An important reason that entrepreneurs and corporations from around the globe are choosing Dubai as their desired business location is the type of facilities they receive here to establish and run their businesses. For this purpose, the government of Dubai and its departments are always ready to assist businesses and try to minimize their problems. For this purpose, announcements are made by the government in order to facilitate businesses from time to time. They are even ready to reduce or cancel different fines and penalties if these are creating problem for businesses and are proving as hindrance for growth of various sectors.
The most important department in Dubai related to company formation in Dubai is the Department of Economic Development (DED). This department is associated with formation of company in Dubai mainland and also plays important role for developing different rules and regulations for better business environment in this emirate. In order to provide relief to companies, DED announced previously to waive 50% fine on businesses as an initiative for ease of doing business. This initiative is proving quite beneficial for companies especially in the situation where companies are feeling pressure amid 5% VAT that they are required to pay since last year.
In order to provide relief to several sectors, Dubai has provided several incentives in last couple of years like reduction in license fee by free zones, increasing number of VAT-fee free zones, decreasing municipality fee, discounting fee for new licenses and freezing educational fee. This step by DED is also a part of this initiative for businesses in order to encourage them while facing VAT. This incentive will also improve business competitiveness in Dubai as most of the violations are committed by startups as they are usually unaware about them. It will assist them in getting experience in one of the world’s best business jurisdictions.
According to statistics, large numbers of companies managed to save AED23.4 million ($6.3 million) last year in 2018 thanks to this 50% reduction in fines in 2017-18. During this period, DED received more than 4,650 fines settlement requests.
Due to positive response of this fee waiver, DED has decided to continue this scheme in 2019 also. According to details, 50% fine waiver scheme will only be available to businesses after violation of any business rule for the first time in a business year.
Previously, the customer was required to request fee waiver if he is eligible for this. But according to the new system, now entrepreneurs will receive a text message of their violation and the 50% fee waiver will automatically be included in the fine. This will further simplified the procedure and make it easier for traders to spend time on their businesses instead of submitting request for fee reduction.
This is a very important step by DED as it will surely boost the morale of businesses and assist them in trying to prevent any violation in future if they commit a single one in a year. We at Riz & Mona can guide you in getting complete information regarding new rules devise by the government at the time you want to setup your business in Dubai.
Entrepreneurs have their own choices while starting a business. There are several types of business structures and any of them may befit investors according to their liking and investment. One such structure that is adopted by large number of entrepreneurs nowadays due to its potential benefits and few risks involved is LLC.
What is LLC stand for?
LLC stands for Limited Liability Company. As the name suggests, Limited Liability Company is a type of company structure where members of the company are not personally liable for any loss. Instead, the company is liable according to its capital share. This type of company structure has few features of a corporation and others like that of a partnership. We can say that LLC is in between a corporation and a partnership company and provides advantages of both these entities.
LLC is a relatively newer concept that has been in use since 1977. It gained popularity in recent decades. The main reason behind recent popularity of LLC business structure among entrepreneurs is that it is addressing various concerns of entrepreneurs along with providing several benefits that are either unique or also available in different types of business structures.
Why to set up an LLC
An important question is why one should choose LLC instead of several other business structures that also exist. The reason is the availability of large number of benefits in LLC that are not present in other entities. There are several LLC advantages for company owners.
Following are important benefits that an entrepreneur can gain after establishing an LLC.
The most evident and important feature of LLC is the protection from personal liability to members of this specific company. In case of debt or any court ruling, the company is only required to pay according to its share capital. It saves members of the company to pay from their personal assets like home, car etc
As compared to most of other business structures, there is less paper work required for formation of an LLC. This reduction in paperwork is mainly due to less strict requirements to follow (no need to hold annual meetings and file annual reports). This makes LLC not only easier to form but also can easily remain in good legal standings
An important advantage of an LLC that distinguishes it from major company structures is the freedom to employ number of shareholders in a LLC. An LLC can have unlimited number of shareholders (some countries may limit number of shareholders but even then they are more than other business entities) that can benefit in growth of business. As compared to S corporations, LLC also has no restriction in choosing corporations as shareholders
LLCs have another important advantage regarding taxation. These companies are free to choose tax status of any business structure (S corporation, C corporation, proprietorship or partnership) according to their own requirement and liking. These companies can also avoid double taxation. They are known as the best entity for tax purpose as compared to other business entities
LLC can also have one or more owners. In case of multiple owners, an LLC has the flexibility to distribute profits among owners appropriately. This allocation of profit could be on the basis of equality, ownership percentage or any other ratio
Nothing is perfect and there are few shortcomings and limitations in LLCs as well. E.g. an LLC terminates when a member departs, it requires keeping careful personal records to take advantage of limited liability etc. But these corporations provide several exclusive advantages that can easily undermine their potential deficiencies. These companies are specially important and beneficiary for small businesses as they are more prone to additional liabilities and double taxation.
