Types of Company Formation in Dubai : Complete Guide 2024

types of company formation in Dubai

Table of Contents

Dubai is a great place known for its strong economy and modern facilities. It is a hub of business with an easy and friendly business setup, with diverse mindsets, and the government here also lends its support to new ideas.

Setting up a company in Dubai is like opening the door to lots of business opportunities in the Middle East. There are different types of company formation in Dubai, but choosing the right one is very important.

Types of Company Formation in Dubai

Choosing the right way to set up your business is super important. It affects things like how you pay taxes, how much paperwork you have to do, and how you share your profits. These decisions have legal consequences, so it is smart to play safe, if you are looking to get advice from a legal pro RFZ is there to help you and guide you to make a decision that will be beneficial.

Company Formation in Dubai

 

1. Free Zone Company Setup in Dubai

Free Zones in the UAE are special areas where businesses can trade goods and services with fewer customs rules. They are designed to attract foreign investors and offer benefits to international companies. One of the main advantages is that foreign investors can have full ownership of their businesses. Starting a company in these zones is also affordable.

Each Free Zone in the UAE has its own set of rules and regulations. They are managed by their respective authorities and operate separately from the federal laws of the Ministry of Labor.

Free Zones are also suitable for freelancers who want to start their own businesses without the constraints of working for a single company.

Advantages of Setting up a Company in Dubai Free Zones

Following are the advantages of setting up a company in Dubai Free Zones:

I. Full Ownership for Everyone: You can completely own your business in Dubai Free Zones, no matter where you’re from. Your nationality doesn’t matter.

II. Take Your Money Home: If you make money with your business, you can take all of it back to your home country. That is good news for foreign business owners.

III. No Trade Limits: Free Zone businesses can trade freely, both within the Free Zone and with international partners. There are no limits on how much business they can do.

IV. Simple Company Setup: Setting up your company in a Free Zone is straightforward. It is faster and easier than in many other places.

V. Use Any Currency: You can use any kind of money you want for your business transactions. There are no restrictions.

VI. Easy Immigration: If you need to deal with immigration for your business, it is a straightforward and stress-free process. Having RFZ experienced advisors can make it even simpler for you.

2. Mainland Company Formation in Dubai

Starting a company in Dubai Mainland can be a great investment. Mainland companies in Dubai can do business all over the city and have more freedom. To do this, you need a special license from the DED.

A new law in 2021 changed the rules. Before, if you were not from the United Arab Emirates (UAE), you could only own up to 49% of your company, and an Emirati person or company had to own the other 51%. But now, foreigners can own 100% ownership of the company without needing an Emirati partner.

This change allows you to grow your business across Dubai and the UAE. To start any type of business in the UAE, you need a license for either commercial, industrial, or professional activities. We, at RFZ, can help you get the right license and save you time and money while following all the rules from the Dubai government.

Advantages of Setting up a Company in Dubai Mainland

Following are the advantages of setting up a company in the Mainland:

  1. Freedom to do business in any part of the UAE without any restriction
  2. Ability to deal with the UAE or GCC government contracts
  3. Office premises anywhere in Mainland Dubai
  4. No limit on the number of visas (depending on the size of the office space)
  5. No minimum capital is required
  6. Ability to create a flexible startup
  7. 100% repatriation of capital and profits
  8. More options for business activities
  9. Easily Bank account opening
  10. Ability to trade internationally and expand your presence

3. Offshore Company Formation in Dubai

An offshore company in Dubai is a type of business that is set up outside where it was first registered. Since 2003, Dubai in the UAE has become a popular place for these kinds of companies from all over the world. People start these companies for different reasons.

Both individuals and larger companies can own an offshore company. But, these companies can’t do much business in the place where they are registered. Offshore company set up in Dubai is different from other types of companies there because you get a Certificate of Incorporation instead of a usual business license.

This makes the setup process quicker. Offshore companies follow international laws and have their own set of rules. The experts at RFZ can help you understand and manage the process of starting such a company. They make sure your company is set up the right way for what you want to do. RFZ knows a lot about an offshore company setup in Dubai, UAE, which helps them understand and meet your business needs.

