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Conditions for establishing a company in the Emirates

١٦ أبريل Conditions for establishing a company in the Emirates

What are the requirements for establishing a company in the Emirates? The United Arab Emirates is considered one of the preferred destinations for investment and business worldwide, thanks to its advanced economic environment and diverse business facilities. Establishing a company in the Emirates requires compliance with a number of conditions and procedures that vary depending on the type of company and the location in which it will be established. In this article, we will review the basic requirements for establishing a company in the Emirates, including licensing requirements, partners, capital, and location, which helps investors make informed decisions on their journey towards establishing their own businesses in this dynamic market.

Conditions

Conditions for establishing a company in the Emirates

Establishing a company in the UAE requires following a set of conditions and procedures. Here are the most important of these conditions:

  1. Choosing the type of company: The investor must determine the type of company to be established, such as a limited liability company, a joint stock company, or a branch of a foreign company.
  2. Determine the business activity: The business activity that the company will carry out must be determined, as this affects the type of license required.
  3. Choosing the location: The area in which the company will be established must be chosen, whether it is a free zone or a commercial area within cities.
  4. Required licenses: Obtaining a commercial license from the local economic department or the competent authority in the free zone. This requires submitting the necessary documents and paying fees.
  5. Partners: In the event of establishing a limited liability company, there must be a local partner who owns 51% of the company’s shares, except in free zones where foreigners can own 100%.
  6. Capital: The amount of capital required to establish the company must be determined, which may vary depending on the type of activity and location of the company.
  7. Required Documents: A set of documents such as passport, residence visa, and academic certificates if required must be submitted.
  8. Opening a bank account: It is required to open a business bank account to deposit capital.
  9. Company Registration: After completing all procedures, the company must be officially registered and the necessary certificates obtained.
  10. Business Procedures: After incorporation, legal procedures such as issuing business cards and registering employees must be adhered to.
  11. These terms help investors understand the requirements for setting up a company in the UAE, making it easier for them to start their business in a thriving business environment.

Steps to establish your company in the Emirates 

Establishing a company in the UAE requires following specific steps to ensure compliance with local laws and regulations. Here are the basic steps to establish a company in the UAE:

  1. Specify the company type: Choose the company type (such as a limited liability company, a joint-stock company, or a branch of a foreign company).
  2. Choose the business activity: Select the business activity you wish to do, as this affects the type of license required.
  3. Determine the location: Choose the location of the company, whether in a free zone (where you can have full ownership) or an area within the city (where a local partner is required).
  4. Choosing a company name: Choose a distinctive name for the company that complies with local laws, and make sure it is available by searching the commercial register.
  5. Obtaining initial approvals: Submit an application for initial approvals from the Economic Department or the competent authority.
  6. Prepare the required documents: Prepare the necessary documents such as passports, CVs, business plans, and partner information.
  7. Open a bank account: Open a business bank account to deposit the required capital.
  8. Signing the Articles of Association: Sign the Articles of Association with the partners, if required, and prepare the necessary documents.
  9. Submitting applications: Submit all required documents to obtain a commercial license, including bank registration documents.
  10. Obtaining a commercial license: Wait for the applications to be reviewed and obtain the commercial license from the Economic Department.
  11. Company Registration: Officially register the company with the Ministry of Economy.
  12. Business Procedures: After establishing the company, obtain business cards, employee register, and comply with other legal procedures.
  13. Additional Insurances and Licenses: Make sure to obtain any additional insurances or licenses you need depending on the type of business you are operating in. By following these steps, you can successfully set up your company in the UAE and start your business.

