Business Setup in Dubai

Dubai hosts several free zones that offer significant advantages for global trade and tax exemptions. Here are ten notable options:

1. Jebel Ali Free Zone (JAFZA) One of the oldest and largest free zones in the UAE, JAFZA is strategically located near Jebel Ali Port, one of the world's busiest ports. This prime location facilitates seamless international trade, making it ideal for businesses involved in import and export activities. JAFZA offers 100% foreign ownership, zero corporate taxes for 50 years (renewable), and exemption from import and export duties, providing significant financial advantages for global traders.

2. Dubai Airport Free Zone (DAFZA) Located adjacent to Dubai International Airport, DAFZA serves as a major player in the global trade and logistics industry. It offers 100% foreign ownership, tax exemptions, and streamlined processes for visa and business licensing, making it a strategic hub for businesses seeking global connectivity.

3. Dubai Multi Commodities Centre (DMCC) Recognised as the world's leading free zone, DMCC caters to a wide range of sectors, including commodities, technology, and professional services. It offers 100% foreign ownership, tax exemptions, and a strategic location in Jumeirah Lakes Towers, providing excellent connectivity for global trade.

4. Dubai International Financial Centre (DIFC) Established in 2004, DIFC serves as a global financial hub with its own legal and regulatory framework. It focuses on financial services, including banking, insurance, and asset management, offering a business-friendly environment with tax incentives and a robust legal system. THE ATLANTIC

5. Dubai Silicon Oasis (DSO) Aimed at technology-based industries, DSO offers state-of-the-art infrastructure, 100% foreign ownership, and tax exemptions, making it ideal for tech startups and companies.

Establishing a branch of a foreign company in Dubai allows the parent company to operate within the UAE under its existing corporate identity. However, certain restrictions and requirements apply:
1. Legal Status and Ownership A branch is not a separate legal entity; it operates as an extension of the parent company, which retains full ownership and liability for the branch's activities.
2. Scope of Activities Branches can conduct activities aligned with those of the parent company. However, specific sectors—such as commercial agencies, banking, telecommunications, and certain professional consultancies—may have restrictions on foreign ownership or require additional approvals.
3. Representative Offices A representative office is a type of branch that is limited to promoting and sourcing business for the parent company. It cannot generate profit within the UAE and must refer all business back to the parent company.
4. Local Service Agent Requirement Branches of foreign companies are generally required to appoint a UAE national or a wholly UAE-owned company as a Local Service Agent (LSA) to assist with administrative procedures. The LSA has no ownership stake or managerial role in the branch.
5. Free Zone Branches Branches established within free zones benefit from 100% foreign ownership and tax exemptions. However, they are generally restricted from conducting business directly in the UAE mainland without engaging a local distributor or agent.
6. Compliance and Licensing Branches must obtain the necessary licenses from relevant authorities, such as the UAE Ministry of Economy and the Department of Economic Development in the respective Emirate.
It's essential to consult with legal experts to navigate these regulations effectively and ensure compliance with UAE laws.

Business setup consultants simplify starting or expanding a business by offering expertise in legal compliance, licensing, and market entry. They help choose the right legal structure (LLC, free zone, or offshore), guide jurisdiction selection, and handle documentation and licensing processes.

The Vista Corporate Group offer end-to-end support, including networking events, business tours, and post-service support like visa renewals and compliance updates. We also assist with real-estate and office space guidance, corporate bank accounts, accounting and compliance services, PRO services, and more. With us, you will save time and money, ensuring that you don’t make the common mistakes that most do when setting up their business in Dubai.

The UAE Golden Visa is a long-term residency visa granted to investors, entrepreneurs, skilled professionals, researchers, and exceptional students. It allows recipients to live, work, and study in the UAE while enjoying exclusive benefits.
Key Features of the Golden Visa:

• Long-Term Residency: Valid for 5 or 10 years, renewable.
• No Sponsor Needed: Unlike regular visas, no local sponsor is required.
• 100% Business Ownership: Allows 100% foreign ownership of businesses.
• Family Coverage: Includes family members (spouse and children) and can extend to domestic staff.
• Enhanced Flexibility: Freedom to enter and exit the UAE without restrictions on duration of stay outside the country.

