ArticlesSteps to set up a company in mainland of Dubai for foreigners

17 April, 20210
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Steps to set up a company in mainland of Dubai for foreigners

Dubai is known around the world for its booming economy, which is why many businessmen bring their ideas to the Middle East Business Center. There are many advantages to setting up a business in Dubai, such as great infrastructure, a strategic location, a competitive environment, fast – tracked legal processes, minimal paperwork, and simple registration, in addition to the advantages over investment and tax benefits when compared to other countries.

Setting up companies within the State or the “Mainland” in Dubai can be a very profitable investment option for investors and trade establishments, since this type of company allows business to be done throughout the United Arab Emirates as well as internationally, and holding the Mainland license in Dubai helps you to enjoy maximum freedom and flexibility to grow and operate your business.

  1. Determine the nature of the economic activity (license type).

License types: (Industrial, commercial, professional, tourism, agricultural, vocational), and the license may include more than one business activity.

  • A license may include more than one business activity.
  • There are over 2,000 diverse economic activities to choose from within the list of businesses in the Emirates.
  1. Legal form options (determination of the legal form of the company, including the parties involved in the activity).

While the legal form depends mainly on business requirements, it also specifies the laws and regulations to be compiled with.

Legal forms within the State:

Partnership – A Limited Partnership – Limited Liability Company – Public Joint Stock Company – Private Joint Stock Company – Trade Representative Offices- Civil Business Company – Local Company Branch – Gulf Company Branch – Foreign Company Branch – Free Zone Company Branch – Individual Establishment – Holding Company.

The legal form must match the economic activity.

  1. Trade name registration.

  • To register a trade name you must follow a set of guidelines:
  • The legal form, (acronyms) i.e. (the statutory wording of the company), for example, Limited Liability Company (L.L.C), shall be observed.
  • A trade name shall not contain inappropriate words, and should not violate public taste.
  • It shall be compatible with economic activities.
  • It shall not contain the names of God, the names of government agencies, or the names and logos of third parties.
  • It shall not be registered by another company.
  • The Dubai Department of Economic Development (DED) shall approve the trade name.
  • The Ministry of Economy shall approve the trademark.
  • The trade name certificates are subject to renovation.
  1. Apply for initial approval.

  • Initial approval means that the UAE government has no objection to the establishment of the facility in the country. It also allows the investor to follow through on the next steps, but in any event, it does not give the authority to start operating or practice work directly.
  • Foreign investors must obtain approval from the General Administration of Residence and Foreign Affairs before obtaining initial approval.
  • Some activities, prior to applying for initial approval, require government authorities associated with the activity approvals, such as:
  • Activities relating to legal matters.
  • Activities relating to security agencies and goods.
  1. Articles of incorporation and local service agent agreement.

    Based on the legal form of the company, it may require the wording and signature of the articles of incorporation, in some cases, it may require concluding a local service agent or company agent agreement.
    • The articles of incorporation are concluded, if the legal form of the company is one of the following:
    – Civil Business Company
    – Sole-Person Company
    – Limited liability Company
    – Limited Partnership
    – Public Joint stock Company
    – Partnership
    – Private Joint stock Company

  1. The location selection.

  • All companies in Dubai must have a real address for the economic activity.
  • Commercial buildings and the location must comply with the requirements set by the Dubai Department of Economic Development, as well as allocating lands by the municipality.
  • The office and warehouses rental contract must be provided, as some emirates require a ratified document.
  • The agreement must be registered with Ijari([1]).
  • Multiple trade licenses are issued using a single business address, with certain restrictions and conditions.
  1. Obtain additional government approvals (if required).