LLC Formation in Dubai
LLC is basically a company type developed in USA. But it is now extensively used in other business centers as well. We are well aware about the business opportunities available in Dubai for all types of business entities. LLCs are one of those entities that are getting much fame in Dubai consistently. An important reason is the support of government for entrepreneurs to open LLC in Dubai.
In fact, Dubai LLC company formation is the most common type of company in Dubai. Such companies are mainly established in Dubai mainland (starting trading companies in Dubai free zone also have same structure as that of LLC). In this case, 51% shares of LLC are reserved for local sponsor while foreign owner will get 49% shares of the company (profits can be distributed differently).
Advantages of LLC in Dubai
Minimum 2 and maximum 50 shareholders are allowed
One can obtain unlimited number of visas without any restriction
Real estate ownership is allowed
LLC can conduct any commercial or industrial activity
All types of business activities are allowed apart from investment, banking and insurance
Establishing an LLC allows company owners to take advantage of the whole UAE market. These companies can directly trade with the entire UAE market
You can easily open global/corporate bank accounts on the basis of LLC
How to set up LLC in Dubai
All these advantages can be attained by entrepreneurs after following the procedure designed for LLC formation in Dubai. LLC is an important type of business structure and the process is lengthy and comprehensive. Investors interested in LLC set up in Dubai have to contact various departments and submit number of documents for this purpose.
Following are important steps that are required to carry out the whole procedure. It will help you get an idea about how to create an LLC in Dubai.
Choose a suitable and unique name and the type of activities that the LLC will be involved in
Choose an appropriate location that suits you according to type of your business. Company operations have to be carried out through a physical/virtual office or warehouse
Make agreement with a local sponsor who will own 51% shares of your LLC (profits may be distributed differently)
Collect all required documents and submit them to the Department of Economic Development (DED) along with completely filled application
Approval from other relevant authorities is also required in case your business will conduct specific activities
Obtain trade license, MOA (Memorandum of Association), share certificates, tenancy agreement, certificate of incorporation, labor cards, visas and other legal documents from relevant authorities
Documents required for LLC in Dubai
There are several documents that must be submitted in DED and other authorities according to the type of LLC to be formed in Dubai. All these documents must be attested and notarized from applicant’s home country and UAE consulate. The notarization process takes sufficient time and it should be done soon after taking decision about setting up company in Dubai. After receiving complete documents, different departments usually take few weeks to complete the whole procedure.
Following are important documents that are required for setting up an LLC in Dubai. All these documents must be submitted in their respective departments.
Duly filled registration application form
Passport copies of all shareholders and managers of company
Passport copy of sponsor
NOC from sponsor (if manager or partner has residence visa in UAE)
Memorandum of Association (MOA) (duly attested from public notary)
Registration of Trade Name and initial approval from DED
Location plan and tenancy contract attested by Dubai Municipality’s Planning Department and Civil Defense Department
Bank reference letter for each shareholder
Why Riz & Mona
Riz & Mona Consultancy has been in the Dubai market for past several years. We are well known for product registration, visa services and formation of all types of companies in Dubai and UAE. We are specialist in LLC formation in Dubai. Due to our experience, we can assure you in handling all your official and legal matters successfully and conveniently.
Handing over the job of LLC company formation in Dubai to us will provide you mental satisfaction and quick approval from all government departments. For this purpose, you can contact us via our WhatsApp # 971-56-9971225 or email address firstname.lastname@example.org.
