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Understanding the Different Types of Business Setups in the UAE

by Business-Setup.ae

Posted on 07-July-2019

The UAE has grown exponentially over the past twenty years and is now seen as an alluring location for business owners looking to set up or expand their business. The UAE has an exceptional finance and banking sector that provides growth opportunities for foreign business owners. Due to incentives parlayed to foreign business owners looking to set up a business in the UAE, this represents a unique opportunity for those wanting to start a business in the area. The first step in the business registration process involves the business owner defining their type of business.

Limited Liability Company

A Limited Liability Company (otherwise referred to as an Onshore Company) is perhaps the most popular type of organization that is registered in the UAE. A business owner will seek to gain this form of license when they intend to receive operational rights to work within the UAE. As a requirement, physical offices must be established in the UAE and there needs to be more than one UAE resident as a company shareholder.

Free Zone Company

Free zones represent a unique opportunity in the way they offer lucrative incentives to entrepreneurs, business owners, and organizations. Within a designated free zone, of which there are over 30 in the UAE, a business can be fully owned by a foreigner. There is a complete tax exemption on imported and exported goods. In addition, there is a 100% repatriation of all capital and profits. Unlike an offshore company, businesses in a free zone must operate in a real office or warehouse.

Branch Office

A company defined as a branch office operates as an extension of an overseas parent company. All business is carried out under the name of the parent company. There are restrictions placed on the branch office – namely that it cannot import or export on its own. A branch office may need a specific license to operate legally. These can be obtained from the relevant government body in the UAE.

Offshore Company

An offshore company has the advantage of being easily set up by business owners looking to operate outside of their country. In the UAE, an offshore company has the most straightforward incorporation procedure. There is no license required and there are no corporate taxes. In addition, an offshore company can be accommodated using virtual offices.

Offshore companies operating in Dubai includes a range of industries looking to expand their goods and services to a larger market.