Types of companies in Dubai
Dubai is a popular destination for foreign investors due to its excellent infrastructure and facilities. However, starting a business in Dubai requires careful planning to ensure that every step is executed properly.
Local and international business owners can choose the types of companies they wish to establish and register them in compliance with the legal requirements. It is important to note that local and international investors have slightly different requirements when coming to Dubai.
When launching a business, there are three types of companies in the UAE to choose from: Mainland, Offshore, and Free Zone businesses. We will assist you in identifying the best option based on your needs. You can find more information about each type of company in the following sections.
3 Main Jurisdictions in the UAE
Mainland
A mainland company is a business that has been granted a license by the Department of Economic Development (DED) in that specific United Arab Emirates emirate. A business established on the mainland can operate in any commerce, industry, or tourism sector. According to DED procedural rules, companies need permission from the authorities to regulate their businesses.
Foreign investors can acquire 100% ownership of their UAE Mainland-based company. The appointment of a manager under the Articles of Incorporation (MOA) or service contract for a temporary or ongoing period is one of the constitutional documents and procedures that shareholders must complete. Contact us to find the best fit for your requirements.
Freezone
The most popular location to start a business in the United Arab Emirates is in the UAE Free Zones, which has long attracted foreign investors.Â
Every free zone has unique requirements for the permitted activities, the efficiency of those activities (which is crucial when a founder applies for a visa), reputation (which may be relevant when opening a bank account), audit requirements, and company establishment processes. Connect with us to find the best suitable free zone for your business.
Offshore
Offshore companies in the UAE are not treated as tax-resident businesses by default. They are designed for operations outside of the country and are managed from abroad. These companies are only recognised as legal entities and are not covered by double taxation agreements.
DIFFERENT TYPES OF COMPANIES IN UAE
The nature of your business operations, chosen jurisdiction, and other factors will determine one of the categories of companies in UAE that are best for you. The following business structures can all be established in Dubai’s mainland, and many are also allowed in UAE-free zones.
Limited Liability Company
One of the most common company types in the UAE is a Limited Liability Company. Used globally, it requires a Minimum of 1 shareholder and max depends on the mainland or freezone to establish it. The liability of each shareholder is limited to the value of their shares, similar to a limited partnership.
In the UAE, an LLC has the freedom to participate in various activities except for those related to banking, insurance, and other financial services.
Civil companyÂ
In the United Arab Emirates, individuals who work in recognized professions such as law enforcement, medicine, accounting, and engineering can establish a civil company. Partners are allowed to own 100% of the company, but only professional business activities are permitted for civil companies.
These activities are classified as either physical or intellectual and must be carried out by one or more natural persons with a specified capital. To open a civil company, there are a few guidelines that must be followed for incorporation.
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Sole Establishment Company
A sole establishment, also known as a sole proprietorship, is a type of business that is owned and operated by only one person. In the UAE, this person is required to have a trade license issued in their name. This means that the business cannot be owned by a company or any other corporate body.
It’s important to note that the owner of a sole establishment is personally liable for any business activities and debts. This means that creditors can seize the owner’s personal property to recover any outstanding business debts.
Branch Offices
A branch office is a separate location of a company that helps expand business reach across countries. There is no separate legal entity, but it serves as a platform for establishing a company presence in new regions and enhancing sales and revenue opportunities.
There are several types of branch offices in Dubai.
- Foreign companies
- Civil companies
- Dubai and UAE companies
- GCC companies
- Free zone companiesÂ
WHY CHOOSE SHURAA?
To set up a business in Dubai and the UAE, you need to have the right information. Although the process is not difficult, it requires some prior understanding.
Having said that, you must remember that the application process is only simple if your license application is error-free and complete at the time of submission.
If you’re starting a new business in the UAE, it’s wise to work with a business setup specialist such as Shuraa Business Setup. They will help you with all the necessary requirements to form your business.
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