Business Setup in Dubai – A Guide for Entrepreneurs

Just as with most highly rewarding entrepreneurial markets, business setup in Dubai will require a fair amount of research and planning. In Dubai setting up a business is not difficult, although it can be confusing. Navigating the different laws in each business jurisdiction and deciding on the best business license that best suits your needs is something that every entrepreneur must face, whether in Dubai or internationally. The process of a business setup in Dubai is also time-consuming and requires several different documents and approvals. Seeking out a professional business consultancy can make this task a lot easier and much more efficient.

This article will aim to give readers a clear understanding of what their options are when setting up in Dubai.

Freezone vs. Local vs. Offshore business setup in Dubai

Freezone Business Setup

Setting up in a freezone jurisdiction allows a foreign national the right to start, operate and own a business, with no requirements for a local shareholder. The company may be 100% owned by an individual, a group of individuals or a company. A freezone company is the easiest and most common form of business in Dubai and the UAE.

• Office required prior to setup
• Restrictions on type of business
• 100% ownership by foreign nationals
• Residency visa eligibility
• 0% taxation
• Can open company bank account

Local Business Setup

Setting up a local company requires that a UAE or GCC national owns at least the majority share (51%) of the company. Although, in most cases, the sponsor does not get involved in daily business and typically prefers to remain a silent partner. It is not uncommon to have a local own 51% of a company on paper, yet never set foot in his company’s offices. The local will simply accept a salary in return for the use of their local status.

• Office required prior to setup
• Restrictions on type of business
• 51% must be owned by a local national
• Residency visa eligibility
• 0% taxation
• Can open company bank account

Offshore Business Setup

The offshore business setup option allows for a company to be registered in the UAE, but may only operate outside of its borders. Unlike the previous options, an offshore company does not give the shareholders and employees the right to residency visa. No office will be required for company registration, however offshore companies may maintain a corporate bank account, in selected banks, which will be 100% exempt from any taxation. UAE offshore companies can be owned 100% by foreign nationals.

• Office not required
• May not conduct business within the UAE
• 100% ownership by foreign nationals
• No residency visa
• 0% taxation
• Can open company bank account

Types of Companies in UAE

Businesses setup in Dubai and the UAE must take the form of one of the following seven types:

1. General Partnership
2. Simple Limited Partnership
3. Joint Participation (Venture)
4. Public Joint Stock
5. Private Joint Stock
6. Limited Liability (the most common in the UAE)
7. Partnership Limited with Shares

The type of company chosen for business setup in Dubai will depend on the business functions and the jurisdiction of the company. For more information on which option is best for you, you may contact us or fill in the form on this page to receive a complementary no-obligation consultation.