Company Formation

Why is Business Set up in Dubai a Strategic Decision?

Are you on the considering to grow your business to a whole new level – maybe abroad? Then the commercial capital of the UAE, Dubai, is the best available choice for you in the entire Middle East. Home to at least 200 nationalities, Dubai has emerged as a business hub over the last decade and comprises of more than twenty Free Trade Zones (maximum in any Emirate in the UAE).

The benefits and perks that are offered by these Free Zones legit ? make it a strategic decision on the investor’s part to choose Dubai for the business set up in the UAE. However, an expert opinion is a prerequisite when it comes to business set up in Dubai, owing to the number of choices available to the investors such as Free Zones, mainland or offshore and due to unwritten laws.

What are the Choices Available to the Investor?

An investor might choose from amongst the Free Zones, Mainland and Offshore when it comes to the business set up in Dubai. The Free Zones act as a magnet for investors involved in almost all kinds of businesses. The investors enjoy world-class facilities coupled with modern technology. However, they are generally recommended for business outside Dubai, UAE.

The UAE offshore such as JAFZA offshore or RAK offshore are suitable when it comes to doing business outside Dubai in addition to buying freehold properties. For the investors interested in business within the UAE, it is recommended that they open mainland LLC companies. An important point to note when it comes to Limited Liability Company (LLC) is that a 51% UAE national partnership is a must. Only the remaining 49% of the shares can be held by foreign partners.

What about the Investors Involved in Special Activities?

 Some investors might be engaged in “special activities” such as construction and engineering, oil trading, sports, insurance, health, medical and auditing. While it is recommended for such investors to go for a mainland LLC, they should also be well-aware of the fact that there are certain bodies and ministries regulating these special activities which have their own set of rules, regulations and requirements.

Understanding these  regulations and requirements is essential for such investors. In addition to this, they must also understand that the visas are linked to space, activity and legal structure. Moreover, as opposed to international practices, Dubai has a unique approach when it comes to the issuance of trade licenses which must be properly comprehended by the investors, for example activities are classified and pre-numbered. There is a restriction on the activities to be added in the one trade licenses. Trading and consultancy services cannot be put together in the same trade license. Trading license is divided into normal trading and general trading licenses. Manager is very important and his or her name must be mentioned in the trade licenses.

What are the Factors to be Taken into Consideration When it Comes to Business Set up in Dubai?

For the investors interested in Business set up in Dubai, UAE, the following factors must be given due consideration before making a final decision:

  1. Activity: The nature of activity in which the investors are interested.
  2. Geographical Area: The scale of the business concerning the geographical area is required. In addition to this, it also pertains to the fact whether the business is within the UAE or outside the UAE.
  3. Visas: The number of visas that are required, as visas are linked with the space. For every 9 sq. meter one visa is issued. Visas are also linked to the activity ( Construction, supermarket and restaurant gets more visas) and legal structure ( LLC company gets more visas then professional company and establishment)
  4. Facilities: The nature of facilities required by the investors viz. office, warehouse or plot.
  5. Legal Structure: Basically the understanding of the legal structure of the company.
  6. Free Zone/ Mainland/ Offshore: The main choice as to where the company has to be set up, which depends upon the 2, above, geographical activity. Free zone is suitable for business outside UAE and Mainland is suitable to serve clients within the UAE and for special activities. Jafza Offshore company is not allowed to do the business in Dubai, UAE, it can hold free hold property in Dubai. Jafza offshore doesn’t entitles to visas.

Thus, Dubai is indeed a strategic choice when it comes to business set up in the UAE.

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