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Business Setup FAQ

Company formation, also known as company registration or incorporation, refers to the process of legally establishing a new business entity or company. It involves registering the company with the relevant government authorities and obtaining the necessary permits, licenses, and approvals to operate the business legally.

The process of company formation varies depending on the legal and regulatory requirements of the jurisdiction where the company is being established. However, the general steps involved in company formation typically include:

  1. Choose a Business Structure: Decide on the legal structure of the company, such as a sole proprietorship, partnership, limited liability company (LLC), corporation, or others, based on factors like liability, taxation, and ownership.
  2. Select a Business Name: Choose a unique and appropriate name for the company that complies with the naming conventions and regulations of the jurisdiction where the company will be registered.
  3. Prepare and File Legal Documents: Prepare the necessary legal documents, such as articles of incorporation, memorandum and articles of association, partnership agreement, or operating agreement, depending on the business structure. File these documents with the relevant government authority or registrar of companies.
  4. Obtain Necessary Permits and Licenses: Identify and obtain any required permits, licenses, or approvals to conduct business activities legally. These may include business licenses, industry-specific permits, zoning permits, health permits, and others.
  5. Register with Tax Authorities: Register the company with the appropriate tax authorities to obtain tax identification numbers, such as an employer identification number (EIN) or value-added tax (VAT) registration, depending on the jurisdiction’s tax requirements.
  6. Open a Business Bank Account: Open a separate business bank account to manage the company’s finances and transactions. This helps to maintain clear separation between personal and business finances and facilitates accounting and taxation compliance.
  7. Comply with Regulatory Requirements: Ensure compliance with all regulatory requirements, such as labor laws, immigration laws, environmental regulations, and data protection laws, relevant to the business activities and industry.
  8. Pay Registration Fees and Taxes: Pay any required registration fees, incorporation fees, and taxes associated with company formation and ongoing operations.
  9. Maintain Corporate Records: Maintain accurate and up-to-date corporate records, including shareholder agreements, meeting minutes, financial statements, and other legal documents, as required by law.
  10. Renew and Update Registrations: Regularly renew and update company registrations, permits, licenses, and tax filings to remain compliant with legal and regulatory obligations.

Company formation is a crucial step for entrepreneurs and businesses seeking to establish a legal entity and conduct business activities in a specific jurisdiction. It ensures compliance with legal requirements, protects the business owners’ interests, and provides a foundation for future growth and success.

Setting up a company in Dubai offers numerous advantages for entrepreneurs and businesses looking to establish a presence in the Middle East. Here are some key reasons why Dubai is an attractive location for company formation:

  1. Strategic Location: Dubai is strategically located at the crossroads of Europe, Asia, and Africa, making it an ideal hub for international trade and commerce. Its proximity to key emerging markets provides access to a vast consumer base and lucrative business opportunities.
  2. Business-Friendly Environment: Dubai offers a business-friendly environment with minimal bureaucracy, streamlined procedures, and investor-friendly regulations. The government has implemented various initiatives to attract foreign investment and foster entrepreneurship, making it easier for companies to set up and operate in the emirate.
  3. Tax Benefits: One of the most compelling reasons to set up a company in Dubai is its favorable tax regime. The UAE does not impose corporate or personal income taxes, capital gains taxes, withholding taxes, or value-added tax (VAT) in most cases. This favorable tax environment translates into significant cost savings for businesses operating in Dubai.
  4. Access to Global Markets: Dubai’s world-class infrastructure, modern transportation networks, and state-of-the-art logistics facilities provide easy access to global markets. The city is home to one of the busiest airports and seaports in the world, facilitating trade and connectivity with major international destinations.
  5. Free Zones: Dubai offers a wide range of free zones that provide various incentives and benefits for businesses, including 100% foreign ownership, full repatriation of profits, tax exemptions, and customs duty waivers. Free zones cater to specific industries such as technology, media, finance, logistics, and healthcare, allowing companies to operate with greater flexibility and autonomy.
  6. Diverse Economy: Dubai’s diverse economy encompasses multiple sectors, including tourism, hospitality, real estate, finance, manufacturing, and technology. The city’s dynamic business environment and thriving economic ecosystem attract companies from around the world seeking growth opportunities and market expansion.
  7. Quality of Life: Dubai offers a high quality of life with modern amenities, world-class healthcare facilities, excellent educational institutions, and a multicultural environment. The city’s cosmopolitan lifestyle, vibrant culture, and recreational activities make it an attractive destination for professionals, expatriates, and their families.
  8. Stable Political and Economic Environment: Dubai enjoys political stability, security, and a robust regulatory framework, providing a safe and secure environment for businesses to thrive. The government’s commitment to economic diversification, innovation, and sustainable development further enhances Dubai’s appeal as a business destination.

