Types of
Business in Dubai
Ø Offshore company
Ø Onshore Company
Ø Free Zone Company
OFFSHORE
COMPANY
ü For operating outside Dubai
ü No licence required
ü No Corporate Tax
ü Require virtual office
ü Anyone can be shareholder or Director
ü Easiest formation procedure
ü Lowest cost
ONSHORE COMPANY
ü For operating inside Dubai
ü Licence required
ü Corporate Tax shall apply
ü Require real office
ü Require UAE shareholder
ü More difficult formation procedure
ü High cost
FREE ZONE
COMPANY
ü For operating inside & outside Dubai
ü Licence required
ü No Corporate Tax
ü Require real office / warehouse
ü Anyone can be shareholder or Director
ü Medium difficult formation procedure
ü Medium cost
Requirements to open a company in Dubai
When setting up a Company in Dubai, foreign investors must take into
account the following:
·
the minimum share capital
requirements,
·
the shareholding structure,
·
the business licensing requirements.
SHARE CAPITAL REQUIREMENTS
The Commercial Law does not require Dubai limited liability
companies to deposit a minimum share
capital before registration, therefore the shareholders will
decide the amount they need to help them reach their goals. For joint stock
companies, there are different share capital requirements depending on the
business they will undertake:
- public companies will require a minimum share capital of 10
million AED,
- insurance and investment companies will require a minimum share
capital of 25 million AED,
- financial institutions require a minimum share capital of 40
million AED.
BUSINESS LICENSE REQUIREMENT
The Dubai Chamber of Commerce and Industry (DCCI) issues the
following types of business licenses:
·
commercial or
trade licenses,
·
industrial licenses,
·
professional licenses.
OTHER REQUIREMENTS
Other
requirements for establishing
a company in Dubai are:
·
drafting and notarizing the
company’s memorandum and articles of association,
·
opening a
corporate bank account,
·
registering native workers with
the Ministry of Labour,
·
registering native workers with
the social security authorities.
OFFSHORE COMPANIES
Opening an Off-shore Company is an ideal,
tax efficient and cost effective structure for entrepreneur who wish to conduct
international trade.
An off-shore
entity is referred to as a non-resident paper company that allows foreign entrepreneurs
to serve Africa and middle east without administrative obligations. An
off-shore business is simply a wholly owned Limited liability company which is
legally tax exempt and has no annual accounting and tax obligations.
Off-shore company is used for
1.
International trading
2.
Holding company
3.
Shipping company
4.
Real estate
5.
Registering copyrights and
patents
6.
International consulting
services
An off-shore
Company in Dubai is governed by the Jebel Ali Free Zone Offshore Companies
Regulations 2003.
ADVANTAGES OF DUBAI OFF-SHORE COMPANY
1.
An Off-shore Company is quick
and simple to set up in Dubai as compared to other type of Businesses in Dubai.
2.
If properly incorporated, an
off-shore company in Dubai is exempted from Corporate Taxes.
3.
An off-shore company in Dubai
portrays a good image to clients, suppliers and even potential venture
capitalists.
4.
In Dubai, off-shore companies
are exempt from all the annual accounting and tax obligations.
5.
The shareholders and Directors
of an off-shore company are not required to register their name and detail for
public record.
DISADVANTAGES
1.
A Dubai off-shore company is
not allowed to trade in Dubai and UAE.
2.
The off-shore company can
neither
i)
Rent local premises in UAE
ii)
Nor employ staff in UAE
iii)
Nor secure residence for staff
3.
Incorporating an off-shore
company is quiet expensive.
4.
A Dubai off-shore company
cannot invest in UAE real estate.
5.
The off-shore company cannot
use UAE’s double taxation treaties to reduce global withholding taxes.
ONSHORE COMPANY
Types of Dubai onshore companies
According to the Companies Law
in Dubai, onshore companies may be incorporated
under different forms among which limited liability companies, private and
public shareholding companies. Foreign companies also have the possibility of
registering branch offices or subsidiaries as onshore companies in
Dubai. All types of onshore companies have different
shareholding structure and share capital requirements as it follows:
·
Dubai limited
liability companies must have at least one UAE national partner
holding at least 51% of the paid-up capital,
·
free zone companies allow 100%
foreign ownership.
·
Licensing requirements are
applicable to all types of companies.
ADVANTAGES
1.
Simple regulatory system,
2.
Tax-free economy,
3.
Lack of capital gains and corporate tax in Dubai,
4.
Possibility of owning real estate,
5.
Multiple currency available bank
account for companies,
6.
Skilled Dubai workforce.
FREE ZONE COMPANY
A
free zone company must have a trade license in the activity of its intended
business. This license must be renewed every year.
It must have an office in its own name in
the Free Zone – rented and to be renewed every year.
It must have a Manager authorized to act
as the legal representative of the company.
It must have at least one
shareholder and the mandated share capital. It must not trade outside the free
zone without a local distributor.
ADVANTAGES OF DUBAI FREE ZONE COMPANY
- 100% foreign
ownership
- 100%
repatriation of capital and profits
- 100% free
transfer of funds
- 100% exemption
of import and export duties if you are not going to bring the goods into
the UAE.
- Free zone
company formation is quicker than incorporation outside of the free zones.
- Easy recruitment
procedures
- 25 years lease
options, warehouse facilities, availability of areas for production and
assembling.
DISADVANTAGES
1. A free zone company in UAE is not allowed
to trade directly with the UAE market. The free zone company can undertake
trading business within the UAE only through locally appointed distributors.
Customs Duty of 5%, currently, is applicable for bringing the goods in for
local business.
2. All free zones
provide attractive schemes for the benefit of investors. But they are different
from each other. Therefore, it will be worthwhile to study the facilities
offered by each, one by one.
for any information for registering company in Dubai query contact us on 999-0694-230
Company Secretary GAURAV SHARMA+919990694230
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