What is Company Formation in Dubai and Abu Dhabi?


If you have a great business idea or have decided to disrupt the market with your ground-breaking technology, then the first step should be incorporating your company. Company formation is essential to safeguard your intellectual property through a proper legal procedure. History is filled with incidences, where the great innovators lost on the chance to be part of history because someone legally registered similar ideas first.

Company formation is also necessary as it gives you protection from legal liabilities that can arise during the course of business. As a company is a separate legal entity, upon registration all the legal liabilities are restricted to the company.

The formation of a company is a major decision and should be done after careful deliberation, as a company is not the individual encoder of its own brand and business, it represents the company’s stakeholders.

The Process of Company Incorporation in Dubai, Abu Dhabi, Sharjah, UAE

The process of getting a business registered with the Registrar of Companies is known as company formation or company incorporation. After registration under any of the several offered categories, the business will become a distinct legal entity. The incorporated company will now be treated as a separate entity from its owner in terms of liabilities, ownership of assets and finances and the legal agreements. In other terms, the incorporated company is considered as the artificial legal person that is registered by an individual or a group of legal individuals.

Company formation in Dubai is an insightful and futuristic business decision. Dubai has a favorable trading environment with the world-class infrastructure, nifty amenities and also has amicable legal norms. Dubai provides a fertile ground for start-ups to flourish irrespective of the origin country.

Emirates provides the companies with blessings of free trade as there are no trade barriers in Dubai. Businesses from around the world are attracted to set up companies in Dubai, as the tax liability is limited as compared to other countries.

The country has easy access to global connectivity due to its strategic geographic location and world-class infrastructure. The transport connectivity is robust in the country and there are constant endeavors for infrastructural improvement. The marginal productivity of the populace in Dubai is high and it is a favorable place from the viewpoint of recruiting workforce. For the last three decades, the Dubai’s market-friendly economic policies are evidenced for sustainable development, fostering foreign investment, research, and innovation.

The knowledge about legislation is necessary for the formation of a company in the Dubai. The registration under the Company Law is required for setting up an onshore company and the authorities have different requirements for setting up a free zone company in Dubai. The procedure is different for setting up an onshore and an offshore company in Dubai. The offshore company does not imply specific limitations on the owners and the business operates with zero level of tax. The onshore company is designed to operate in Emirates territory while the offshore company can’t operate in Emirates. The onshore company has some tax obligations.

The equity requirement for business setup in Emirates is similar to that of other countries. The companies are required to have a minimum of 50% indigenous stakeholders, the remaining portion of shares can be held by the foreign stockholders. For certain industries in Dubai, the law towards foreign direct investment provides complete foreign ownership to onshore companies. The minimum capital requirement for the onshore private companies is AED 5 million and AED 30 million for the public joint-stock companies.

Under this process, the license registration is required which refers to getting the legal approval before the individual can install his money-making idea in Dubai. The various licenses required for establishing a business in Dubai are the trading license, the commercial license, the professional license, and the industrial license. The general trade license is needed to be obtained by every company irrespective of the nature of its operations.

Our setup guide is proved as the true laboratory behind the illusions by providing the proper guidance for setting up a business in the Dubai.

Documents Required For Company Formation In Dubai

The required list of documents for company formation includes the following documents:

  • A certified copy of the tenancy contract.
  • The photocopies of the passport/residency certificate/visa/ national identity.
  • The approval from the Ministry of Economy and other departments of government.
  • The stamped visa from the Immigration department of Dubai and a trade name certificate is also required.

The requirement of documents varies with the nature of the company incorporated. For the public shareholding company and the professional firms, the certified documents have to be verified by the Notary Public of the origin country. The company needs to be legalized by the Dubai’s embassy and the Ministry of Foreign Affairs in Dubai. You are also required to submit the passport copies of the proposed directors and the managers along with the entry stamp and the photocopy of the visa page. For the already working shareholders, the no-objection certificate is required from the employer and the photocopy of the national identity. For Corporate Shareholder the photocopy of the Memorandum and Articles of Association along with the Certificate of Incorporation is required, both need to be legalized with the Emirates embassy. The list of shareholders is needed to be registered in the Arabic format.

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