Overall, setting up a company in Dubai offers numerous benefits, including strategic location, business-friendly environment, tax advantages, access to global markets, diverse economy, quality of life, and stability. These factors make Dubai an ideal choice for entrepreneurs and businesses seeking growth, expansion, and success in the Middle East and beyond.

The accounting treatment of share capital depends on the type of company and the applicable accounting standards in the jurisdiction where the company is incorporated. Here is a general overview of how share capital is accounted for:

  1. Initial Issuance: When a company issues shares to investors during its initial public offering (IPO) or through private placements, the proceeds received from the sale of shares are recorded as share capital on the balance sheet. This represents the amount of capital contributed by shareholders to the company in exchange for ownership rights.
  2. Common Stock and Preferred Stock: Share capital is typically classified into different categories based on the types of shares issued. Common stock and preferred stock are the two most common types of shares. Common stock represents equity ownership in the company and usually carries voting rights. Preferred stock may have preferential rights over common stock, such as priority in dividend payments or liquidation preferences.
  3. Par Value and Additional Paid-in Capital: In some jurisdictions, shares may have a par value, which is the nominal value assigned to each share by the company. The par value represents the minimum amount that shareholders must pay for each share. The amount received from investors in excess of the par value is recorded as additional paid-in capital or share premium. This represents the premium paid by investors for the shares over and above their nominal value.
  4. Treasury Stock: If a company repurchases its own shares from the market, the cost of repurchased shares is recorded as treasury stock on the balance sheet. Treasury stock is deducted from total shareholders’ equity and is considered as a contra-equity account. Treasury stock can be reissued or retired in the future, depending on the company’s capital management strategy.
  5. Accounting Standards: The accounting treatment of share capital is governed by generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS) in most jurisdictions. These standards provide guidelines on how to account for share issuance, share repurchases, stock dividends, and other transactions related to share capital.
  6. Disclosure Requirements: Companies are required to disclose relevant information about their share capital in the financial statements and accompanying notes. This includes details of share issuances, repurchases, dividends, stock splits, and other changes in share capital during the reporting period.

Overall, the accounting treatment of share capital involves recording the initial issuance of shares, tracking changes in share capital over time, and complying with applicable accounting standards and disclosure requirements.

The real use of an offshore company typically revolves around financial and legal benefits associated with establishing a business entity in a jurisdiction outside of one’s home country. Here are some common reasons why individuals and businesses choose to set up offshore companies:

  1. Tax Optimization: One of the primary reasons for establishing an offshore company is to take advantage of favorable tax laws and regulations in offshore jurisdictions. Many offshore jurisdictions offer low or zero corporate tax rates, as well as exemptions from various taxes such as capital gains tax, withholding tax, and inheritance tax. This can result in significant tax savings for businesses and individuals.
  2. Asset Protection: Offshore companies are often used as vehicles for asset protection and wealth preservation. By holding assets such as real estate, investments, and intellectual property through an offshore company, individuals can shield their assets from potential legal claims, creditors, and lawsuits. Offshore jurisdictions typically have strong privacy laws and strict confidentiality provisions, making it difficult for third parties to access information about company ownership and assets.
  3. Privacy and Confidentiality: Offshore companies offer enhanced privacy and confidentiality for their owners and beneficiaries. Many offshore jurisdictions do not require the disclosure of beneficial ownership information to public registries, allowing individuals to maintain anonymity and protect their privacy. This can be especially important for high-net-worth individuals, celebrities, and public figures who wish to keep their financial affairs private.
  4. International Business Expansion: Offshore companies can serve as vehicles for international business expansion and investment. By establishing a presence in an offshore jurisdiction, businesses can access new markets, facilitate cross-border transactions, and take advantage of international trade opportunities. Offshore companies may also benefit from simplified regulatory requirements and streamlined business processes in certain jurisdictions.
  5. Estate Planning and Succession Planning: Offshore companies are commonly used for estate planning and succession planning purposes. By transferring assets to an offshore company, individuals can structure their affairs in a tax-efficient manner and ensure smooth transfer of wealth to future generations. Offshore companies can also help mitigate inheritance tax liabilities and facilitate the orderly distribution of assets upon the owner’s death.

