Company formation in Dubai
Company formation in Dubai, What is it?
If you have a great business idea or have decided to disrupt the market with your ground-breaking technology, then the first step should be incorporating your company. Company formation is essential to safeguard your intellectual property through a proper legal procedure. History is filled with incidences, where the great innovators lost on the chance to be part of history because someone legally registered similar ideas first.
Company formation is also necessary as it gives you protection from legal liabilities that can arise during the course of business. As a company is a separate legal entity, upon registration all the legal liabilities are restricted to the company.
The formation of a company is a major decision and should be done after careful deliberation, as a company is not the individual encoder of its own brand and business, it represents the company’s stakeholders.
Documents Required For Company formation In Dubai
The required list of documents for company formation includes the following documents:
- A certified copy of the tenancy contract.
- The photocopies of the passport/residency certificate/visa/ national identity.
- The approval from the Ministry of Economy and other departments of government.
- The stamped visa from the Immigration department of Dubai and a trade name certificate is also required.
Step-by-Step Guide: Company formation Process in Dubai
Welcome to this thorough, step-by-step manual that will take you through the company formation procedure in Dubai.
Understanding the company formation procedure is crucial for a successful venture, whether you’re an entrepreneur trying to launch a new firm or an established business planning to expand into the Dubai market.
Dubai, known for its favorable business environment and strategic location, offers numerous opportunities for businesses across various industries. By following this guide, you will gain valuable insights and practical knowledge to navigate the company formation process smoothly.
Step 1: Define Your Business Structure
Establishing your company’s organizational structure is one of the initial phases in the company creation process in Dubai.
Dubai offers several options, including:
Sole Proprietorship
You are able to run your firm as an individual with a sole proprietorship. This structure provides complete control but also makes you personally liable for any business obligations.
Limited Liability Company (LLC)
An LLC is a popular choice for entrepreneurs in Dubai. It offers limited liability protection and allows foreign ownership, provided a local UAE national acts as a sponsor or partner.
Free Zone Company
Establishing a business in one of Dubai’s free zones provides various benefits such as 100% foreign ownership, tax exemptions, and customs privileges. However, free zone companies are restricted to operate within the free zone or conduct limited business outside.
Branch Office
If you already have a company outside Dubai and want to expand your operations, opening a branch office is an option. A branch office is an extension of the parent company and requires a local service agent.
Step 2: Choose a Business Name
Choosing the right business name is crucial for branding and establishing your presence in Dubai. When selecting a name, ensure it aligns with your business objectives and complies with Dubai’s naming conventions:
- The name must not violate public morals or the laws of the UAE.
- It should not include any religious references or offensive language.
- Avoid using abbreviations or acronyms unless they are widely recognised.
- It is advisable to perform a comprehensive search before deciding on your company name to make sure it is original and has not already been registered by another corporation.
Step 3: Prepare the Legal Documentation
To proceed with the company formation process, you need to prepare the necessary legal documentation. The exact requirements may vary depending on your chosen business structure, but some common documents include:
- Passport copies of shareholders and managers
- No-Objection Certificate (NOC) from current sponsor (for expatriates)
- Memorandum of Association (MOA) or Articles of Association (AOA)
- Tenancy agreement for office space
Bank reference letter
Initial approval from relevant government authorities
To ensure that all the legal documentation is written precisely and in accordance with the rules, it is important to retain the services of a competent business consultant firm or a local law firm.
Step 4: Obtain Approvals and Licenses
You will need to complete this phase by obtaining the required permits and approvals from the relevant authorities.
The specific licenses required will depend on your business activities and the jurisdiction in which you plan to operate. Some common licenses include:
- Trade license
- Professional license
- Industrial license
- Tourism license
Make sure you comply with all the regulations and provide the relevant government authorities with the necessary papers.
The authorities will review your application, conduct any necessary inspections, and issue the licenses upon successful completion.
Step 5: Open a Corporate Bank Account
Once you have obtained the necessary licenses, it is essential to open a corporate bank account for your business operations. Choose a reputable bank in Dubai that offers suitable services for your business needs. The bank will require various documents, including:
- Trade license
- Memorandum of Association or Articles of Association commonly known as MOA & AOA respectively.
- Passport copies of shareholders and managers
- Proof of address
- Ensure you have all the required documents and meet the bank’s eligibility criteria to facilitate a smooth account opening process.
Some of the most prominent Banks for your Account opening during the company formation in Dubia are
- First AbuDhabi Bank
- Emirates NBD
- AbuDhabi Commercial Bank ADCB
- Emirates Islamic Bank
- Dubai Islamic Bank
Step 6: Visa Processing
If you plan to hire expatriate employees or need to obtain residency visas for yourself and your partners, you will need to go through the visa processing stage. The exact process may vary depending on your business structure, but it generally involves the following steps:
- Apply for entry permits and visas for your employees or partners.
- Conduct medical fitness tests for the individuals.
- Submit the required documents to the relevant authorities for visa stamping.
- Complete the Emirates ID registration process.
It is advisable to engage the services of a reputable PRO (Public Relations Officer) or a company to assist with the visa processing, as they are familiar with the procedures and can ensure a smoother experience.
Establish Companies in the UAE
The process of establishing a company in the UAE involves only a few simple steps, in all seven emirates. You can apply in person at the Department of Economic Development in the emirate where you plan to establish business. Additionally, digital platforms are available to obtain a commercial license and establish a company online where applying with the necessary documents will lead to a license within minutes. Investors can also apply through legal offices or designated companies offering business establishment services. Establishing a company typically involves identifying the location, specifying the nature of business and paying ascribed fees, for the issuance of a commercial license.