Company formation in UAE – There’s no denying that Dubai is the place to go if you want to start a business in another country. However, it would be best if you always kept in mind that Dubai is extremely popular as a global trading hub in the Middle East and North Africa (MENA). As a result, it offers many advantages to enterprises and companies wishing to grow, prosper, and connect with the rest of the world.
According to figures, Dubai’s economy rose by 2.1 per cent in the first half of 2019, with total GDP reaching USD 56.7 billion in the first half of the year. Furthermore, in 2020, GDP is predicted to rise to 3.8 per cent. As a result, the city’s expansion prospects have piqued the interest of a growing number of entrepreneurs. Fortunately, thanks to the UAE’s free zones, the process is simple if you’re thinking about launching a company formation in UAE.
Few Things to Keep In Mind during Your Offshore Company Setup Dubai
Before you start your offshore company formation Dubai, there are a few things to consider before you start your offshore company formation. Here’s a detailed breakdown of each factor separately.
Offshore Vs. Free Zones in the Economic Zone
There’s no denying that you must ideally decide whether you wish to operate in a Free Zone or Offshore before you begin. Both solutions have pros and downsides depending on your needs.
You must ideally look to apply for a license and a location in one of Dubai’s free zones if you want 100% ownership (absolute) of your company. The Dubai government created the free zone idea to entice foreign investors to shop in the city. To put it simply, it’s a unique economic zone where business owners can profit from various ownership and taxes incentives.
However, it’s essential to mention that one of the major drawbacks of having a business in a free zone is that you can’t make direct trade with the UAE market. Detailed research reveals that there are now around 30 free zones in operation in Dubai. In general, each free zone is organised around a specific industry area and gives licenses to businesses that fall into that group.
If you are a first-timer, you must remember that several of the same advantages apply to offshore enterprises registered in a free zone. However, it’s essential to note that offshore is not a replacement for a free zone firm. The fundamental distinction between a free zone and an offshore company is how the firm is run.
For instance, offshore companies are only permitted to conduct business outside the UAE. They also do not require a minimum amount of capital before incorporation. Moreover, you will need a sponsor, which will limit your foreign ownership to only 49 per cent- this is drastically different from operating in a free zone.
Are You Prepared To Start An Offshore Business Setup In Dubai?
There are plenty who come up with a million-dollar concept daily. However, the real challenge begins when you have to execute it. What comes next? Although it may seem like a long process, creating your company effectively will only take a few weeks. This is when the difference between a wantrepreneur and an entrepreneur begins.
As per the experts, there are solutions to this problem, one of which is establishing your company as an offshore corporation. This business structure is not only the most efficient for new businesses, but it is also the most cost-effective. It’s a legal business like any other, but it doesn’t need corporate headquarters or local sponsors.
To put it simply, the beneficial owner owns the company absolutely, and this structure allows you to create corporate bank accounts anywhere in the world- similar to any other corporation. As a result, it’s the ideal place to take off and take your first steps towards entrepreneurship.
Here’s a detailed breakdown of things to think about while officially registering your offshore company. These will undoubtedly assist you in getting started with your offshore company formation in UAE.
Find an Agent to Help You Register Your Business
There are plenty of brokers offering company formation services since the offshore business proliferates. However, you must ideally ensure that your homework is solid- this will allow you to choose the option with the most positive online reviews.
Decide On Your Incorporation Nation
There’s no denying that this is important since not all countries permit every type of business. You can, however, do business everywhere in the world, except in the country where you were incorporated. As a result, it’s critical to understand that you won’t be able to do business in any country where you mix.
Obtain the Necessary Information
Your representative will inform you of the paperwork you must submit. Although certain jurisdictions may have more information requirements than others, the following is typically required:
- A clear and readable notarised copy of your passport. A notary, banker, or lawyer might certify the passport.
- Proof of address for the previous three months (e.g., a utility bill).
- A bank reference letter from the client’s bank account may be requested in some cases. (Don’t worry; the account balance is unimportant.)
The agent will instruct the relevant country’s registry to incorporate your company once all of the following have been completed. Later on, you should receive a copy of your corporation documentation within two to three business days. This means your company is up and running, and you may begin doing business.
The entire procedure should take approximately two weeks and cost around $1500 on average, from when you make your order until you receive all of the requisite original paperwork. The annual renewal charge is expect to be around $1,000.
It only fits to admit that the United Arab Emirates is a legal entity that allows you to conduct international business while remaining outside UAE jurisdiction. To put it simply, offshore firms in the UAE can own property and businesses anywhere globally, including UAE. Therefore, companies base in the UAE Free Zone should not be confuse with offshore companies base in the UAE.