Overall, the real use of an offshore company lies in its ability to provide tax advantages, asset protection, privacy, and flexibility for individuals and businesses operating in a globalized economy. However, it’s important to note that offshore company structures should be established and managed in compliance with relevant laws and regulations to avoid legal and reputational risks.

An onshore company, also known as a mainland company, is established within the jurisdiction of the UAE outside of its free trade zones. While free trade zones offer various incentives and benefits for businesses, onshore companies have their own advantages and use cases within the UAE:

  1. Local Market Access: Onshore companies have the advantage of being able to operate and trade directly within the local UAE market without restrictions. This can be beneficial for businesses that primarily target local customers or need to establish a physical presence in the country.
  2. Flexibility in Business Activities: Onshore companies have greater flexibility in the types of business activities they can undertake compared to free zone companies, which are often limited to specific industries or sectors. This allows onshore companies to engage in a wider range of business activities based on their preferences and requirements.
  3. Access to Government Contracts: Onshore companies may have better access to government contracts and projects within the UAE, as many government tenders and initiatives are open exclusively to locally registered companies.
  4. No Currency Restrictions: Onshore companies can transact in any currency without restrictions, whereas free zone companies may have limitations on currency exchange and repatriation of funds.
  5. Lower Operating Costs: While free zones offer certain tax exemptions and incentives, onshore companies may benefit from lower setup and operating costs, as they are not subject to free zone-related fees and regulations.
  6. Flexibility in Employment: Onshore companies have more flexibility in hiring local and expatriate employees compared to free zone companies, which often have specific visa and employment regulations.

Overall, the real use of an onshore company in the UAE’s free trade zones lies in its ability to access the local market, operate with greater flexibility in business activities, and benefit from lower operating costs compared to free zone alternatives. However, the choice between establishing an onshore or free zone company ultimately depends on the specific needs and objectives of the business.

The company’s shareholders have over 15 years of joint experience in this business, including banking, financial and legal consulting in UAE.

You can register a company yourself in the UAE, but it’s important to understand the complexities and legal requirements involved in the process. Here are some reasons why individuals often choose to seek assistance from business setup consultants or PRO (Public Relations Officer) services:

  1. Legal Knowledge: Company registration involves navigating various legal and regulatory requirements, which can be complex and unfamiliar to individuals without legal expertise. Business setup consultants are well-versed in the laws and regulations governing company formation in the UAE and can ensure compliance with all necessary requirements.
  2. Documentation: Registering a company requires the preparation and submission of numerous documents, including business plans, shareholder agreements, Memorandum and Articles of Association, and more. Business setup consultants can help ensure that all required documentation is accurate, complete, and submitted correctly to the relevant authorities.
  3. Local Processes: The company registration process in the UAE can vary depending on factors such as the chosen jurisdiction (mainland vs. free zone), type of business activity, and specific requirements of government departments. Business setup consultants have experience with these processes and can navigate them efficiently on behalf of their clients.
  4. Language Barrier: While English is widely spoken in business settings in the UAE, some official documents and procedures may be in Arabic. Business setup consultants often have bilingual staff who can assist with translation and interpretation, ensuring clear communication throughout the registration process.
  5. Time and Efficiency: Registering a company can be time-consuming, especially if you’re unfamiliar with the process or if there are delays or complications along the way. Business setup consultants can streamline the process, expedite approvals, and handle administrative tasks on your behalf, saving you time and effort.
  6. Comprehensive Services: Beyond company registration, business setup consultants may offer additional services such as visa processing, bank account opening, office space rental, and ongoing business support. This comprehensive approach can provide peace of mind and support throughout the entire setup process and beyond.

