Dubai is lucrative to set up your business, but setting up a business is a little different from other part of the world. There are few things that you have to know before setting up a business in Dubai and decide accordingly.
Types of business setup in Dubai
When setting up business in Dubai you have 3 options to choose from, that options are setting it up in Mainland, setting it up in Free Zone and setting up an offshore business.
Business in Mainland
A business in Mainland Dubai is registered with Department of Economic Development (DED). A business registered in Mainland Dubai is Tax Free and allows you full authority on how you run your business, but as per law for any business in Mainland Dubai requires a local Sponsor or Local Service agent. The local sponsor will have a 51% share in the business, whereas the expats running the business will have a 49% share.
Business in Free Zone
Running a business in a free zone is a great option, as it doesn’t require any local sponsor and you can hold 100% share of the company. The downside of owning a business in Free Zone is that you cannot trade in UAE directly, you can only trade within that free zone. A business in Free Zone cannot also take part in bidding for any government projects.
The third option is offshore, it is a business that is run outside of the residence jurisdiction; it is usually used for international trading.
Each option has its own benefits, and you have to think over which option suits you the best.