Establishing a company in Dubai
Setting up a company in Dubai is one of your plans, and you have many questions? You do not know which legal structure to choose, which Free Zone to select, or which procedures to follow.
Setting up a business in Dubai can be complex, especially if you are not familiar with local procedures and the specific characteristics of the Emirati market. Merritt supports its clients at every stage of the process and advises them, in particular, on choosing between a commercial license in a Free Zone or on the Mainland.
The choice of structure should be made according to your business needs, objectives, and the actual use of your company. The support therefore goes beyond registration: it also aims to help you make consistent decisions for establishing your business in the Emirates.
The cost of living in Dubai may also influence your decision. As an expatriate, you need to include housing, any children’s education, healthcare services, and leisure activities in your overall financial planning.
Offshore, Free zone, or Mainland?
Offshore company
The offshore company is a non-resident structure. It does not allow you to have a physical office in the UAE, employ staff or use local suppliers, or obtain a residence or work visa.
It may meet specific needs when you are not seeking an operational presence in the UAE.
Free-zone company
The Free-zone company is a resident company. It can allow you to have offices in Dubai, hire local or international staff, work with local suppliers, and obtain residence and work visas.
There are more than 45 Free-zone jurisdictions in the UAE, each with its own rules and licenses.
Mainland Company
A Mainland company allows you to operate directly in the local market and offers a broader scope of activity than a Free-zone structure.
Since the 2021 reform, having an Emirati partner is no longer necessary for most activities: in many cases, a foreigner can now own 100% of the capital.
Choose the structure according to your project
The fundamental difference between an offshore company and a Free-zone company lies in residency and local presence. With an offshore company, you cannot set up a physical office in the UAE, employ local staff, or obtain a visa.
Conversely, a Free-zone company allows you to have an operational presence in the UAE and may be more suitable if you wish to live in Dubai, open an office, hire staff, or work with local suppliers.
A Mainland company follows yet another model: it allows you to operate directly in the local market and is not subject to the same business activity restrictions as a Free-zone structure.
The choice should therefore be made carefully, depending on the activity carried out and the company's actual use.
What are the advantages of a free-zone company?
Setting up a company in Dubai can be particularly advantageous with a Free-zone structure. Here are the main tax and operational benefits to keep in mind:
No taxes on profits and capital gains
You will not have to pay taxes on profits and capital gains.
No withholding tax on dividends
There is also no withholding tax on distributed dividends.
5% customs duty
If you sell goods to the United Arab Emirates, a 5% customs duty still applies.
When should you consider a free-zone company?
The Free-zone company is particularly suitable when your project requires a real presence in the United Arab Emirates.
Hire a team
If your project requires hiring a professional team, the Free Zone may be a solution worth considering.
Have offices on-site
A Free Zone company can allow you to have offices in Dubai and maintain a physical presence in the UAE.
Obtain residence and work visas
A Free Zone company also makes it possible to obtain residence and work visas.
Have local customers and suppliers
The Free Zone can also be considered when your project involves business relationships with local customers and suppliers.
Set up a Free Zone company in practice
For setting up a company in Dubai, it is recommended to seek assistance from professionals familiar with local regulations. The procedures differ from those used in Europe and can quickly become difficult to navigate alone.
Registration
Understand the various stages of company formation and the formalities required to register it with the chosen jurisdiction.
Bank account
Prepare to open the business bank account. Merritt also assists with this step, which may require specific preparation of the application.
Documents to provide
Identify the documents required to incorporate the company and open the bank account to avoid delays in the process.
Lead times
Allow time for registration, bank account opening, and, where applicable, obtaining a residence visa.
Support for your setup as well
Merritt assists its clients with the steps involved in setting up their company in Dubai, as well as with the company's ongoing administrative management.
Moving to a new country involves more than just setting up a company: housing, banking, visas, and practical arrangements must also be planned for.
The goal is to enable you to focus more on developing your business.