While it’s possible to register a company yourself in the UAE, seeking assistance from experienced professionals can simplify the process, minimize potential risks, and ensure compliance with all legal and regulatory requirements. Ultimately, the decision to use business setup consultants or handle the registration process independently depends on your level of expertise, resources, and preferences.

Opening a company and a bank account in the UAE can be a relatively efficient process, especially if you choose to set up in one of the country’s many free zones. Here’s a general overview of the timeframe for each step:

  1. Company Formation:
    • Mainland Company: Setting up a mainland company typically involves more steps and regulatory requirements compared to free zone companies. The timeframe for registering a mainland company can vary depending on factors such as the type of business activity, completeness of documentation, and processing speed of the Department of Economic Development (DED). In general, it may take anywhere from a few days to several weeks to complete the registration process for a mainland company.
    • Free Zone Company: Free zones offer streamlined processes for company formation, making it faster and more straightforward compared to mainland registration. Depending on the chosen free zone and the type of package or service selected, you can often complete the registration process within a matter of days. Some free zones even offer online registration portals, allowing you to initiate the process remotely and receive your license quickly.
  2. Bank Account Opening:
    • Mainland Company: Opening a corporate bank account for a mainland company typically involves submitting the company’s incorporation documents, shareholder information, and other relevant paperwork to the chosen bank. The timeframe for opening a bank account can vary depending on the bank’s internal procedures, due diligence requirements, and the completeness of the documentation provided. In general, it may take anywhere from a few days to a couple of weeks to open a corporate bank account for a mainland company.
    • Free Zone Company: Opening a bank account for a free zone company follows a similar process to mainland companies, but may benefit from streamlined procedures offered by some banks in collaboration with free zone authorities. The timeframe for opening a bank account for a free zone company can vary depending on the bank’s requirements and the completeness of the documentation provided. It typically ranges from a few days to a couple of weeks.

Overall, if you opt for a free zone company setup and work efficiently with service providers, you can potentially complete the entire process of company formation and bank account opening within a matter of days. However, it’s essential to ensure that all required documentation is prepared accurately and that you comply with all regulatory requirements to avoid any delays in the process. Working with experienced business consultants or PRO services can help expedite the process and ensure a smooth setup experience.

The duration required to register a company and open a bank account in the UAE can vary depending on several factors, including the type of company (mainland or free zone), the specific requirements of the licensing authority and bank, and the efficiency of the service providers involved. Here’s a general overview:

  1. Company Registration:
    • Mainland Company: Registering a mainland company typically involves several steps, including obtaining initial approvals, drafting legal documents, and completing the registration process with the relevant authorities such as the Department of Economic Development (DED). This process can take anywhere from a few days to several weeks, depending on factors such as the complexity of the company structure, the completeness of documentation, and the efficiency of the authorities.
    • Free Zone Company: Registering a company in a free zone often involves a streamlined process compared to mainland registration. Free zones offer various packages and services designed to expedite company setup, including pre-approved business activities, ready-to-use office space, and online application portals. Depending on the chosen free zone and package, company registration can be completed in as little as a few days.
  2. Bank Account Opening:
    • Mainland Company: Opening a corporate bank account for a mainland company typically requires submitting the company’s incorporation documents, shareholder information, and other relevant paperwork to the chosen bank. The timeframe for opening a bank account can vary depending on the bank’s internal procedures, due diligence requirements, and the completeness of the documentation provided. In general, it may take anywhere from a few days to a couple of weeks to open a corporate bank account for a mainland company.
    • Free Zone Company: Opening a bank account for a free zone company follows a similar process to mainland companies, but may benefit from streamlined procedures offered by some banks in collaboration with free zone authorities. The timeframe for opening a bank account for a free zone company can vary depending on the bank’s requirements and the completeness of the documentation provided. It typically ranges from a few days to a couple of weeks.

