Debunking the Top Myths About The Process of Business Setup in Dubai


Research has shown that the process of business setup in Dubai is the most cost-effective option for foreign investors. Dubai attracts investors with factors such as robust infrastructure, cost-effective packages provide by free zones, lucrative trading options in the mainland etc. However, aspiring entrepreneurs still possess certain myths regarding the process of company formation in Dubai. Business set up consultants in Dubai attempt to debunk certain myths here. Read on.

The cost of business setup in Dubai is high 

Every entrepreneur needs a certain amount of capital investment to set up a business anywhere in the world. The cost of establishing companies varies from country to country. However, the cost of setting up a business in Dubai is comparatively cheaper than in other European countries. In other major jurisdictions, you need to pay a wide range of taxes including corporate taxes, income taxes etc. However, you are not liable to pay such taxes while setting up a company in Dubai. The only tax in Dubai is the Value Added Tax (VAT), which is a meagre 5%. Moreover, many free zones offer low-cost business setup packages in Dubai.

The process of business setup in Dubai is complex 

Dubai continues to be an open economy even when many top jurisdictions have adopted stringent policies that keep away investors. The process of business setup in Dubai is flexible and involves fewer steps. Free zones are the best option for investors who wish to register a company in Dubai smoothly. Free zones are regulated by independent authorities with less stringent licensing rules.

You Don’t need to run around government departments when it comes to business setup in Dubai free zones. Free zones have dedicated customer service executives who will process your applications quickly. You can even submit applications from outside the UAE to open a company in Dubai free zones. The process will be much easier if you apply through business setup consultants in Dubai.

Foreigners must partner with UAE Nationals 

This is one of the biggest myths associated with the process of business setup in Dubai. Free zones in Dubai permits 100% foreign ownership and you don’t need to have a UAE national as a local sponsor. Foreign investors can even fully own their companies when they start an offshore company in Dubai. Earlier, Dubai mainland required the investors to partner with a UAE national to start a business.

The local sponsor used to hold 51% ownership and the rest 49% shares were owned by foreign investors. However, the government scrapped that rule in 2021 and now foreign investors can fully own a Dubai mainland company under specific commercial license activities. You can now start a real estate brokerage company in Dubai mainland with 100% foreign ownership (It used to be 100% owned by UAE nationals earlier).

Company formation is a time-consuming process  

Aspiring entrepreneurs often think that it takes much time for obtaining a business license in Dubai. However, it is not true as the process of business setup in Dubai is flexible. You can receive your trade license in Dubai within three weeks if the documentation is proper. Setting up a business in Dubai free zones is music easier as you can get the license in a few days. Proper documentation is the key to quickly opening a company in Dubai. Business set up consultants in Dubai can help you properly draft all the documents to expedite the licensing process.

Knowledge of business and tax laws are necessary 

This is somewhat true. You can’t start a business in Dubai without knowing about UAE immigration, labour and tax laws. Furthermore, there are a new set of regulatory requirements such as Economic Substance Regulations (ESR), Ultimate Beneficial Ownership (UBO) and Anti-Money Laundering and Combatting Financing of Terrorism (AML-CFT). However, foreign investors need not rack their brains to understand such complex legal requirements.

What you can do is seek the help of experts who are well-versed in immigration & labour laws apart from having a good knowledge of VAT, ESR, UBO and AML-CFT. Business set up consultants in Dubai are experts in all the laws at the Federal and Emirate level. Applying through company setup advisers in Dubai will help you start and run a business in compliance with the local laws.

How can Jitendra Business Consultants Help You? 

The process of business setup in Dubai is preferred by foreign investors due to factors including cost-effectiveness, 100% foreign ownership, no tax, flexible licensing process etc. However, many aspiring entrepreneurs show inhibition in taking the plunge due to some common myths associated with the process of company formation in Dubai. That is why we have debunked a few of the most common business incorporation myths here. For further assistance, you can contact the best business setup consultants in Dubai such as Jitendra Business Consultants (JBC).

JBC can help foreign investors with knowledge about UAE laws, licensing procedures in free zone mainland and offshore jurisdictions. We have a team of business setup consultants in Dubai who can help you with processes such as VAT registration, ESR, UBO, AML-CFT etc. Contact us today for a quick company formation in Dubai.

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