Registration of a company in Dubai in 2020

This article provides insight on the types of companies which you can register in Dubai in 2020.

The number of companies is constantly growing in Dubai. 38 thousand new licenses have been issued. If you also wish to register a company in Dubai, read on.

In 2019, over 38 thousand new business licenses were issued in Dubai, and this is significantly higher than the number of licenses issued in 2018.

Over the said period, a total of 184,437 jobs were created, which immensely contributed to Dubai’s competitiveness and attractiveness for investors and to development of the business environment.

The number of revoked licenses decreased: from 5.037 in 2018 to 4.949 in 2019.

Owing to the new Foreign Direct Investment Law, new horizons are opened for business.

Moreover, last year, changes were made to the register of economic activities, namely, 35 types of activities in the field of light industry, 50 types of commercial activities were transformed to qualify as professional types of activities.

Preparations for “EXPO 2020” attracted a huge number of hotel businesses, restaurant operators, providers of services and goods to invest in the Dubai economy.

In 2019, a total of 324,773 licensing and business registration procedures were formalized in Dubai. 26.2 billion dirhams (equivalent to 7.14 billion US dollars) in total was paid by businesses for the rental of office premises.

What types of company can I choose when registering a company in Dubai in 2020?

The Government of Dubai continuously seeks to create unique and favorable conditions for foreign businesses.

Opening a company in the UAE requires an individual approach. If you wish to get professional consultation and support when registering a company in Dubai, you can contact us by email:  [email protected]

The following types of companies can be registered in Dubai:

• A company in one of Dubai free zones. Companies in free economic zones (FEZs) operate according to the rules established by the administration of each particular free zone. Among some of the key features of Free Zones are exemption from taxes and the possibility of 100% full ownership of the company by foreigners. In addition, there are no restrictions on the return and withdrawal of capital in the FEZs; export and import are not subject to duties. However, such companies cannot trade in the local market of the Emirates without the involvement of a distributor. 
• An offshore company. Offshore companies are non-resident companies. Such companies cannot have an office in the free zone and in the UAE. They are not required to obtain a license to conduct business, as they are prohibited from trading and producing goods within the UAE. In addition, the shareholders of such a company do not need to have a resident visa of the Emirates. For such companies there is no minimum capital requirement; export and import are not subject to duties. A foreign citizen can be in full possession of the company by ownership.
• A local company. To register a local company, you will need to attract a local sponsor or agent. In the case of a limited liability company, only 49 percent of the company may belong to a foreign citizen, and 51 percent should belong to the local sponsor. However, this shareholding does not envisage similar distribution of the company’s profits in the mentioned proportions. Usually, a local sponsor is paid an annual compensation for participation, and foreign entrepreneur retains all the profits. When registering a civil entity or an individual enterprise, a foreign entrepreneur may completely own the company, however a local service agent should be assigned to carry out all the interactions with government authorities and agencies. Foreign entrepreneurs can open both the civil entity and the Individual Enterprise solely for the provision of services; such companies will not be able to trade. 

What types of licenses are available for businessmen when registering a company in Dubai?

The following license types are available for entrepreneurs:

• It allows you to conduct wholesale and retail trade and is of two types:
  • general type;
  • license to trade in certain types of goods.
• With this license, the entrepreneurs may set up production from raw materials, assemble finished goods using production facilities. These types of license will also be required for packaging products.
• This license requires professional experience and allows:
• to provide engineering consultations;
• to perform keep accounting, bookkeeping and audit services,
• to conduct research and provide consulting services;
• to register a business;
• to provide educational and medical services and other types of services.

The license type is associated with the activity type, thus if the activity type of the license is professional, then the license should be professional as well. When the license combines several activities, the largest activity which is the industrial activity is taken into consideration followed by the commercial activity and then the professional one. For example, if a license contained both commercial and professional activities, the type of the license should be commercial since it’s the larger activity.

Contact us and we will help you with opening an account, registering a company in Dubai, obtaining a visa. Save your time and money!