Overall, while it’s possible to complete company registration and bank account opening relatively quickly in the UAE, factors such as the specific requirements of the authorities and banks, the completeness of documentation, and any additional services or packages chosen can impact the overall timeframe. Working with experienced business consultants or PRO services can help streamline the process and ensure compliance with all regulatory requirements.

The process for renewing a company in the UAE depends on various factors, including the type of company (mainland or free zone), the licensing authority, and any specific requirements or regulations applicable to your business activity. Here’s an overview:

  1. Mainland Companies: If your company is registered in the mainland, the renewal process typically involves submitting the necessary documents and fees to the relevant authorities, such as the Department of Economic Development (DED) in the respective emirate where your company is located. In many cases, you may not need to personally visit the authorities, as renewal applications can often be submitted online or through authorized representatives.
  2. Free Zone Companies: If your company is registered in a free zone, the renewal process may vary depending on the specific free zone authority governing your business. Many free zones offer online portals or dedicated service centers where you can submit renewal applications remotely. However, some free zones may require physical presence for certain documentation or procedures.
  3. Documents and Fees: Regardless of the type of company, you will typically need to submit certain documents and pay renewal fees. These documents may include the company’s trade license, lease agreement, passport copies of shareholders or partners, and other relevant paperwork. The renewal fees vary depending on factors such as the type of company, the duration of the renewal, and any additional services or facilities provided by the licensing authority.
  4. Timeline: It’s essential to renew your company’s license before the expiration date to avoid penalties or legal consequences. Renewal timelines may vary depending on the licensing authority and the specific regulations governing your business. Some authorities allow for early renewal within a specified period before the expiration date, while others require renewal closer to the expiration date.
  5. Professional Assistance: Many companies choose to work with business consultants or PRO services to facilitate the renewal process and ensure compliance with all requirements. These professionals can help navigate the renewal process efficiently and handle any documentation or administrative tasks on your behalf.

In summary, while it’s generally not necessary to personally visit the authorities for company renewal in the UAE, the specific requirements and procedures may vary depending on factors such as the type of company and the jurisdiction. Working with experienced professionals can streamline the renewal process and ensure compliance with all regulatory requirements.

In the United Arab Emirates (UAE), there are generally no federal taxes on personal income, capital gains, inheritance, or corporate profits. However, there are some exceptions and considerations to be aware of:

  1. Corporate Taxes: As of my last update, there is no federal corporate tax in the UAE. However, companies engaged in certain activities, such as oil exploration and production and branches of foreign banks, may be subject to taxes at the emirate level. Additionally, companies operating in free zones may be subject to specific tax regulations set by the respective free zone authorities.
  2. Value Added Tax (VAT): In 2018, the UAE implemented a 5% value-added tax (VAT) on the sale of goods and services. VAT applies to most goods and services, including food, electronics, entertainment, and professional services. Certain goods and services may be exempt from VAT, such as residential property rentals, local transportation, and certain healthcare services.
  3. Customs Duties: While not technically a tax, customs duties are levied on certain imported goods entering the UAE. The rates vary depending on the type of goods and their country of origin.
  4. Excise Tax: The UAE also imposes excise taxes on specific goods deemed to be harmful to human health or the environment, such as tobacco products, sugary drinks, and energy drinks. Excise tax rates vary depending on the type of product.
  5. Individual Taxes: There is no personal income tax on salaries or wages earned by individuals in the UAE. This means that individuals generally do not pay taxes on their employment income. However, expatriates may be subject to taxes in their home countries based on their citizenship or residency status.

It’s important to note that tax regulations in the UAE are subject to change, and businesses and individuals should stay informed about any updates or amendments to tax laws. Additionally, while there may be no federal taxes in the UAE, companies and individuals are still required to comply with relevant regulatory requirements and may incur fees for licenses, permits, and other administrative processes.

