For those looking to do business in the stunning city of Dubai, the emirate offers some of the world’s most liberal and welcoming business environment.
As an international hub, it stands as a platform for businesses to establish themselves with ease.Opening a business in a Free Zone such as Dubai has numerous advantages related to taxation, setup procedures, and regulations.
The very first step is researching Dubai’s individual Free Zones because each one has its own benefits and downsides.A Free Zone is a designated location in the UAE with special laws and regulations set in place for foreign business setup.These laws support businesses providing incentives like no taxes or less taxes- for trade, import, export and other activities.
After the Free Zone has been selected, the next step is to decide on the business license.Those looking to form a limited company in the UAE need to obtain a Trade License, which requires the following documents for the application: corporate documents, such as ‘Memorandum of Association’, ‘Articles of Association’ and a ‘Certificate of Incorporation’; and personal documents, such as a passport copy and valid visa.
The license application and registration forms must then be completed and the company name should be approved.This process often involves extra steps, such as opening a bank account, taking out a local service agent, getting a sponsorship agreement, signing a lease agreement and getting certain permits.Once you have obtained all the licenses and permits and registration of the company has been approved, the process of opening a company in Dubai becomes easier.
Different entities offer many more business setup services, such as obtaining valid visas and opening company bank accounts.They also assist with filing audited financial statements, communicating with company shareholders, handling tax, and obtaining visas for employees.
Business Expansion Opportunities
The process for opening a business in Dubai can be simplified by engaging a local professional to support all the paperwork and legal requirements.Businesses that make the leap from the home to a foreign country tend to benefit from a wealth of opportunities made available through the Free Zones.
When relocation or incorporation into one of the Free Zones, businesses can take advantage of incentives such as 100% foreign ownership, no corporate tax, freehold property ownership, and full repatriation of gains and profits.These incentives encourage foreign entities to set up their business in the UAE, helping to promote the UAE as an international business hub.
Moreover, the Free Zones in the UAE offer vast opportunities to entrepreneurs, enabling them to invest in an area of their own choice.The access to an international market is also a major benefit, due to the country’s strategic position.This is why many do not consider the Free Zone option before setting up a business in the UAE.
The immigration laws are quite favorable to companies as well.If setting up a business in the Free Zones, businesses are eligible for their Immigration Cards and Residency Visas.It is also faster to obtain than in the mainland, as company formation in a Free Zone generally takes less than a week.
The process is simple, straightforward and straightforward to secure a visa in the Free Zones, compared to the mainland Dubai.The best thing is that a company’s sponsors do not have to pay a deposit, unlike the mainland.
Tips on Working in Dubai
It is important to remember that any business set up in Dubai must comply with local laws and regulations.Business owners must also take into account the local customs of the country.The culture in the country of Dubai is quite different from other countries and visitors must respect this.It is important to be aware of the laws, regulations, and traditions before conducting any business in the region.
Although there are numerous advantages to setting up a business in a Free Zone, there are also certain downfalls.For instance, the return-on-investment for those businesses established in the Free Zones is much lower than the mainland, and there is limited tenancy availability, as well as limited access to the local labour market.
In addition, certain employment laws in the UAE are not favorable to foreigners, as they make it more difficult to obtain visas and employment permits.It is also important to be aware of the risks involved when trading with the Middle East, as the region is prone to sudden changes in political, financial and legal climates.
However, setting up a business in the Free Zones can still offer business owners more freedom, in terms of taxation, lease terms and foreign ownership.For those looking to open a business in a Free Zone, it is important to have a thorough understanding of the pros and cons before committing to a business plan.
Expanding a Business
Once a business has been established and running for a few months or years, there may be a desire to look for ways to expand. This can include the opening of additional branches, and recruiting more staff.As with setting up a business, the process of expanding an existing entity is a straightforward one.
One of the benefits of setting up in a Free Zone is the flexibility of expansion, with businesses able to grow with minimal disruption. This can be done by registering with the Department of Economic Development and then obtaining a permit to trade and operate in the Free Zone.This process is shorter than the mainland registration process, taking up to three weeks, as opposed to six months on the mainland.
When taking the decision to expand a business in the UAE, it is important to consider any employment and taxation laws that may apply in the relevant jurisdiction.It is also important to find out if the business will be liable to pay taxes in the UAE or any other jurisdiction, as this could affect the profitability as well as the legal responsibility of the company.
Businesses also need to ensure that they have a reliable and trustworthy local business partner or agent, as this is beneficial for the development of the business.Furthermore, if opening multiple branches or offices, it is important to consider the additional costs for setting up the new entity and whether to open one in the mainland or in the Free Zone.
Frequently Asked Questions
Starting a business in the UAE can often be a daunting task and there are various questions which come to mind, especially when it comes to setting up a business in a Free Zone. Here are some of the most common questions asked by business owners when they decide to set up a business in Dubai.
- What types of businesses are allowed in the Free Zones?
- Do I need to register in the mainland before establishing a business?
- What is the process of company formation in Dubai?
- What type of visas and permits are required?
- Are there any restrictions for foreign investors?
There is no one-size-fits-all answer to these questions, as it depends on the type of business, location, and the size of the company. It is therefore important to seek professional advice from a lawyer or a consultant when setting up a business in the Free Zones.
Conclusion
For those looking to embark on the journey of setting up a business in the amazing city of Dubai, the Free Zones offer the perfect opportunity.The process is straightforward, the incentives are attractive and the access to an international market is excellent.Business owners must take into consideration the pros and cons of the setup before committing and make sure that they understand the local laws, regulations, and customs before conducting any business in the region.
