The economy of UAE is booming with a lot foreign investment from across the world. Several industry sectors in UAE are witnessing a positive growth presently.
Due to the market prospects and large volume of target audience investors from other countries are starting companies in Dubai. Entrepreneurs are keen on establishing their companies in Dubai and scaling up their business operations.
Hence, before venturing into the rapidly growing business ecosystem of Dubai, the entrepreneurs must get an answer to a few questions that will allow them to plan the business launch more efficiently in UAE.
Key Things to Know Before Starting a Company in UAE
Here are a few key things to know for the investors before starting a company in UAE.
There are several points to consider before starting a company in the UAE for the investor. Dubai is a perfect choice for trading companies as well as consulting companies. Also, an ideal location for several business categories such as technology, travel, tourism, hospitality, healthcare and more.
To effectively manage business profits, overseas traders can choose to establish a company in UAE and export the goods from a company in the home country to the UAE company.
They can invoice the trade from UAE and sell to the buyer, pay the VAT if eligible under the minimum sales turnover criteria, and send goods directly to the destination without the shipment touching the UAE Ports.
Also, businesses trading internationally can set up a company in UAE and carry out the invoicing in Dubai and sell it to the buyer without sharing the supplier invoice or details. There are many flexible ways to trade based in UAE and easily scale up the business growth.
1. UAE’s Tax Policy
UAE has a very favorable tax policy for entrepreneurs, organizations, and employees. There is no personal income tax in UAE. The Corporate Tax is at a nominal rate of 9%. Other than that there is only a 5% VAT in UAE chargeable for all sales transactions within the country.
Businesses must be well aware of the VAT registration and period filing of VAT returns. Also, since the introduction of VAT, organizations must keep a well-audited account and submit the reports to the authorities upon demand.
All Companies operating in UAE are not in the scope of VAT, it depends on the modus operandi of the company. Also, there are certain criteria for registering for VAT such as a minimum annual turnover of above AED 375,000.
To know more read: VAT Registration Criteria in UAE
2. Business Jurisdiction
Opening the company in the right business jurisdiction is an important aspect to focus on. It determines the future business operations of the company.
There are three business jurisdictions to start a company in UAE – the Free Zone, mainland, and offshore.
Investor must choose the nature of the business activity and the correct jurisdiction to start a successful business in UAE. An experienced business consulting firm such as AURION Business Consultants can support all this process.
3. Special Approvals for Certain Business Activity
Certain business activities in Dubai, UAE require special approval due to the nature of the business. For example, any finance related business must get approval from the Central Bank of UAE.
Similarly, a food stuff trading business must get approval from the Dubai Food and Safety Department and Dubai Municipality before starting the sale.
Additionally, business activities such as real estate, healthcare, construction, manufacturing, finance, etc., require special approvals from specific government departments.
For example, a real estate consultancy must be registered with the Real Estate Regulatory Authority (RERA), and the registration certificate to start the company operations in UAE.
Depending on the business activity there are certain approvals required in UAE to sell and market the products and services. For example, healthcare companies must get approval from Dubai Health Authority to market or sell the product in UAE.
The approvals will protect the rights of the customer as well as the organization in case of any disputes or so occur between the parties.
4. Business Network and Infrastructure
The business network and infrastructure in the free zone are ideal for service companies to attend to their client’s business requirements. Similarly, companies who are into global business operations and not focusing on UAE markets can opt for an Offshore Company.
UAE provides a perfect platform to develop a strong business network and also has a robust infrastructure for business growth.
5. Bank Account Opening in UAE
Opening a Bank Account in UAE is a relatively straightforward process. Bank in UAE provides digital bank account opening services to investors based in UAE. Entrepreneurs can easily open and operate their corporate bank accounts digitally using internet banking facilities.
Our Consultants will easily guide you through the process of opening a bank account in UAE.
6. UAE residence Visa
The entrepreneur can apply for the investor visa under the company, sponsor one director and hire employees depending on the visa quota. The residence visa process is hassle-free and can be applied with minimum documents from the Free Zone Visa department.
Our expert team of Business Consultants will assist you in the UAE residence visa process and ensure you have a hassle-free process.
7. Starting Branch or Subsidiary Company in UAE
A foreign company can start its branch or subsidiary company in Dubai easily. Starting a company in UAE helps in expanding the business and scaling up the business to new geographies.
By submitting the required documents to the authorities, choosing the activity, license type, and choosing the office space, the branch office can be quickly set up in UAE.
8. Company Laws in UAE
UAE has certain amendments in the following laws to make the business ecosystem more transparent and compliant with global regulations.
- Economic Substance regulations
- Ultimate Beneficiary ownership declaration
- Ant-Money laundering registration
- VAT Registration
These amendments to the company laws will help in creating a transparent business environment in UAE.
9. Business Support Services
Entrepreneurs must always have a look at the overhead expenses and administrative requirements that will occur during the business.
Enough funds should be available to meet the expenses related to business insurance and office space expansion. Additionally, employee hiring and staffing, employee training and skill development, and more.
Hence, as a whole, there are multiple headers that an entrepreneur must oversee before venturing into starting business operations and establishing a company in UAE.
To know more about the cost-effective ways of starting a company in UAE, talk to our expert Business Consultants right away! Read our Blog: How to Setup a Business in UAE?
