Starting a company in Dubai outside of a free zone is easier than you might think. Above all, the company foundation in Dubai is comparatively fast, sometimes even in only 15 minutes. Nevertheless, some specific features must be considered. For example, one may not use a private address as a business address (and vice versa). In addition, you need a permit in advance to start a company in Dubai. Furthermore, the preparation of a social contract is mandatory in Arabic, but a translation into another language may also be added. At the end of the process is the successful licensing. Nevertheless, there are still two tasks to do: the registration with the respective competent chamber and the tax office.

Founding 1st company in Dubai – Introduction

Dubai has grown into a business location of format in recent years. The reputation among entrepreneurs stems from the fact that the United Arab Emirates (UAE) has established a pro-business regime. This includes, among other things, that the tax regulations are significantly leaner compared to Germany, for example. However, this is also due to the fact that only a taxation of companies is known there. Natural persons are thus protected from income taxation, which then also applies to the receipt of profit distributions. But also with regard to the rules on the establishment of companies, the rules and the procedure remain pleasingly simple. How bureaucratic this process is and what you still need to know in advance to start a company in Dubai, we want to describe now.

2. What types of companies are there in Dubai?

If you want to start a company in Dubai, you must first decide whether the company should be based in one of the numerous free trade zones. Since these free zones have their own rules, in this article we only deal with those that have general validity, thus being limited to the core area of the UAE. In terms of the legal forms available for a company formation, there are practically no differences between a Free Zone company and Mainland Company.

Now the question has to be answered which legal form the company should receive. In addition to the sole proprietorship, there are the General Partnership, the Limited Partnership, the Limited Liability Company (LLC), the Public Joint Stock Company and the Private Joint Stock Company. In comparison, there are a large number of other legal forms in Germany, most of which, such as the KGaA, have little meaning. But even in the UAE, of the five legal forms, practically only the Dubai LLC plays an important role.

3. regulations for setting up a company in Dubai

Before we get to the practical part, we talk about the framework conditions that you should know before starting a company in Dubai. This also includes, for example, that insurance companies and credit institutions must assume the legal form of a public joint stock company.

Furthermore, you have to specify which company name the company to be founded should receive. In doing so, it is necessary to ensure that the designation is in accordance with the public policy of the state, which therefore also includes taking Shariah into account. Of course, it must also be ensured that the company is unique and unambiguous, so that confusion is excluded. In addition, other information may be required, such as the subject matter of the company or the partners in partnerships. The risk of confusion in relation to the company’s field of activity must be excluded. In addition, the legal form of the company is mandatory at the end of the company name.

A company in Dubai must of course have a domestic address. This information, together with information on the company, the legal form and, where applicable, the paid-in capital and the official registration number assigned to it, shall be included in all official letters of the company. If an undertaking is in liquidation, this information shall also be included in such documents.

When drawing up company contracts, statutes and similar documents, it should be noted that they are only valid in Arabic. Although translations into other languages are also permitted as an addition, only the Arabic-language version is legally binding.

4th company foundation process in Dubai

4.1. Is the planned company available or already awarded?

When starting a company in Dubai, the first contact with the authorities often takes place for the purpose of determining whether a planned company name has already been assigned or is excluded for other reasons.

4.2. Establishment of a company in Dubai: further preparations

Further preparations include the preparation of a business plan and a Memorandum of Association (MOA). For individual companies, a contract with a local service agent (LSA) is required. In parallel, a letter of intent must also be drawn up.

Then you have to make sure that a proper office is available. Unlike in Germany, however, this must not be a private address. Conversely, the business address also does not allow use as a residence. Thus, at least in this respect, an operating split is excluded. As proof, a rental contract is just as permissible as bills about electricity, water, Internet or telephone connections. In addition, the commercial property must provide sufficient space for the intended number of employees.

4.3. Obtaining a declaration of safety

When the necessary preparatory work is completed, the bureaucratic path follows until registration. The first step is to obtain a declaration of safety. It is checked whether prospective entrepreneurs meet all the requirements for starting a company in Dubai. Only upon receipt of the confirmation (initial approval) are the further steps open.

4.4. Obtaining an authorisation to pursue accredited activities

Once a social contract has been drawn up and an appropriate commercial property has been found, it may still be necessary to obtain a work permit for the planned activity. If you want to settle as a doctor in Dubai, for example, you need a permit. This is of course obtained by providing the relevant proofs.

4.5. Establishing a company in Dubai: Granting a business license

So, now we go to the most important step, the licensing of the company. To do this, you submit the aforementioned documents to the licensing authority and pay the fee for them. The fee depends on the exact allocation of the field of activity. Shortly afterwards you already get the license and the company is founded.

4.6 Final formalities

Nevertheless, two further steps remain to finally establish the company in Dubai in accordance with the law. On the one hand, you have to register the company with the competent chamber. On the other hand, since the introduction of corporate tax, the company has also had to register with the tax authorities.

5th company founded in Dubai – Conclusion

Anyone who wants to start a company in Dubai should therefore proceed well prepared. Although all requests are processed very quickly by the competent authorities, any lack of information or any pending proof will inevitably lead to a delay. Since the establishment of a company in many cases is also the basis for granting a residence permit in the UAE, you should have a vital interest as an entrepreneur in the smoothest possible company foundation.