Setting Up a Business in Dubai
Doing business in Dubai with the benefit of paying no direct taxes might seem very lucrative to many investors on both global and local scales. The land of opportunities also provides a passage to open trade in the Middle East, Asia, and African countries as well. Though the capital of Emirates provides international platforms for many ventures, according to the company act of ordinance, every type of company except for offshore is bound to have a local shareholder comprising a 51% share of the company. However, the rights of shareholders are strongly protected by the government under a shareholders protection agreement and are allotted with fair sets of rules for creating a healthy environment for better functioning. Afterward, there is a process of making the company’s Memorandum and Articles of Association for the formation of the company. Then there is the submission of all authorized documents and business license application form to the Department of Economic Development for legal approval. The costs of company setup are mainly divided into categories without any hidden taxes, but still, a local sponsor or consulting company is required for the authorization of the paperwork process.
Dubai is a land of the talented and multilingual labor force that arrives from various parts of the world. Apart from labor, another important step is renting an office space. In addition to registration charges, the startup is also asked to pay Dh15,000 for a general trading license, Dh10,000 to Dubai Municipality, Dh3,000 to the Ministry of Economy and Dh1,200 to Dubai Chamber of Commerce. Fee charges also vary according to the types of businesses, like mainland, offshore, and Freeland companies.
Different Costs Are Imposed According To The Types of Businesses
For a Freezone company overall you just have to pay once, sign up in the city and then secure copyright of the name. Then yearly charges apply for the license of the business and visa for employees.
In the case of the Mainland the same cost of infrastructure, license, and for a visa is charged like Freezone Company. However, the expense of setup can vary according to external variables such as policy changes or billing expenses.
Cost Of Company Setup With No Investment
If there is a hurdle in funding or having a financial crisis, then it is best advisable to look for sponsors in Dubai. There are many ways a company can look for financial support, but only if the business has a great idea to work on.
Crowdfunding is where a group of investors supports the potential concept of an entrepreneur or a small business. Moreover, there is also a concept of peer funding in which a separate individual decides to endow independently in the startup. Both companies said they would get the money back with interest or become major shareholders in the profit. Through peer funding, individuals carry less risk in the investment but there can be another method of Individual sponsorship where there is only one sponsor who is ready to finance the startup while carrying 51% of the share in return. The sponsor also helps the company to get registered in the markets and files for visa work in case of a non-Emirati business establishment in Dubai. Lastly, banks these days are also providing financial help to potential small scale companies or competent individuals who want to expand their horizons of prospects in the market. However, in the case of an offshore company, the process can sometimes become slow and difficult especially for a foreign company. Moreover, if you are not able to pay for the loan, then the business can pay a serious consequence for it.
Looking For Business Setup Services in UAE
All these expenses can sometimes be truly confusing and tricky to handle accurately, thus, many companies now seek business setup services by a consultancy agency to get accurate marketing insights with proper product knowledge and reliable set up practices like human resource administration or operational management. They even provide expert financial services to the newbie setup and create a simple, systematic structure of bookkeeping to endow with direction on financial management as well.
Hence, according to the World Bank in 2019, Dubai ranks 25th on a global scale for starting a business venture with the best facilities.