Establishing a company in the UAE is a goal pursued by many investors and entrepreneurs from around the world, given the country’s tremendous economic opportunities and an encouraging investment environment. The UAE is one of the world’s leading destinations for business and trade, thanks to its strategic location and advanced infrastructure, as well as flexible laws and government facilities that support sustainable economic growth. To open a company in the UAE, there are conditions for opening a company in the UAE and procedures that investors must observe and adhere to to ensure the success of the incorporation process and avoid any legal obstacles. These conditions start from choosing the appropriate type of business activity and determining the legal form of the company, through obtaining the necessary approvals from the concerned authorities, to officially registering the company in the commercial records and obtaining the required licenses.

One of the basic steps of establishing a company in the UAE is to determine the appropriate legal form of the company, which can be a limited liability company, a public or private joint stock company, a branch of a foreign company, or other recognized legal forms. The choice of legal form depends on the size of the business, the number of shareholders, and the type of activities the company will undertake.

After determining the legal form, investors are required to choose a trade name for the company, ensure that it conforms to local standards and laws, and then submit an application to reserve the trade name. This is followed by the preparation of the necessary legal documents, such as the memorandum and articles of association of the company, and submitting them to the competent government agencies for preliminary approvals.

Opening a company in the UAE

Opening a company in the UAE is an ideal strategic move for investors and entrepreneurs seeking to establish a strong presence in one of the world’s most dynamic and growing markets. The UAE has a well-developed infrastructure, a flexible legal and regulatory framework, and a strategic geographical location linking East and West, making it an attractive destination for foreign and domestic investments.

The first step in the process of opening a company in the UAE is to choose the type of company that fits your business objectives. Options available include limited liability companies, joint stock companies, and sole proprietorships, as well as companies in free zones that allow full foreign ownership and offer attractive tax and customs benefits.

The process requires the submission of a range of documents, such as copies of passports, business plans, and constitutive contracts. The necessary licenses and permits must also be obtained from the relevant government agencies, which vary according to the type of business activity and the chosen location of the company. Free zones, such as Dubai South and Jebel Ali Free Zone, provide additional incentives and facilities including exemption from taxes on income and profits.

Compliance with local laws and regulations is critical to ensure the smooth running of the business. The UAE offers a supportive business environment characterized by transparency and efficiency, while providing e-government services that greatly facilitate registration and licensing procedures.

The UAE is home to a multicultural community of professionals from around the world, creating an environment rich in cultural and intellectual diversity. This diversity enhances opportunities for cooperation and business partnerships, and opens new horizons for innovation and development.

In addition to strong government support for startups through business incubators and technology initiatives, companies in the UAE have broad growth opportunities in sectors as diverse as technology, tourism, financial services, and logistics.

Conditions for opening a company in the UAE

Opening a company in the UAE requires following a set of legal and administrative steps and conditions. Here are the most important conditions to consider when opening a company in the UAE:

1. Choosing the type of company: You can choose between several types of companies such as a limited liability company (LLC), a public joint stock company, a private joint stock company, a foreign branch, and more. The type of company chosen affects capital requirements and legal responsibilities.
2. Determining the commercial activity: The commercial activity to be carried out by the company must be determined and approved by the competent authorities.
3. Obtaining approvals and licenses: The necessary approvals and licenses must be obtained from various government agencies such as the Department of Economic Development (DED), free zones if the company is to be established in a free zone, and other specialized entities.
4. Company name registration: A unique name for the company that complies with local standards must be selected and registered with the competent authorities.
5. Preparation of the Memorandum and Articles of Association: The Memorandum and Articles of Association of the Company must be prepared and documented with the competent authorities. The contract includes details about the partners, the capital, the activity of the company, and its management.
6. Opening a bank account: A commercial bank account must be opened at one of the approved banks in the UAE.
7. Renting an office or workspace: UAE law requires the company to have a physical address, whether it is an office or a suitable workspace.
8. Obtaining work permit and visas: Necessary work permits and visas must be obtained for foreign employees who will be working for the company.
9. Compliance with legal and tax requirements: Comply with all legal and tax requirements, including tax registration if the company is subject to Value Added Tax (VAT).
10. Chamber of Commerce Registration: After obtaining licenses and approvals, the company must be
11. registered with the local chamber of commerce.

Also read: Procedures for establishing a company in Dubai

Types of companies that can be established in the UAE

In the UAE, several types of companies can be established, each catering to different needs of investors based on the nature of the business and business activities. Here’s a look at the main types of companies that can be established in the UAE:

(A limited liability Company)

• It is the most common type of company for business in the UAE.
• It requires an Emirati partner who owns at least 51% of the company’s shares, while foreigners can own a maximum of 49%.
• Often used for small and medium businesses.

Joint stock company (public)

• It is usually used for large companies that want to list their shares on the stock exchange.
• There should be at least 10 founders.
• Requires substantial capital and is subject to strict SCA supervision.

private joint stock company

• Suitable for companies that want to raise capital from a limited number of shareholders without listing shares on an exchange.
• It can have between 2 and 200 shareholders.
• Less complex than PJSC in its procedures and requirements.

(joint venture)

• It is established between two or more partners who are personally and jointly liable for the debts of the company.
• Often used for small and family business.

Limited partnership

• It consists of a general partner who assumes full responsibility and a limited partner whose liability is limited to the extent of his contribution to the capital.
• Used in businesses that benefit from limited liability partnerships.