Unlike regular visas, which are tied to employment or family sponsorship and are typically valid for 2-3 years, the Golden Visa provides greater flexibility, including the ability to stay outside the UAE without losing residency and covers family members and domestic staff. It is tailored for investors, skilled professionals, and exceptional achievers.

Businesses are moving to Dubai for several compelling reasons, making it a global hotspot for entrepreneurs and corporations alike:
1. Tax benefits
Dubai offers 0% personal income tax and no withholding taxes. Corporate tax is capped at 9%, with many free zones providing 100% corporate tax exemptions for specific periods. These benefits significantly reduce operational costs.
2. Strategic location
Dubai’s position between Europe, Asia, and Africa makes it a vital hub for trade and logistics. Its time zone advantage also enables businesses to operate across multiple continents during the same working hours.
3. Business-friendly environment
The UAE government supports businesses with streamlined registration processes, robust infrastructure, and policies encouraging foreign investment. Initiatives like 100% foreign ownership in many sectors and reduced regulatory barriers make it easy to set up and operate.
4. Diverse economy
Dubai's economy is no longer oil-dependent, thriving in industries like trade, tourism, real estate, finance, and technology. The city has been quick to adopt global trends, such as smart-city initiatives and green energy projects, ensuring long-term business sustainability.
5. High-quality infrastructure
Businesses benefit from state-of-the-art infrastructure, including world-class transportation networks, cutting-edge telecommunications, and modern office spaces. Free zones like Dubai Internet City and Dubai International Financial Centre (DIFC) cater to specific industries with tailored facilities.
6. Talented workforce
Dubai attracts a highly skilled, multinational workforce due to its quality of life, cosmopolitan culture, and competitive salaries. Its labour laws also allow businesses to access a flexible workforce.
7. Pro-business government policies
Policies like the UAE Golden Visa for investors and entrepreneurs, as well as initiatives to ease banking and licensing processes, demonstrate the government’s commitment to fostering a business-friendly climate.
8. Market access and ease of trade
Businesses in Dubai can trade freely across the UAE and the broader GCC region, tapping into a market of over 50 million people. Companies in free zones can also engage in international trade with minimal restrictions.
9. Robust tourism and consumer market
In 2024, Dubai continued its remarkable growth as a global tourism hub, attracting 11.93 million international visitors between January and August—a 7% increase compared to the same period in 2023 (dubaidet.gov.ae). This influx of tourists has significantly boosted key sectors like retail, hospitality, and real estate.
10. Economic stability
Dubai’s economic policies and strategic diversification have fostered resilience and stability, even during global economic challenges, making it a secure place for investments.
Dubai has retained its position as the world’s top city for attracting Greenfield Foreign Direct Investment (FDI) projects, according to the Financial Times Ltd’s fDi Markets data.
In H1 2024, Dubai attracted 508 Greenfield FDI projects, representing a 6.2% global share, up from 5.7% during the same period last year. This growth highlights Dubai's competitiveness and appeal to international investors.

When choosing the best place to set up your business in Dubai, consider the following factors:
1. Understand your business needs

• Industry alignment: Identify areas in Dubai that cater specifically to your industry. For instance, Dubai Design District (d3) is best for lluxury fashion and interior design industry, while Dubai Healthcare City suits healthcare enterprises.
• Target audience: Choose a location accessible to your primary customer base to enhance engagement and sales.
• Transportation: Ensure the area is well-connected via major roads and public transport to facilitate ease of access for clients and employees.
• Proximity to suppliers and partners: Being near key suppliers or business partners can streamline operations and reduce logistical costs.

