Doing business affordably in Dubai

Starting a business in Dubai can offer tax and business benefits, but it is less straightforward than is often portrayed: you choose between establishing a branch on the UAE Mainland or in a Free Zone, must arrange a legal structure, trade license, and registrations, and take into account the corporate tax that has since been introduced. Whether the move is worthwhile depends heavily on your specific situation. Below, you will find the main points and considerations.

Want to proceed immediately? Check out our page on starting a business in the UAE affordably.

Why do business in Dubai?

More and more entrepreneurs are considering establishing themselves in Dubai, one of the emirates of the United Arab Emirates (UAE), and starting a business. Tax considerations and the strong business climate often play a role. However, anyone doing business in another country must comply with that country's rules and requirements. Good preparation and legal advice are therefore essential.

What forms of business exist in Dubai?

Just like in the Netherlands, you can choose from various business structures, each with its own rules. Common types include:

• Limited Liability Company (LLC): to be incorporated with multiple shareholders, with limited liability as a key characteristic.
• Private Shareholding Company: a corporate form for larger enterprises.
• Share Partnership Company: a form in which partners collaborate.

The choice depends on your activities, the number of owners, and the desired liability structure.

How do you set up a company in Dubai?

It is sometimes suggested that you can set up a company in the UAE within fifteen minutes, but in practice, much more is involved. Among other things, you need to arrange:

• a trade name and the registration thereof;
• the Memorandum of Association (MOA), the deed of incorporation;
• a trade license appropriate to your activities;
• registration with the Chamber of Commerce (the local Chamber of Commerce).

In addition, visa and residence aspects, as well as any requirements regarding local shareholding, play a role. It therefore remains complex; proper guidance prevents mistakes.

Free zones and special economic zones

An important distinction is that between the UAE Mainland and the Free Zones. The UAE has special economic zones that fiscally and operationally attractive, including Dubai Maritime City, Dubai CommerCity, and Dubai Science Park in Dubai. Each zone has its own benefits, conditions, and restrictions (for example, regarding doing business within the local market). Familiarize yourself with these before making a location decision.

Please note: the business climate and regulations in the UAE have changed in recent years. For instance, a federal corporate tax has since been introduced, meaning the UAE is no longer automatically “tax-free,” and Free Zones have their own tax regimes with specific conditions. Furthermore, the international “Doing Business” ranking is no longer up-to-date. Therefore, base your choice on the current rules.

Frequently asked questions about doing business in Dubai

Is doing business in Dubai really tax-free?

Not without further ado. The UAE has introduced a corporate tax, although thresholds and special regimes apply (including for certain Free Zone activities). Whether and how much tax you pay depends on your structure and activities. Have this assessed on a case-by-case basis.

What is the difference between a Mainland and a Free Zone?

In principle, a Mainland company may operate more broadly in the local market, whereas a Free Zone company has its own (often favorable) rules but may face restrictions when doing business outside the zone. The best choice depends on your customers and activities.

Do I remain liable for tax in the Netherlands?

Possibly. Your place of tax residence and the location where your business is actually managed determine whether the Netherlands continues to levy taxes. A foreign establishment without a genuine relocation of the activity often does not yield the intended tax benefit. Have this thoroughly investigated.

Advice on establishing a business in Dubai

Setting up a company in Dubai is less straightforward than it seems: there are various legal forms and jurisdictions, and the tax benefits must be assessed on a case-by-case basis. The legal experts at MKB Juristen advise on the possibilities and risks and guide you where necessary. View our expertise in corporate law or schedule a consultation.