Things to Consider before Company Registration in Dubai

Things to Consider before Company Registration in Dubai

Before you register your company, it is imperative to keep a few things in mind.

 

1. Have your Business Plan ready

This is important, as some kind of company structures are more suited to certain business models than others. For instance, if you were looking to get into finance / banking / investment, your company cannot be a Limited Liability Company in the United Arab Emirates. Companies with limited liability structures are not permitted to engage in some commercial activities.

A business setup consultant who has experience in matters relating to company registration in Dubai can advise you on all these potential pitfalls beforehand, before you set up your company in the United Arab Emirates. For instance, if you were looking to get into the construction sector, it is mandatory that you have a Local Partner who will own 51% of your company. So if you had grand plans about having ten business partners with each holding 10% of the company’s shares, this might not always be possible.

The Local Partner must be an Emirati who has attained the age of 21 or a company incorporated in the United Arab Emirates that is 100% owned by Emiratis.

2. Decide on a company structure

  • You could have a Sole Establishment (this is the same as a Sole Proprietorship Firm) if there is only one business owner.
  • You could establish your company as a Partnership if there is more than one owner.
  • In case there are multiple owners, you could look at a Limited Liability Company, where the minimum number of shareholders is two and the maximum number 50.
  • If the business model you have in mind is not suited to a Limited Liability Company in the United Arab Emirates, you could think of establishing it as a Private Share Holding Company or a Public Share Holding Company in case you plan to take it public later on, offering your shares for sale.
  • You should think of establishing your company as a Civil Company if you are a professional.
  • If you already own a company in your home country or country of residence [other than GCC] and was looking to expand your presence to the Middle East, you could think of incorporating your company as a Branch Office or a Representative Office. The difference between a Branch Office and a Representative Office is that the latter is not allowed to make a profit. All work must be sourced to its parent company.
  • If you already own a company in a GCC country, you could set up a Branch of a GCC Company in the United Arab Emirates.

GCC [Gulf Cooperation Council] member countries include Saudi Arabia, Qatar, Bahrain, Oman, and Kuwait, apart from the United Arab Emirates.

3. Select a name for your company

There are rules governing the allowed nomenclature for companies in the United Arab Emirates. The names of countries are not permitted anywhere in the company name, which is formally referred to as trade name in the UAE. However, the names of geographical regions and nationalities can be a part of the trade name. Religious names are not permitted to be a part of the trade name. While first names are allowed, this must be the first name of one of the shareholders in the company.

A business setup consultant can run a search for you to see if the name you have in mind for your company has already been registered by another business entity. In case it is a Branch Office or a Representative Office that requires you to have the same name as the parent company, but this has already been registered, you have to consider other options. You can think of adding the term ‘Middle East’ to the parent company’s name to come up with a unique name for your Branch Office or Representative Office in the United Arab Emirates.

4. Finalize a location for your company and rent office space

Certain types of companies may find it advantageous to choose some locations over others. For example, if you were thinking of setting up a general trading establishment, it might be better if it came up in the shopping district or close to a residential area. If you were thinking of setting up an industrial unit, there is no point establishing it in the business district; deliveries might be delayed if trucks can’t access your location with ease.

Free zones offer dedicated infrastructure, and there is a dedicated free zone for just about every kind of business activity. Out of 45 free zones in the United Arab Emirates, some 30 of them are in Dubai. A good business setup consultant can help you identify the right free zone for your business – if a free zone will prove to be a better location than the mainland. The mainland is the area in the United Arab Emirates that is not part of a free zone

Once you have decided on your location, you need to rent office space. A good business setup consultant can not only let you know of affordable options, but also on the right commercial space – for an industrial unit, the power supply must be compatible with the  equipment / machinery that will be installed. A business setup consultant might also advise you to choose a co-working space if you are looking to keep costs down.

5. Incorporate your company

You can get yourself some professional assistance to draw up the Articles of Incorporation, which are the company formation documents. These will outline who the owners of the company are, and what percentage of the shares has been allotted to each owner. If there is a Local Partner, his/her name must be explicitly mentioned in the company formation documents.

The Articles of Incorporation may be known by different names in your country, such as the Memorandum of Association if there is only a single owner or the Articles of Association if there are multiple owners.

 

Once the company formation documents have been drawn up, they need to be notarized by a Notary Public.

6. Register your company and apply for a Business License

You need to apply for company registration with the Department of Economic Development in the emirate you plan to set up your company in. In Dubai, the Department of Economic Development is called Dubai Economy. When applying for company registration, you must also specify the commercial activities that you plan to engage in. There are 2,100 business activities for you to choose from and it is possible to specify multiple business activities on the same application.

Once the Department of Economic Development has determined that your company structure and shareholding pattern is consistent with the business activity/activities you have chosen, you will be granted a Business License to formally engage in these activities. It is to be noted that the Tenancy Contract [the agreement between you and the landlord who owns the space you have decided to rent] is also to be included in the application. The address of the space you have rented out becomes the registered office address of your company.

With that, you are almost ready to commence operations – there is just one more thing you need to do.

7. Open a corporate bank account

Owing to strict anti-money laundering regulations in the United Arab Emirates, this is not as easy as one might assume to be the case. Depending on who you have in your corner as your business setup consultant, it could take as little as a couple of hours or the whole day. A good business setup consultant will advise you on the documents that need to be submitted, so that you can proceed to open your bank account smoothly, without encountering any problems.

Why Choose A&A Associate LLC for Company Registration in Dubai?

At A&A Associate LLC, we have years of experience helping entrepreneurs establish companies in the United Arab Emirates. Whether it is company formation on the mainland, free zone company registration or offshore company formation in UAE, we can be counted on to lend our world-class expertise to your dream. We have been of assistance to clients from 100 countries around the world and have a 98% client satisfaction rate so far.

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