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Setting up business in Dubai

Dubai offers an entrepreneur enough options to set-up business in quick time. Here are the various types of companies that you can establish:

1. Trading Company
2. Professional Practice
3. Industrial Company
4. Branch or Representative Office

There are two major categories of business licenses:

Dubai Economic Department License DED (requires a local partner)

Following are the types of licenses issued by DED:
1. Sole Establishment License (trading, manufacturing, services, import & export)

a. Requires a local partner
b. 100% ownership by local partner
c. You may act as a business manager and start your business
d. Not recommended unless you have a very reliable local partner, because everything will be on local partner’s name.
e. Cost of getting license is about AED 8,000 ($2185.00)
f. Local partner charges an annual fee for sponsorship. It varies from AED 8,000 to AED 15,000 per year.
g. Apart from this you need to rent an office space to start the business. It is a must and without renting office space you may not get business license.

2. Limited Liability Company (LLC) (trading, manufacturing, services, import & export)

a. Requires a local partner
b. 51% ownership by local partner
c. 49% share will be divided to the rest of the partners as per their investment.
d. Recommended as it gives you more security on your investment. The local partner cannot interfere with your business activity and act as sleeping partner. You have full control over your business. You have complete signing authority for all types of business transactions except for the new employee approval. You may have as many partners as you like, depending upon investment amount.
e. Cost of getting license is about AED 18,000 ($4,918.00.00)
f. Local partner charges an annual fee for sponsorship. It varies from AED 8,000 to AED 15,000 per year.
g. You will get partner visa status of 3 years and renewable there after as long as your company exists. You can live, do business, buy property, travel and live like a citizen in the country.
h. Cost of each partner visa is approx. AED 14,000 out of which AD10,000 is refundable when you close and cancel your business license.
i. Apart from this you need to rent an office space to start the business. It is a must and without renting office space you may not get business license.

For both types above trading licences, hiring each employee cost you Approx AED 7,500 out of which AED 3,000 is refundable when you fire an employee. Employee visa is valid for 2 years and can be renewed after 2 years for an amount of AED 3,500 approx.

Free zone License JAFZA (does not require a local partner)

UAE Free Zones are fully equipped and ready for business with all the amenities, communicational infrastructure and facilities made available for investors. The large number of free zones operating in Dubai and throughout the UAE allows investors to pick and choose the most beneficial form of setup.

Since no local sponsorship or staff recruitment essentials are imposed in free zones, the investor has the complete ownership of the business. Imported raw materials and equipment are exempt from customs duty and exports are free of any levies in free zones.

100% import and export tax exemptions
100% company ownership for investors
100% repatriation of capital and profits
Corporate tax exemptions for 15 years and a further 15 years upon renewal
Personal Income tax exemption
Assistance with all support services, such as staff visas, housing and facilities.

Most common types of companies are:

• Manufacturing
• Free Zone Company FZC
• Free Zone Establishment FZE



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