The United Arab Emirates is the federation formed in December 1971 with Dubai, Abu Dhabi, Sharjah, Fujairah, Ajman, Ras al Khaimah and Umm al-Quwain.

Dubai is the largest city in the Middle East that has several opportunities for allowing foreign investors to set up different kinds of companies. The city has many opportunities and develops constantly. Besides these, the Middle East is the largest oil exporter of the world. No taxes are levied indirectly or directly on individuals and citizens living in Dubai. Therefore, this attracts people to register a company in Dubai.

Dubai has a designated area for different kinds of registration activities that has compliance. This area is called the Dubai International Financial Centre (DIFC). The Middle East has different kinds of financial centres that facilitate different activities in Dubai. There is no form of restriction if it comes to foreign ownership of the company. The shareholders and directors of a company that registered in Dubai have the complete ownership. The Law No. 2 from the Federal Commercial Companies of 2015 mentions that an outside company has jurisdiction of DIFC to comply with the needs of foreign ownership. It means 51% of ownership is obtained to the individual who is an UAE resident.

Ownership in reference to a company must be categorised as per the citizenship. UAE nationals can control 51%. This entity forms get controlled by an UAE national. This kind of foreign investment restrictions are removed from sectors from 2018.

From the taxation aspect,the indirect taxes like VAT are present in Dubai. It is considered as the value added tax that charges 5% of goods and services provided in Dubai. No individual income taxes are charged for employees who work in Dubai. All these benefits are a promising option for an investor to do the company registration in Dubai.

The regulatory authority for Dubai company formation is through the Registrar of Companies. The registrar can act as the unified authority to carry different kinds of registration and compliances related to companies. The application for Dubai’s company registrar goes towards the registrar of Companies.

Following areas are selected for Dubai’s company registration:

• Inside DIFC – This is the best option for an investor to form a company. There are various benefits to choose this area such as the inclusive company registration process or an ease of compliance. No restrictions happen for the foreign ownership of the company. The shareholders and directors of Dubai’s registered company can have 100% foreign ownership.
• Outside DIFC- It is the jurisdiction that is outside of DIFC. The company can be incorporated outside DIFC. The Law No. 2 of Federal Commercial Companies of 2015 mentions the company out of DIFC jurisdiction must comply with the needs of foreign investment.

Ownership aspect in reference to the company must be categorised on citizenship. UAE nationals can control 51% of this. It has entities controlled by the nationals of UAE. These restrictions are removed from several sectors in 2018.

Following are the added benefits for Dubai’s company formation:

Regulatory Environment

Dubai courts have the common law system. But the precedents of court cases get handled by the Dubai’s lawyers who have UK and US legal qualifications. Dubai has a unique style of regulation.

Complete Foreign Ownership

Foreign Ownership of a company registered in Dubai DIFC can be 100%. So the shareholder or a foreign investor has 100% equity ownership in the company.

Ease Of Compliance

Less compliance for Dubai as compared to other jurisdictions.

Less Tax Burden

Direct tax is levied on an individual that is less if compared to the indirect tax amount. Indirect taxes like VAT can be present in Dubai. It is considered as the value added tax that is charged for 5% on services and goods that are provided at Dubai. No kind of individual income tax is charged on Dubai’s working employees.

These structures are used to register a company in Dubai:

• Company gets limited by shares – this form of company is called a private limited company having specific shares.
• Limited Liability Company- this limits the shares amount.
• Branch Office- this kind of company is located outside of Dubai. The office opened at Dubai can carry out operations.
• DIFC transferred Company- It is transferred from non-free zone to a free zone. For instance, the transfer of non DIFC centres to a DIFC centre.
• Limited Liability Partnership- called as LLP has the Partnership entity that is managed by many partners. Liabilities of partners can be limited.

It is the partnership entity of a foreign owned company that is controlled by shareholders of majority foreign citizens.

The most important are:

Licensing Requirement – the company that forms a basic purpose to carry few activities. Three kinds of licenses are given for a company registered in Dubai. They are:

• Commercial licenses having all types of trading activity.
• Professional licenses that cover services, professions, artisans and craftsmen.
• Industrial License to manufacture or establish industry.

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The local sponsor needs to do the company registration in Dubai. It is essential for the individual to choose a local sponsor. You can set up business in dubai free zone with help from business consultants at blackswan. These individuals can have profit sharing agreements by local profits and a few sharing ratios to get decided by the parties.

If the applicant chooses to register a company in Dubai, the business structure can be used by the applicant. Lot of disadvantages and advantages can be chosen from this business structure.

The applicant can select a sponsor from the UAE. It is essential to satisfy the Law No 2 of Federal Commercial Companies of 2015. The UAE national can control the 51% ownership, when the applicant likes to set up the outside company from DIFC.

To set up an office within DIFC, the applicant doesn’t need any sponsor. But it can be beneficial to find the sponsor. Then the applicant can transfer the company. The applicant has to reserve the company name with DED. A requisite fee must be paid by the applicant to reserve the company’s name. They have to draft the articles of association and memorandum of association for the company. This is downloadable from the Companies Registry. Once the drafting gets complete, the application and documents are forwarded to DED and the Companies Registry. They process the related documents. The company then receives the incorporation certificate for carrying out the mentioned activities in Dubai. Then they can choose the license form for carrying out their business. They are:

• Commercial license for many types of trading activities
• Professional license to cover artisans, professions, services and craftsmen
• Industrial License to manufacture and establish industries.

• Business plan of AOA and MOA duly notarised by their authorities
• Business managers passports
• Sponsor’s passport (either UAE national)
• National NOC from Sponsor
• Bank’s reference letter for every shareholder

For Industry License

• Copy of Feasibility Study
• Company’s existing profile
• Information of the investor

Know more about Industrial Licence in Dubai

For Branch Offices Set Up

• Incorporation Certificate attested copy
• AOA and MOA
• Board Resolution Of Company
• Three months bank statement of parent company
• Original Power Of Attorney and Passport Copy.