Many people dream of being their own boss and setting up their own business. Here at Abdulshafe and Co we can help with UAE business setup, and company establishment. Our team of business setup experts can help you set up your dream business. In this article we will be discussing the procedures required to establish a company here in the UAE.
Determine the Type of Business Activity To be Conducted
In order to establish a company in the UAE , you firstly need to determine the type of business/ company you want to start. This will determine the license you require to establish the company, these licenses vary from professional, commercial or industrial .
The UAE offers several structures suitable to a varied category of entrepreneurs. Which can be seen below:
– Freezone company/ Free Zone Enterprises
– Mainland Business
– Professional Services
– Branch Office
– Offshore Company
Determining Ownership
The next step in establishing a company is determining ownership. If you prefer 100% ownership of your company, then you need to acquire a license and location in one of the many free zones in the UAE . Setting up a business in a UAE Freezone comes with many benefits, both financial and social. These benefits include:
• Complete foreign ownership
• Absence of currency regulations
• Import and Export duty exemption
• Tax Benefits – 100% tax exclusion for Freezone companies.
• Repatriation benefits
• Smooth labor recruitment
• Readily available workspaces
• Ease of company incorporation
• Trouble-free immigration procedures
• Excellent communication and infrastructure
Choosing a Trade name
When choosing a trade name, you need to ensure that it reflects the nature of the company. There are certain rules and regulations regarding the trade name of companies in the UAE.
• When choosing a trade name for your new Freezone company, you should check either with the free zone authority or the Department of Economic Development (DED) about the permitted trade names and whether the intended name has already been registered.
• For the DED to approve the proposed trade name, the name :
• Must not violate public morals of the country
• Must be followed by the legal form of the company
• Has not been previously registered
• Is compatible with the required type of activity and legal status
• Should not contain names of any religion, or governing authority.
Designating Share Capital
The minimum share capital is proposed by the Memorandum of Association however business owners usually don’t need to pay minimum capital when setting up the company.
Locating an Office Space and Hiring Employees
Next step in establishing a company after setting up all your forms and legal procedures is to decide and sort out your office location . You have the option to either buy or lease office spaces in free zones. Office area requirements depend on the number of employees and the type of business activity your company will be conducting.
Each company requires a manager to be present to oversee operations and they must be ready and on board before registration has been approved.
In order to obtain a license from the DED, it is mandatory to have a local partner, agent or sponsor .In free zones, a local contact can significantly move the business forward
Establishing a Business in a Freezone
As mentioned earlier, setting up a business in a free zone can have significant economic, financial and social benefits for the business as compared to setting up a mainland business. However, the procedure of establishing a company in Free zones differs to mainland business setup. Different Free zones around Dubai have different capital requirements. In Dubai Airport Freezone, you can form an FZ Co. with a minimum share capital of AED1000, while in DMCC the minimum share capital for a Freezone company establishment is AED 50,000.
In order to set up a business in a Dubai Freezone, the following documents will be required:
• A corporate account opening form
• A board of directors’ resolution sanctioning the opening of the account, and the signatories to the account.
• A copy of your company’s certificate of incorporation
• A copy of your share certificates
• A copy of the company’s memorandum and articles of association
• Copies of passports for all partners in the company
Applying for a Business License
The type of business license you apply for depends on the primary activity of your business . Different Free zones allow different types of business activities to be conducted. DMCC and DIFC both allow financial and non-financial businesses to be conducted. So this is important to keep in mind when choosing which free zone you want to establish your company in.
Get Pre-Approvals
– Companies established in free zones are governed by the rules of the respective free zones. TO get the necessary approvals you need to apply with certain documents. The type of business activity, type of company and the requirements of free zone authority affect the types of documents required that needs to be provided.
Documents needed for initial approval can be shown below:
• “Completed application form
• Business plan
• Copy of existing trade licence/registration certificate (if you are an existing company, applicable for a local company only)
• Coloured passport copies of the company’s shareholder/s and the appointed Manager/Director for the new company
• Specimen signature of the company’s shareholder/s and the appointed Manager/Director for the new company
• 2 years’ audited financial reports for a corporate entity or certificate of reference from a personal bank of the individual shareholder
• NOC from current sponsor (for individuals)
• Unit title deed
• Letter of Intent
• Registry Identification Code Form (RIC) for Manager/Director (Original and notarized)”
Freelancers need to submit fewer documents. In most cases, they need to submit:
• Application for registration
• CV
• Bank reference letter
• Registry Identification Code Form (RIC) (Original and notarized)
B. Registration
After getting initial approval, you need to pay registration fees and licence fees. The fees depend on the type of licence required. Then, you need to submit:
• Completed application for registration
• Board Resolution appointing Manager/Director (Notarised and attested)
• Power of Attorney given to Manager/Director (Notarised and attested)
• Memorandum and Articles of Association (Notarised and attested)
• Specimen signature of Manager/Director (Notarised and attested)
• Passport-size photo of Manager/Director against a white background
• Share capital information,
C. Licensing and visa process
• Lease agreements will be prepared by the authority
• Then trade licence will be issued
• Visa processing will start
After initially setting up your Freezone business, you are obliged to comply with laws that govern your business as well as protect labor rights, health and the environment. Your business will be governed by the free zone authority in which your business is set up and in some cases might be additionally governed by another government entity. Specific laws relating to the type of business activity you conduct will also govern your business.
The laws mentioned below govern free zones in Dubai:
• “Laws relating to free zones under Dubai Development Authority
• Laws relating to Dubai International Financial Centre
• Laws relating to DMCC
• Jafza Offshore Companies Regulations 2018 (PDF, 650KB)
• JAFZA Implementing Regulations 2016 (PDF, 45KB)
• Law No. 25 of 2009 Concerning the Dubai International Airport Free Zone (PDF, 75KB)
• Law No. 15 of 2006 on the regulations of free zones and special development zones”
After all the steps mentioned above have been completed, then you have officially established and are now running your own business in the UAE , however, sometimes this can take a lot of time and effort for an individual to do by themselves. There is a wide range of free zone company formation services available which can help you set up your business in Dubai Free zones. Abdulshafe and Co. specialize in and helps with Freezone company formation setup and services. With our help, you will be able to set up the business you have always dreamed of starting with ease and help ensure that the entire business setup process goes smoothly.
Sources :
https://www.edarabia.com/how-start-company-dubai/
https://u.ae/en/information-and-services/business/starting-a-business-in-a-free-zone