  • In some cases, activities require special approvals for licensing by government authorities (federal or local) regulating those activities, such as:
  • Ministry of Interior: Public transport, driving schools, fire fighting equipment, alarm and protection systems, used car sales agencies, used spare parts, car rental.
  • Ministry of Justice: Legal activities – Legal consultations.
  • Department of Municipal Affairs of the relevant Emirate: Engineering and Architecture activities.
  • Telecommunications Regulatory Authority, Licenses Management: Communications.
  • Executive Board: Tourism and Travel – Public Services – Trading Charter – Ship agencies and Naval agencies – Car Clubs – Air Transport Rental – Foreign Companies Branches.
  • Ministry of Economy: Insurance – Insurance Consulting.
  • Health Authority of the Emirate: Health-related activities.
  • Department of Municipal Affairs in the relevant Emirate, Abu Dhabi Food Control Service: Food relevant work and feeding.
  • Supreme Council for Petroleum: Services of land-based and offshore oil and gas fields, ground-offshore oil drilling operations.
  • External approvals of bodies organizing the following activities are required:
  • Activities relating to legal matters.
  • Activities of the Securities and Commodities Authority.
  • Special Approval – Abu Dhabi Chamber of Commerce

Duration of the incorporation process

  • Estimated time of Incorporation varies depending on the nature of business activity, the type of shareholders and the scope of work involved. On an average it takes between 8 to 15 working days, after receiving the documents for corporate registration with the Registrar of Companies.
  • Specialised business activities require approvals from the concerned department and an operating license is issued. Physical presence of the authorized partners is required for Initial Approval and to execute the Agreement.

Legalization of the company

Cost and Service Fee at the time of Incorporation

 

DEPARTMENT DESCRIPTION FEE – AED
Department of Economic Development Trade Name Reservation, Initial Approval,

Registration, License (AT ACTUAL)

*12,000.00
Market Fee (5% of Rent) 000**
Local Sponsor Local Emirati Sponsor (as required under law) 5000.00
AIMS GLOBAL Consulting and Processing Fee
TOTAL

 

POST REGISTRATION EXPENSE (IF VISAS REQUIRED)

DEPARTMENT DESCRIPTION FEE – AED
Ministry of Labor Establishment Card Fee – Ministry of Labor 2,300.00
Ministry of Immigration Establishment Card Fee – DNRD 1,500.00
General Post office PO Box and Company Stamp Fee 1,200.00
DTCM Approval if required AT ACTUAL

 

Cost and Service Fee at the time of Incorporation

* Per Department of Economic Development Invoice

** Depends on Office rent

*** Any External Approval will be charged AT ACTUAL depending upon business activity.

                   Note: Government fees are subject to change and applicable as actual

 

VISA COSTS 

DEPARTMENT DESCRIPTION FEE – AED
Immigration Investor Visa (At Actual) 4,000.00
AIMS GLOBAL Service Fee Service fee for processing
DEPARTMENT DESCRIPTION FEE – AED
Immigration / Labor Employment Visa (At Actual) 6,500.00

 

Special privileges for the Gulf Cooperation Council (GCC) countries

Citizens of the GCC countries in the UAE shall be treated in the same manner as their citizens without distinction or discrimination in the following areas:

First: Transportation and accommodation

Second: Work in the governmental and civil sectors

Third: Social insurance and retirement

Fourth: The practice of crafts and occupations

Fifth: Economic, investment and service activities

Sixth: Property ownership

Seventh: Capital mobility

Eighth: Tax treatment

Ninth: Trading and buying stocks and incorporating companies

Tenth: Education, health and social services

The lack of differentiation in treatment among GCC citizens concerning incorporating companies results in:

  1. A Gulf citizen does not need a service agent if he wishes to incorporate a company in the UAE, while he or she may not be a sponsor or an agent for someone other than the GCC citizens.
  2. GCC citizens may register their company as an individual organization (given that all the partners are GCC citizens), GCC citizens may also own 100% of the shares of commercial and professional companies, and may conduct activities in one of the following legal forms:
  • Limited liability company
  • Public/private joint stock company
  • Civil business company
  1. Gulf companies wholly owned by GCC shareholders are allowed to open branches in the United Arab Emirates, and these companies do not need to refer them to the Ministry of Economy.

([1]) Ijari is an application devised by Dubai territory to protect the rights of all parties namely, landlords, tenants and real estate management companies.

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