What you need to know about setting up a company in Dubai
Becoming self-employed and setting up their own company remains just a dream for many Germans. Legitimate, because setting up a company involves immensely high costs right from the start of the company, which are difficult to cover. In particular, taxes, which account for just under half of the profit generated, must be paid to the state so that, after deduction of fixed costs, there is not much left over for an entrepreneur at the end of the month. The solution to this problem is obvious here: Establishing a company in Dubai.
About the Emirate of Dubai
Dubai is one of the seven emirates of the United Arab Emirates (UAE) on the Persian Gulf. The rapid growth of the city of Dubai in recent decades is primarily due to the countless construction projects financed by private investors. Since there was cause for criticism regarding building regulations in the past, Dubai reacted quickly and massively tightened the requirements for construction projects to be approved. The idea behind this was both the protection and safety of investors and to improve the quality of construction projects. The result is architectural masterpieces that cannot be found anywhere else in the world and which ensure that almost 17 million tourists come to Dubai every year and are inspired by the city.
But why is Dubai so popular with emigrants?
Dubai is known for its very liberal economic policy. The restrictions on economic and business transactions are barely noticeable and environmental protection requirements only play a minor role. However, the tax relief associated with emigrating to Dubai is even more attractive than this: In Dubai, neither income nor corporation tax is collected. A perfect basis for setting up a company abroad, among other things.
Set up a company in Dubai
The UAE has a total of 7 emirates, in which you set up your company, it doesn't matter in principle. For example, you can have a company in Dubai but live in Ras al Khaimah, or vice versa. Both are possible. However, you should keep in mind that real estate in Dubai is a bit more expensive than in other Emirates.
Irrespective of this, you should make your company formation dependent on which sector you work in and, above all, where your business transactions will take place. Based on these criteria, you can also choose the right legal form for you. Here you can roughly differentiate between 3 types of companies: Mainland, Freezone and Offshore.
The Mainland company
A Mainland company is comparable to a German GmbH. Setting up such a company is particularly beneficial if you want to sell both products and services within and outside the UAE.
The Mainland company can be founded in two different ways: Through a license and/or through a GmbH, of which you are the sole owner. In the past, there was also a third option where you needed an Emirati to set up a company. However, this regulation has been repealed and only applies in the rarest cases, such as in the oil sector.
The freezone company
There are a total of 45 free trade zones (freezones) in the UAE. Therefore, if your primary business activity or customers are based abroad and therefore also outside the UAE, setting up a freezone company is the right choice for you. Of course, in certain cases, as a freezone company, you are allowed to produce, store or deliver goods within the UAE. However, you are subject to certain restrictions that you must comply with.
The offshore company
Although the offshore company is similar to the freezone company, it differs from it in the criterion that you have only registered the company yourself in the UAE or Dubai, but you do not have to be there yourself, as is the case with the freezone company.
The influencer license
More and more influencers have recognized the huge potential behind Dubai and are increasingly emigrating to the Emirate to produce their content there. Since this content production can be regarded as both a product and a service, a license must be applied for from the NMC (National Media Council).
3 benefits of setting up a company in Dubai
- You are not required to reside in the UAE when setting up a freezone company.
This means that in some cases you can set up a company in Dubai without having to be there. When applying for a company license as well as setting up the company itself, we at EXTENT are happy to assist you with our professional expertise.
- You can open a bank account when you set up a company.
This is necessary for you as an entrepreneur in order to be able to issue invoices and receive amounts. For this, you need a residence visa, which we will also apply for you.
- They enjoy many tax benefits.
In Dubai, you are completely exempt from almost all taxes. The only exception is the 5% value added tax, which you must pay as a Mainland company. As a freezone company, you are exempt from this.
Support in setting up a company
Dubai is one of the countries in the world that explicitly promote entrepreneurship. For this reason, the Emirate has established numerous funding offers to make it easier for entrepreneurs to establish business in the UAE. The Dubai Startup Hub, for example, is mentioned by name here. This is a cloud platform that supports the national startup ecosystem.
With the Dubai Future Accelerator, young entrepreneurs, on the other hand, have the opportunity to try out their hand at doing business and see the city of Dubai as a test run.
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