COMPANY FORMATION IN DUBAI 

There are two main types of businesses that can be set up in Dubai. 

LLC (Limited Liability Company) and Civil Companies. LLC-type (limited liability company) and the civil societies.

Companies are commonly referred to as “Mainland” companies as they are registered in a jurisdiction that allows you to trade locally. This type of jurisdiction is for example preferred when opening a restaurant.  

When you hear the word "free zone”, these are the same types of legal structures, but this time registered in areas with significant advantages.

These companies allow the acquisition of premises and trade with Dubai companies. 

For commercial activity, they can be held in the form of an LLC (limited liability company) with a maximum of 49% of the share capital held by a foreigner and at least 51% by a local Emirati partner or partners.

If you are selling your professional services locally, you will need to register a civil company in which you were obliged until 2021 to have a local Emirati Agent to help you with the administrative procedures.  

A local service agent is a representative of a foreign company who is responsible for enabling the company to do business in Dubai. The agent must be an Emirati national and has no interest in the company's operations, administration or profits, and has no financial constraints.  

His role was to coordinate with government departments and provide assistance with work permits, visa applications, Licence approvals, etc. Unlike the LLC, this agent did not have a share in your company.

Today, you are free to set up a civil company without being contractually bound to a local Emirati agent. 

MAJ continues to offer full support throughout the entire civil company registration process with the help of our local Emirati agent who is fully English and French speaking et kkk

Please note that a civil company does not offer you limited liability through your company and that you are fully committed financially in case of bankruptcy.  

Finally, you should know that these types of companies registered with the Dubai Economic Department and which are intended to sell in the Emirates are subject to a 9% tax on their profits. 

Free zone companies can be XNUMX% foreign-owned and have a number of benefits, such as no corporate tax.

They allow for all types of business activities and the sale of services internationally. These jurisdictions are also ideal for setting up a management company (holding company).  

If you sell online, you can perfectly well sell your services in the UAE with a company registered in Free zone. However, you will be limited by the fact that you cannot own a retail outlet in Dubai.  

If you are a professional and want to work from an office, you will be free to set up a business centre and enjoy a workspace for yourself and your team anywhere in Dubai.

These companies can be registered in various Emirates other than Dubai, for example, Sharjah (Sharjah Media City - SHAMS), Ajman (AFZA) or even Ras Al Khaimah (RAKEZ).  

It should be noted that setting up a company in one of these areas can lead to many disadvantages and must imperatively be the subject of consultation with our team in order to understand these risks. 

MAJ offers a company creation service with costs totally transparent, and no subsequent hidden charges.

By definition, an offshore company is a company owned by a person who is not resident in the jurisdiction in which it is registered.

These companies cannot conduct commercial activities. However, they can own real estate and enter into contracts with UAE residents and businesses. 

Attention, it is very commonly difficult to access the opening of a professional bank account in the United Arab Emirates for an Offshore company. Indeed, the fact that you do not have a Residence Visa does not favor your relationship with the local banking community. 

However, we have our own internal strategy optimised by our banking team and we allow you to benefit from an offshore set-up. 

Do you want to expand your business in the Middle East? It is perfectly do-able.  

Your existing company will own your branch in Dubai.

 The different Licences in Dubai are the following:

• Commercial Licence
• Professional Licence
• Industrial Licence  

Each set-up is entirely tailor-made, taking advantage of the expertise of our Chartered Accountant in France. The latter is bound to complete confidentiality in his function as he works in Dubai, through our structure.  

Formerly a consultant with PWC and financial auditor with L'Oreal, he will be able to contact your advisors and ensure a seamless structuring.  

We have assisted major English-speaking companies in this stage of their development and have numerous references, so do not hesitate to contact our team to find out more.

Do you want to do business in Dubai and take advantage of the city's strong growth?  

For example, opening a restaurant or offering your services as a sports coach.  

This requires the registration of your company to trade in the mainland, and your profits will be taxed at 9%.

Not targeting a local market and want to sell online, with the possibility of invoicing internationally? Then your company should definitely be registered in a free zone. 

Dubai currently offers the best tax conditions in the world.  

Companies registered in Dubai (in Freezone) are tax exemptwhich means that you will not have to pay tax on the profits of these companies.  

Companies registered in the Mainland benefit from the unparalleled development of a city that to double its population in the next 15 years and attracts several million visitors each year.

Dubai also benefits from a strategic location that makes it easy to do business with the rest of the world, particularly because of its reputation and the fact that the city is not associated with a "Tax haven".   

