8 Common Questions Asked About Setting Up a Business in Dubai | ExpatWoman.com

8 Common Questions Asked About Setting Up a Business in Dubai

If you're considering opening a company in Dubai, here answers to some basic questions you might have about Free Zones and LLCs.

8 Common Questions Asked About Setting Up a Business in Dubai

Looking to set up your business in Dubai? You may have a lot of questions

There is a lot of research that needs to be done when looking into opening a company in Dubai.

Since it’s a decision that shouldn’t be taken lightly, you will need to have an in-depth understanding of how things work in the emirate.

To start off, there are some basic common questions you might have on setting up a business in Dubai, so we’ve got the answers for you here…

1. What is a Free Zone?

Free Zones in Dubai were created with an aim to boost international business in the UAE through providing 100% foreign ownership.

There are many different Free Zones and each has its own requirements concerning permitted activities as well as office space. It tends to be a cheaper and easier process than an LLC.

2. How does a Limited Liability Company (LLC) differ from a Free Zone Company?

An LLC allows you to freely operate anywhere in the UAE and you can trade within the country and internationally.

SEE ALSO: 5 Mistakes to Avoid When Setting Up a Business in Dubai

Previously, you would need a local Emirati sponsor/partner who has 51% ownership of your company, but some businesses simply need the flexibility. However, as of November 2020, the UAE granted 100% foreign ownership of all onshore commercial companies in the UAE.

3. Do I have to live in Dubai to open a business there?

No, since 100% foreign ownership is now possible Free Zones and for onshore UAE-based businesses.

SEE ALSO: You Can Now Start Businesses Remotely in Dubai

Dubai is the first city in the world that allows remote investors to start and run businesses from abroad.

4. Do I need to rent an office in Dubai?

Yes, you are required to have a physical address in the country.

To even qualify for a licence, you’ll need to have a valid lease for an office or warehouse space.

Starting a business in Dubai FAQ

5. What are the limitations of having a Free Zone company?

While there are many benefits to having a Free Zone company, there are also some limitations. These include:

  • Can’t trade directly with the UAE market
  • Can trade within the UAE only through locally appointed distributors
  • There is a 5% custom duty applicable
  • Employees have to work only from the company’s offices within that Free Zone

6. How long does it take to set up a business in Dubai?

This will depend on whether it’s an LLC or a Free Zone Company. It will also vary depending on which Free Zone and if the company has an individual or corporate shareholder.

It’s usually said that it can be formed within 48 hours, but in reality, it will take anywhere from 3 – 6 weeks.

7. Do I need to get a residence visa after registering the business?

This too will depend on whether it’s an LLC or a Free Zone licence.

The General Manager, who has the authority to sign on behalf of the company, should have one. The visa holder needs to be in Dubai every six months or it will be cancelled.