2. Assess the correct jurisdictions

• Free Zones: Dubai offers numerous free zones like Jebel Ali Free Zone (JAFZA) and Dubai Multi Commodities Centre (DMCC), providing benefits such as 100% foreign ownership and tax exemptions. However, businesses in free zones may face restrictions on operating within the mainland.
• Mainland: Setting up in the mainland allows you to trade freely across Dubai and the UAE but may involve different regulatory requirements.
• Offshore: Ideal for holding companies, asset protection, and tax planning. Offshore companies benefit from confidentiality but cannot conduct business within the UAE.

3. Consider cost implications

• Rental rates: Commercial rents vary across Dubai. For example, areas like Sheikh Zayed Road are known for their high-rise infrastructures and active commercial environments, which may come at a premium.
• Operational expenses: Factor in costs related to utilities, maintenance, and other operational needs.
• Licensing costs: The cost of obtaining a business license in Dubai varies based on several factors, including the type of license, business activity, location, and additional approvals required.

Here's an overview:

• The cost for mainland licenses typically ranges from AED 10,000 to AED 50,000, depending on the business type and other factors.
• Free Zone license costs can vary depending on licensing authority and fee structure. For example, the International Free Zone Authority (IFZA) offers licenses starting from AED 12,900.

Additional Costs:

• Office space: Commercial rental costs vary based on location and size. Consider co-working spaces as an option, too.
• Visa quota: The number of visas your business requires for employees will affect the total cost.
• Additional approvals: Certain business activities may require approvals from specialised authorities, which come with additional fees.

4. Analyze your competition

• Market presence: Establishing your business in areas with a high concentration of similar businesses can be advantageous.
• Market trends: Stay informed about areas experiencing economic growth or development, as they may present new opportunities.

By carefully assessing these factors, you can select a location in Dubai that aligns with your business objectives and paves the way for sustained success.

Mainland business setup process
Regulated by the Department of Economic Development (DED)

• Ownership: Full foreign ownership is allowed for many activities, though some may still require a local sponsor.
• Market access: Businesses can trade freely across the UAE and take on government contracts.
• Office space: Renting physical office space is mandatory, with no virtual office options.
• Business activities: Allows diverse activities under one license.

Free Zone Business Setup

• Ownership: Offers 100% foreign ownership with no need for a local partner or sponsor.
• Market access: Limited to free zones and international trade; mainland access requires a local distributor or agent.
• Office space: Virtual offices and flexible lease terms are often available.
• Tax benefits: Free zones provide corporate tax exemptions, customs duty exemptions, and no personal income tax.
• Business activities: Activities are restricted to those supported by the specific free zone.

Key Consideration: Choose UAE’s Mainland for local trading and Free Zones for tax benefits and international operations.

In the United Arab Emirates (UAE), businesses must obtain specific licenses corresponding to their activities. The primary types of business licenses include:

Commercial License: For entities engaged in trading activities, such as import-export, sales, and general trading.
Industrial License: Required for businesses involved in manufacturing, production, or industrial operations.
Professional License: For service-oriented professions, including consultancy, legal services, and artisanship.
Tourism License: Necessary for businesses operating in the tourism sector, such as travel agencies, tour operators, and hotels.
Agricultural License: For activities related to agriculture, including farming, crop production, and agricultural consultancy.
Craftsmanship License: Required for skilled trades like carpentry, plumbing, and electrical work.

In the UAE, businesses may engage Local Service Agents (LSAs) or Local Sponsors depending on their legal structure:

Local Service Agent (LSA): Required for professional licenses or foreign company branches. The LSA facilitates government processes but does not hold ownership or management rights. They are paid a fixed annual fee.
Local Sponsor: Mandatory for certain mainland commercial businesses, where a UAE national or company holds 51% ownership. Sponsors may relinquish operational control in exchange for a fee or profit share.

Key Difference: LSAs assist without ownership, while Local Sponsors legally hold shares but may not actively manage the business.

