Company Formation in Dubai
Dubai has become the hub of business organizations where every company wants to have a branch or open its main office. It is so because of the open market the country has offered to its investors. Of course, there are a few rules that need to be strictly adhered to when a company wants to set up a business in Dubai.
The government of Dubai stipulates a few categories of organizations that can start their setup in Dubai. To name a few of them:
- Joint Venture company
- Private shareholding company
- General partnership company
- Limited Liability company
- Share partnership company
Usually LLCs are the ones usually opted by the investors from other countries. Here the company can be formed by up to 50 members and companies that have expatriate partners go for this option. It is because the trading license can be obtained by the expatriates as they get about 49% of the legal ownership.
Foreign companies can also start branches or representative offices in Dubai and they should be fully foreign owned and a service agent should be present. This branch office can conduct business as mentioned in the license and should be engaged in business activities as the parent company.
In UAE nationals companies, only UAE nationals will work here as local agents. Time taken to commence such a branch is about 4 weeks after all the documents such as the latest profile, plan for the business, and financial statements are received. Manufacturing of products should be done in the country of origin. The Ministry should approve the venture. The representative company can only handle the products of the parent company.
An investor from other countries is also permitted to start a given type of business without a local partner. Such an investor should have a legal and valid residence permit in Dubai. A local agent is necessary for such an investment. Free Zones are also operating in Dubai and they are offered a few incentives such as complete ownership, no personal income tax, no recruitment concerns, and no corporate taxation. They need to submit documents such as certificate of incorporation, power of attorney, memorandum of association, and so on.
The license for all the business concerns in Dubai falls under any of the 3 categories, which are:
- Commercial license
- Industrial license
- Professional license
The Department of Economic Development in Dubai processes and issues the licenses for the companies. Certain activities like financial institutions, pharmacy, education, publishing, media, air transport, agriculture, and many other activities need the approval from the concerned department or ministry.
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