The living environment in Dubai makes it one of the most attractive cities in the world.  

Owning a company in Dubai is also an open door to spending time there or even wanting to settle down.  

Although it has an image of a "seaside city", it is nevertheless one of the most optimised and richest cities in terms of "Business.  

Indeed, just by following the travels or living areas of successful entrepreneurs, it is clear that there is something going on in this city, which has become the favourite spot for these personalities to meet.  

For families, the city offers an ultra-secure environment. In a context where our European capitals suffer from real security problems, it is quite normal to consider offering a secure environment to relatives.

This city is also an unrivalled example of "living together", and proves that it is possible to bring together communities that are extremely opposed in terms of their origins, their cultures and their religions, in perfect harmony.  

Lastly, as an individual shareholder of a company and benefiting from zero taxation on your income as a tax resident in the Emirates, this obviously has a knock-on effect on your ability to capitalise.

To obtain a Residence Visa in Dubai, there are several options available to you: 

• Being an employee of a local company

As an employee of a company in the UAE, you will be granted a 2 year residency visa for a mainland registered company, and a 3 year residency visa for a freezone company. This residence visa is intrinsically linked to your employment and can be terminated at any time if your employment contract ends.  

In this case, you have 30 days following the termination of your employment contract to obtain a new residence visa or be forced to leave the territory.  

Beware that some people claim to sell "Residence Visas". This may be displayed under the heading of Freelance Visa.  

These visas do not exist and this consists of selling a Residence Visa within a third party company under the cover of a false job. This solution is favoured by African and Indian expatriates, but leads to the following problems:   

• As your Visa is intrinsically linked to the company that does not belong to you, you have no control over your Residence Visa, and therefore over your life, and potentially that of your family.  

For example, if the company closes down, you will lose the total amount of money you spent to obtain your Visa, as well as those of your family.  

In addition, the company may decide to increase its fees overnight in return for keeping your Visa active.

Finally, it is mandatory for the company to prove to the government that it pays you each month as an employee. Therefore, you would have to send funds to the company each month, to be returned to your own personal bank account through a government agency called WPS, and thus suggest that you are receiving a salary.

• Visa by investment in residential property

Applicable to people who choose to invest in a residential property worth one million dirhams or more.

The investment must be in residential property and not in commercial property. In addition, the visa only applies to freehold residential properties. It is not possible to apply for this visa for a property on plan.

The duration of the visa varies between three and five years and can be maintained as long as the investor owns property in the country.  

The three-year visa is available to those who have purchased a property worth one million dirhams or more, while the five-year visa requires ownership of a property worth at least five million dirhams.  

Please note that in most cases, even if your visa is linked to your investor status, you will still need to consider opening a company in order to access various levers.  

• You create your own job through the setting up of your company  

In this case, you have full control over your Visa of residence, and that of your family. In addition, you are able to create residence visas for potential partners and/or employees. This can be done without having to invest a large amount of money in the property market. This solution offers you full security in your settlement project.

As an employee in the UAE, you are eligible to sponsor and create Residence Visas for your family. They will be granted a visa of the same duration as yours.  

We will assist you in this process, firstly by preparing the necessary file, and secondly, by travelling with you to the organisations on site. 

It is simply not possible to undertake the set up of a company in the United Arab Emirates without making mistakes. 

Firstly, it is almost systematically impossible to open a professional bank account, and a large sum of money is invested in a Licence that is often out of date.

Secondly, and without being aware of it, since this step is carried out in a totally disinterested way, comes the time for fiscal consideration.

This can be, for example, the optimisation of your set-up from the outset, with a view to repatriating your capital at a later date and with the objective of investing in real estate in your country of origin.

At MAJ, each arrangement is entirely tailor-made, in cooperation with the banker, the tax expert and our operational team.

The result is a total guarantee of a perfectly tax-optimised package and the assurance of opening your business bank account in record time. 

MAJ supports you in Dubai, and offers you a range of tailor-made services, including  

• The setting up of your company
• An accounting support, and a follow-up of your administrative procedures
• Tax optimization 
• Follow-up and legal advice
• The opening of your bank accounts  
• The obtaining or extension of your visas  
• The search for health insurance
• Your settling in as a freelancer

The Common Reporting Standard (CRS) also called The Common Reporting Standard (CRS) is a standard developed by the OECD, at the request of the G8 and G20, to improve tax transparency and combat tax evasion. This standard defines an automatic exchange of information between tax administrations on the financial accounts of non-resident clients of financial institutions. improving tax transparency and combating tax evasion. This standard defines an automatic exchange of information between tax administrations relating to the financial accounts of non-resident customers of financial institutions. 

