How to set up a company in Dubai as a Foreigner or Investor

For several decades, The UAE has quietly and loudly rang bells as the destination for thriving, ambitious foriegn investors and entrepreneurs. It is highly a investment hub flowing with stable political system, business friendly taxation and liberal trade restrictions.

Starting a business in UAE is an excellent decision as the vast encouragement extended to startups and wide investments by the UAE local governments give rise to an easy business set up. The encouragement has demonstrated and optimized its lucrative opportunities hence the need for potential investors to see it as the next business scaling ground.

What are the profitable businesses in UAE

According to UAE’s National Economy Register (NER), foreign business operating in UAE goes to 3209 by December 2020, evidently it has tripled in number in 2024. These businesses are majorly 100% foreign owned across the top industries. Below are the thriving industries

Hospitality & Tourism: The UAE government recognizes the potential of its hospitality & Tourism industry in its UAE tourism strategy 2031. The strategy is centered around to attract $27 billion in new investments with aim to welcome 40 million hotel guests by 2031.

Logistics & Transport: The Emirates significantly highlights transport as a crucial role in the UAE’s economic development. The role to play in the industry will be driven by high citified pace with an effort to boost tourism, internal and external connectivity. The expansion of the self-driving transport projects 25% to have all transportation becoming smart hence opening up the industry opportunities.

Real Estate: The real estate market has an excellent beginning having recorded transactions worth $1-36billion in January 2024 both in sales and mortgage transactions. The sector has been efficiently supported by the government incentives, premium projects and appealing to people’s taste of luxury and work-life balance.

Construction: This industry has been growing constantly with its worth hitting $38.99 billion in 2024, thanks to projects like Burj Khalifa, Palm Jumeriah and Dubai Marina.

Banking & Finance: The banking sector has gained over 50 banks making it a strong contender. Statistically in 2023, the top 10 publicly listed banks generated net profit worth $12.6billion and the UAE cental bank forecasted a $18.7 billion revenue from digital payment by 2031.

Retail: This industry will continue to build the UAE economy in few years down the line. By 2027, the retail industry could reach $70.5billion as the stream of tourists, local and foreign increased expenditures will drive the industry.

E-Commerce: ECDB ranks the UAE as 46th in terms of e-commerce market size even ahead of Singapore. The country’s high internet penetration rate and a shift in customer behavior are the drivers of the industry.

Healthcare: The UAE’s population could reach 11million by 2030, equally there will be an increase demand for healthcare. The Emirates has the best healthcare system across the globe and the government is committed to provide top tiers services to its citizens.

Consulting: The favorable economic environment demonstrates the benefits of setting up a consulting firm in UAE. The global trends in the middle east markets have been focal point of global development.

Oil & Gas: It’s no doubt that the UAE is one of the world’s top oil producers with an output of 3.30million barrels per day in 2023. The sector is abundantly attractive despite production costs with the knowledge of low corporate taxes, no currency restrictions, advanced infrastructures and technology access.

What are the types of company formed in UAE

In the UAE, a type of company can be formed depending on the jurisdiction or legal structure, scope of activities, cost, infrastructures and regulations. Below are the jurisdictions.

Mainland Jurisdiction: In the mainland, a Limited Liability Company (LLC) can be formed by a foreign national if there is a UAE sponsor owning at least 51% of the business unless they operate in some sectors that allows 100% foreign ownership. Businesses in the mainland can conduct business anywhere in the UAE and across the globe with an approval from the relevant authorities. The Department of Economic Development of each emirate is in charge of giving license on the mainland.

Free Zone Jurisdiction: The free zones are geographically divided areas in the UAE, mostly gated or fenced. In the free zone, foreigners can form a 100% ownership company and enjoy extra benefits. The relevant free zone authorities are in charge of providing licenses.

Offshore Jurisdiction: A company formed in this jurisdiction are legally established for the purpose for the purpose of making profit outside the country of residence. No physical office is required for offshore company in UAE and the offshore authority is in charge.

What are the free zones in UAE

The UAE offers investors more than 40 free zones that allows 100% ownership. The more than 40 free zones have the top free zones that are best for setting up a business as a foreigner and they are Abu Dhabi, Ajman, Sharjah, Dubai, Ras Al Kalimah, Fujairah, Jebel Ali.

