Dubai is a vibrant Middle East trading hub which proves attractive to international entrepreneurs. The following information will help you determine whether Dubai company incorporation is the optimum solution to fulfill your international business objectives:
Advantages of Dubai Company Incorporation
- Dubai company incorporation is not perceived as an offshore company in a tax haven. Dubai is a reputable international trading jurisdiction. This is confirmed in the UAE’s 28th place ranking in the 2010 Corruption Perceptions Index by Transparency International.
- If properly-structured, Dubai company incorporation is an ideal way to legitimately book international profits without paying local corporation tax.
- To encourage Dubai company incorporation, the Dubai government offers investor incentives, including low cost energy and good communications infrastructure.
- Dubai has strong client confidentiality laws and refuses to exchange information with the Organisation for Economic Cooperation and Development (OECD).
- Through a Dubai branch company, one can wholly own the entity and not be subject to an annual audit.
- Foreigners can own 100% of a Dubai company if it is located in one of the UAE Free Zones.
- Through a Dubai Offshore Company, it is possible to have a Dubai entity and business address, without the legal requirement to rent a physical office and employ staff.
- There are no specific capital requirements for Dubai company incorporation. After a decree to abolish the legal minimum, capital requirements are dependent on the objectives of the business. In this way small and medium enterprises should benefit, without the disadvantage of a relatively large capital requirement.
- The UAE is the world’s 23rd most competitive economy, according to The Global Competitiveness Report 2009-2010.
- The UAE ranks a positive 35th on the United Nations Human Development Report 2009 for its high overall life expectancy, literacy, education and living standards.
Disadvantages of Dubai Company Incorporation
- Dubai company incorporation is both difficult and expensive because of i) high government fees ii) inconsistent and complex Dubai company law and iii) inefficient bureaucracy. Reflecting this, the World Bank’s Doing Business 2010 Survey ranks the UAE the world’s 33rd easiest place to do business. Furthermore, the UAE is ranked a lowly 46th in the Heritage Organisation’s Heritage Organisation’s 2010 Index of Economic Freedom.
- It is challenging to incorporate a Dubai company unless your Firm enters an expensive lease to open a local office and employ local staff.
- A Dubai limited liability company (LLC) requires a UAE national to hold a 51% share.
- There are no clear, consistent laws and rules governing Dubai company incorporation, including cash payments to the government.
- A Dubai Branch company requires a UAE national sponsor.
Approximate costs for Dubai Company Incorporation
- Dubai LLC – budget for total engagement costs approximate US$ 35,000 – US$45,000. Total engagement costs vary depending on the range of the professional services required, the industry type and the Government license required.
- Dubai Offshore Company – budget for engagement costs approximate US$13,000 for this type of Dubai company formation, including corporate bank account and local virtual office.
- UAE Free Zone Company – budget for engagement costs range between US$ 27,000 and US$ 37,000 depending on Free Zone location, quarterly rental costs etc.
- Dubai Branch Company – budget for engagement costs range between US$35,000 and US$45,000, depending on the range of the professional services required, the location of parent company and the rental of business premises.
- Dubai Airport Free Zone Company – budget for engagement costs range from US$16,000 to US$ 29,000 including i) Free Zone Authority fees ii) working visas iii) Free Zone rental deposit iv) corporate bank account opening and v) Consultants professional advisory fees.