Everything You Need To Know Before Opening a Company In Dubai! (FAQs)
Table of Contents
Introduction
Having assisted over a hundred individuals in establishing their companies, obtaining residency visas, and opening bank accounts in Dubai, We’ve encountered numerous questions regarding the process. In this comprehensive guide, we will address some of the most frequently asked questions to provide clarity and guidance for those considering establishing themselves in Dubai.
At Genzone, we specialize in providing all-in-one services for individuals looking to establish their businesses, relocate to Dubai, and become taxable residents of the United Arab Emirates.
1. How long does the overall process take?
The entire process, including setting up your company, obtaining a residency visa, acquiring your Emirates ID, and opening personal and business bank accounts, typically takes around one month. While half of the process, such as registering your company and obtaining your employment visa, is completed outside the country, the remainder, including medical and biometrics appointments, is conducted within Dubai. For those in a hurry, we offer VIP options that expedite the process, allowing completion in as little as one week.
2. Do I need a local agent or sponsor to set up a company in Dubai?
No, you can own 100% of your company with 100% foreign ownership and repatriate all profits without paying taxes. Unlike in the past where local sponsors were required, you now have full ownership of your Dubai-based company.
3. What type of company should I establish in Dubai?
There are two main types of companies: Mainland and Free Zone. Mainland companies are suitable for physical trade within or around the UAE, while Free Zone companies are ideal for providing professional services or conducting online businesses. Free Zone companies offer the flexibility of operating virtually from anywhere in the world without the need for a physical office.
4. Can Free Zone companies do business in the mainland?
Yes, Free Zone companies providing professional or online services can offer their services to individuals and companies in the mainland. However, they cannot sell physical products in the mainland without a Mainland license.
5. Do I have to pay the 9% corporate tax?
Most businesses in the UAE are subject to a 9% corporate tax on profits exceeding $12,000. However, there are exemptions for certain businesses, and a small business tax relief is available for those generating less than $817,000 in revenue annually.
6. Is it difficult to open a bank account in Dubai?
While it can be challenging without proper guidance, we have the contacts and expertise to facilitate both personal and business bank account openings, regardless of nationality or business activity.
7. Can I sponsor other people to move to Dubai?
Yes, you can sponsor family members or individuals under your company for employment visas, allowing them to obtain residency visas and Emirates IDs to live and work in Dubai.
8. Which Free Zone should I choose for my business?
While specific industries may have corresponding Free Zones, most businesses can choose based on factors such as efficiency, service quality, and communication. Dubai Free Zones are renowned for their excellent services, making them a popular choice for many businesses.
9. Do I have to live in Dubai to own a business here?
Living in Dubai is not mandatory to operate a business, but depending on your visa type, periodic visits may be required to maintain residency. However, to become a taxable resident and benefit from Dubai’s low tax rates, residing in Dubai for a portion of the year is advisable.
10. what is difference between freezone and mainland company?
Establishing a business in Dubai can be done through two primary jurisdictions: free zones and the mainland. Each jurisdiction offers distinct advantages and considerations for entrepreneurs:
Free Zone Company
- Ownership: Free zone companies allow 100% foreign ownership, meaning that individuals or entities from outside the UAE can fully own and operate their business.
- Taxation: Most free zones offer 0% corporate and personal income tax for a specified period, typically 15 to 50 years. This tax exemption applies to both local and international transactions.
- Import/Export: Free zone companies benefit from simplified import and export procedures, often with customs duties exemption.
- Business Activities: Free zones are designated areas for specific industries or activities, such as technology, media, healthcare, and logistics. Companies must operate within the scope of activities permitted by the respective free zone authority.
- Office Space: Free zone companies typically lease office space within the designated free zone area. However, some free zones allow companies to operate virtually without physical office space.
- Trading: Free zone companies can conduct business with entities outside the free zone without the need for a local distributor or agent.
