Everything You Need to Know About IT Company Formation in Dubai

Setting up an IT business in Dubai has become more lucrative than ever due to the recent surge in demand for tech-related services across the world. Every business in Dubai and other parts of the world are desperately trying to adopt digital transformation as the COVID-19 pandemic posed a grave threat to business continuity. Digital transformation has become an absolute necessity as remote working and virtual conferencing have become the new normal.

The process of IT company formation in Dubai is an attractive prospect for the investors as the emirate has been ahead in developing an ecosystem for the tech industry. The business setup consultants in Dubai recommend the entrepreneurs to invest in the IT sector as the emirate offers plenty of business setup opportunities in both mainland as well as free zones.

Why the Business Setup in Dubai is Perfect for IT Businesses?

Dubai is a land of opportunity that strongly support the businesses from a variety of industries due to its strategic location, supportive policies by the government, ease of doing business, and the thrust given to future-ready technologies an digital transformation. The procedures of business setup in Dubai are highly streamlined and well-regulated and the investors need not worry about red-tapism.

Also, the Dubai government has a dedicated strategy named Smart Dubai 2021 which aims to make the city a hub of future-ready technologies by 2021. The strategy’s goal of making digital transformation a reality has proven to be successful and beneficial for the growth of IT companies. On the back of a highly conducive atmosphere, the process of business setup in Dubai offers immense opportunities for the IT companies.

Where to Setup a Business in Dubai: Mainland or Free Zones?

One of the key decisions the IT companies have to make while initiating company formation in Dubai is about the jurisdiction to set up the business.  There are easy and affordable opportunities for business setup in Dubai mainland and the free zones. The procedures and regulations of company formation in Dubai free zones vary from that of the mainland. The mainland company formation in Dubai provides the IT companies with the opportunity to deliver their services across the UAE. However, the business set up regulations in free zones allows the companies to trade within the free zones or globally. This is a strategic decision and the investors need to hire the best business setup services in Dubai while finalizing on the jurisdiction to set up their business.

How to Initiate Company Formation in Dubai Mainland?

The company formation in Dubai mainland is being controlled and regulated by the Department o Economic Development (DED). The businesses in the IT or tech-related sector need to apply for company registration in Dubai DED through a highly regulated process.

To obtain a license issued by the DED, the IT companies need to consult with prominent business setup services in Dubai who help in eliminating any possible roadblocks during the process. Since the IT sector is a service-oriented business setup, the investors need to obtain a professional license in Dubai. Companies with a professional license can enjoy the benefit of 100% ownership by appointing a Local Service Agent (LSA). The following steps are to be followed to complete the IT company registration in Dubai Mainland.

1. Choose a Business Activity

To initiate the procedure of business setup in Dubai Mainland, it is mandatory to choose the business activities listed by the DED. The DED has listed more than 2,000 activities on its website and the IT companies need to select the appropriate business activities. Conducting any activity that is not listed under the license would attract penalties. To avoid the confusion regarding the activities, it is recommended to consult reputed business setup services in Dubai.

2. Select a Legal Structure

Depending on the business requirements and the number of shareholders, the companies need to determine the right company structure. The LLC is the most popular type of company formation in Dubai mainland, where the owner holds 49% share and a UAE national who acts as a local sponsor is required to have at least  51% of the shares. The IT companies can opt for other legal structures such as sole establishment for company registration in Dubai. The IT entrepreneurs can have 100% ownership if they appoint an LSA.

3. Reserve a Company Name

The IT companies need to reserve the name of the company after determining the legal structure. The companies need to strictly follow the regulations regarding the company name registration in Dubai. The business setup consultants in Dubai, UAE recommend that the trade name should be connected with the company structure and business activity of the company as consumers can relate easily with the business.

4. Apply for Initial Approval

The companies can go ahead with the process of business setup in Dubai if the DED has no objection. Apply for an initial approval with the DED with the right documents and the authority will issue an Initial Approval Certificate. The DED also asks for approval from concerned Ministries for certain special activities such as

  • Legal
  • Audit
  • Banking
  • Transportation
  • Insurance
  • Tourism
  • Engineering
  • Oil & Gas

5. Rent/ Lease Office Space

After getting the approvals, the companies need to rent or lease office space. This is a mandatory requirement as the DED stipulates that the companies in Dubai must have a physical address. Virtual offices are not permitted for company registration in Dubai. The entrepreneurs need to sign a tenancy contract with the landlord and get it registered with Ejari for attestation. Business setup consultants in Dubai will execute all the important documentation processes for IT entrepreneurs.

6. Collect the License

In the final stage, the companies should submit documents including initial approval receipt, copy of leasing contract attested by Real Estate Regulatory Agency (RERA) in Dubai, duly attested LSA contract, etc. to the DED. After submitting the documents and the government fee, the DED will issue the license upon verification of the application.

Opportunities for Business setup in Dubai Free Zones for IT Companies

Unlike the mainland company formation in Dubai, the free zones offer a much simplified and cost-effective business setup process for the IT companies. The procedure of company incorporation in Dubai free zones mostly involves simple steps. However, the most crucial step is the selection of the right free zone. The free zones are regulated by different free zone authorities with varying regulatory structures.

Almost all the free zones in Dubai offer business setup opportunities for IT companies. However, the entrepreneurs can also set their business in industry-specific free zones that focus on IT & Tech related companies. The following are some of the free zones that are specifically designed for the IT or Tech sector. The following are the major Tech-Free Zones in Dubai:

1. Dtec by Dubai Silicon Oasis

The Dubai Silicon Oasis (DSO) free zone has been formed as the UAE’s answer to Silicon Valley in the US. Launched in 2004, DSO has grown to be one of the fastest-growing free zones for the Tech companies. The DSO recently launched the DTec, which is the largest tech startup centre in the region. Dtec offers the best platform for tech entrepreneurs to launch their business and scale-up.

2. Dubai Internet City

Launched in 2000, Dubai Internet City one of the leading free zones that have become a hub for the IT companies and startups. The Dubai Internet City Free Zone offers ultra-modern infrastructure and a faster process of company incorporation. The Dubai Internet City free zone is home to over 1,600 companies forms more than 160 nations. It offers flexible co-working spaces, commercial spaces, and innovation centres with all the facilities and amenities.

Why Choose Jitendra Business Consultants?

The importance of the IT industry has grown across the world as nearly all the businesses have been forced to adopt digital transformation due to the fast spread of the COVID-19 pandemic. Though the pandemic precipitated a grave crisis with health and economic implications, sectors like the IT industry has been able to create fresh opportunity. In this scenario, the IT company incorporation in Dubai makes business sense. Since the company formation in Dubai is a strategic decision, the investors require the assistance of reputed business setup consultants in Dubai such as Jitendra Business Consultants (JBC).

JBC helps the investors in selecting the right jurisdictions (mainland or free zones) thereby making the process of company incorporation in Dubai a hassle-free affair. JBC has a team of highly qualified business setup consultants who ensures that the entrepreneurs are being assisted in all the steps right from registration to company incorporation in Dubai, UAE.

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