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Company Formation in Dubai

Complete Guide on Company Formation in Dubai

The United Arab Emirates (UAE) is a crucial component of global investors’ activities since it is a geographical and economic centre of the Middle East. Dubai is the UAE’s second-biggest emirate and serves as the country’s most significant port and commercial centre.

It has worked hard to develop a diverse economy. Manufacturing, logistics, financial services, information technology, retail, travel, tourism, medical care, and education are all important industries, with a particular emphasis on green technologies.

Dubai has made significant investments in transportation, telecommunications, electricity, and industrial infrastructure in order to attract worldwide companies. The Registrar of Companies is Dubai’s primary regulatory body for business creation. This registrar would serve as a centralised authority for completing various types of company compliance and registration. In most cases, a business registration application in Dubai is submitted to the Registrar of Companies.

What’s the eligibility criteria for establishing a business in Dubai?

Licensing is required

A corporation is created with the primary goal of carrying out a certain task. For a corporation that is registered in Dubai, there are three types of licences available. The following are the licences:

  • Commercial licences that cover a wide range of business activities;
  • Professional licences for trades, services, artisans, and craftsmen;
  • Industrial licences are required for the establishment of an industrial or manufacturing facility.

Free zone business carried out

The business setup in Dubai needs a local sponsor. Finding a local sponsor is a required prerequisite for a person. The local sponsor must be a UAE national with more than 51 percent ownership of the company.

Choose the Form of Business Structure

When a person applies for company registration in Dubai, he or she must choose the kind of business structure that will be used. There are several upsides and downsides to selecting a business structure.

The United Arab Emirates is a popular investment and business location. Its low tax policy and ease of doing business have helped boost its status as a commercial centre in the Middle East. To establish a business in Dubai, follow the given instructions:

  1. First and foremost, the applicant must choose a UAE national as a sponsor. This condition must be met on a mandatory basis to meet the requirements of the Federal Commercial Companies Law No. 2 of 2015. (Companies Law). If the applicant wishes to establish a firm outside of the DIFC, a UAE national must possess 51 per cent of the controlling share. If the applicant wishes to open an office in the DIFC, however, a sponsor is not necessary. Finding a sponsor, on the other hand, is usually a good idea. Later on, the applicant has the option of either transferring the firm or not.
  2. The applicant would next have to go through the procedure of reserving the company’s name with the Department of Economic Development. The application, together with the required money, must be submitted in order to allocate the company’s name.
  3. Dubai has certain regulations when it comes to choosing a company name. Make sure to choose a name that is not offensive in language and doesn’t hurt religious sentiments. If you are planning to name the company after a person, make sure that person is the owner or is a partner in the company.
  4. After completing the preceding steps, the applicant must prepare the Company’s memorandum of formation and articles of organisation. The MOA and AOA documents will be available for download from the Companies Registry.
  5. The papers, along with the application, must be sent to the Department of Economic Development and the Companies Registry once the application has been completed. The paperwork relating to this would be processed by the Companies Registry.
  6. The business would obtain a certificate of formation from the Companies Registry, allowing it to carry out the required operations in Dubai. After this procedure is completed, the applicant must choose the type of licence that is required to conduct business. Dubai is home to the following licences:
    • Commercial licences that cover a wide range of business activities;
    • Professional licences for trades, services, artisans, and craftsmen;
    • Industrial licences are required for the establishment of an industrial or manufacturing facility.
  7. As a result, if the firm wants to engage in any type of trade activity, it must submit an application for a commercial licence. However, if the applicant wants to create a business involving professional attorneys, he or she must first get a professional licence.
  8. In order to conduct the operations per the provisions of the Companies Act, the applicant for company registration in Dubai must designate management, directors, and shareholders.

Documents necessary for registering a business in Dubai:

Because there are so many various types of businesses in Dubai, each one will require its own set of paperwork. In order to register a business in Dubai, you’ll need the following documents:

  • Form of Business Application
  • Passports of the Company’s Executives
  • Business Plan
  • MOA and AOA notarized by the authority
  • NOC provided by the sponsor
  • Sponsor’s passport, proving that he or she is a UAE national
  • Bank Reference Letter for Each Shareholder

Aside from the above papers, the following documents must be supplied for an industrial licence

  • A copy of the Feasibility Study
  • Existing Business Profile
  • Information on the investor

For the establishment of Branch Offices

  • Three months’ worth of bank statements for the parent company
  • Original Power of Attorney and a copy of passport
  • Copy of the Certificate of Incorporation, MOA, and AOA that has been attested
  • Board Resolution of the Company

Formation of a business in Dubai requires extensive research. Before you decide how to create your company’s presence in Dubai, it’s critical to have a thorough grasp of your choices. Making the wrong option might stifle your company’s overall growth in the United Arab Emirates; thus, consider the above factors when deciding on the best structure for your requirements.

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