The United Arab Emirates is a country with a thriving business environment. It is a hub for international trade and investment, with a strong economy and a stable political climate.
One of the key benefits of doing business in the UAE is the country’s ideal location. Additionally, the country has a highly skilled and educated workforce, with a large number of expatriates from around the world.
Another advantage of doing trade in the UAE is the favorable tax system. The country has no corporate or personal income tax, making it an attractive destination for businesses looking to maximize their profits. You can also take advantage of these perks by incorporating your own business in the country. Read the instructions below to learn how to do this.
Types of companies to register
There are several kinds of organizations to consider when registering a company in the UAE.
Limited liability company
The most common structure is the Limited Liability Company (LLC), which requires at least two shareholders and can have up to 50.
LLCs are the most popular establishment in the UAE due to their flexibility and limited liability protection. They require a minimum share capital of AED 300,000 and must have a local Emirati partner who holds at least 51% of the shares.
Sole proprietorship
Another option is Sole Proprietorship, which is owned and operated by a single individual. Sole Proprietorships are ideal for small businesses and startups. They are easy to set up and require minimal capital. However, the owner is personally liable for all debts and obligations of the business.
Branch office
Branch Office is a foreign company’s extension in the UAE. Branch Offices are a good option for foreign companies looking to establish a presence in the UAE without forming a new legal entity. They are required to appoint a local service agent and must obtain a license from the relevant authorities. It’s important to note that the parent firm is liable for all debts and obligations of the branch.
Steps of company registration
Company registration in UAE involves the following main steps that must be followed to ensure a successful registration process.
Choosing business activity
The first step is to choose a corporate activity and legal form. This step is crucial as it determines the type of license required and the jurisdiction in which the enterprise will operate.
Choosing company name
You just choose a company’s name and get it approved by the Department of Economic Development. The name should be unique and relevant to the business activity.
Obtaining initial approval
The owner must obtain initial approval from the Department of Economic Development, which involves submitting the required documents such as passport copies, corporate plans, and lease agreements.
Obtaining permits
The next step is to obtain the necessary licenses and permits from the relevant authorities such as the Ministry of Economy, Dubai Municipality, and Dubai Chamber of Commerce and Industry. These licenses and permits vary depending on the business activity and legal form.
Register with the tax authority
The conclusive step is to register with the Federal Tax Authority and obtain a tax registration number. This step is mandatory for all companies operating in UAE. Once all the steps are completed, the firm can legally operate in UAE.
Capital requirement
To register an organization in the United Arab Emirates, particular capital conditions must be fulfilled. The minimum capital requirement varies depending on the type of firm being registered, with a minimum of AED 10,000 for a sole proprietorship and AED 300,000 for a limited liability corporation. Additionally, there are fees associated with the registration process, including trade name reservation fees and licensing fees.
It is important to note that these requirements and fees are subject to change and may vary depending on the specific emirate in which the firm is being registered.
