Foreign investors coming to the UAE can choose among the Emirates they want to open companies in, but also among the various types of legal entities they can set up operations in. Dubai is one of the most prolific Emirates of the UAE and it is also one of the most reputable business centres in the world.

Those who want to open a company in Dubai can set up onshore companies with the purpose of completing activities in and outside the UAE. For this purpose, they need to comply with the requirements of the Company Law.

Types of Dubai Onshore Companies

According to the Companies Law in Dubai, onshore companies may be incorporated under different forms among which limited liability companies, private and public shareholding companies. Foreign companies also have the possibility of registering branch offices or subsidiaries as onshore companies in Dubai. All types of onshore companies have different shareholding structures and share capital requirements as follows:

  • Dubai limited liability companies must have at least one UAE national partner holding at least 51% of the paid-up capital,
  • free zone companies allow 100% foreign ownership.

Licensing requirements are applicable to all types of companies.

Advantages of Setting Up Onshore Companies In Dubai

The registration of a company in Dubai provides many benefits to foreign investors, that are why the Emirate has flourished during the last few years. Among these benefits are:

  • the simple regulatory system,
  • the tax-free economy,
  • the lack of capital gains and corporate tax in Dubai
  • the possibility of owning real estate,
  • multiple currency available banks accounts for companies,
  • the skilled Dubai workforce.

Register Onshore Company in Dubai

Most of the time, businesspersons must choose between onshore and free zone companies when setting up a company in Dubai. There are several differences between these entities, and we mention the most important below:

  • the onshore company can complete its activities on all the territory of the UAE, but also outside of it, while a free zone company is bound to operate within the respective free zone;
  • a foreign investor will need a local partner or sponsor for registering an onshore company, while in a free zone, full foreign ownership is permitted;
  • the registration options for an onshore company are multiple, while free zones companies must be registered under the legal structures available in those economic areas;
  • from a licensing point of view, both types of companies can apply for similar licenses, however, free zone companies must complete specific activities of the free zones they are registered in.

Both types of entities have advantages and disadvantages, however, the Dubai onshore company is more suitable for large operations which can be completed in and outside the country. Also, an onshore company can take the form of a limited liability company, a legal entity popular in all countries in the world.

Foreign companies seeking to operate in the UAE can also set up onshore companies in Dubai under the form of subsidiary and branch offices.

Registration Requirements and Steps For A Dubai Onshore Company

The opening of an onshore company in Dubai falls under the regulation of the Company Law and implies preparing several documents and filing them with the Dubai Trade Register. In order to incorporate an onshore company, a local or foreign investor must prepare the Articles of Association and appoint a local agent to complete the registration procedure with the Companies Registrar.

The following steps need to be completed upon the creation of an onshore company in Dubai:

  1. Find a location that serves as a legal address for the onshore company (a virtual office is a good option for start);
  2. Draft and notarize the Memorandum and Articles of Association of the company;
  3. Bank account set up in which the share capital will be deposited;
  4. File the statutory documents alongside personal information of the shareholders and company directors;
  5. Register for taxation and apply for a VAT number, according to the new VAT legislation;
  6. Apply for one of the licenses mentioned above, in accordance with the activities to be completed.

If the company needs other special licenses and permits, these must be obtained with relevant authorities in the industry the company operates in those must be recognized by the Dubai government

For guidance in registering an onshore company in Dubai, you can rely on our local consultants.

Licensing requirements for Dubai onshore companies

No matter the type of onshore company to be incorporated in Dubai, there are three types of trade license;

  • Commercial Trade License
  • Industrial Trade License
  • Professional Trade License

Commercial Trade License

The Commercial license is for a company dealing with buying and selling of goods and commodities, or any kind of trade activities. It can be used for both specialized trading and general trading activities in the UAE.

Industrial Trade License

The industrial trade license is used by businesses that want to conduct industrial or manufacturing-based activities. This license will allow them to engage in activities related to converting natural materials or incorporating natural resources into their end products.

Professional Trade License

The purpose of the professional trade license is to establish that the person or business is qualified to provide services in a certain profession. All professionals, specialists, craftsmen and artisans need to acquire a professional trade license to set up a business in Dubai.