Setting Up A Small Business in Dubai

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  • #1524
    Jonathan Lea
    Keymaster

    I am currently considering moving to Dubai or other states in the United Arab Emirates where the business climate might be more advantageous for me to grow a company over the long term.

    From my experience of working at Clyde & Co in Dubai for six months over 2006 I remember that there was quite a lot of administrative requirements and associated costs with setting up in Dubai, either onshore or in one of the separate free zone jurisdictions.

    I’d therefore like to get an idea of how feasible it is for a small business with a sole director/employee to start in Dubai or anywhere else in the United Arab Emirates with favourable laws. Particular questions are 1) Do you need a separate entrepreneur or self-employment visa 2) What are the initial and ongoing costs and regulatory burdens of starting and running a small business 3) Are there any particular rules covering web based businesses where you don’t need an office location as such and can scale a business by growing a virtual online global community?

    #1525
    Links_Group
    Participant

    Hi there,

    Thank you for your post. Yes, the United Arab Emirates is one of the most attractive investment destinations for foreign companies in the world. Following Dubai’s successful bid to host the World Expo 2020, the UAE’s economic outlook is expected to remain positive as experts anticipate the expo will add at least 1.5 percentage points per year to the emirate’s real GDP growth over 2014-2020.

    Foreign investors are required to establish a legal commercial presence in order to conduct business in the UAE or Dubai on a regular basis. The cost of establishing a legal presence in UAE can vary depending on whether you incorporate onshore or in one of the many Free Zones. To know which option is best for your business, the most important question to ask is ‘where is the audience for my company’s product or service?’

    If the audience for your company’s product or service is onshore (mainland or outside the Free Zone), then it would be best to establish an onshore entity. This is the core business of The Links Group and we are able to recommend a structure that improves beneficial ownership for the foreign entity.

    Fees for this service can only be ascertained after a full ‘Know Your Client’ review. This includes: a duty of care to protect the local shareholder (if required) against undue risk and a duty of care to the foreign party to ensure they retain 100 per cent beneficial ownership and control at all times – in line with any future potential exit strategy.

    Another way to conduct business onshore is through establishing an unincorporated association agreement with The Links Group. In this case, The Links Group will own the license and the foreign party incubates for 12 months and has 100 per cent beneficial ownership and control of the entity. No office space is required for this option.

    If the audience of your business is within a particular free zone or outside of the UAE borders, then Free Zones offer a great opportunity for foreign investors such as 100 per cent foreign ownership and tax exemption. It would be best to check with the relevant Free Zone on the turnkey costs including mandatory office space.

    While the roadmap may seem complicated, a trusted company formation specialist will be able to set you on the right path and help you avoid potentially costly roadblocks along the way

    I hope this helps.

    Kind regards,
    John Martin St.Valery, Founding Partner, The Links Group

    #1680
    nmodha
    Participant

    I’ll try and keep short and brief and respond to your succinct questions:-

    Particular questions are 1) Do you need a separate entrepreneur or self-employment visa

    Yes, there is a formal requirement and process for appointment of shareholders. Some firms do provide nominee services but this is not recommended. Employment visa is not mandatory unless investor is desirous of obtaining residency within Dubai or anywhere in the UAE.

    2) What are the initial and ongoing costs and regulatory burdens of starting and running a small business

    Please look at this link to understand the options available, costs (including license fees, lease costs, etc) for company formation in Dubai free zone and/or registering a company in other free zones across the United Arab Emirates.

    3) Are there any particular rules covering web based businesses where you don’t need an office location as such and can scale a business by growing a virtual online global community?

    Yes this is possible in most of the free zones (with the exception of JAFZA, DIFC, and some of the free zones in Dubai). You should also visit the UAE Law Blog link to read more on company incorporation in Dubai.

    Thanks.

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