Thanks to its expertise, and in full compliance with the law, MAJ offers today CRS-proof company structures and thus allows you to benefit from total confidentiality on your activities in the United Arab Emirates. total confidentiality about your activities in the United Arab Emirates. 

Since January 2019, the United Arab Emirates applies a 5% value added tax (VAT) on products and services marketed in the territory.  

The registration of your company with the FTA (Federal Tax Authority), in charge of VAT collection, is mandatory before reaching a turnover of 375K AED (+/- 000K USD).  

The MAJ team will take care of this procedure for you.  

• There is no tax on your company licence (registered in Free zone) and on your personal income.  

However, you should be aware that the annual cost of your licence is a "social contribution", and allows the Emirates to obtain an income and to ensure the proper functioning of public institutions.  

The cost of your Licence is therefore an annual expense and must be taken into consideration in the same way as rent for your accommodation.  

What makes this system very different from the one currently in place in the majority of states where you are taxed, is the fact that once you have paid this fixed annual Licence fee, all of your profit is yours. 

In order for you to benefit from zero tax on your personal income, you must plan to live in the UAE for more than 6 months per year.  

However, there are several reasons why you may still be liable for various taxes in your home country.

In order to make sure of this and to assist you in this stage of your life, an appointment with our tax expert is planned and included in the purchase of your Freelance Licence.  

It is possible, and right now.  

You can book a one-hour meeting with our tax advisor and discuss your personal situation.

To do so, please book your appointment by clicking on this link: www.maj.ae/consultation-expert-fiscaliste

Our team takes care of everything and offers you exceptional residency validation conditions.  

For example, your residency validation requires only one 15-minute trip to a government centre for your medical examination, where you will be welcomed as a VIP.  

Our team will travel to all the organisations and deliver your documents directly to your home. 

Please note that since the beginning of 2022, Dubai randomly sets the appointment date for fingerprinting. Until this step is completed, the production of your Emirates ID cannot start. Due to the large number of new applications for residency in the UAE, it can take up to 45 days to obtain an appointment.  

MAJ uses its local contacts to get you an appointment the same day. As the Emirates ID is required to access government services, this can save you valuable time and money.  

For example, once you have your Emirates ID, you can rent a flat. This means that you can reduce your expenditure on short-term rentals and get access to an annual rental contract as soon as possible. 

As soon as your residency validation process is fully validated with the receipt of your Emirates ID, we will help you to open your personal bank account and obtain your bank account number within 24 hours.

If you wish to obtain an account in the UAE without being a resident, our banking department can assist you in obtaining a "Saving account".  

As a non-resident, you will not receive a cheque book and can only use your debit card to withdraw or deposit funds at ATMs.

The unrivalled attractiveness of the United Arab Emirates in terms of taxation generates an exponential number of new company set-ups, year after year.   

This results in thousands of files to be examined by the local banking world, while taking care to ensure real checks to fight against money laundering.  

The FATF (Financial Action Task Force) has also added the UAE to its grey list for 2022 with the aim of accompanying the country in this ultra-fast growth and ensuring that it remains in perfect harmony with the respect of international fights (against terrorism, etc.).  

These verifications increase the time required to open a professional account in the Emirates.  

Moreover, in order to give priority to certain files, the sales representatives present in the banks and in charge of welcoming the applicants for accounts, do not hesitate to take advantage of this situation by demanding important liquidity deposits, or even a minimum balance to be left on the account at all times, on pain of financial penalties.  

It takes between 2 and 5 months, depending on many criteria, to open a business bank account.

To address this problem in terms of time, financial limitations, and administrative burden, MAJ offers an optional guaranteed opening of your business bank account, within 30 days, and with exceptional conditions.

Indeed, our agency takes full advantage of its unique and in-depth links with the local banking community to offer you the following benefits:  

• Opening of your account within 30 working days
• Next day signing
• No cash deposit required
• No minimum balance required on the account
• No need to provide a business plan
• No need to provide proof of a real estate rental agreement (Ejari).
• Extraordinary opportunity to sign your account opening upon validation of your residency and passport stamp, before receiving your Emirates ID (you gain up to 45 extra days).  

For more information about our unique banking service, please visit our dedicated page www.maj.ae/bank 

Club MAJ Business is a business club private business club.  

Access is strictly reserved for owners of a company in Dubai and by application only.

To find out more about Le Club, please visit our dedicated page.