Benefits of setting up your business in UAE free zones

  1. 100% foreign ownership
  2. 100% repatriation of capital & profit
  3. Fast and easy business set up procedures
  4. Independent laws and regulations
  5. Developed business communities
  6. 100% exemption from corporate income taxes
  7. Modern and Sophisticated Infrastructures

What are the business licenses in UAE

To operate successfully in UAE, a business license has to be obtained according to the business activities. Below are the significant licenses.

1.Professional license: These are for companies that provide services akin to consulting. The cost od issuing this license is generally affordable.

2. Commercial License: These are for business that its activities are selling and buying goods and services and it is commonly known in the UAE.

3.Industrial license: This license is for the manufacturers inclusive of factories.

Steps to setting up a business in UAE as a foreigner

Having established the thriving businesses, understanding business jurisdictions and licenses, setting up a company in UAE can still be a complex process, but here are the general steps you need to take:

  1. Choose a business activity: Decide on the type of business activity you want to engage in. Dubai offers several different business activities, including trade, service, industrial, and professional.
  2. Choose a legal structure/Jurisdiction: Decide on the legal structure/jurisdiction of your business. The most common forms are a mainland Company, a free zone Company, a branch company in Mainland or free zone or Offshore Company.
  3. Choose a company name: Choose a unique name for your company that is not already taken.
  4. Obtain necessary licenses and permits: Obtain the necessary licenses and permits required for your business activity. This will depend on the type of business you are setting up.
  5. Find a local sponsor: If you are setting up a Limited Liability Company (LLC), you will need to find a local sponsor who can hold 51% of the shares in the company. This can be a UAE national or a company owned by a UAE national
    This applies only to a Mainland Company as a free zone or offshore company you do not require a sponsor.
  6. Register your company: Register your company with the Dubai Department of Economic Development (DED) and the Dubai Chamber of Commerce.
  7. Open a bank account: Open a bank account for your company and deposit the minimum required capital.
  8. Rent office space: Rent office space for your company. This can be in a free zone or on the mainland. Offshore company do not require a physical office space.
  9. Hire employees: Hire employees for your company and obtain the necessary visas and work permits.
  10. Obtain visas and residence permits: Obtain visas and residence permits for yourself and your employees.

What are the documents required to set up a business

Below are the following documents if you are setting up your Dubai business with individual shareholders only;

  • A valid passport copy
  • A passport photograph
  • Residence visa Copy (if applicable)
  • Emirates ID copy (if applicable)

If you are setting up with corporate shareholders, you will also need to provide the following:

  • Certificate of Incorporation
  • Certificate of Incumbency or equivalent
  • Memorandum of Association

What is the cost of setting up a business in UAE

  • Setting up a company in Dubai as a foreigner differs as it additionally includes obtaining a license and resident visa to operate legally. The cost depends on several factors, including the size and nature of your business and whether you operate on the mainland or in a free zone or as an offshore company.
  • Your business can be registered as Mainland legal Jurisdiction with the inclusion of license and resident visa between the range of 25,000AED to 30,000AED
  • The offshore jurisdiction inclusive of license and resident visa is 18,000 AED to 20,000 AED
  • Whilst the offshore jurisdiction doesn’t require license and resident visa as it is not allowed is 3,500 to 5,000 AED

What are the benefits of setting up a company in UAE

There are several benefits of setting up a company in Dubai, including:

  1. Strategic location: Dubai is strategically located between Europe, Asia, and Africa, making it an ideal location for businesses that want to expand globally.
  2. Tax benefits: Dubai offers a tax-free environment for businesses, which means that companies can keep more of their profits.
  3. Easy business setup: Dubai has streamlined the process of setting up a business, making it easier and faster for entrepreneurs to start their businesses.
  4. Access to world-class infrastructure: Dubai has world-class infrastructure, including modern airports, seaports, and highways, making it easy for businesses to transport goods and services.
  5. Skilled workforce: Dubai has a highly skilled and diverse workforce, which means that businesses can easily find the talent they need to grow and succeed.
  6. Political stability: Dubai is known for its political stability, which makes it a safe and secure place for businesses to operate.
  7. Business-friendly environment: Dubai has a business-friendly environment, with a government that is committed to supporting businesses and entrepreneurs.
  8. Access to funding: Dubai has a vibrant financial sector, with access to funding from banks and investors.
    Overall, setting up a company in Dubai offers several benefits and can be a great way to expand your business and reach a global audience.

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