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If you have decided to explore the opportunity of setting up a company in Dubai, you undoubtedly are seeking some information regarding finding an ideal location to establish your business, either offshore, onshore or in UAE Free Zone, and might have questions for which you want to find answers as soon as possible.
Our company formation consultants in Dubai have gathered for you the most frequently asked questions on the A to Z of company incorporation as well as on other related matters for informational purposes.
If you cannot find the answer to your question or if your question is not listed here, please contact us to get in touch with one of our company formation consultants who will be happy to assist you.
Frequently Asked Questions Concerning Company Formation
Why choose the United Arab Emirates to incorporate my company? 
The UAE, and Dubai particularly, has, for good reason, garnered a lot of media attention recently. Dubai enjoys a central location between Europe, Africa and Asia. This makes it a prime business destination for many sectors and industries. You will not find a city as cosmopolitan or as advanced anywhere within a five-hour flight from Dubai. The city’s highly-regulated environment adheres to international best practices operating with zero rates for personal and corporate taxes. Businesses in Dubai enjoy 100% capital repatriation with no currency restrictions. This level of financial freedom is rarely found in areas with such a developed business environment. One can find numerous opportunities in the UAE and across a wide range of sectors. Dubai is a leading commercial center with state-of-the-art infrastructure and outstanding business environment. Other reasons include:
- A liberal economy fully-integrated with the world economy.
- The city is central, located between Europe, Asia and Africa, attracting approximately five million investors and tourists each year.
- One of the safest cities in the world.
- More than 200 nationalities live in harmony and call Dubai their home.
- Dubai is well-serviced by international and local financial institutions.
- The education system in Dubai is suitable for all cultures and languages.
- Dubai enjoys world class healthcare.
Why choose SFM to incorporate my company in the UAE?
SFM has more than 15 years of experience in company formation and bank account opening. Our internal network of specialists in Dubai is unparalleled.
We are members of many international fiscal planning organisations, providing tailor-made advice to clients and providing full integration of the latest laws.
We are a competitive incorporation specialist firm in Dubai, committed to providing you with the best service at reasonable prices.
Find out why SFM is the best strategic partner for you. Click here.
What types of company structure are available in the UAE?
1. Free Zone Entities – this type allows 100% foreign ownership and exempt from corporate and personal taxes for a specified number of years. These entities are not licensed for business outside of the free zones. This model is ideal for import/re-export or for industrial and/or manufacturing companies. Service related companies also use the free zones as bases of operations.
2. Onshore structures in UAE are commonly misunderstood. They garner attention due to the legal requirement of a nominated ‘local sponsor’. This is also a requirement in other countries, Switzerland for example. This ensures that there is a liable person, in the country, able to provide answers and direction in any event where the foreign owner is unable or unwilling to assist. A limited liability company is set up with the local sponsor owning 51% of the shares. However, under business law, corporate profits need not be distributed in proportion to the shareholder holdings. The local sponsor is paid a yearly fixed fee to use his name while the resident director/owner and the foreign owner manage and distribute the profits.
3. The professional license allows 100% of the shares to be allocated in the name of a foreigner. The local sponsor is a designated ‘Local Service Agent’. This entitles him to a yearly fixed fee for his role as a sponsor in the trade license. The license owner must have and provide evidence of formal qualifications in the professional service.
4. A representative office license is also available to the incorporator; this allows the company to engage in marketing and gathering information on behalf of a parent company. In this case, there is a requirement for a local service agent but there is no obligation to be a company shareholder.
All companies registered in the UAE require a physical office. SFM can help you find an office or to arrange for a lease for the incorporation process.
Does the UAE have an offshore corporate structure?
Yes, there are two offshore structures that we recommend. The first is RAK; the second is the more expensive JAFZA. RAK offshore is a purely offshore structure; JAFZA offshore entitles the owner to one residence visa. It is the only offshore structure that permits property ownership in the emirate of Dubai. JAFZA offshore requires a minimum of two directors and one shareholder.
Do I require a residence visa?
Anyone wishing to live and work in the UAE needs a residence visa. To employ staff in your organisation, a manager of the entity must have a residence visa. This will then enable the company to recruit staff. Offshore incorporations do not require a residence visa as they do not entitle the holder to do business in the UAE. The free zone incorporations allow for issuing residence visas depending upon the size of the rented or purchased premises of the establishment.
When should I renew my corporate documents?
In the UAE all licenses are renewable annually. Failure to renew on time will result in penalties and the cancellation of all residence visas linked to that company.
Do I pay taxes in the UAE?
There are no corporate or personal taxes in the UAE. Companies must pay a 5% import duty to clear their goods from the port into the country.
What are the bank account opening procedures?
SFM can assist you with opening bank accounts. We will ask the bank to send their representative to our offices, minimising your waiting time and avoiding the inconvenience of going to the bank and having to wait in line.
What is the difference between a shareholder and a director?
The shareholder owns the company through a share certificate. One or more people may own a company through shares. The director is the person responsible for the management of the company. He signs business contracts and account opening forms, etc. Shareholders usually elect directors, but sometimes they are appointed by resolution. A company can have one or more directors.
How can I settle my fees?
You can pay by bank transfer, credit card, cheque, banker's draft or with cash at any of our offices. SFM charges all incorporation fees in advance. If extra services are required, we will charge this on a timesheet basis and add the cost of all fees paid during the process.
