Company formation in Dubai. Why?

November 07 12:24 2021 by David Curry Print This Article

The market-friendly policy framework, world-class infrastructure, and favorable environment for business growth make Dubai a leading destination for entrepreneurs and big business owners. Key drivers for company formation in Dubai include:

• An access point for global import and export that facilitates significant supply chain traffic
  • A strategic geographic location connecting many global resource centers
  • No taxes on personal, capital, and corporate income as well as full Capital and profit repatriation
  • No exchange rate restrictions and no blocked currencies
  • State-of-the-art infrastructure, including first-class telecommunications networks, as well as an efficient electricity network inexpensive
  • Flexible recruitment process for a well-trained, highly qualified workforce
  • Sophisticated financial services sector that is conducive to all business activities
  • Solid legal framework, especially in finance-free zones, for the security of assets and the transparency of transactions.
  • A cosmopolitan lifestyle supported by world-class real estate infrastructure and world-class medical and educational services.

Types of Business Entities in Dubai

Investors and Entrepreneurs have several options for starting a business in Dubai given the nature of the business, legal framework, documentation, and other considerations.

1. Free Zones
   Dubai has more than 18 free zones spread across the emirate. Free zone has specific configurations and operating rules related to the type of activity allowed. There are common incentives for setting up a company in the Dubai Free Zones:
   Full ownership without the need for a local sponsor or local service representative
   Easier customs regulations and significant tax exemptions
   Access to the highly skilled labor market
2. Mainland
   Most mainland or onshore businesses still require local sponsorship for a variety of activities, although a significant number of activities have been contracted to 100% foreign ownership. Starting a business in mainland Dubai requires approval from the Department of Economic Development (DED). There are no restrictions on the activities of companies on the Mainland as they can operate in and out of the country.

There are several ways to start businesses on the Mainland:

• Joint venture A joint venture is formed by two or more natural or legal persons who undertake to share all profits and losses associated with the business.
• Public participation In a public holding company, the capital is divided equally among the shareholders, with each shareholder being responsible for it on a pro-rata basis. The minimum capital requirement for establishing public participation in Dubai is AED 10 million.
• Private Equity In contrast to public equity, private equity holdings are owned by a relatively small number of shareholders and do not trade their shares publicly. Companies need at least 3 members.
• General Partnership General Partnerships are restricted to Dubai citizens only. The partners of a general partnership share assets and debts equally.
• Limited Liability LLCs have a minimum of two members and a maximum of 50 members. As one of the most common business structures in Dubai, an LLC enables investors to protect their personalities. I Debt or Liabilities. To start a business in Dubai, LLCs must have a minimum share capital of AED 200,000.
• Sole proprietorship, this is the simplest form of the business unit as it is only founded and owned by one person. Individuals in a sole proprietorship are fully responsible for their personal wealth. Sole proprietorships are set up for commercial or professional purposes.