Undertaking the process of business setup in Dubai Textile City enables foreign investors to establish their companies in the region’s largest textile trading destination. Dubai Textile City free zone was opened for business in 2006 to boost Dubai’s textile sector and position the emirate as Middle East’s foremost textile trading hub. The free zone was formed as a result of an agreement between TEXMAS, the Textile Merchant Group, and the Ports Customs and Free Zone Corporation (PCFC).
Since the textile market is set to be one of the most lucrative sectors in Dubai after the oil sector, opting for a business setup in Dubai Textile City makes business sense. Dubai Textile City offers dedicated warehouse facilities, state-of-the-art office and showroom spaces to make textile trading and re-exports smooth. The procedure of company formation in the fee zone is straightforward and flexible, for which business set consultants in Dubai can assist foreign entrepreneurs.
Activities Allowed for Business Setup in Dubai Textile City
Dubai Textile City mainly permits business activities related to the textile industry. In this respect, the free zone authority allows three types of business activity for company formation in Dubai Textile City. The three broad categories of business activities in Dubai Textile City are stated below:
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Types of Legal Entities in Dubai Textile City
Based on the number of shareholders and nature of the corporate structure, three types of legal entities are permitted for business setup Dubai Textile City. It is important to note that the documents and capital requirements may vary for each legal structure. Business setup consultants in Dubai can provide more information on such requirements. The following are the three legal structures recognised by Dubai Textile City free zone authority:
Free Zone Limited Liability Company
Free Zone Limited Liability Company (FZ-LLC) is an independent legal entity that can be established with only a single shareholder. The shareholder can be an individual or a corporate entity.
Free Zone Company
A Free Zone Company (FZCO) in Dubai Textile City is a legal entity with at least two shareholders. The shareholders can be individuals or corporate entities. An FZCO can be easily formed by availing of business setup services in Dubai.
Branch of Foreign or UAE Company
Companies registered outside the UAE or within the UAE can set up a branch office in Dubai Textile City. A branch is a legal entity under the name of its parent entity. A branch office should conduct the same activities conducted by the parent company.
Process of Business Setup in Dubai Textile City
The process of business setup in Dubai Textile City is rather straightforward, requiring fewer approvals. However, the entities need to be approved by TEXMAS before applying for a trade license. Investors can simplify the licensing process with the help of business setup consultants in Dubai. Investors must execute the following steps to set up a business in Dubai Textile City:
- Select an activity
- Choose an appropriate legal structure
- Reserve a company name
- Apply for a license
- Sign lease agreement
- Submit documents
- Pay relevant fee
- Receive license
- Apply for UAE Residency visas
- Open a bank account
Documents Required for Company Formation in Dubai Textile City
Investors need to be meticulous in drafting and translating the documents required for business setup in Dubai Textile City. Inadequate or inaccurate documentation is one of the common reasons why the process of company incorporation in Dubai often gets delayed. However, documentation can be made perfect by availing of bespoke business setup services in Dubai. Get the following documents for quickly registering a company with Dubai Textile City free zone:
- Passport copies of shareholders
- CV and passports copies of Manager
- Personal information sheet of each shareholder and manager
- Proof of company name reservation
- Proof of initial approval for the company incorporation
- Notarized Memorandum of Association (MOA) and Article of Association (AOA)
- Lease agreement showing a physical address for the proposed company
Benefits of Business Setup in Dubai Textile City
Investors always think about the benefits they get in return for setting up a company in a free zone. Fortunately, each free zone in the UAE offers unique benefits apart from providing come common benefits as well. By incorporating a company in Dubai Textile City, foreign investors can experience the following benefits:
- 100% foreign ownership
- 100% repatriation of capital and profits
- Zero personal income tax
- Zero corporate tax
- Exemption from customs duties
- Options for subleasing
- Ability to transfer goods into the city free of customs duty
- Options for a long-term lease for 30 years (renewable)
- Rent-free for 15 years – pay only ground lease
- No intermediaries to add to costs
- Worldwide publicity promotes better business turnover
- Low operational expenses
- Dubai and the UAE is a safe and stable environment for doing business
- Strategic location
- Excellent connectivity to trading hubs
Compliance Requirements in Dubai Textile City
Companies incorporated in Dubai Textile City must comply with the latest regulations that are applicable for companies across the UAE. These regulations include Ultimate Beneficial Ownership (UBO), Economic Substance Regulations (ESR) and Anti-Money Laundering and Combatting Financing of Terrorism (AML-CFT). UBO details must be disclosed at the time of company registration in Dubai Textile City. The companies must also create and maintain UBO registers such as the Real Beneficiary Register (RBR), and Partners of Shareholders Register (PSR).
Companies must make a self-assessment every year to check whether they fall under the scope of ESR. If yes, they should meet obligations such as filing of ESR Notification and Economic Substance Report. Financial Institutions and Designated Non-Finance Businesses and Professions (DNFBPs) must meet AML-CFT requirements as per relevant laws. Failing to ensure compliance with these regulations will lead to hefty penalties and other punishments such as suspension of trade license and sharing of information with the foreign competent authority. Consult with business setup consultants in Dubai to avoid non-compliance.
Enlist the Best Business Setup Services in Dubai, UAE
Starting a Textile Business in Dubai Textile City is a lucrative opportunity for foreign investors wishing to establish a presence in the Middle East. The process of business setup in Dubai Textile City is simple and offers direct access to the free zone’s unparalleled facilities and other benefits. However, applying through business setup consultants in Dubai such as Jitendra Business Consultants (JBC) makes the process more efficient and faster.
JBC is the leading provider of bespoke business setup services in Dubai with over 20 years of experience. We have a team of consultants who are well-versed in UAE Immigration laws and labour laws. Our market knowledge and experience act as a guiding light for aspiring entrepreneurs. Our services include PRO services, documentation & translation, VAT registration, VAT return filing, audit & accounting, trademark registration etc. JBC also helps investors to ensure compliance with ESR, UBO and AML-CFT laws. Call JBC’s advisers today to receive our best business setup packages.