Costs and procedures for establishing a company in Dubai

Establishing a company in Dubai represents an important strategic step for investors who want to take advantage of the thriving economic environment and available government facilities. Dubai is one of the best global business destinations thanks to its advanced infrastructure, business policies, and modern commercial laws that facilitate the procedures for establishing and managing companies efficiently. Dubai offers diverse opportunities for businesses from all sectors, from financial services and technology to manufacturing and trade. In this article, we will discuss the costs and procedures for establishing a company in Dubai, including choosing the appropriate type of company, procedures for obtaining the necessary licenses, and the legal and financial requirements that must be considered. We will also highlight potential challenges and how to avoid them, as well as the benefits of investing in Dubai’s growing market. This article will be a comprehensive guide for investors looking to launch into the business world in Dubai with confidence and success.

Costs and procedures for establishing a company in Dubai

Procedures for establishing a company in Dubai

Here are the basic steps for establishing a company in Dubai :

1. Choosing the type of company: You must select the type of company you want to establish, such as a limited liability company (LLC), a sole proprietorship, or a company in a free zone. This choice affects the terms, costs, and licenses required.
2. Choosing a company name: You must choose a unique name for the company and ensure that it complies with local laws and is not similar to the names of existing companies.
3. Identification of shareholders and directors: The identity of the main shareholders and directors of the company must be determined, and the required documents such as passports and identity cards must be submitted.
4. Memorandum of Association and Articles of Association: Memorandum of Association and Articles of Association must be prepared, which define the company’s structure, shareholders’ rights and management.
5. Obtaining government approvals: An application must be submitted to obtain business licenses from the relevant authorities such as the Department of Economic Development in Dubai or the regulating body of the selected free zone.
6. Establishing a bank account: A bank account must be opened for the company in one of the local banks in Dubai, in order to manage financial matters and commercial transactions.
7. Tax Registration: The company must be registered for taxes if required, in accordance with local tax laws in Dubai.
8. Residence visas: Shareholders and directors can obtain residency visas to work in Dubai, which vary based on the type of company and economic activity.
9. Social and health insurance: The company must register for employee social and health insurance, according to local laws.

• Costs of obtaining a commercial license (license to practice business).
• The costs of renting or purchasing the site where the business will be conducted.
• All costs related to workplace furnishings.
• Fees for clearing work permits and sponsorships related to expatriate employees and the necessary visas for them in the name of the company.
• Open a bank account and deposit the minimum capital into it.
• The legal form of the company requires costs that vary according to the nature of the activity, whether industrial, commercial, or professional, and industrial activity has the highest costs.
• Fees for obtaining a commercial license in order to determine the cost of establishing a company in Dubai.

The cost of establishing a company in Dubai is divided into two costs

First: Obtaining the necessary licenses to practice the company’s activity

Obtaining the necessary licenses to carry out the company’s activity in Dubai is an essential and vital step to ensure legal compliance and successful operation. This process requires several precise steps that include multiple details that vary depending on the type of activity and geographical location of the company.

First, entrepreneurs must choose the appropriate area in Dubai to establish their company, whether it is in the free zones or outside it, as licensing requirements vary based on this choice. Then, they must submit license applications to the competent authorities such as the Department of Economic Development or the Free Zone Authority, attached with the necessary documents such as the Memorandum of Association, Articles of Association, and details of shareholders and management.

Second, obtaining licenses requires that the chosen business comply with local laws and government regulations, while adhering to health and environmental standards if required.

Finally, entrepreneurs must provide the required guarantees, whether financial or otherwise, that may be required by some types of licenses, and they must also submit the financial fees required to obtain these licenses.

In short, obtaining the necessary licenses to practice the company’s activity in Dubai includes a precise and integrated process that requires advance planning and full preparation to ensure the company’s compliance with all local laws and regulations, which contributes to the success of the company’s establishment process and its continuity in the local market.

Second: Entry fees to the markets

The second fee regarding the cost of establishing a company in Dubai is market entry fees:

• The cost of entering markets subject to the local law system is approximately 5% of the value of the company’s lease contract.
• There are fees estimated according to a committee affiliated with the competent authorities in Dubai, which are related to if the company’s headquarters is owned by a foreign investor.
• Residence fees for foreign investors in Dubai are estimated at approximately 5% of the value of the housing contract.
• Waste fees are estimated by the UAE Waste Committee.

Basic papers for establishing a company in Dubai

To establish a company in Dubai , you need to submit a set of basic and required documents. These are the basic papers you usually need:

• Registration application form: Submitted to the Department of Economic Development (DED) or the chosen free zone depending on where the company is established.
• A copy of the company contract: This contract includes details of the company’s structure, activities, distribution of capital, and the names of shareholders and managers.
• Passports for shareholders and directors: Certified copies of passports for each shareholder and director in the company.
• Personal photographs: Recent color photographs of shareholders and directors.
• A bank letter with the financial balance: The bank letter proves that you have sufficient financial capacity to establish and operate the company.
• Real estate letter: proving ownership or rent of the place that the company will take as its headquarters.
• Approval of local authorities: varies according to the type of activity and region. You may need special approval from the competent authorities.
• Dubai Chamber of Commerce and Industry Certificate: To register a company, the company must be a member of a local chamber of commerce.
• Special licenses and permits: You may need additional licenses depending on the type of activity, such as health permits or environmental licenses.

In the conclusion of this article, we find that starting a company in Dubai represents an exciting challenge and an important investment opportunity in one of the most prosperous cities in the world. By adhering to local legal and regulatory procedures, investors can build strong foundations for their business success in this dynamic environment.

Dubai offers companies the opportunity to benefit from its advanced infrastructure and distinguished government facilities, making it an ideal destination for international business. In addition, the emirate offers a diverse, multi-sector business environment, where businesses of all sizes and activities can thrive and grow.

It is important for entrepreneurs to have a good understanding of potential challenges such as adhering to tax and administrative controls, as well as securing the resources needed to successfully start a business. With good planning and proper advice, businesses can achieve sustainable success in Dubai, and contribute to its thriving and growing economy.

The most frequently asked questions about establishing a company in Dubai