Dubai has developed as a major destination for entrepreneurs, especially Gulf nationals, wishing to launch a company due to its dynamic economy, strategic location, and business-friendly atmosphere. 

Doing business in Dubai is one of the best ways to get a resident visa. The company offers suitable for business development 

Understanding the business landscape in Dubai

Tourism, real estate, trade, and technology are driving Dubai’s economy forward. The city’s continuous expansion attracts both domestic and foreign investment.  When establishing a business in Dubai, you have a distinct edge as a Gulf national. The government encourages Gulf nationals by providing a variety of incentives and assistance programs.

Sole Proprietorship

A sole proprietorship is the simplest form of business ownership. As a Gulf national, you have the advantage of being able to fully own and operate your business without the need for a local sponsor or partner. It involves minimal paperwork and can be a quicker process. It’s important to note that in a sole proprietorship, there is no legal distinction between you and your business. 

Steps to Establish a Sole Proprietorship in Dubai

• Select a unique business name
• Ensure it complies with Dubai’s naming regulations.
• You will need to obtain the appropriate licenses and permits from the relevant government authorities.
• Register your sole proprietorship with the Dubai Department of Economic Development (DED). 
• It’s advisable to open a separate business bank account to manage your finances and transactions.
• Ensure you understand and meet the tax obligations associated with your business activities.
• Based on your needs, choose a site for your business, whether on the mainland or in a free zone.

Limited Liability Company (LLC):

An LLC is a type of business entity that provides limited liability protection to its owners, often known as “members.”

One of the primary advantages of an LLC is that the personal assets of the members are protected.

An LLC in Dubai can have multiple members, allowing for shared ownership and investment. 

While Gulf nationals can control 100% of an LLC, they can also choose to have a local partner or sponsor with a minority stake. 

Steps to Establish an LLC in Dubai

• Select a unique and appropriate business name 
• Prepare an LLC agreement outlining the rights, responsibilities, and ownership structure of the members.
• Obtain approvals and licenses from DED
• Complete the registration process by submitting all relevant documents and paying the registration fees.
• Based on your business needs and objectives, decide whether your LLC will operate on the mainland or in a free zone.

What is a Free Zone Company?

A Free Zone Company is a business incorporated in one of Dubai’s many free zones. These zones are intended to encourage international investment while also providing numerous incentives to entrepreneurs. Gulf nationals can take advantage of these advantages by establishing their enterprises in Dubai’s free zones.

The most important benefit of a Free Zone Company is that Gulf nationals can hold 100% of the company. A local partner or sponsor is not required.

Tax exemptions, such as zero corporate and personal income tax, customs duty exemptions, and no import or export taxes, are frequently granted to free zone enterprises for extended periods of time.

Free zone companies often enjoy tax exemptions for extended periods, including zero corporate and personal income tax, customs duty exemptions, and no import or export taxes.

The procedure for forming a Free Zone Company is often simple, with few regulatory obstacles. When compared to other corporate models, this can result in a faster setup.

Owners of businesses have complete control over their operations and management decisions, which allows for greater agility and flexibility in business strategy.

Many free zones cater to specific industries, such as technology, finance, healthcare, and more. This specialization can provide access to industry-specific infrastructure and resources.

Steps to Establish a Free Zone Company for GULF nationals in Dubai

• Select a free zone that aligns with your business activities and objectives.
• Determine an appropriate business name and specify your intended business activities.
• Apply for the relevant business license from the chosen free zone authority. 
• Completing the company registration process, which normally entails submitting relevant paperwork and paying registration costs, is required.
• You can apply for visas for yourself and your staff through the free zone authority, depending on the number of employees.

Mainland Company

A Mainland Company, also known as an onshore company, is a firm founded on the Dubai mainland. Mainland Companies, unlike enterprises in free zones, can engage in a variety of business activities and target both local and foreign markets.

Mainland companies can open branches and offices around the UAE, enabling for corporate growth. While Gulf nationals can have a majority of the shares (at least 51%), the remaining shares are frequently held by a local sponsor or partner. Depending on the business activity and location, this arrangement may differ.Business owners have complete control over their business, making decisions autonomously and without interference from others.

