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A Guide on Business Set Up in Dubai

November 23, 2020

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Over the last couple of decades, Dubai has proven itself to be a massive hub for big businesses and corporate visionaries. Being centrally located, the city has established itself to be quite a happening and diverse spot for all kinds of businesses and events. But how does a business being to set up its roots amongst all the others already thriving in this city of concrete and glass? Well, its all about finding the right kind of sponsorship for your business.

In the UAE, when a non-Emirati decides to set up a business, they can do so either Free Zone Business Setup or the Dubai Mainland Business Setup. However, both these options come with their own set of pros and cons. Depending on what kind of business you’d like to run and who you’re looking to trade with, you can take your pick on where to launch your business.

Business Setup in Dubai

Check out the Free Zone Business Setup:

If perhaps your company wants to establish itself in Dubai, but would like to trade with international markets or outside of UAE, then you would probably want to set up in the Free Zone. The perks of the Free Zone are great where the greatest of all is that it lets you retain 100% ownership, no need for UAE national to appoint over your business. Besides that, you are also completely exempted from corporate tax, customs tax, face no currency restrictions or foreign exchange controls and are also free to repatriate all invested capital and profits.

Yup, sounds great right? But of course, you cannot make any decisions without seeing the whole picture and Free Zone comes with a few cons too, for one, Free Zone businesses cannot trade directly with the local market. You would need a local distributor, an agent who steps in and demands a fee. You also cannot take on work for the government, not the mention the greatest trial, a ton of legal paperwork!!

Set Roots on the Dubai Mainland Business Setup:

If your business wants to get in on the local markets like trade within UAE or outside of UAE, want to provide services in UAE or outside of UAE, Real estate business, Tour operator, Contracting, Restaurants, Trading etc. then you have to look into launching your business on the Dubai Mainland. While this does open your business to a whole lot of opportunities, the difference here is that you will have to appoint a UAE national as your local partner/Sponsor of the company where he will hold 51% of the ownership on paper only as per UAE Commercial Companies Law no 2 of 2015. In a Professional license, you still need a UAE national as a local service agent, not as a partner of the company. The company will be 100% owned by a foreign expat only and UAE nationals will get yearly Sponsorship fees against his name in the license. They will be your gateway to trade within the country, your paperwork, and your greatest ally. Getting started with a local sponsor has been the best and only way to enter the UAE market.

How corporate/local Sponsorship works:

If a foreign investor chooses the professional license then UAE national will be just an agent of the company, if Commercial license then UAE national will be a partner of the company with a minimum of 51% share capital.

Type of licenseUAE national ownership %Sponsorship FeesNotes
Professional license0%Starts from AED 8000/- per annumLegally foreign person will be 100% owner of the company.
Commercial License51% in capital & 20% in profit or lossStarts from AED 10,000/-Local UAE national will waive his rights in profit and loss by signing the MOU and loan agreement so ultimately foreign national will have 100% ownership.
Industrial license51% in capital & 20% in profit or lossStarts from AED 15,000/-Local UAE national will waive his rights in profit and loss by signing the MOU and loan agreement so ultimately foreign national will have 100% ownership.

Benefits of Mainland Company:
  • No minimum capital requirement
  • Flexible business opportunity across all emirates as well as outside of UAE
  • Legal business contracts with government entities made easier
  • Effortless product approvals
  • Vast Investment opportunities
  • Permitted to rent/own a physical office
  • Ease of availing bank facilities like loans
  • Increase your employee strength with options for unlimited visa availability without depending on office size
  • 100% Tax-Free Income
  • 100% foreign ownership – depending on business activity mentioned above
  • Can easily open branches worldwide
  • Easy to operate and manage the corporate bank account.

  • Making the Best Choice

    So here you have it, a simplified guide to what you need to do to get your company up and running in Dubai. Where to get established and how?. We here at Avyanco understand that your business is your soul, we will provide you with all the information you need to make this big and very important decision to turn your dream into reality.

    Your passion for your company is as strong as our commitment to making sure you make the right choices to give your business the best possible path to a successful business journey here in the UAE.

    Believe in our expertise, like we believe in your corporate success. Because when it comes to business sponsorships, there is a right choice, and we’ll make sure it’s the perfect one for you.

    Call/WhatsApp us on: +971 50 3989000, (T): +971 4 240 5000, Email: info@avyanco.com.

    Contact info

    Avyanco delivers its customers with the most authentic and effective consultation to start their business in Dubai and
    keep their book of record in place with top-class auditing and accounting services.

    Address

    Office No. 1406 The Exchange Tower, Business Bay, Dubai, UAE