Dubai is one of the busiest and well-structured cities in the world. As a business hub, this emirate is providing lucrative opportunities for all types of businesses. But there are few sectors that have naturally been benefitted in Dubai. One such sector is the automotive sector. UAE has high reserves of petroleum products that makes prices and availability of such products easier in Dubai. Apart from that, the high standard of roads and highways also provide reason for people to purchase cars and other vehicles at their best.
Another important reason for growth of automotive business is the abundance of wealth in Dubai and the high lifestyle of its people. Purchasing luxury cars is not an issue here. The rules of owning a vehicle are also lenient in Dubai. A person with valid driving license can purchase car or other vehicles. Apart from that, bank loans are also easily available here and buyer with salary of just AED 4,000 can apply for car loan.
All these factors ultimately result in growth of the whole sector that enhances business opportunities for car dealers and traders. The favorable condition of this sector is evident from statistics which shows that purchasing of new and old cars in UAE and Dubai is on the rise.
Before starting your business related to motor vehicles, you need to get car trading license in Dubai for this purpose. This is necessary for companies and individual sellers, manufacturers, importers and exporters of vehicles. A commercial license is required for sale of vehicles in Dubai. This will allow incorporation of vehicle trading company in this emirate. In this regard, the two main departments are Dubai Department of Economic Development (DED) and Road & Transport Authority (RTA) Dubai. There are specific documents required for registration of such license here.
Another important activity for car traders in Dubai is the luxury motor vehicles services in this emirate. It is a lucrative business here due to its overall wellbeing and prosperity of people. Millions of cars are sold every year and many among these belong to companies providing luxury cars including Toyota, Mitsubishi, BMW, Chevrolet etc.
Dealing in selling or trading of these cars is also allowed in Dubai with condition of a separate license. This license is issued by DED. This is a very expensive license and large numbers of specific documents are required for approval of this license. The popularity of this license is evident from the fact that thousands of these luxury motor vehicle service licenses are issued every year in Dubai mainland by the authority.
Another important business related to vehicles is wrapping and modification of cars. This is especially related to luxury cars. Before starting this business, the main requirement is to acquire car wrapping and modification license in Dubai.
If your company deals with maintenance and repair of motor vehicle, then there is no specific license for setting up such business in Dubai. But in this case, you will be required to take approval from RTA Dubai before starting business of maintenance and repair of motor vehicles here.
If you want to establish a company in Dubai that exports vehicles from UAE to other countries, then you will need a vehicle export certificate for this purpose. This certificate is available for both individuals (citizens and residents) as well as for companies. RTA Dubai is the authority that awards this license for businesses.
Car trading license provides several types of business opportunities for car dealers and car traders. One can easily avail these opportunities either in Dubai mainland or in specific free zones through a valid license. For simple and quick approval of car trading license, you should contact experienced and reputed consultancy firm Riz & Mona Consultancy.
Dubai’s reputation as a business hub is universally acknowledged. Business opportunities are always available for entrepreneurs from around the globe in any field and trade. Every year, multiple new large and small companies start their business venture in Dubai amid the profits they can expect to gain in this business-friendly place. There is no doubt that many of these companies and professionals continue their venture. But this surely doesn’t happen for everyone.
Like all other destinations, Dubai also has few rules for new and established businesses and it is mandatory for them to follow them fully. On occasions, it becomes difficult for them to cope with the situation and it results in failure of their startup in Dubai. But most of the time, the reason for their failure is not understanding important factors that they will face before and after setting up their business in this emirate. Merely fully understanding these things can easily consolidate any new company in this important business jurisdiction.
Following are important things to consider for any startup in Dubai.
Choose appropriate location:
Business opportunities are available in mainland area as well as several free zones in Dubai. Both these areas are distinguishable due to their unique features. Before setting up your company, you need to know advantages provided by both these areas and their limitations for various businesses. If your business is related to providing goods or services inside Dubai and UAE, then the best option is the mainland area. In this situation, you must be aware about the requirements of businesses in mainland Dubai. Business in this area will require services of local sponsors who will own 51% shares of company.
