You Want To Know Company Formation In Dubai?
Company Formation In Dubai is a procedural process involving many steps. These may be briefed as the selection of location, set up and the opening of bank accounts, registration documentation, and procurement of visas. Many of the business owners find these procedures difficult as they involve all the strict guidelines imposed by the government. For instance, they need to be aware of the varied business cultures and their operating patterns in Dubai, the different categories Dubai companies are grouped into and which category suits them best and is beneficial for them.
Thus, either it’s a new company formation or even starting a new branch of one’s existing company in Dubai, it can be intimidating with never-ending steps and regulations that are involved.
Before proceeding for Company Formation in Dubai, one needs to develop a business plan that sets out what to do and how to accomplish it. Below listed is a series of procedural steps to be followed in order to set up Company in Dubai:-
Step 1: Choosing the Type of Business and Activities-
Correct identification of the type of business and its varied activities is required for the effective running of the Company.
Applying for Business License
The business licenses that one needs to apply for is categorized into three types, namely; the industrial, trade and professional license. These are briefly explained as below;-⦁
The Industrial License
Those applying for this license are the industrial sectors referring primarily to those who wish to take up manufacturing as its major function. Activities here include, the converting the raw material or semi-finished goods into finished products with the aid of power or any other energy resource.
The Trading License
This license is to be acquired by a Company who would like to carry on the activities of Trading in the Country.
The Professional License
Service-oriented sectors of business, like, craftsmen, artisans, professionals, and financial services providers, would be applying for this type of license Dubai.
Thus, once the preferred type of business is settled along with the related type of license is applied; one should approach a reliable expert who would aid in the process of company formation in Dubai after the applied business license is granted.
Step 2: Choosing the Type of Company to be registered-
There are three types of Companies one can form in Dubai. Each one of them has their respective rules and procedural & documentation requirements for formation. These are:
In comparison to any other Company formation in Dubai, the process of forming an offshore company is the simplest and economical. Very minimal legal formalities are followed. The operating License for carrying out operations in Dubai need not be possessed by the Company. A physical structure called office is not mandatory. While forming the company, there is no restriction for a shareholder, director or promoter.
Being totally contrary to the offshore company, an onshore company varies in areas concerning its formation process and operations. The process of registering an onshore company is complex and tedious of all business registrations and incorporations. An onshore company is primarily set up to conduct business transactions internally. Both foreigners, as well as Dubai nationals, can become members and thus go about with the process of company formation in Dubai.
Free Zone Company
Dubai being among the worlds economic zone freehub makes it one of the most favorable locations in the Middle East. In comparison to the procedure of formation of an onshore company, company formation in Dubai for free zones is less complex. This also aids in varied new start-ups in different fields of business.
Step 3: Finding the Location
Dubai has more than 20 Free Zones, including Media City, Dubai International Financial Centre, and Dubai Airport Free Zone. Each of the Free Zone offers a variety of services and advantages that are suited to different types of businesses. Thus, one has to find out the ones suitable for their specific business needs and activities.
Step 4: Confirmation of the Registration & Start-Up Costs
In order to start a business in the Free Zone, the cost of first time registration along with the yearly renewal cost needs to be considered. One should carefully analyze all the costs to be incurred and need not opt for the cheapest option at the first glance since it might end up one paying more in the long run.
Step 5: Submission of Application Form
The Free Zone Application Form along with documents that include passport copies, visa copies, business plan, bank statements and the No-Objection certificate from the current sponsor, needs to be submitted.
Step 6: Approvals to be procured from the Regulatory bodies
Prior approval from departments such as the Irrigation Department, Environment Department and Ministry of Health before processing the application need to be obtained.
Step 7: Making payments and signing of Agreements
The initial registration fee needs to be paid. Some Free Zones allow the payment on the installment basis, but one has to be careful as it may lead to paying a lot more in the end. Once the payments are made, the relevant legal documents will be received that need to be signed in the presence of a Free Zone authority. Further, one will receive their Free Zone License and associated documents such as share certificates, certificate of incorporation etc.
Step 8: Further additional procedures
Further, opening of bank accounts, payment of share capital, maintenance of all the necessary documents and receiving all the relevant approvals and permits, if any.
Conclusion: In addition to this, the aspiring Business persons should make themselves totally aware of the market conditions at the time of application for registration of the company. They should know about the trade cycles and varied trends prevailing in the country which would have its effect on the task of Company Formation in Dubai.