Advantages of Setting up Dubai Offshore Company

Following are the advantages of setting up an Offshore Company in Dubai:

I. Owned by Foreigners: People from other countries can fully own their companies in the UAE, giving them complete control over their business.

II. Privacy: If you want to keep your business details private, starting a company in the UAE is a good choice. The names of the people in charge and the owners are kept secret, but they need to be shared with the Company Registry.

III. Protecting Assets: In the UAE, your business’s assets are well protected, but the details depend on which part of the UAE your company is in.

IV. Lower Costs to Run the Business: These companies in Dubai don’t have as many rules about reporting. This means they might not need a real office or many staff to follow rules, which can save a lot of money.

V. Strong Legal Support: The UAE laws help protect offshore companies and keep personal assets safe if there are legal problems.

VI. Bank Accounts in Different Currencies: Companies in Dubai can open bank accounts that handle different currencies. This makes it easier to do business internationally and keeps their money safe.

Types of Company Structure in Dubai, UAE

The following are types of company structure that is allowed in Dubai, UAE:

1. Sole Proprietorship

This is when you own and run the business by yourself. You are responsible for everything.

Partnership:

 You can team up with others to start a business. There are two types:

  • General Partnership: Everyone in the partnership is fully responsible for the business.
  • Limited Partnership: Some partners have limited responsibility, meaning they are only responsible for what they invest.

2. Limited Liability Company (LLC)

It is a common choice. You and other owners (called members) have limited responsibility, and it is good for small to medium-sized businesses.

3. Joint Venture

This is like a partnership, but for a specific project. It can be between local and foreign companies.

4. Public Joint Stock Company (PJSC)

This is for big companies with shares that can be bought and sold on the stock market.

5. Private Joint Stock Company (PrJSC)

Similar to PJSC, but with some restrictions.

6. Branch or Representative Office

Foreign companies can open these to do specific things in the UAE. There are rules and limits.

The requirements and rules can vary depending on where in the UAE you want to start your business and what kind of business it is. It is a good idea to get advice from an RFZ expert to understand what is best for you. Rules can also change, so staying updated is important.

Conclusion

In Dubai, there are three jurisdictions to start a company.  You can go for Mainland, Free Zone or Offshore and RFZ can help you decide which area will be the best choice for your business. Each jurisdiction has its own benefits, especially regarding taxes and how much responsibility you have. It is important to carefully think about your goals and resources before deciding. No matter what you opt for, it will be the foundation for your business success in Dubai busy business scene.

FAQs

1. What is the difference between an LLC and a sole establishment in Dubai?

Ans. LLC vs Sole Establishment in Dubai:

  • LLC: A company with shared ownership. Owners’ risk is limited to their investment.
  •  Sole Establishment: Owned by one person who takes all the risk, including personal assets, if the business fails.

2. What is the difference between a Free Zone Company and an LLC in UAE?

Ans. Free Zone vs LLC in UAE:

  • Free Zone Company: Owned by foreigners, can fully own it, and gets tax benefits. Mainly for business outside UAE or in special zones.
  • LLC: Can do business all over the UAE.

3. What is the difference between Mainland and Free Zone UAE?

Ans. Mainland vs Free Zone in UAE:

  • Mainland: Can operate anywhere in UAE with 100% ownership
  • Free Zone: For foreign businesses in special areas, with benefits like full ownership, but limited to working within those zones or internationally.

Set Up Your Company with RFZ

If you are planning to set up a company in Dubai and are confused about the jurisdiction, RFZ is the company that can assist you in finding the best type.

At RFZ, we offer personalized help to people according to their requirements. We can assist with everything from creating a company to managing finances and ensuring you follow the rules.

Our experienced team. We will give you trustworthy advice at every step of your business journey in the UAE.

Are you ready to make your business dreams a reality? Partner with RFZ, and let us do it together.

For a free consultation, contact us at +971 4 589 0815. You can also send us a WhatsApp message at +971 4 589 0815 or email your questions to info@rfz.ae. We are here to assist you!

Umber Awan
Umber Awan

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