Company formation in the UAEBlog
The UAE has firmly established itself as a cornerstone of international trade. Its highly strategic location in the Middle East puts it at the centre of the vast markets of Europe, Asia and Africa.
The country’s highly attractive tax regime further elevates it as the perfect place to do business with the rest of the world. The UAE still levies 0% tax on corporate and personal income. VAT is the only common tax and stands at just 5%.
Businesses setting up in the UAE’s free zones benefit from further tax advantages including 100% customs tax exemption, as well as the ability to repatriate all capital and profits and no currency restrictions.
These factors and more are behind the country’s huge popularity with international entrepreneurs. Further sweetening the deal is the UAE’s easy and affordable company incorporation process. When setting up with a company setup agent, company formation in the UAE can be incredibly straightforward.
Company formation in the UAE – key facts
There are several common considerations to keep in mind when starting a business in the UAE – regarding licensing, setup types, business activities, and more.
Understanding license types
There are several license types available in the UAE. The right one for your business will depend on the nature of your business activities.
If your business activities fall into the category of industrial or manufacturing, then you will require an industrial license. If you are in the commercial sector – i.e. the buying and selling of goods – then you will require a commercial license. Similarly, those offering professional services will require a professional license.
Free zone or mainland setup?
One of the most important considerations when establishing your UAE business is whether to set up in a free zone or on the mainland.
There are many advantages to both. Free zones such as Fujairah Creative City offer benefits such as a quick and easy incorporation process, ongoing business support, and financial incentives such as tax exemptions and zero currency restrictions.
There are several types of free zone licences available. Many free zones offer a range of license types including industrial, commercial and e-commerce and professional services.
You’ll also find a range of licenses available on the mainland. Mainland businesses can trade directly with the UAE market and take on potentially lucrative government contracts. The setup that’s right for you will depend on the nature of your business. An expert in company formation can help you make this decision, advising on the best option for your specific requirements.
In many cases, setting up a free zone company can be the most cost-effective way to start a business in the UAE.
Your company name
Choosing a company name is a hugely important step in establishing a UAE business. There are a few things to keep in mind when making this decision. You must abide by a strict, yet easy to follow, set of naming conventions. Once again, a company setup expert can help you with this step.
In short, you should avoid any offensive or blasphemous language. Avoid names of well-known organisations and avoid abbreviations if naming your company after yourself – i.e. Dave Mann Consulting, rather than D Mann Consulting. You must also check that your chosen name is available to register.
Company formation in a UAE free zone
With the right assistance, company formation in UAE free zones can be a fast and straightforward process.
The first step is to make your license application. You should apply for your license directly to the managing authority of your chosen free zone.
Free zone licenses can often be granted in a matter of days depending on the nature of your business and the license required. To ensure a smooth process, it is once again a good idea to instruct the services of a company formation specialist at this stage.
Whether making your application yourself, or through a company formation agent, you are usually only required to provide a few details and some basic documentation, including:
- Completed application form
- Passport copy of the proposed owner or owners
- Two colour passport size photos.
UAE company formation cost
The cost of company formation in the UAE depends on a number of factors. Your license type, location, number of employees and the size of your premises can all impact the total cost of setting up here.
If you’re looking for the cheapest company formation in the UAE, it may be advisable to set up in a free zone. Free zones such as Fujairah Creative City offer many affordable license packages with no paid-up share capital requirement, no annual audit and an easy incorporation process. There is also no need to be present in the UAE to establish your new company.
A license package in Fujairah Creative City, inclusive of one visa application and use of the free zone’s co-working facility costs just AED 24,775.
Starting your UAE business
If you’re armed with the right knowledge, setting up a business in the UAE doesn’t have to be overly complex.
That being said, it does require a level of prior knowledge of the process. What’s more, it is important to note that the application process is only straightforward if your license application is complete at the time of submission and free from errors.
To help you to ensure that this is the case, it’s a good idea to work with a company formation specialist such as Business Incorporation Zone (BIZ) when establishing a new company in the UAE.
We are a team of company registration professionals who are passionate about bringing the dreams of aspiring entrepreneurs and SMEs to life.
As well as handling your license application, BIZ can also assist with the opening of corporate bank accounts and advise on the most appropriate financial institution to suit your specific needs.
We also offer visa and immigration services and can handle all government formalities, permissions, work permits and visa applications that are required to trade in the UAE.
In short, our experts can establish your company on your behalf, make your license and visa applications, and take care of all the necessary admin – leaving you free to get on with running your business.