The UAE has introduced reforms allowing 100% foreign ownership in many sectors, reducing the necessity for Local Sponsors in certain industries. However, specific activities may still require an LSA or Local Sponsor, making it essential to consult with local authorities or legal experts to determine the appropriate structure for your business.

Engaging with a qualified legal consultant like Vista Corporate Group can provide clarity on these arrangements, ensuring compliance with UAE laws and aligning with your business objectives.

1. Determine the Business Activity
Identify the specific activities your business will undertake, as this influences licensing requirements and jurisdiction selection.
2. Choose a Jurisdiction
Decide between setting up in the Mainland or one of Dubai's Free Zones. Mainland companies can operate across the UAE market, while Free Zones offer benefits like 100% foreign ownership but may have restrictions on direct mainland operations.
3. Select a Legal Structure
Choose an LLC if you want direct access to the UAE market, or go for a Free Zone Entity if you prioritise 100% ownership and focus on international trade. A Branch Office works best for extending an existing business into Dubai.
4. Reserve a Trade Name
Register a unique trade name that complies with Dubai's naming conventions, ensuring it reflects your business activity and adheres to cultural norms.
5. Apply for Initial Approval
Submit an application to the relevant authority (Department of Economic Development for Mainland or respective Free Zone Authority) to obtain initial approval for your business activities.
6. Prepare Legal Documents
Draft and notarise necessary documents, including the Memorandum of Association (MOA) and, if applicable, a Local Service Agent agreement.
7. Secure Office Space
Lease a physical office space as required by Dubai law, whether in the Mainland or within a Free Zone. Some Free Zones offer flexible workspace solutions suitable for startups.
8. Obtain Additional Approvals
Depending on your business activity, secure any necessary approvals from relevant government bodies or ministries.
9. Finalise Licensing
Submit all finalised documents and approvals to the relevant authority to receive your business license.
10. Register for Visas
Owners and employees can apply for residency visas through the appropriate channels, adhering to UAE immigration regulations.
11. Open a Corporate Bank Account
Choose a suitable bank and provide the required documentation to open a corporate account.

Dubai offers various legal structures for business setup tailored to different needs:
1. Limited Liability Company (LLC)
Ideal for most mainland activities. Allows 100% foreign ownership for many activities.
2. Sole proprietorship
Owned by one individual with complete control and liability. Suitable for professional services.
3. Civil company
For professionals like doctors or engineers. It requires administrative support from a local service agent.
4. Branch office
Extension of a foreign company. No local ownership is required.
5. Free zone company
Offers 100% foreign ownership and tax benefits. They cannot trade directly in the mainland.
6. Joint Stock Company (JSC)
For large-scale businesses. It can be public or private, with at least three shareholders.
7. Offshore company
For international operations and asset management. Cannot trade within the UAE.
8. Partnership Company
Requires local ownership of at least 51% between parties.
LLCs are versatile for mainland operations, while Free Zone Companies offer full ownership and tax perks for international trade.

To open a corporate bank account in Dubai, follow these steps:
1. Choose a Bank
Select a bank that aligns with your business needs. Options include Emirates NBD, Dubai Islamic Bank, and Commercial Bank of Dubai.
2. Prepare Documentation
Required documents typically include:

• Valid trade license
• Certificate of incorporation
• Memorandum and Articles of Association
• Passport copies of shareholders and authorized signatories
• Proof of address
• Board resolution authorizing account opening

3. Meet Minimum Balance Requirements
Some banks require a minimum balance, which can vary. For example, Dubai Islamic Bank requires a minimum balance starting from AED 50,000.
4. Submit Application
Complete the bank's application form and submit it along with the required documents.
5. Compliance Review
The bank will conduct due diligence, including Know Your Customer (KYC) procedures.
6. Account Approval
Upon successful review, the bank will approve and open your corporate account.
Note: Requirements may vary between banks. Consulting with a trusted and reliable business setup advisor in Dubai, like Vista Global Business Setup, can facilitate the process.