The Formation of a Business in the City of Dubai

Dubai is one of the fastest growing cities in the whole world. The city is located in the emirate of Dubai which is one of the seven emirates of United Arab Emirates. The city, a decade ago, was just an ordinary city whose main source of income was through the oil refinery and trading. The oil trading sector constituted a major portion of Dubai’s economy and almost all of the exports consisted of oil and petroleum products. Due to the steps taken by the government, the condition of Dubai started changing. The city that was previously an ordinary city started emerging as one of the favorite tourist destination and the city that offers the greatest sorts of luxuries in the world. Along with these, the city went under commercial and industrial development as well and became one of the greatest commercial hubs in the world. A lot of people due to this development made their way into the markets of Dubai. New businesses started being setup in the city of Dubai. The companies in UAE that were situated in other emirates were moved into the city of Dubai by the owners. Also a lot of foreign exchange in the form of capital and investment was provided by the investors that were investing in the businesses in Dubai. New free zones were setup that helped in promoting the business in the region and motivated the international companies to setup their bases in this huge metropolitan city. Even now a lot of foreigners are moving into the commercial market of Dubai and are setting up businesses there. Due to the ease of setting up a business in the city of Dubai, these new investors do not face any kind of inconvenience which has also contributed in making Dubai a popular commercial hub. The question that arises in our minds here is that “how to set up a business in Dubai”. The overall process of business and company formation is quite simple and hassle free. The laws and regulations in Dubai for corporate companies are quite lenient with almost no tax in corporate sectors. The activities in Dubai are licensed and fall under three categories of Commercial license which is for all trading companies, Professional license which covers professional services offered by the people and Industrial license which is for manufacturing and production activity. These licenses are normally provided by Dubai Economic Department and are mandatory for companies to obtain one for the relevant activity before starting operations. There are certain ownership requirements that have to be followed area wise while setting up a business in Dubai. There are some areas where 100% local ownership is allowed only. Free zones on the other hand allow 100% foreign ownership. Some areas require majority of shares owned by local residents or government. Once it has been decided that in which area the company or business is going to be set up, the next important thing is to decide the type of business that is going to be formed. In Dubai, General Partnership Company, Partnership en commendams, Joint Venture Company, Public Shareholding Company, Private shareholding company, Limited Liability Company and Sole proprietorship businesses are normally allowed.