30 Jun Costs and procedures for establishing a company in Dubai
Costs and procedures for establishing a company in Dubai. Companies wishing to establish activities in Dubai enjoy flexibility in commercial or service activities. To invest in Dubai, you must obtain a business visa and obtain a commercial license for the activity. In this article, we will learn about the cost of establishing a company in Dubai.
In establishing a company in Dubai, investors face challenges and procedures that include financial, legal and administrative aspects. Choosing Dubai as the company’s home base is a strategic move given the dynamic economic environment and advanced facilities available in the city. However, the process of setting up a company in Dubai requires careful planning and knowledge of the necessary procedures, including licenses, financial costs, local taxes and legal regulations. This text aims to review the costs and procedures for establishing a company in Dubai and the factors affecting the establishment process.
Costs and procedures for establishing a company in Dubai
The cost of establishing a company in Dubai
The cost of setting up a company in Dubai varies based on several factors, including the type of business activity, the free zone chosen, and the expected business volume. The basic costs start from registration and licensing fees. Rather, the cost of establishing a company in Dubai is divided into two parts of the costs, which we talk about more clearly in the following lines:
First: Obtaining the necessary licenses to practice the company’s activity
To benefit from the facilities and benefits provided by Ajman Free Zone, companies must obtain the necessary licenses to practice their activity. The basic steps for obtaining licenses include determining the company’s activity, choosing the correct type of company, submitting a license application, submitting the required documents, obtaining the necessary approvals, paying fees, and receiving licenses. Note that these steps may vary based on the type of company and its activity, and requires local consultation to ensure full compliance with the terms and laws.
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.
Work licensing procedures from the Department of Economic Development
To obtain a work license from the Department of Economic Development in Dubai, a number of procedures must be followed. Here are the basic steps to obtain a business license:
- Choosing a business: You must determine the business activity you want to practice. The company’s activity must be in compliance with the permits granted by the relevant authorities.
- Choosing the legal type: You must choose the appropriate legal type for your company, such as local company, foreign company, or free company. You should consult legal counsel to determine the appropriate legal type based on your business needs and requirements.
- Company name: You must choose an appropriate name for the company and ensure that it is available and does not conflict with the names of other registered companies. You can check the availability of the name and submit a request to register it to the Department of Economic Development.
- Submitting an Application: An application for a work license must be submitted to the Dubai Department of Economic Development. Required documents must be submitted with the application, such as a copy of the passport of shareholders and directors, a copy of the necessary contracts and financial documents.
- Evaluation and Approval: The Department of Economic Development will evaluate the application and documents submitted. If all requirements are met, the Department of Economic Development will issue a business license.
- Payment of fees: The prescribed fees must be paid to issue a work permit. You can obtain information about the required fees and payment methods from the Department of Economic Development.
- Issuing a business license: After completing all procedures and paying the fees, the Department of Economic Development will issue a business license for your company. You must receive the license and verify that it is correct and matches the information provided.
Fees required to register the company and obtain the necessary licenses from local authorities
Fees required to establish a company in Dubai
Fees for establishing a company in Dubai and obtaining the necessary licenses from local authorities vary from one region to another within the same country. Fees also vary depending on the type of company, its activity, and its size. Usually, fees are collected by the relevant government agencies, such as economic development departments, commercial licensing bodies, or municipalities. It is preferable to contact the local relevant authority in the area in which you intend to establish the company to obtain accurate and updated information regarding the required fees. When contacting the relevant authority, you can ask the following questions to obtain information about the fees:
- Company establishment fees: These fees relate to registering the company and issuing the initial license.
- License renewal fees: There may be annual or periodic fees to renew the commercial license.
- Additional services fees: There may be additional fees for additional services that may be provided by the relevant entity, such as license amendments, changes in shareholders or licenses for specific activities.
- Testing and Inspection Fees: Some activities may require additional fees for field testing and inspections to ensure compliance with local standards and regulations.
- Tax Fees: There may be tax fees that vary based on the type of company, its activity, and local tax laws.
Local taxes and financial fees applied to companies in Dubai
In Dubai, there are several local taxes and financial fees that apply to companies. Here are some basic taxes and financial fees in Dubai:
- Value Added Tax (VAT): VAT has been implemented in the UAE, including the Emirate of Dubai, as of January 1, 2018. The standard rate of VAT is 5%, and is levied on specified goods and services.
- Business License Fees: The Dubai Department of Economic Development requires annual fees for business license maintenance and annual renewal for businesses. Fees vary based on the type, activity and size of the company.
- Visa and work fees: Living and working in Dubai requires fees for residence visas and work permits. Fees depend on the type of visa, duration and job classification of the employee.
- Real estate registration fees: If the company owns a property in Dubai, property registration processes may require additional fees.
- Rental and Leasing Fees: If a company is leasing an office or commercial space in Dubai, it may need to pay a monthly or annual rental fee.
- Customs duties: Customs duties may apply to the import and export of goods and merchandise, and vary according to the product, the exporting country and specific trading arrangements.
It should be noted that laws and regulations regarding taxes and fees may change over time. Therefore, it is advisable to contact the relevant authorities such as the Dubai Taxes and Customs Authority and the Department of Economic Development to obtain updated and accurate information regarding taxes and financial fees applied to companies in Dubai.
Costs of renting a work space in Dubai
The costs of renting an office or work space in Dubai vary based on several factors, including location, size, equipment required, and the rental period. Here is a general sample of the costs that may be included in renting an office or work space in Dubai:
- Monthly Rent: Monthly rent is the basic cost of renting. The monthly rental price can range significantly based on location, space, and fixtures. For example, the cost of renting a small office in a commercial area in Dubai may start from around 5,000 AED and above.
