Creation of one
society to Dubai
The different types of companies in the Emirates:
1. Offshore companies
The Offshore Company is considered to be operating outside the jurisdiction of the Emirates.
All of its customers must therefore be located outside the Emirates.
The advantages are:
It can register remotely without the physical presence of the partners in the Emirates.
It is particularly suitable for types of activity such as consulting or intermediation.
Its cost of creation makes it the cheapest company in the Emirates (RAK).
The registration deadline is 48 hours.
The disadvantages are:
The offshore company immediately presents an obvious structural defect.
Indeed, the advantages related to the non-physical presence (impossibility of having offices in Dubai) constitute a base of disadvantages.
First and foremost, a lack of economic substance (see article on economic substance).
Secondly, this type of company does not allow you to obtain residence in the Emirates
This is generally assessed on the basis of factual criteria such as: the existence of human and material resources of the structure, its management autonomy, its legal reality and, where applicable, the nature of its assets .
Advantages disadvantages :
Speed of creation of the company.
Requires no physical presence.
Expansion of company on the international market.
No local sponsor needed.
Impossibility of obtaining offices.
No commercial and business relations in the Emirates.
A weak economic substance.
No application of the tax treaty.
Difficulty in obtaining the confidence of banking institutions.
2. the Free-zone company
This company is characterized by its domiciliation in a specific so-called free zone, these zones are located within the 7 Emirates, in particular in Dubai
The conditions for doing business in free zones are very attractive.
The advantages are:
The first specificity linked to this area is the application of the law. Indeed, Free Zones have their own rules of law in order to facilitate commercial and business life.
Disputes in the Free Zone are settled through Common Law.
Thus, the establishment formalities are simplified, in particular no obligation to associate with an Emirati partner, ensuring independence and ownership of the company.
In addition, it should be noted that the same applies to employees working in the free zone, the latter are not subject to the labor law legislation applicable in the United Arab Emirates. (See article on labor law in the Emirates)
It is quite possible to hire employees on the condition that they are resident and to obtain resident status for them.
From a tax point of view, it should be remembered that the company established in a free zone will see itself (see article on the tax treaty) therefore no tax will have to be paid in this case.
The disadvantages are:
The free zone finds its most inconvenient limit, in the restriction preventing to have an activity outside this zone.
If the free-zone allows certain administrative facilities and confers legal advantages, on the other hand, its opening is limited to certain sectors of activity.
Another important aspect, naturally the creation of a free-zone company requires the installation of offices in a free zone.
Finally, due to the legal disparity and the limits mentioned above, it is more difficult to obtain the confidence of banks, although it is not impossible to claim to open a bank account.
Advantages disadvantages :
We allow you to obtain the speed of opening of the company (according to the chosen zone).
The administrative procedure is simplified.
The number of important areas in Dubai (see above).
Legal advantages (specific legal area, tax law, labor).
Activity limited to the free-zone (the same goes for the location of the offices).
The price can be expensive.
Licensing by activity.
3. The Mainland Company
The so-called “Mainland” society is naturally opposed to the free zone from a territorial point of view. Indeed, Mainland could be translated as the main territory, as such, the main characteristic of this type of society is not to be limited: on the one hand from a territorial point of view, on the other hand on its area of economic interaction.
The manager of a Mainland company can very well become a player in the local market. This alternative makes it possible to obtain a number of non-negligible guarantees relating to business life. Moreover, this form of company opens the doors to you without restriction of the market of the Emirates, but also of the international market, in a range of very varied commercial activity.
The advantages are:
Following a 2020 legislative reform, [1] it is now possible for anyone who opens a company under local law called Mainland to no longer be associated with a local sponsor (depending on the sector of activity), therefore holding all of the company's assets. (See article on the reform applied on June 1, 2021)
This advantage is one of the major strengths for many investors wishing to act on the UAE market.
This legal form will also allow you to buy real estate.
This strength is proportional to the confidence that the banking system gives to this type of company which provides certain guarantees.
Regarding the legal aspects, federal law [2] or common law jurisdictions will apply depending on the case.
The disadvantages are:
Mainly, the Mainland company has few disadvantages. However, it should be noted that the creation of this type of company is more expensive, which is the translation of the advantages it provides, those mentioned above.
In addition, from an administrative point of view, the registration period is longer without, however, exceeding 3 weeks.
Advantages disadvantages :
Opportunity to do business within the Emirates.
No longer requires an Emirati partner for the majority business (See law).
Freedom of territorial settlement.
Trust of banks.
Application of the federal law of the United Arab Emirates.
Registration deadline.
Cost.
4. The freelance license
The freelance license is a work permit in the Emirates, this license is suitable for self-employed workers because it guarantees freedom to offer various and varied services. In particular, with the health crisis the number of self-employed workers has increased, in Dubai there is a large number of freelance licenses, we note a reduction in the number of licenses issued over the past three years.
The United Arab Emirates attracts many independent consultants who can now enjoy the quality of life in the Emirates through this working method.
This permit, however, will be granted according to the sector of activity, it must correspond with the type of license requested, therefore duly justified. The freelance license can be obtained, both in a free zone and in the Mainland territory.
The advantages are:
Allows you to work in Dubai in complete independence, this scheme is perfect for remote work (at home) which only requires an internet connection for example.
It also eliminates the possibility of working outside the Emirates. A physical office is not a necessity.
We allow you to obtain this license quickly and its cost is less expensive.
Although it differs from the regime of other companies, the license will allow you to obtain a residency visa in the Emirates.
Possibility of obtaining the license both in a free zone of Dubai and in the Mainland territory.
This plan is not a company, it allows not to hold an audit, however we recommend the follow-up of the accounts.
Finally, this regime does not require you to have an Emirati partner either.
The disadvantages are:
If this regime allows total independence, it requires particular rigor in order to develop without structure.
It follows that it is not possible to have an employee under the license who is not a company, it is also excluded that the license does not allow obtaining a physical office.
This permit does not allow obtaining a professional bank account but only a private bank account.
The requested license must correspond to a specific sector of activity, which may de facto exclude certain areas of activity.
However, this status requires obtaining the license in the free zone sector.