Dubai, UAE is one of the most sought-after business destination for anyone having just enough money in his pocket to invest and a business idea that is lucrative and can earn him great profit. And this number keeps on increasing every year. But what are the necessities for one to fulfill before  company formation in Dubai. This is one of the most frequently asked questions because each year a lot of individuals or organizations express their desire to open up their business here while companies abroad want to open up branches or extensions.

One must first become accustomed to the economy of the city and all the flourishing businesses. Aspiring businessmen and women ought to have a knowledge of the various categories companies in Dubai are grouped into and analyze each one. Also, they must familiarize themselves with the current market scenario and the impact that their business might have. Here are the rules and regulations and requirements for one to fulfill before opening up a company in Dubai.

Why Dubai?

A non aligned economic policy has been one of the key reasons why Dubai has remained over the years the goto place for businessmen and women. People from across the globe come to this place with Indians, Africans, and Europeans leading the list.

But what makes Dubai such a sought out option is that due to its non aligned economic policy companies around the globe have Dubai as their first choice for trade without the fear of reprimand from their economic block partners. Also, for any given product the market here is high compared to any other country. And Dubai has some of the most simple laws for company registration. Profit earned in Dubai for any foreign investor is higher as compared to other countries. Professionals once clearing themselves about the benefits now have to learn about the various companies they can open and licenses they can apply for and the various complexities involved.

Types of Licenses:-

The business licenses are divided into three broad categories namely the industrial, the trade and the professional license. Here is a breakdown of these:-

  • The Industrial License

People wishing to take up manufacturing roles in the country which includes conversion of raw materials or semi finished goods into finished products and/or assembling and packaging of the said product as well.

  • The Trading License


Generally if people are investing in state’s trdr areas or in a particular trade that involves either retail or wholesale trade throughout the country you may apply for these licenses. However, these also qualify for transport, hotels and general contractors.

  • The Professional License

These licenses are generally applied for professionals who provide services rather than investing in capital. Engineering, education, consultancy companies, medical practitioners and financial services providers all fall under this category.

Seeking professional help from company setting up experts in Dubai is always recommended as they will guide you on what license to apply for based on your business and how to go about the application process. Also you need an expert advice on what company to open up after having acquired the license.

Types of companies:-

There are only three type of companies you can open up. Ecah having its own advantages has its own set of regulations and requirements.

Offshore Company


With the cheapest requirements to open up a company and only a few legal restrictions opening of an offshore company in Dubai is the easiest. Exemption from the common tax valid for other companies is present while also it is not necessary to have an operating license in Dubai. And a virtual office with regular maintenance is all that is needed and no physical office space is to be kept. Anyone can be a shareholder or the owner or the manager. Foreign professionals exploit this rule as this means that you may be foreign owner and still get to enjoy all the benefits of an offshore company. However the only disadvantage here is that operations cannot be carried out in the Emirates. If you wish to do so you must liaise yourself with an onshore company. Nevertheless, offshore remains the easiest and the most cost friendly business in Dubai.

Onshore Company

Complete opposite of the offshore company, the restriction here is that all the operations have to be mandatorily carried out in the Emirates. They can deal directly with the retailers and don’t need to get themselves associated with a wholesaler. However employing business tactics they do so that their product is more quickly absorbed in the market. They are required to pay taxes to their respective legislative bodies. The limit for foreign parties on shareholding is 49 percent irrespective of field of operation. Registering an onshore company is the most tedious and complicates amongst all the companies. Hence it is recommended that you take help from professional company formation in Dubai.

Free zone Company


Dubai is no doubt one of the world leading freezone hubs. Again the process of forming a freezone company is much less complicated as compared to an onshore company. And the environment provided by each of these zones is favourable for startups and can be exploited in the best possible ways. Zero charges or corporation tax, 100% foreign ownership, rights go liquidate anytime and rights to perform multiple activities are some of the many benefits offered by freezones. However again you must seek help from expert company formation firms as opting to go by the registration process yourself can be tedious and you may miss out on a number of important steps.

These were the pointers to keep in mind before Dubai company formation. Even though Dubai may remain a favorite for professionals it has its own set of regulations that need to be followed.

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  1. james December 13, 2017 Reply