In Dubai, the three most coveted type of company setup are the mainland company setup, the offshore company setup and the Free Zone Company Setup. Although three of them can be set up in Dubai, all the three have different ways of going about doing it. A mainland company will certain pre-requisites which are not required for those who wish to get a company set up off shore and similarly for Free Zone Company. Every individual will have a reason for setting up their company, and this will determine whether yours will be mainland company or not. This article will specify all the aspects for each of the company as well as the other processes involved.
The Difference between onshore and off-shore Company in Dubai
Off Shore: It does not require a specific local sponsor not does it impose any regulations for foreign owners or the shareholders of the company.
On Shore: An on-shore company does not allow any complete foreign ownership and instead it specifies that there be a local sponsor who will be there and have a 51% percent stake in the company and without any obligation for financial capital investment.
Off Shore: An offshore company does not require to pay anyone corporate tax.
On Shore: An onshore company has the obligation to pay a certain amount of tax as per the laws in the UAE.
Off Shore: An offshore company cannot conduct their business inside the UAE.
On Shore: An onshore company can conduct their business inside the UAE
If you are looking to tap into the advantages that the tax systems and the incentives that come with the location so that you can sell to your markets abroad, then it is correct for you to create an off-shore company in Dubai. This sort of investment will require a lot of thorough research that gets a complete grasp of the business activities and the licensing requirements.
Free Zone Company Setup in Dubai
- It can be operated inside and outside the UAE
- Licensing is required
- There are no corporate taxes involved
- Requires a real office/warehouse
- It allows for anyone to be the director or shareholder
There are certain laws and regulations that have been enacted that must be complied by those who want to setup company in Dubai. Some of these laws include the Dubai Company Act, which enumerates all those companies which can be setup in Dubai.
- The LLC’s or the Limited Liabilities Companies
- The Private and Public Joint Stock Companies
- Branch Offices
- Free Zone LLC’s
- Free Zone Establishments
If you are a foreigner then you have to consider that all the following factors have indeed been taken care of:
- Minimum share capital requirements
- The shareholding structure
- Business Licensing Requirements
The Dubai Chamber of Commerce and Industry is the government organization that is tasked with issuing business licenses:
- Trade or commercial licenses
- Industrial Licenses
- Professional Licenses
For setting up a company in Dubai, there are still some more processes that you need to undertake before you can begin your operations legitimately:
- You need to draft and notarize the company’s memorandum and the articles of association
- You will need a corporate bank account
- If you are employing native workers, then you will have to register them with the Ministry of Labor
- You will also need to register them with the authorities of social security.
Then there comes the issue of getting VISA’s. If you want to land in Dubai and have residence over there, you will need to get a Residency VISA issued for you and your family. If you also plan to bring foreign workers, then you will need to get them VISA’s as well.
Indeed, setting up a company in Dubai is no walk in the park, but with the help of the right people and consultants who are experts in setting up business in Dubai, then you can get the job done.