Mainland Company
- Ownership: Most Mainland companies require a local partner, known as a sponsor or service agent, who holds at least 51% of the shares. The local partner may not necessarily be actively involved in the business operations and is compensated through a predetermined annual fee or profit-sharing arrangement.
- Taxation: Mainland companies are subject to corporate tax, However, businesses may be subject to local taxes and fees imposed by the respective emirate.
- Business Activities: Mainland companies have more flexibility in conducting a wide range of business activities without restrictions on geographic location within the UAE.
- Licensing: Mainland companies obtain licenses from the Department of Economic Development (DED) in the respective emirate where the business operates. The DED oversees business registration and compliance with local regulations.
- Employment: Mainland companies have no restrictions on hiring employees from the local or international market. However, they must comply with UAE labor laws regarding employment contracts, salaries, and working conditions.
- Operations: Mainland companies can trade freely within the UAE market and participate in government tenders without restrictions.
11. What are the associated fees for setting up and maintaining a company in Dubai?
Setting up and maintaining a company in Dubai entails various associated fees that entrepreneurs should consider when planning their business venture. Beyond the initial setup costs, ongoing expenses for license renewals, visas, office rental, and expert assistance should be factored into the budget to ensure smooth operations and compliance with regulatory requirements.
Initial Setup Costs
Business License Fee: The cost of obtaining a business license varies depending on the type of company, business activity, and jurisdiction (free zone or mainland). Fees range from a few hundred to several thousand dollars.
Registration Fee: Entrepreneurs must pay a registration fee to the relevant authorities, such as the Department of Economic Development (DED) for mainland companies or the respective free zone authority for free zone companies.
Office Space: Renting office space is a mandatory requirement for many businesses in Dubai. The cost of office rental depends on factors such as location, size, and facilities. Prices range from a few thousand to tens of thousands of dollars per year.
Legal and Consultancy Fees: Engaging legal advisors, consultants, or business setup services may incur additional fees for assistance with documentation, compliance, and navigating the setup process.
Annual Renewal Fees
Business License Renewal: Companies must renew their business licenses annually, with renewal fees varying depending on the jurisdiction and business activity. These fees can range from a few hundred to several thousand dollars.
Visa Renewal: Entrepreneurs and employees requiring residency visas must renew them periodically, typically every two to three years. Visa renewal fees include government charges, medical tests, and typing center fees.
Office Lease Renewal: Annual rental payments for office space are an ongoing expense for businesses operating in Dubai. Rent may increase annually, depending on the terms of the lease agreement.
Changes and Amendments
Change of Company Structure: Any changes to the company’s structure, such as adding shareholders, changing business activities, or altering the legal entity type, may incur fees for documentation and government approvals.
Amendments to Licenses and Permits: Modifications to business licenses or permits, such as updating company details or expanding business activities, may require additional fees and processing time.
Expert Banking Assistance: Engaging professional assistance for opening and managing bank accounts may involve service fees charged by consultants or banking institutions.
Miscellaneous Expenses
Corporate Services: Companies may opt for additional corporate services, such as virtual office facilities, mail forwarding, telephone answering, and company secretarial services, which incur additional costs.
Compliance and Audit: Budgetary provisions should be made for compliance-related expenses, including accounting, auditing, and regulatory filings, to ensure adherence to local regulations and financial reporting standards.
In summary, entrepreneurs should carefully assess the associated fees for setting up and maintaining a company in Dubai to develop a comprehensive budget and financial plan. By accounting for all relevant costs, businesses can mitigate financial risks and ensure smooth operations while establishing a successful presence in the dynamic business landscape of Dubai.
Conclusion
In conclusion, establishing a business in Dubai and obtaining residency can be a streamlined process with the right guidance and expertise. If you require assistance with company setup, residency visas, or tax residency in Dubai, our team at Genzone is here to help. Book a call with us today to embark on your Dubai journey with confidence and ease.
