Legal Aspects of Business Setup in Dubai
It is in Dubai that everyone needs to make a settlement of their own company. The world is moving at a pace that makes everyone compete to make a change. From foreign investors to local business chains are looking for their ideal spot in Dubai to establish their mark. The Dubai government is making appropriate decisions to ensure the business setups in Dubai are economically viable. But also understanding business setup in Dubai requires you to go through all the legal aspects the government put forward. The legal procedures can be tricky and hard for many to understand. Here are some of the important legal guidelines that need to be followed while you consider a new business setup in Dubai.
Setting up the business in Dubai
When you consider establishing a company in Dubai you need to find out the basic geography of the place. The location of your company dictates how you are going to sustain yourself in the market. More than that, the authorities in Dubai have divided many places to give more clarity to the significance of the location. The place is basically split into Mainland and Free Zones.
Dubai Mainland provides a great deal of purpose for your company to sustain. Setting up a company on the mainland will give you a tremendous amount of opportunities and perks that can predict the well-being of your company. But to own a company in the mainland you need a local sponsor. According to the Department of Economic Development, which is controlling the operations of the mainland, you need to have some residents to advocate for you in front of the nation. And he should be a shareholder in the company.
When it comes to Free Zones in Dubai, the amount of business opportunities you are going to get does not have an end. These are certain regions in Dubai which present themselves to be ideal for business activities. They provide the perfect ground for trading and marketing. The companies inside a free zone will have total ownership of their company. They don't want a sponsor or anyone to make decisions for them. The tax-free policy is the highlight of these free zones. There are more than 20 free zones alone in Dubai. A total of 44 of them are in the entire UAE. And each implemented its own rules to ensure the smooth running of the zones. So when deciding the location for your company, make sure to entirely understand the legal jurisdiction of the specific free zone.
Required Documents for a Dubai Business Setup
Application Form: A form that needs to be filled with the details of the desired company you need to set up in Dubai. You can find a physical copy from the Tasheel offices or from the ministry of Trade in Dubai. The application can be also completed online with the official website on the internet but the requirement for physical submission of documents is recommended.
Copies of passport: For the verification of identity and ethnicity you need to provide a copy of your passport with the other documents. Each shareholder of the intended company should submit a copy for verification.
Memorandum of association: This is only applicable to the companies that choose to set up their companies in the Dubai mainland. This document should be attested at the time. The necessity of it is to show who all are the main shareholders and other important people according to the hierarchy in the company. It defines the motive and purpose of the company. The ministry will get a good view of how the company is useful in society and helps in economic growth.
Steps in Registering a New Business Setup in Dubai
Step 1: Business Name Registration
The primary thing you need to do is to start with selecting a name for the company. There are plenty of other owners registering their companies every day. Your title should be unique. Registering the name will let you know whether the name is already taken or not. Also by registering the name of the business, you can mention it in the remaining documents. It is the initial step in business registration.
Step 2: Application for Business License
There are mainly three types of business licenses in Dubai. The professional, commercial, and industrial. Knowing what your company falls into should be discussed while making a business plan. The business must have a goal. They are serving specific customers. Having a business plan will make you decide on what sector your company will fall into. According to the business plan, you can decide the license for the company you need to run.
Step 3: Good Conduct Certificate
A good conduct certificate will make the shareholder of the company more trustworthy with the application. The police clearance procedure is a quick process that can make sure you are free from any charges or criminal background.
Step 4: Verification of Documents
The verification process is the final step in considering all the documents you submitted to the ministry of trade. This process will be completed within two weeks of time if it is free from errors or missing documents. They will check everything is correct and complete to justify that the intended business is ready to run in Dubai.
ConclusionThe company formation in Dubai is becoming common with all the exceptional advantages they are getting from the government. It is opening doors for new businesses. Many keep worrying about the legal threads about the new business setup in Dubai. But the authority has laid it straightforward to make it easier and more convincing for the shareholders and entrepreneurs.