The United Arab Emirates (UAE) is a popular destination for businesses looking to expand their operations in the Middle East. Apart from an obvious geographical advantage, the country offers a favorable business environment, a stable political and economic climate, and tax exemptions.
Here are the essential steps for a Company Formation in the UAE that are generally followed-
● Selecting the type of company
The UAE offers several options for company formation, including a limited liability company (LLC), a free zone company, an offshore company, and a branch office. Each type of company has its advantages and requirements, and the choice will depend on the business needs and objectives.
● Identifying the business activity
Businesses must select a specific set of activities they want to engage in when registering a company in the UAE. The chosen operations will determine the type of license and approvals required from the relevant authorities.
● Finding a local sponsor or service agent
For most types of companies, a local sponsor or a service agent is required to provide support and assist with the registration process. Please note- the sponsor or service agent selected must be a UAE national or a UAE-owned organization.
● Registering the company name
All new businesses must register a unique name for their company with the Department of Economic Development (DED) in the UAE where the company will be situated.
● Obtaining necessary approvals and licenses
Depending on the type of activity and operations, new businesses may need approvals and licenses from multiple departments, such as the Ministry of Economy, the Department of Tourism and Commerce Marketing (DTCM), or the Dubai Health Authority (DHA).
● Renting office space
Companies must have a physical office space to operate in the UAE. This requirement can be fulfilled by renting a serviced office, a commercial space, or a virtual office depending on the staff size and business requirements.
● Obtaining visas and work permits
Companies must apply for visas and work permits for their employees through the General Directorate of Residency and Foreigners Affairs (GDRFA) in the relevant emirate.
● Opening a bank account & registering for taxes
All businesses are required to open a corporate bank account in the UAE to facilitate financial transactions. The UAE does not have a federal Corporate Tax, but they have introduced value-added tax (VAT) and excise taxes. Therefore, organizations should register for VAT and comply with the relevant tax laws and regulations.
Although the process of company formation in the UAE can be time-consuming and complex, it is recommended that businesses seek the assistance of a reputable consultancy/services firm like MarkAi Corporate Services to finish the process with minimum hiccups and ensure compliance with all the requirements and regulations.