Can you own 100% of your business in Dubai?
Starting a business in Dubai can be an exciting opportunity, but many entrepreneurs are unsure about the ownership restrictions in the region. In this article, we will explore whether it is possible to own 100% of your business in Dubai.
Understanding Business Ownership in Dubai
In Dubai, the legal framework for business ownership is governed by the Dubai Department of Economic Development (DED) and the Dubai Creative Clusters Authority (DCCA).
Dubai offers various free zones that allow 100% foreign ownership of businesses. These free zones are designated areas where foreign investors can establish their companies without the need for a local partner or sponsor.
Popular free zones in Dubai include Dubai Multi Commodities Centre (DMCC), Dubai Internet City (DIC), Dubai Media City (DMC), and Jebel Ali Free Zone (JAFZA).
These free zones provide attractive benefits such as exemption from corporate and personal income taxes, full repatriation of profits, and no currency restrictions.
For businesses outside the free zones, the ownership model differs. Previously, having a local partner or sponsor was mandatory, with the local partner holding a minimum of 51% ownership.
However, in recent years, the DED has introduced initiatives to promote foreign business ownership in mainland Dubai. These initiatives include the issuance of 100% ownership licenses in specific sectors.
Currently, specific commercial activities such as professional services, trading, consultancy, and e-commerce are eligible for 100% foreign ownership in mainland Dubai, subject to certain criteria.
The Process of Owning 100% of Your Business in Dubai
To own 100% of your business in Dubai, you need to follow these general steps:
1. Determine Eligibility
Identify if your business activity falls within the eligible sectors for 100% foreign ownership in mainland Dubai. If not, consider establishing your business in one of the free zones.
2. Prepare the Required Documents
Compile the necessary documents such as passport copies, business plan, proof of address, and any specific industry-related certifications or permits.
3. Choose a Company Name and Legal Structure
Select a unique business name and determine the legal structure of your company, such as Limited Liability Company (LLC), Sole Proprietorship, or Branch of a Foreign Company.
4. Secure Approvals and Licenses
Submit your application to the DED or the relevant free zone authority. Obtain the necessary approvals and licenses based on your business activity.
5. Register for Taxation
Register for taxation with the relevant authorities, such as the Federal Tax Authority (FTA) for Value Added Tax (VAT) registration.
6. Open a Bank Account
Once you have obtained the necessary licenses, establish a business bank account with a local or international bank operating in Dubai.
While it was previously required to have a local partner or sponsor, Dubai now offers opportunities for 100% foreign business ownership. By understanding the available options, complying with the legal requirements, and following the necessary steps, entrepreneurs can own their businesses in Dubai and benefit from its vibrant economy and strategic location.