UAE’s diverse and progressive economic landscape has remained the center of international business avenues for over two decades now. From one year to the next, the economic prosperity of UAE has multiplied, dispersing profitable investment opportunities for entrepreneurs, SMEs and Large Enterprises from around the world. Over the years, UAE has made a major influence on global company setup industry, allowing its major sectors to flourish within its zones. Currently, the UAE houses over 200 of the fortune 500 companies in Dubai. Here is an overview of UAE’s two most popular company setups of choice for investors.
Which Business Structure to Go For
To kick start your business in UAE, the investor must take into account his capital budget and suitable business jurisdiction that fits best with the chosen activity. There are two major channels in for company formation in UAE – Mainland LLC business setup and Free Zone company setup.
- Mainland LLC
- Full operating rights within the UAE
- 100% Tax-Free Status
- Compulsory physical workspace to register
- Local partner to own 51% shares
- Permission to bid on Government tenders
All businesses registered in Dubai Mainland are governed by DED or Dubai Economic Development Authority. As an entrepreneur, registering the business as mainland LLC minimizes many lengthy processes and unnecessary costs that other setup structures entail. The local government authorities give exclusive attention to mainland setups by providing flexible business solutions in finance, administration, and legal aspects. Unlike free zones, entrepreneurs have no limit on the number of visas and can rent a fully serviced office space in affordable payment plans anywhere around Dubai. Investors belonging to the services industry such as business consulting enjoy a list of advantages such as access to local trading, wider business activities, easier recruitment, fast incorporation, an abundance of customers, numerous amenities and top-grade infrastructure. Moreover, only mainland companies can bid for government tenders.
- Free Zone Company
- 100% import and export tax exemptions
- 100% repatriation of capital and profits,
- 100% foreign ownership
- Can operate within free zone boundaries
- Can operate in UAE through an LSA
UAE houses over 45 different free zones, the majority of which are located in Dubai. While the zones are abundant, selecting the suitable option involves selecting the specific business activity, legal structure and ultimate goals of the business in the region. Although the business cannot sell outside of the free zone in UAE, a Local Service Agent can be hired to sell on their behalf. Moreover, free zones are also defined by their dominant sectors such DMCC which provides exclusive benefits to businesses belonging to the commodity trading sector. Other zones also extend privileges based on their respective activities such as RAKEZ that gives special benefits to manufacturing businesses.
Cost of setting up a mainland company can start from AED 39,000 and go up depending on the type of business activity and local sponsorship costs. Here are some general costs included in most package. A registered office space setup is compulsory for an LLC business setup with office rents starting from AED 20,000 a year for different office types including serviced offices, furnished offices and shell and core office space in Dubai or in other emirates of UAE.
Now, the Dubai Department of Economic Development has also introduced Instant Licenses for Dubai LLC company formation which provides an option to the client to start a business in Dubai in 24 hours without the need for Memorandum of Association (MoA) and office space lease contract for the first year. You can avail the Instant License option for prices starting from as low as 27,000 Dirhams with IBG Consulting. Read more about this offer here:
Free zone company setup cost varies from one zone to the other since every authority practices its autonomy.
- Free zone registration includes Licensing, Rental Cost, Bank Guarantee and few other minor charges and can start from AED 14,500 and go up depending on the free zone chosen and the type of business activity.
- Visas are generally separate and can cost from anywhere around AED 5,000 and rise up depending on the type of visa.
- Other charges vary from one free zone to the other including
- Notarization Charges
- Name Approval Charges
- Premium bank account in Dubai
- Insurance expenses
- Medical checkup
- Typing and shipping fees
- Police clearance
- Emirates ID card
- Echannel Registration
How can IBG Help?
Seeking help from an experienced professional is a wise approach to prevent overhead costs, documentation delays and other complications that often arise during incorporation process. IBGME is UAE’s premier business consulting agency that overlooks all types of business setups, visas, office space and PRO services in UAE. Our full-feature packages and customizable plans will cover all the requirements of your business with affordable and fast setup options. Meet our consultants today or visit our website ibgme.ae.