Company Formation

Starting a tax-free business in Dubai can be a lucrative opportunity for entrepreneurs due to the favorable tax environment and the strong buying power of the population in the United Arab Emirates (UAE).
 
Besides the tax benefits of setting up a tax-free business in Dubai, there are several other advantages of setting up a company in Dubai, including:
 
Strategic Location: Dubai is strategically located between Europe, Asia, and Africa, making it an ideal location for businesses that want to access markets in these regions.
 
Business-Friendly Environment: Dubai is known for its pro-business environment, with a government that is committed to attracting foreign investment and creating a favorable business climate.
 
Infrastructure: Dubai has world-class infrastructure, including modern airports, ports, and transportation systems, making it easy to do business and access markets around the world.
 
Skilled Workforce: Dubai has a highly skilled and diverse workforce, with people from over 200 nationalities living and working in the city.
 
Government Support: The Dubai government offers a range of incentives and support services to help businesses set up and grow, including streamlined registration processes and access to funding and resources.
 
Lifestyle: Dubai offers a high standard of living, with modern amenities, a vibrant cultural scene, and a safe and secure environment for residents and visitors.
 
Overall, starting a tax-free business in Dubai offers businesses a unique combination of strategic location, favorable tax environment, business-friendly policies, world-class infrastructure, skilled workforce, government support, and quality of life, making it an attractive destination for entrepreneurs and investors.

There are several reasons why it is recommended to use a professional business consultant when setting up a tax-free business in Dubai.
 
A professional business consultant can help ensure that your company is set up in compliance with all the legal requirements and regulations of the Dubai government and the free zone authority. This can help avoid legal issues and penalties down the line.
 
By working with a professional business consultant, you can avoid costly mistakes and delays in the formation process, which can save you time and money in the long run.
 
Finally, a professional business consultant can assist you with structuring your company in a way that limits or eliminates any corporate tax payments.
 
Even though we recommend the use of a professional business consultant when setting up a tax-free business in Dubai it can be a good idea to have an overview of the different steps involved in the process.
 
Here are the steps that you need to follow in order to set up your tax-free business in Dubai:
 
Choose your business activity:
 
Determine the type of business you want to start in Dubai. Research the local market and identify the most promising sectors for your venture.
 
Choose your business structure:
 
Decide on the legal structure of your business. Dubai offers several options, including a free zone company, an offshore company, or a mainland company.
 
Choose a free zone:
 
Select the free zone in Dubai where you want to set up your business if your choice of company type is a free zone company. The different free zones have different strengths and weaknesses. For instance, DMCC is your only choice if you want an office in JLT in Dubai.
 
Register your business:
 
Register your company with the chosen free zone authority. The registration process involves submitting documents such as a business plan, passport copies of shareholders, and other required paperwork.
 
Obtain necessary licenses:
 
Depending on the nature of your business, you may need to obtain specific licenses and permits to operate legally in Dubai besides setting up a company in the UAE. These may include permits for certain activities from governmental institutions.
 
Open a business bank account:
 
Open a business bank account in Dubai to manage your finances and facilitate transactions. This can be a time-consuming and difficult process in the UAE unfortunately, especially if you want to have an account in one of the more established banks.
 
Rent an office space:
 
Finally, rent an office space within the free zone to establish a physical presence for your business. Most free zones offer a range of office spaces and business services to suit different needs and budgets. In case your company does not need an office it is possible to rent a shared desk in the free zone which only cost a fraction of a regular office.
 
Overall, starting a tax-free business in Dubai requires careful planning and execution. Working with a reputable business consultancy firm can help you navigate the legal and regulatory requirements and ensure a successful launch.
 
Fill out our contact form if you want to hear how we can help you start your tax-free business in Dubai.

A free zone company in the UAE is a type of business entity that operates within a designated free zone area. Free zones are designated areas in the UAE where foreign investors can set up businesses with 100% ownership and enjoy a range of benefits, including tax exemptions, customs duty exemptions, and simplified import and export procedures. A free zone company is therefore the only type of company for entrepreneurs that wish to start a tax-free business in Dubai.
 
Free zone companies are subject to the rules and regulations of the respective free zone authority where they are established, which often have their own set of licensing, legal and regulatory frameworks. They are also required to have a physical presence within the free zone, such as an office (a shared desk solution will suffice), warehouse, or industrial unit, and may be subject to minimum capital requirements depending on the type of business activity they engage in.
 