The cost of living in the UAE can vary significantly depending on factors such as location, lifestyle, and personal preferences. Here’s an overview of some key expenses you might encounter:

  1. Housing: Housing costs can be one of the largest expenses in the UAE. Rent prices vary depending on the city and type of accommodation. In popular expat areas like Dubai and Abu Dhabi, expect to pay higher rents compared to other emirates.
  2. Utilities: Utility bills typically include electricity, water, and internet. These costs can vary based on usage and the size of your accommodation. In general, expect to pay a moderate amount for utilities, especially during the hot summer months when air conditioning usage increases.
  3. Transportation: The UAE has an extensive public transportation network, including buses, taxis, and metro systems in cities like Dubai and Abu Dhabi. Transportation costs can vary depending on your usage and whether you own a car or rely on public transport.
  4. Food: Food prices in the UAE can vary depending on whether you eat out or cook at home. Dining out at restaurants, especially in upscale areas, can be relatively expensive. However, groceries from supermarkets and local markets are generally more affordable.
  5. Healthcare: Healthcare costs in the UAE can be significant, especially for expatriates who may not be covered by government-funded healthcare. It’s advisable to have health insurance to cover medical expenses, including doctor’s visits, hospitalization, and medications.
  6. Education: If you have children, education costs can be a significant consideration. International schools in the UAE can be expensive, with tuition fees varying depending on the school’s reputation, curriculum, and facilities.
  7. Entertainment: The UAE offers a wide range of entertainment options, including shopping malls, restaurants, cinemas, and recreational activities. While some activities may be relatively affordable, others, especially those in tourist areas, can be more expensive.
  8. Miscellaneous Expenses: Other miscellaneous expenses to consider include clothing, personal care items, communication (mobile phone, internet), and leisure activities.

Overall, while the UAE offers a high standard of living with modern amenities and infrastructure, it’s essential to budget carefully and consider your lifestyle preferences when estimating your living costs. Additionally, factors such as inflation, currency fluctuations, and changes in government policies can impact living expenses over time.

Improving your language skills can be a rewarding journey, and there are several effective strategies you can use to enhance your proficiency. Here are some tips to help you deal with different aspects of language learning:

  1. Practice Regularly: Consistent practice is key to language improvement. Set aside dedicated time each day to engage with the language through activities like reading, writing, speaking, and listening.
  2. Immerse Yourself: Surround yourself with the language as much as possible. This can include watching movies or TV shows, listening to music or podcasts, and reading books or articles in the language.
  3. Use Language Learning Apps: There are many language learning apps available that offer interactive lessons, vocabulary drills, and pronunciation practice. Find one that suits your learning style and incorporate it into your daily routine.
  4. Find a Language Partner: Practice speaking with native speakers or other learners through language exchange programs or online forums. This will not only help improve your speaking skills but also give you exposure to different accents and colloquial expressions.
  5. Take Language Classes: Consider enrolling in a language course or hiring a tutor to receive structured instruction and personalized feedback. Group classes can provide opportunities for interaction and collaboration with fellow learners.
  6. Set Realistic Goals: Define specific, achievable goals for your language learning journey, such as mastering a certain number of vocabulary words or holding a conversation on a particular topic. Celebrate your progress along the way to stay motivated.
  7. Focus on Communication: Prioritize developing your ability to communicate effectively in real-life situations. Don’t worry too much about making mistakes – they are a natural part of the learning process and can provide valuable opportunities for improvement.
  8. Seek Feedback: Ask for feedback from teachers, language partners, or native speakers to identify areas for improvement and track your progress over time. Actively incorporate feedback into your practice sessions to address weaknesses and build on strengths.
  9. Be Patient and Persistent: Language learning takes time and effort, so be patient with yourself and stay committed to your goals. Celebrate small victories and stay motivated by reminding yourself of the benefits of bilingualism and the opportunities it can open up for you.

By incorporating these strategies into your language learning routine and maintaining a positive attitude, you can effectively deal with different aspects of language acquisition and make meaningful progress towards fluency. Remember that every step you take brings you closer to achieving your language learning goals.

The company’s shareholders, who have many years of experience in bank sector, legal and financial consulting, where confidentiality policy is an indicator of professionalism and absolutely essential part of business, incessantly have followed and continue following the regime of maintaining of absolute confidentiality of client information and embody the principle of this approach at all levels of our company.

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