On the other hand, foreigners can own 100% shares of their businesses in free zones but with certain conditions. Free zones are profitable for traders having import and export businesses along with few exclusive businesses that are supported by these free zones. Few of these specific free zones are: Dubai Media City (DMC), Dubai Design District (D3), Dubai Healthcare City, Dubai Science Park, Dubai Industrial Park, Dubai Internet City and several others.
UAE was once a tax haven but the situation has completely changed now. There is 5% VAT applied on most of the businesses. But there are still few sectors that have been exempted from VAT. But if you are setting up your new business in Dubai mainland, then there are more chances that it will be affected by VAT. In this case, you must contact VAT consultants in Dubai that can assist you in knowing effect of VAT on your business and the amount you are required to pay on annual basis. This information is important in initial stages of your startup as it will help you manage finances of your company well.
If your desired destination for startup is a free zone in Dubai, then there are 23 free zones that are exempted from VAT in UAE. Few of these free zones are in Dubai. If your designed free zone is one among these, then there is nothing for you to worry. Otherwise, you need assistance from VAT consultant for better running of your business.
Get information for main authorities:
Another important aspect that has to be considered for startups is to know about main authorities that are required to deal with before and after establishing their business in Dubai. Main authority for almost all types of businesses is Dubai Department of Economic Department (DED). If you are a trader and deals with import and export of goods, then your concerned authority is Dubai Municipality (DM).
In few selective cases, you will be required to contact several other authorities. For instance, Ministry of Health (MoH) will be required for opening clinics and pharmaceutical companies while various other departments are required for company formation in any of the free zones in Dubai.
Prohibited and restricted items:
Dubai is one of the world’s most business friendly places that allow most of the business activities and trading of products. But even then, there are few restrictions in Dubai for businesses. Apart from that, not all products can be imported and manufactured in Dubai as well. It is necessary for startups to get detailed information regarding this feature. It will assist them in avoiding later nuisance or indulging in any illegal activity.
These are few important points that startups need to know before starting their business in Dubai. There are several other things they can do for proper starting their business in the lucrative jurisdiction of Dubai. For complete information and practical assistance in this matter, you can contact Riz & Mona Consultancy. We will assist in Dubai mainland company formation, LLC company formation and others.
In the last decade, the trend of online shopping has increased a lot all over the world. Companies like Amazon and Alibaba are household names in many countries. Online shopping produced a strong impact in the whole Middle East region as it increased by 1500% in just a decade. In this region, the most modern and sophisticated country is the UAE while Dubai is the main city in UAE that adopts new trends with great fervor. People in Dubai are quick to replace manual shopping with online shopping. This directly increases the prospects for e-commerce business in Dubai and UAE.
In this scenario, Dubai presents one of the best opportunities for setting up an e-commerce company in the whole Middle East region and its adjacent areas. Viewing the growth and future potential of this business of modern world, one can expect huge profit with e-commerce business in Dubai. The most important part is that the scope of this business is increasing with every passing year. This type of online business has same potential in mainland area as well as in all the free zones in Dubai. Such business has special privilege in few specific free zones like Dubai Media City (DMC), Dubai Science Park, Dubai Internet City etc.
In order to start an e-commerce business in any part of Dubai, whether in a free zone or in mainland area, there is a complete procedure to follow. Following are important points to remember before starting e-commerce business in Dubai.
The first and foremost thing is obtaining appropriate license for e-commerce business in Dubai. In case of such business in Dubai mainland, the main authority to contact is the Department of Economic Development (DED). If you want to setup this online business in any of the above or other free zones in Dubai, then the required license will be issued by relevant authority in the free zone.
Despite being an online business, an e-commerce company needs an office in Dubai to start its business. This is a mandatory process in both mainland and free zones. Renting an office will fully legalize your business.
Another important step for establishing an e-commerce company in Dubai is its online presence as a website. For this purpose, the domain name has to be registered as the first step. It is important as this can also be used as company’s name.
The website must be developed in a way that enables dynamic interaction between buyers and vendors. For this purpose, online payment gateway is also necessary. The most important thing to consider in this regard is the security of this gateway. Few possible options in this regard are cash on delivery, pre-paid card systems or credit card payment.