Free zone companies are popular among foreign investors who want to access the UAE market and the wider Middle East region, as they provide a business-friendly environment, with streamlined procedures and minimal bureaucratic hurdles.

A mainland company in the UAE is a type of business entity that is registered with the Department of Economic Development (DED) and operates within the jurisdiction of the UAE government. A mainland company has the right to conduct business in any part of the UAE without any restrictions, and it allows for 100% foreign ownership for certain activities.
 
Mainland companies are subject to the UAE Commercial Companies Law and other federal laws and regulations.
 
Mainland companies have access to a wider range of business opportunities in the UAE market and can participate in government tenders and projects. They are also allowed to rent office space almost anywhere in the UAE. However, they are subject to UAE labor laws and must follow the guidelines set by the Ministry of Human Resources and Emiratisation. Furthermore, all mainland companies are subject to the 9 percent corporate tax bracket for yearly profits exceeding 375,000 AED from the 1st of June 2023.

To obtain a residence visa to the UAE, you generally need to follow these steps:
 
Secure a job offer or establish a business in the UAE:
 
The most common way to obtain a residence visa is to secure a job offer from a company in the UAE or to establish a business in the country.
 
Apply for a residency permit:
 
Once you have a job offer or have established a business in the UAE, your employer or business partner can apply for a residency permit on your behalf. You will need to submit the required documents, including your passport, passport photos, medical test results, and a police clearance certificate.
 
Undergo a medical exam:
 
As part of the application process, you will be required to undergo a medical exam to ensure that you are in good health and do not have any communicable diseases.
 
Obtain an Emirates ID:
 
After your residency permit is approved, you will need to obtain an Emirates ID, which is a national identity card that is mandatory for all residents of the UAE.
 
It’s important to note that the specific requirements and procedures for obtaining a residence visa may vary depending on the individual’s circumstances and the type of visa being applied for. It’s advisable to seek the advice of a qualified business consultant for guidance on the visa application process.

To get a business bank account in Dubai, you generally need to follow these steps:
 
Choose a bank:
 
Research different banks and their offerings in the UAE, and select one that best meets your business needs. Alternatively, let a professional business consultant choose the right option for you based on the information you have provided him.
 
Prepare the necessary documents:
 
You will need to provide various documents to the bank, including your company’s trade license, memorandum of association, articles of association, passport copies of the company’s owners and directors, and a bank reference letter.
 
Schedule a meeting with the bank:
 
Contact the bank to schedule a meeting with a representative to discuss the account opening process and requirements.
 
Attend the meeting:
 
Attend the meeting and provide the necessary documents, as requested by the bank. You may also be required to provide additional information about your business, such as its nature, purpose, and expected cash flow.
 
Complete the application process:
 
After the meeting, the bank will review your application and documents. If approved, the bank will provide you with the necessary paperwork to sign, and you will need to make an initial deposit into the business bank account in Dubai.
 
Activate the business account:
 
Once the paperwork is signed, and the initial deposit is made, the bank will activate your account, and you can begin using it.
 
It’s important to note that the specific requirements and procedures for opening a business bank account in Dubai may vary depending on the bank and the type of company you have. In addition, it is worth mentioning that banks require a personal visit to the UAE to complete the account opening process. It’s advisable to seek the advice of a qualified professional business consultant for guidance on the business account opening process in Dubai.
 
Fill out our contact form if you want to hear how we can help you get a business bank account in Dubai.

In the United Arab Emirates (UAE), there is a federal corporate tax rate of 15% on the profits of companies operating in the oil and gas industry, as well as branch offices of foreign banks.
 
However, there has been no federal corporate tax on the profits of other businesses in the UAE so far. On the 1st of June, this will change since businesses in UAE will have to pay a 9 percent corporate tax on the profits of their business in the UAE that exceed 375,000 AED, which is equivalent to approximately 100,000 USD. Even though the corporate tax scheme also applies to free zone companies it will be possible for free zone companies in certain circumstances to avoid paying any corporate tax.
 
Fill out our contact form if you want to hear how we can help you optimize your company structure and thereby minimize your company`s corporate tax payments.