.

One of these low barriers is in the form of its company formation process. With the help of an expert, company formation in Dubai can be incredibly straightforward. In many cases, you can be trading within a matter of days.

If you’ve got a great business idea – and the drive to turn it into a reality – you could well see success in Dubai. With that in mind, here’s everything you need to know about company formation in Dubai.

Company formation in Dubai cost

Cost is one of the first factors to consider when starting a business. Here in Dubai, you may be pleasantly surprised at your findings.

While there are many factors involved, you can expect a trade license to cost in the region of AED 15,000 to AED 25,000.

This is very much a ballpark figure, however.

Company formation in Dubai costs vary depending on where you choose to set up, whether you take on premises, how many employees you have – and much more.

The cost of applying for your industrial license will also depend largely on whether you do so in the mainland or in a free zone. Company formation in Dubai free zone costs, for example, are often much lower than when setting up in the mainland. Equally, if you opt to use a co-working space rather than a permanent office, your setup costs will likely be lower.

Company setup in Dubai

There are several steps involved in company formation in Dubai – some complex, some less so. The first is to determine the activities you wish to carry out, and in turn, the type of license you will require.

If you are undertaking a commercial activity – such as buying and selling products or services – then in most cases, you’ll need a commercial license. Other available license types include e-commerce, industrial, and professional.

When you have decided on your chosen activity, you will need to make it clear when applying for your license.

Your activities must be chosen from the official Department of Economic Development (DED) list. This list contains 2,000 activities from a wide range of sectors, as detailed below. However, while there are many to choose from, they can be quite specific. For this reason, it’s best to work with a company formation specialist who can align your business with a permitted activity.

Next, you’ll need to choose and register your company name. This needs extra care here in Dubai due to the UAE’s company naming conventions. You cannot include any offensive or blasphemous language and if you wish to include your name in your company name, you must use it in full rather than just your surname or initials. You must also check that your chosen name is available to be registered.

Now for another key decision. Do you wish to set up in a free zone or mainland setup? Free zones offer a range of benefits, including, but certainly not limited to, full customs tax exemption, no currency restrictions and the ability to repatriate 100% of your capital and profit. Mainland companies cannot take advantage of these benefits, but they are permitted to trade directly with the local UAE market without the need for a service agent and take on government contracts – both things that free zone businesses cannot do.

Company formation in Dubai – making your applications

With these initial decisions made, you can now make your applications – both for your license and your visas.  

The process here is slightly different depending on whether you have chosen to set up a free zone or mainland business.

If you’ve decided that the mainland is a better base for your business, you’ll need to make your application directly to Dubai’s DED. Most of this process takes place online.

As well as a trade license issued by the DED, you may also need approvals from the Dubai Chamber of Commerce and Industry, the Ministry of Labour and the Ministry of Interior before you can do business.

If, however, you have decided on a free zone setup then you can make your application directly to your chosen free zone. As free zones are self-regulated, you will not require all of the additional approvals listed above. This is one of several reasons why free zone company setup is often the most straightforward and cost-effective method of starting a business in Dubai.

In both cases, it is always advisable to work with a company setup agent at this stage. We can manage the entire license process on your behalf to ensure a seamless incorporation process.

Finally, you’ll also apply for visas – for you, your employees and your dependants. A company setup agent can also take care of this process for you to ensure a fast and straightforward service.

Understanding company setup in Dubai

Company formation in Dubai has been designed with simplicity in mind. That said, it does take some in-depth knowledge of the UAE and its many customs and regulations.

That’s why it’s always advisable to acquire the services of a business setup company who can not only advise on the process but also seek out the most suitable license and setup type for your business, based on your needs and your budget.

By making use of a business setup service, you also gain peace of mind that your license and visa applications are free from errors and omissions – both of which can lead to delays and rejection.

When you work with a company formation specialist, all you need to provide is some basic documentation and a little information about the nature of your business. Then, sit back and let the experts take care of the rest – managing your license and visa applications, communicating with all relevant departments and authorities, and reporting back when you’re ready to start trading. It really is that simple.