Steps to establish mainland company for GULF nationals in dubai

• Define the major business activity or activities in which your organization will participate.
• Select a local sponsor or partner who will hold the required percentage of the company’s shares if necessary.
• Based on your business objectives, choose a legal structure for your organization, such as a sole proprietorship, a limited liability company (LLC), or another.
• Make a trade name reservation for your firm and ensure that it fits with Dubai’s naming requirements.
• Prepare the Memorandum of Association (MOA) and Articles of Association (AOA), which outline the structure, ownership, and operations of the firm.
• Submit the MOA and AOA to the Dubai Department of Economic Development (DED) for approval.
• Apply to the DED for the requisite business license.
• Apply for grants based on your business’s activities and the number of employees.

Offshore Company: A Strategic Business Structure for Gulf Nationals in Dubai

An offshore company is a commercial entity that is registered in a jurisdiction other than the one where its primary operations are carried out. Offshore businesses are typically utilized in Dubai for non-operational objectives, such as asset holding, investments, and enabling international trade.

For high-net-worth people and investors in particular, offshore entities can be utilized to secure assets.

In Dubai, offshore businesses may benefit from tax advantages such as exemptions from corporation and individual income tax, capital gains tax, and value-added tax (VAT).

Without the necessity for local sponsorship or collaboration, Gulf nationals can hold 100% of an offshore corporation.

 Since offshore businesses are prohibited from operating in the UAE market, they are best suited for conducting business internationally or storing assets abroad.

For business owners, some offshore jurisdictions provide a high level of confidentiality and privacy.

Steps to establish offshore company for GULF nationals in dubai

• For high-net-worth people and investors in particular, offshore entities can be utilized to secure assets.
• In Dubai, offshore businesses may benefit from tax advantages such as exemptions from corporation and individual income tax, capital gains tax, and value-added tax (VAT).
• Without the necessity for local sponsorship or collaboration, Gulf nationals can hold 100% of an offshore corporation.
•  Since offshore businesses are prohibited from operating in the UAE market, they are best suited for conducting business internationally or storing assets abroad.
• For business owners, some offshore jurisdictions provide a high level of confidentiality and privacy.

Benefit tax policy:

Businesses with yearly profits of AED (375,000) or $102,000 began paying 9% tax when the Cooper tax law went into effect in 2023, which remains the lowest tax rate in the world.

Cost to establish a company in Dubai:

license Payment:

 The process for obtaining a trade license differs depending on the issuing government and the type of business activity. AED 10,000 to AED 50,000 (approximately $2,720 to $13,600) or more may be required as license fees.

Trade Name Reservation: 

In this phase, a distinctive trade name for your company is reserved. The price could vary from AED 500 to AED 2,000 (about $135 to $540) depending on the organization that grants authority (Department of Economic Development or a specific free zone).

Office space:

 Location, size, and amenities all affect how much an office space costs. Flexi-desk or shared office space may be available in free zones for AED 5,000 to AED 15,000 (about $1,360 to $4,080 annually). The annual cost of a dedicated office space in a free zone or on the mainland could range from 20,000 to 100,000 AED or more.

Legal and Documentation Fees:

These fees include the costs of writing legal documents, receiving approvals, and having them notarized. Costs might range from AED 5,000 to AED 15,000 (about $1,360 to $4,080) or more, depending on your business structure and unique requirements.

Registration and processing fees :

Range from AED 2,000 to AED 5,000 (roughly $540 to $1,360) and include administrative 

expenses for processing your license and visa applications for Establishing a company in Dubai

Visa costs:

Visa fees must be taken into account if you want to apply for visas for both yourself and your staff. Depending on the type of visa (employment, investor, partner, etc.) and processing costs, visa costs can range from AED 3,000 to AED 4,000 (approximately $815 to $1,085) each application.

FAQs

Are there any restrictions on doing business in Dubai as a foreigner?

While Dubai is generally open to foreign investment, there may be restrictions or specific requirements in certain industries. It’s important to check the regulations related to your specific business activity.

What is the minimum investment to establish a company in Dubai?

Setting up a service-based company on the mainland in Dubai requires a minimum investment of AED 18,500.

How do I decide between a mainland and a free zone business?

Your decision should be influenced by aspects such as your business activity, ownership choices, location requirements, and regulatory concerns. A business advisor can assist you in making an educated selection.

Conclusion:

For nationals of the Gulf, starting a business opens up a world of possibilities. Dubai is a popular destination for businesspeople from the Gulf region due to its advantageous location, robust economy, and welcoming environment.Dubai offers a variety of business structures to meet your unique needs and goals, whether you decide to set up a Sole Proprietorship for ease of operation and independence, an LLC for adaptability and limited liability, a Free Zone Company for tax advantages and streamlined procedures, or a Mainland Company for access to the local market and business expansion.