- Service Charges: Lease contracts may include charges for services provided such as electricity, water, maintenance and security. These fees vary based on unit size, building type, and services provided. These fees may be included in the rent or paid separately.
- Maintenance Fees: Additional fees may apply for common maintenance of the building or mall. These fees include general maintenance, cleaning, landscaping and utilities.
- Additional services fees: If you require additional services such as meeting rooms, reception service or legal advice, you may incur additional costs for these services.
It should be noted that these costs are general estimates and vary based on the factors mentioned above. It is important that you contact real estate agencies and real estate management companies in Dubai such as Itqan Company to obtain specific offers and estimates that suit your requirements.
Types of companies in Dubai
Here is a table showing the different types of companies in Dubai, including free zones and outside:
| Type of Company | the description | Property |
|---|---|---|
| Limited Liability Company (LLC) | A firm consisting of two to 50 partners. Partners bear responsibility according to the percentage of their shares in the company. | There must be a local partner who owns 51% of the shares, while a foreign investor can own up to 49% of the shares. |
| Public Joint Stock Company (PJSC) | A large company can go public. It requires a minimum capital and is subject to strict supervision by government agencies. | Domestic and foreign investors can own shares, with some regulatory restrictions. |
| Private Joint Stock Company (PrJSC) | A joint-stock company, but it does not offer its shares for public subscription. It can be owned by a group of investors. | There must be a local partner who owns 51% of the shares, while a foreign investor can own up to 49% of the shares. |
| Branch of a foreign company | Foreign companies are allowed to open branches in Dubai to practice the same commercial activity as those in the home country. | Full (100%) foreign ownership is permitted. |
| Representative office | The representative office represents the foreign parent company in Dubai but cannot conduct business activities or make profits. | Full (100%) foreign ownership is permitted. |
| Free zone company | Companies located within specific free zones in Dubai benefit from several incentives such as tax exemption and full foreign ownership. | Full (100%) foreign ownership is permitted. |
| Joint company | It consists of two or more partners who are jointly responsible for the company’s obligations. | All partners must be citizens of the UAE or GCC countries. |
| Limited partnership company | It consists of general partners who are jointly responsible for the company’s obligations, and limited partners whose liability is limited to the amount of their share in the capital. | All joint partners must be citizens of the UAE or GCC countries. Foreign investors can be limited partners. |
| Sole proprietorship | A facility owned and operated by only one person. | Foreigners can only own sole proprietorships in free zones. In the rest of Dubai, the owner must be a UAE or GCC national. |
This table provides a comprehensive overview of the types of companies available in Dubai and the various options that can meet the needs of different investors based on the nature of their business activity and their ambitions to invest in Dubai .
Documents required to establish a company in Dubai
Establishing a company in Dubai in cooperation with Itqan Company requires providing a set of necessary papers and documents to ensure that the process runs smoothly and complies with all local laws. Below are the documents required to establish a company in Dubai:
- Copies of passports: A photocopy of the passport for both shareholders and directors of the company.
- Trade name: Submit proposals for trade names and choose a trade name approved by the Department of Economic Development in Dubai.
- Business Plan: Some free zones may require the submission of a business plan that explains the nature of the business activity and the company’s objectives.
- Memorandum of Association and Articles of Association: Preparing and submitting the company’s Memorandum and Articles of Association, which must include details about the company’s activity, capital, and shareholding percentage.
- No Objection Certificate (NOC): If a shareholder or director is resident in the UAE and works for another entity, there may be a need to provide a NOC from his or her current employer.
- Personal photographs: Passport size photographs of shareholders and directors.
- Capital details: Provide details about the company’s contributed capital, and confirm the bank deposit if required.
- Office Address: Submitting a lease agreement for an office or work space within the chosen free zone, Itqan can help facilitate this process.
- Application form: Fill out the official application form to establish the company and submit it to the chosen free zone authority.
- Registration fees: Pay the fees required to register the company and obtain the necessary licenses.
- Contact Details: Provide company contact details including postal address, email, and phone numbers.
Itqan Company helps you prepare and submit these documents, in addition to providing legal and administrative consultations to ensure that all requirements are met and the necessary licenses are obtained as quickly as possible.
Learn about the costs and procedures for establishing a company in Dubai
In conclusion, we can say that establishing a company in Dubai includes certain costs and procedures. Establishment costs vary based on the type of company, its activity, and its location. These costs may include business license fees, visa fees, legal consulting fees, etc. It is recommended to contact relevant authorities such as the Department of Economic Development in Dubai and relevant government agencies to obtain more specific information regarding costs and necessary procedures.
You should also keep in mind that the laws and regulations regarding setting up companies in Dubai may be subject to change and updating. Therefore, it is recommended to obtain specialized legal advice and communicate with relevant authorities to ensure compliance with all required legal and procedural requirements.
Due to the changing nature of information and laws, you should obtain updated information from official and reliable sources before taking any legal or financial actions.
Frequently asked questions about the costs and procedures for establishing a company in Dubai:
What are the main costs associated with setting up a company in Dubai?
Costs of government licenses and permits, office or space rental costs, registration fees and insurances.
What are the basic procedures for establishing a company in Dubai?
Choose the company type and legal form, apply for a business license, prepare legal documents, and register in government registries.
Are there ongoing annual costs after establishing the company in Dubai?
Yes, annual costs such as renewal fees, other government fees, and professional services fees must be paid.
What are the fees required to establish a company in one of the free zones in Dubai?
Fees vary depending on the type of company and activity, but include registration fees, licensing fees, and service fees.
What taxes apply to companies in Dubai?
Free zones in Dubai enjoy tax exemptions, but must adhere to local tax regulations and international tax requirements if they apply.