Before you begin the process of establishing your company in Dubai, there are generally a couple of things you should be aware of. Let us examine a few of them.
Economic Zone: Offshore vs. Free Zones
You must choose whether you want to operate offshore or in a free zone before you set up. Every alternative has advantages and limitations that vary based on your needs.
Free Zone
If you want complete control over your business, you should think about requesting a license and setting up shop in one of Dubai’s free zones. The Dubai government introduced the free zone idea to entice foreign companies to establish operations in the city. Business owners can benefit from complete ownership, 9% corporation taxation (applying to UAE enterprises on profits over Dh 375,000), and zero percent individual income tax in this special economic area.
However, one of the main drawbacks of running a business in a free zone is that you can’t conduct direct business with the local market in the United Arab Emirates.
In Dubai, there are now more than thirty free zones in use. Every free zone is usually created around a certain sector category and grants licenses to businesses operating inside those boundaries.
Offshore Businesses
Offshore businesses can take advantage of several of the same advantages by registering in a free zone. It isn’t a replacement for a free zone company, though. A free zone company and an offshore corporation differ mostly in how their businesses are run. Offshore businesses are permitted to conduct business outside of the United Arab Emirates, but not within. Additionally, there are no minimum capital deposits needed to be made prior to incorporation.
Nevertheless, in contrast to conducting business in a free zone, you will need a sponsor, limiting your foreign ownership to just 49%.
Significant business Permits
In addition to selecting a zone, you must determine the kind of licence that is required. Application is available for three primary types of business licences issued by the Department of Economic Development (DED):
Commercial licence
Establishing a business in Dubai that entails trade or the purchasing and selling of items is made possible with a Commercial Licence. This licence applies to companies in general retail, real estate, travel & tourism, sales, logistics, and import & export.
Professional License
Service providers, artisans, and craftsmen’s firms are granted a professional licence. Some of the companies that seek this kind of permit are repair services, cosmetics salons, and medical services.
Industrial License
Businesses involved in manufacturing operations that convert resources and raw materials into finished goods, either manually or automatically, are granted an industrial licence. Paper, metal, and textile manufacture are among the industries covered by this permit.