Advantages of establishing a company in the Emirates

Establishing a company in Dubai , UAE offers many advantages that make it a preferred destination for investors and businessmen. Here are the most prominent of these advantages:

  1. Encouraging business environment: The UAE offers a dynamic and supportive business environment, with flexible laws that encourage investment.
  2. Full ownership: Free zones allow foreigners to fully own their companies without the need for a local partner.
  3. Tax Exemptions: Companies in free zones enjoy tax exemptions, as there are no taxes on profits or personal income.
  4. Ease of procedures: Investors enjoy easy and quick establishment procedures, with support from specialized government agencies.
  5. Advanced infrastructure: The UAE provides a modern infrastructure that includes road networks, airports and ports, which facilitates the movement of trade and transportation.
  6. Strategic Location: The UAE is located in a unique geographical location that provides access to the markets of the Middle East, Asia and Africa, facilitating regional expansion.
  7. Diversification of the economy: The UAE economy includes multiple sectors such as tourism, real estate, technology, and trade, which provides diverse investment opportunities.
  8. Investment incentives: The UAE government offers investment incentives to investors in certain areas such as innovation and technology.
  9. Intellectual Property Protection: The UAE has strong intellectual property protection laws, ensuring the rights of businesses and investors.
  10. Efficient workforce: The UAE offers a skilled and diverse workforce, making it easy to hire qualified employees. These advantages make setting up a business in the UAE an attractive option for aspiring investors.

Conditions

Free zones in the Emirates

Free zones in the UAE are one of the most prominent factors that contribute to attracting investors and businessmen from all over the world. These areas allow foreigners to own companies 100%, which enhances their attractiveness as an ideal destination for investment. Free zones include “Dubai Investments”, “Jebel Ali”, and “Sharjah”, which provide a flexible and encouraging business environment. Free zones also feature attractive tax exemptions, as no taxes are imposed on profits or personal income, which contributes to enhancing profitability. The government also facilitates incorporation and licensing procedures, making the process of establishing companies easy and fast. These areas provide advanced infrastructure, including modern ports and road networks, which ensures easy access to global markets. Free zones are also a hub for innovation and technology, as start-ups and technology companies are supported through investment incentives and government support. In addition, these areas contribute to diversifying the national economy by attracting new investments in various fields such as technology, industry, and trade. The presence of an integrated and flexible business environment makes free zones in the UAE the ideal choice for investors seeking to achieve success in the global business market.

Types of companies in the UAE

There are many types of companies in the UAE, providing a variety of options for investors and businessmen. Here are the most prominent types of companies available:

  1. Limited Liability Company (LLC): Consists of two or more partners, with each partner’s liability limited to the extent of his share in the capital. Requires a local partner owning 51% of the shares (outside the free zones).
  2. Public Joint Stock Company: Its shares can be offered for trading in the financial market, and requires a minimum capital. It consists of 5 or more persons.
  3. Private Joint Stock Company: Similar to a joint stock company but its shares cannot be publicly traded. The number of partners must be between 3 and 50.
  4. Branch of a foreign company: Foreign businesses can establish a branch in the UAE without the need for a local partner, provided they obtain the appropriate license.
  5. Sole Proprietorship: It is considered a sole proprietorship, as it is owned by one person who is responsible for all obligations. It does not require a local partner in free zones.
  6. General Partnership: Consists of two or more partners, and the partners are jointly and severally liable for the company’s obligations. Requires a local partner.
  7. Civil company: Mainly used in fields such as law and medicine, it is considered a partnership between a number of professionals.
  8. Free zone companies: They offer full foreign ownership, tax exemptions, and are suitable for investment in certain areas.
    Each type of company has advantages and disadvantages, so it is important to choose the type that best suits your business goals and market requirements.

In conclusion , the diversity of options available to investors and businessmen from different backgrounds and sectors is evident. Each type of company offers unique advantages, enabling individuals and businesses to choose the structure that best suits their business goals and strategies. From limited liability companies to joint stock companies and branches of foreign companies, the UAE offers an investment-friendly environment with legal and procedural facilities that help speed up the process of establishing a business. Understanding these types helps investors make informed decisions, enhancing their chances of success in the dynamic UAE market. Thanks to its flexible business environment and advanced infrastructure, the UAE remains one of the leading investment destinations in the region and the world.

Frequently asked questions about types of companies in the UAE