Starting a business in Dubai can prove to be a lucrative and profitable venture. It’s not difficult to start a company in Dubai, as there are many sources of information and companies ready to assist you in starting up your company. You could also get help from your friends or relatives who have established companies before. A good place to begin is by consulting a business adviser (who can also provide services for businesses in other areas of the world).
Dubai is a cosmopolitan city and emirate within the united Arab Emirates situated on seven islands. Burj al Arab, the highest and most skyscraping tower, is dominating the skyline. In its height is Dubai Fountain, embellished with lights and jets. At its foot lies Dubai Tower, the biggest and tallest man-made structure in the world. At its toe lies the Palm, a palm-fringed marine mammal zoo where one can observe sea-life and birds. At its backdrop is the exclusive Burj el Arab Hotel, home to the worlds only 7-star hotel.
There are several international financial centres and international business hubs in Dubai. The leading economic centre is Dubai with its wide range of education and employment opportunities. To cater to the needs of the multinational corporate there are numerous international business centres offering different forms of registration. Companies can benefit from these registration services by carrying out their necessary paperwork in their chosen location. Registration in Dubai involves various legal requirements like foreign ownership, transfer of shares and formation of limited liability company (LLC) with the government.
There is a huge requirement for companies to register in Dubai because of its location and its legal system, and it needs a large amount of money to run its administration. Dubai has attracted many wealthy individuals with its free trade zones, tax free income and low corporate tax. This attracts new business aggressively. There is no capital gains tax in Dubai, and the same applies to the workers and the investors. Thus, it is very easy to set up an International Business Company in Dubai which is beneficial for the company’s owners as well as the investors.
Like other places around the world, in Dubai, Company Formation in Dubai includes different forms of taxation, including income tax, value added tax and property tax. A foreign individual or a company registered in Dubai has to pay all these taxes, depending on the kind of trade they perform in Dubai. An offshore company formation in Dubai is comparatively cost-effective than other methods of registration. For instance, a US citizen, if he owns a company in Dubai, does not have to pay income tax to the Dubai authorities as he would have to pay income tax to the US authorities. He could also choose the option of paying the lower value added tax, but he will have to pay a certain percentage of his profits in this way.
On the other hand, a foreign investment in a company would have to pay the full amount of the income and capital gains tax to the Dubai authorities, as well as other countries along with the company would pay their own share of property taxes. So, he cannot enjoy such advantages. Even if a company were to buy a stake in an oil refinery in Dubai, and then sell it afterwards, they will still be required to pay the appropriate property taxes in Dubai. But with a the national owning the shares, the ownership automatically increases in the end, thus increasing the company’s asset value, even before paying the taxes.
The advantages of Company formation in Dubai are evident to everyone who wants to open a new branch in Dubai. It can be cheaper than applying for offshore company registration in places like the UK or Canada. Companies formation in Dubai is comparatively easier than doing it in distant countries. Also, if the applicant wants to change their ownership in the future, he does not need to go through the process of acquiring a new citizenship and he can easily transfer the shares.
Company formation in Dubai requires a minimal financial contribution as compared to the fees related to offshore registration. Companies can save a large amount by opting for a limited liability company registration, which offers them several benefits such as exemption from property taxation, tax payments and stamp duty. Companies have to pay registration fees at the end of each year; otherwise they might lose their shareholders’ rights and their ability to trade in certain markets. Company formation in Dubai also provides the ease of having their own legal personnel on hand in case of legal disputes.
Also read: The Dubai Business Law and Regulations on Company Formation