Affiliated Company

• A subsidiary of a foreign company wishing to open a branch in the UAE.
• The branch can carry out the same business activities of the parent company but there must be a local Emirati service agent.

Representative Office

• Foreign companies can open a representative office in the UAE with the aim of marketing their products or services, but cannot conduct any business or generate revenues in the UAE.

A Free Zone Company

• It can be established in one of the UAE’s many free zones, such as Jebel Ali and Dubai Internet City.
• It allows full foreign ownership and offers attractive tax and administrative advantages.
• Ideal for companies aiming for export or international business dealings.

Holding company

• Used to manage a group of companies or assets, they can be limited liability or shareholding.
• Provides an appropriate legal structure to effectively manage assets and returns.

Cost of Opening a company in the UAE

The cost of setting up a company in Dubai varies based on several factors, including the type of company, its location and the size of the planned business. Here are some sources that can affect the cost of establishing a company in the UAE:

• Capital: Some types of companies can require the minimum capital required by law, and this varies between different companies.
• Government fees: Government fees include the costs of registration, licenses, and other administrative services.
• Legal and accounting advice: You may need legal and accounting advice to guide you through the process of setting up a company and complying with local laws and regulations.
• Rental and office costs: If you need an office for your company, you will need to pay for rent, insurance, and utilities.
• Insurances and guarantees: You may need insurances such as civil liability insurance and employee health insurance.
• Advertising and marketing: There can be advertising and marketing costs to attract customers and business partners.
• Visas and Permits: You may need to pay costs to obtain residence and work permits for foreign employees.

Documents required to establish a company in the UAE

To establish a company in the UAE, a set of basic documents must be submitted to the relevant authorities. The documents required may vary slightly depending on the type of company and the region in which the company will be established (within the UAE or in one of the free zones). The following is a list of common documents required:

1. Form of application for incorporation: A completed form containing all the basic details of the company.
2. Memorandum and Articles of Association: includes details about the structure of the company, the percentage of partners, and the rights and obligations of shareholders.
3. Passport Copies: Valid passport copies of all shareholders and directors.
4. Shareholders and Directors’ Portraits: Recent passport-size portraits.
5. Proof of address: Documents evidencing the addresses of shareholders and directors (such as utility bills or bank statements).
6. Board Resolution: In the case of foreign companies that open branches in the UAE, a resolution of the Board of Directors must be submitted approving the opening of a branch in the UAE and the appointment of a branch manager.
7. Certificate of Incorporation (if foreign company): A certificate evidencing the incorporation of the parent company in its country of origin.
8. Trade License: If the activity requires a special license, a copy of the trade license must be submitted.
9. Business plan: In some cases, authorities may request a detailed business plan outlining the company’s activity and future plans.
10. Notarized authorization: If there is a local service agent, a notarized authorization must be provided by the partners authorizing the agent to take action on their behalf.
11. Proof of capital deposit: Documents proving that the capital has been deposited in a local bank account, if these are required.
12. Preliminary approval from the concerned authorities: Some activities require preliminary approvals from specific regulatory authorities (such as health, education, tourism).
13. Company Premises Lease Agreement: Notarized lease of company premises or title deed, with no objection certificate from the landlord if the premises is leased.
14. Trade Names Report: A report from the Department of Economic Development stating that the proposed trade name is available and not reserved.

Advantages of opening a company in the UAE

Opening a company in the UAE offers many advantages and benefits that make it an attractive destination for businessmen and investors. Here are some of the key advantages of opening a company in the UAE:

• Sophisticated business environment: The UAE is characterized by a sophisticated and modern business environment with advanced technologies and advanced infrastructure.
• Government focus on economic development: The UAE government adopts encouraging policies to support business and promote foreign investments.
• Access to the MENA market: The UAE is strategically located to make it an ideal hub for accessing the MENA market.
• Economic Diversification: The UAE offers great economic diversification, where companies can work in a variety of sectors such as real estate, energy, retail, technology, and tourism.
• Tax exemptions: Some areas such as free zones allow the possibility of benefiting from tax exemptions for companies.
• Political and security stability: The UAE enjoys political and security stability, giving businesses the confidence to expand and grow.
• Flexibility in labour legislation: The UAE provides flexible labour legislation that allows for the recruitment of global talent and facilitates recruitment processes.
• Social and cultural life: The UAE provides a diverse and culturally rich living environment that makes it an ideal place to live and work.

In conclusion, opening a company in the UAE is an excellent strategic move for local and international investors alike. The UAE has a thriving and supportive economic environment, which provides broad opportunities for development and commercial growth in various sectors. Thanks to flexible economic policies and well-developed infrastructure, the UAE has become an ideal destination for aspiring entrepreneurs and investors.

The process of establishing a company in the UAE requires compliance with a set of conditions and laws set by the government to ensure transparency and fairness in business transactions. These conditions include determining the appropriate type of company, obtaining the necessary licenses, and accurately submitting the required documents. In addition, the UAE offers multiple options to investors through free zones, which allow 100% ownership of companies, and offer many tax and customs advantages.

An important aspect of opening a company in the UAE is to take advantage of the government support provided to new companies. The government provides several initiatives and programs aimed at encouraging investment and promoting innovation. The diverse and multicultural business environment also contributes to enhancing cooperation and partnerships between local and international companies, opening new horizons for growth and expansion.