Why are your fees lower than your competitors?
We maintain our own offices and staff in the UAE. The work we carry out on your behalf occurs in-house and at reasonable prices. Associates needed for the incorporation process are hand-picked and priced economically, therefore passing cost savings to our clients.
How long does the incorporation process take?
Incorporation can take as little as five working days or up to six weeks for some free zone entities. The initial stage is the trade name registration. Once that is complete, it is a matter of gathering all the documentation required for that type of incorporation and relevant license issuing authority. Click here to learn more about the easy steps to setup a company in the UAE.
How long does the residence visa process take?
Clients may only apply for a residency visa once the company is established. This is a streamlined process; once the applicant has completed their medical examination, the results are electronically sent to the relevant naturalization and residency department after which the residency is issued and entered in the holder's passport.
Learn more about the visa process in the UAE here.
Do I need to visit UAE to incorporate the company?
We can incorporate offshore companies without needing your physical presence. However, in the event of incorporation in the free zones and onshore jurisdictions, we can start the process without you but your presence will eventually be required. You are expected to sign formal incorporation documents at the notary public here in the UAE.
However, if you were to provide us with a power of attorney, certified and attested by a UAE embassy or consulate abroad, we can complete the incorporation procedures without requiring you to visit the UAE
Can the same person be a manager and a shareholder at the same time?
Yes, this is possible for all UAE incorporations.
Which incorporation is most suitable for me?
We offer consultation to help you decide, considering your immediate needs for the company and future vision. There are many different advantages to consider. You should take the time to explore all options with one of our specialist consultants.
Do my documents need to be notarised and attested?
All educational and corporate documents required during the incorporation process and for the issuing of residence visa process will need attesting at the corresponding UAE embassy or consulate in the country of the document origin. These documents must then be attested by the UAE Ministry of Foreign Affairs in Dubai. This renders them officially accepted documents.
Do I need to meet the bank in person to open an account?
Yes, this is a mandatory requirement for a bank account in the UAE.
Does opening a company mean that a bank account will automatically be opened for the company?
Although we cannot guarantee the opening of a bank account, we can say that we have never encountered a refusal of this service.
Which banks do you work with?
We work with Emirates NBD, Abu Dhabi Commercial Bank and NOOR Bank. We can provide Swiss banking options to our clients.
Is it possible to open a private account as well as an account in the name of my company?
Yes, this is possible.
What fees apply for maintaining the bank account?
All UAE banks have a minimum balance requirement. If you do not maintain this minimum, there is a maintenance cost of USD 30 per month.
Can I have a bank account in different currencies?
Yes, this is possible.
How can I access my account?
All banks provide online transactional banking and debit/credit cards which you may use worldwide.
Can I get a residence visa for family and dependents?
SFM will arrange medical tests and residence visa formalities for dependents and extended family at your instruction.
Do I require office space in the UAE?
Yes, office space is required for UAE incorporations. You may wish to minimise cost with a small space or explore large office options to bring your headquarters to UAE. In both these instances, SFM will advise you on the best possible office space. Appropriate decisions can be made from there.
Do I require a sponsor in UAE?
Depending on which incorporation structure you choose, you may require a sponsor. There are many ways a local sponsor can help businesses just like yours. The position and background of a sponsor can aid in many areas of a business located in the UAE. Our vast knowledge of the industry and region means we can provide specific information.
Freezones, Onshore, Offshore, what are the differences?
Free zone entity (FZE)
Dubai has multiple free zones on its territory. The main characteristic of a Free Zone entity is that it allows the client to own 100% of the corporation. Therefore there is no need for a local sponsor. The Free zone entity is allowed to transact within the free zone and internationally.
An office space is mandatory and residence visas are possible depending on the size of the office / work premises.
In few specific free zones (such as DIFC, DMCC) there is a mandatory requirement for accounts to be kept and audited yearly, but in most other free zones, no accounting/audit requirement is necessary. Learn more about freezones in the UAE here
Onshore
This type of incorporation entails the use of a Local person as a partner or an agent, depending on the type of incorporation. This local partner or agent is entitled to a yearly fixed fee, which is usually predetermined by contract. The advantage is that this type of incorporation allows for the conducting of business throughout the UAE and internationally.
An office space is mandatory and residence visas are possible depending on the size of the office / work premises.
There are no accounting or auditing requirements. Learn more about our onshore company formation services here.
Offshore
This follows your typical offshore IBC type incorporations, there is no need for an office to be rented and therefore it does not allow for the issuance of residence visas for this type of incorporation.
There is no accounting or auditing requirements.Learn more about our offshore company formation services here.
How do I register for VAT in UAE?
An entity must register for VAT if their taxable income exceeds the mandatory registration limit of AED 375,000.
Furthermore, an entity may choose to register for VAT voluntarily if their income is less than the mandatory registration limit but exceed the voluntary registration cap of AED 187,500. To register for VAT in UAE click here.
How long does it take to create a website with SFM?
We guarantee delivery within two to four weeks once you have selected your preferred option. Learn more about our website creation services here.
Where can I set up a freezone in UAE?
Dubai is where most of the freezones are, as it is known as the business capital of UAE with specific established free zones for a wide variety of business fields. However, we also operate in other Emirates that now follow Dubai's business vision and have developed their Free Zones offering competitive and flexible rates competing within the UAE market. Click here to view the free zones we operate in.
