A Brief Comparison of Business Entities in Dubai


Dubai is viewed by foreign entrepreneurs as an entry to the huge African and Middle Eastern markets. The preferred forms of business incorporation in Dubai are the Limited Liability Company (LLC), the Free Zone Company and the Branch office. A foreign investor can, however, have 100% ownership of a free zone company, whereas a limited liability company can only be formed if 51% share ownership belongs to a local shareholder. Dubai limited liability companies can carry out trade within the UAE. In comparison, a Dubai free zone company can conduct business with within the UAE via resident agents. A Dubai limited liability company is not subject to corporate income taxes or withholding taxes.



Dubai LLC Registration Facts


  • It takes 5 weeks to incorporate a Dubai limited liability company
  • There is no minimal capital requirement
  • A physical office setup is required
  • A Dubai limited liability company can conduct business in Dubai and is permitted to engage in sales contracts with local clients
  • Visa applications allowed
  • No need for a public register of shareholders and directors
  • Minimum of 2 shareholders are required for company formation
  • One director is required
  • A local shareholder is required
  • There are no corporate tax requirements



Steps Required for Dubai Limited Liability Company Formation


  • Appoint a company name
  • Provide the office lease management
  • Sign company registration forms
  • Tax and social security registration
  • Business license



Benefits of Dubai Company Incorporation


Dubai is well known as the most profitable emirate in the UAE and a metropolitan city, which marries features of both eastern and western cultures. Advantages of forming a Dubai limited liability company include the following:


  1. Taxation Benefits


  1. Foreign investors enjoy benefits of lawfully boosting their profits by lessening tax liabilities, all within a highly reputable business dominion. There is no requirement for company taxes, withholding taxes, personal taxes, VAT, import/export taxes and capital gains tax
  2. The 66 international double tax treaties diminish withholding tax on foreign remittances, which is favorable for local businesses


  1. Financial Services


  1. Dubai is the widely acknowledged financial center of the Middle Eastern and African (MEA) markets and the Dubai International Financial Center is utilized by numerous financial organizations, insurance firms and asset management companies
  2. Since there are no exchange controls, a business owner in Dubai has no problem getting access to local currency


  1. Entrance to the Middle East and Africa


  1. Dubai has a history of being a trading center for the huge markets of Middle East and Africa. Because of this crucial geographic location, Dubai has many international trading and freight and shipping companies
  2. Due to its superb logistics and transportation infrastructure, Dubai is the ideal location for product distribution. Also, Dubai permits duty free exports to 17 Middle Eastern countries, which is highly favorable for the incorporation of an offshore company by a foreign investor
  • Dubai hosts easy import/export policies and imposes no trade restrictions, as well. As a result, numerous international banking and non-banking financial institutions use Dubai as a base for operations and utilize Dubai’s superb trade finance facilities.


  1. Regional Headquarters


  1. A Dubai company incorporated by a foreign investor gives it a reputability and source of trust for the Middle Eastern and African markets, which otherwise have a negative view of foreign invested companies. As a result, foreign businesses vastly profit from the liberal business laws and policies in Dubai
  2. Foreign investors can use a Dubai incorporated Offshore Company as a lawful tax exempt vehicle, to extract funds as dividends, management fees and royalties from regional subsidiaries
  • As a highly modern and developed city, Dubai provides excellent quality for living facilities, education, entertainment and tourism


  1. Preferred Location for Entrepreneurs


  1. 80% of Dubai’s population consists of foreigners, and hence there are a lot of foreign entrepreneurs found there. This, in turn, promotes a healthy environment for creativity and interchange of skills and entrepreneur talent across a potpourri of cultures and industries, all strengthened and fuelled by the free market milieu
  2. Because of its high reputation as one of the richest nations around the globe, Dubai is an ideal location for high net worth and reputable foreign entrepreneurs. Many of the world’s most renowned and biggest brands are also found in Dubai, promoting the luxurious style of living there



Disadvantages of Dubai Company Incorporation


  1. Expenses occurred due to various government fees and unavoidable office charges
  2. A UAE national has to own 51% of shares, so that a foreign investor can incorporate a limited liability company in Dubai
  3. Dubai is vulnerable to terrorism and terrorist attacks, which can have unfavorable effects upon the economy, property prices, foreign investment, business assurance, as well as the peace and well-being of residents
  4. UAE nationals have to sponsor company visas and licenses and, thus, have indirect control over foreign investors’ business ventures in Dubai
  5. Dubai’s laws are in favor of the nationals and any disputes between a foreign investor and a national can make running a venture in Dubai very testing and challenging
  6. Government tenders have been backing UAE nationals and Dubai companies, since the previous few years
  7. In case creditors appeal folding up of a Dubai company and if inadequate accounting records pointing towards insolvency are discovered by court auditors, then directors and shareholders are liable for outstanding company dues
  8. If a UAE shareholder dies, his shares in the Dubai company will be transferred to his family
  9. While registering a company and opening its bank accounts, a foreign investor will be required by the Dubai government to attest documents in the Dubai Embassy located in his country of origin. Not only is this an expensive, but also a time costing procedure which adds more complications to the company incorporation process. The documents needed to be attested include:
    1. Parent company certificate of registration, as well as Memorandum and Articles of Association
    2. Parent company share certificate, also known as certificate of incumbency
  • Parent company Certificate of Good Standing
  1. Board Resolution allotted by parent company
  2. Power of Attorney allotted by parent company