These are main steps that have to be taken for establishment of e-commerce business in Dubai. We at Riz & Mona Consultancy are available to complete the whole procedure of setting up your e-commerce related company from acquiring license to building website and renting office space. We are well known for services we provide regarding company setup in Dubai and other emirates of UAE.
Small businesses have a special place in the lucrative market of Dubai. Though, Dubai provides best opportunities and incentives to all types of businesses but most of the businesses are run by small traders. Among all these small businesses, those related to food and beverages industry have their own importance and growth opportunities.
Restaurants have an additional importance in Dubai because millions of tourists also visit Dubai every year and enjoy their food during their trip from these restaurants. Apart from that, many employees and workers live independently in Dubai and they use these restaurants for their daily meals. This makes Dubai an ideal location for such type of business.
There are already many restaurants operating in Dubai and new ones are regularly opening in several areas. These restaurants are present all over Dubai including mainland areas and free zones. But there is no problem for setting up new restaurants in the city despite competition due to rise in population and tourism on consistent basis.
There is a complete procedure to open restaurant in Dubai. Restaurant license is required for opening this food business in Dubai. This is a trade license that allows the opening and operating of restaurant in Dubai. An important thing about this license is that it depends on the nature of restaurant that one wants to start in Dubai.
There are total 4 types of restaurant licenses available in Dubai that target 4 different types of restaurants. This variety in license is really important step by the government as it not only increases chances for small investors but also provide different options to residents and tourists.
Following are 4 main types of restaurant licenses available in Dubai.
It is the simplest type of license that is available for establishment of typical restaurants that can serve food, snacks, drinks etc. that are available for immediate consumption by customers. The main authority to issue and regulate this professional license is Dubai Municipality (DM).
Mini Store & Restaurant License:
This type of license allows the restaurant to prepare and serve food, snacks etc. for customers. Apart from that, these businesses can also sell consumer goods like beverages, canned foods, bakery products, dairy, daily newspapers etc. This is a commercial license.
Multi & Restaurant license:
This is the largest of all the static restaurants. This type of license allows establishing a common area having several shops of coffee and food vendors. Here, the customers can either enjoy their food and drink inside shops or by seating in the common area. This is a professional license.
Floating Restaurant License:
This is a different type of license as compared to the above-mentioned ones. This is a commercial license that is commonly used to entertain tourists on an entertainment area. After acquiring this license, the trader can serve food and beverages on ship, yacht or boat. Dubai is a coastal city and such business can result in gaining huge profit. This license is mainly issued and regulated by Dubai Municipality (DM).
These are the main restaurant licenses available in different business locations in Dubai. One can expect huge profit after setting up any of these restaurants following an appropriate license. You have to contact various departments and prepare required documents for this purpose. We at Riz & Mona Consultancy can make this process simpler for you thanks to our experience in the market of Dubai. For further details and assistance, you can contact us via WhatsApp # 971-56-9971225.
UAE is undoubtedly one of the world’s best countries for all types of trades and businesses. It has done so by providing best facilities and incentives to entrepreneurs from all parts of world. Individual businesses and companies can be established in mainland areas as well as several free zones in the country. It is the reason that businesses are continuously setting up in different parts of UAE especially in the emirates of Dubai, Abu Dhabi and Sharjah.
Most of these businesses are gaining good profit by having their presence in UAE. But it is a reality that not all companies can get desired results in any international market including the business-friendly place like UAE. The reason behind failure of few businesses in UAE is that they can’t cope with the challenges that are offered by UAE.
Following are important challenges that are faced by startups and even already established businesses in UAE. It is important for businesses to know and make strategy to overcome these challenges in order to ensure their safe place in UAE.
Ownership of company:
Foreigners can own 100% of their business if they are incorporating in a free zone. But most of these free zones are exclusive to selective business type and many companies can only survive in mainland UAE where they can interact freely. But here, they face issue of ownership.
For any mainland business entity, 51% shares will be delivered to a UAE national who will act as sponsor of that business. This not only reduces company’s profits (these sponsors are paid annually according to their capabilities and function in the company) but it may prove risky in few circumstances. An experienced consultancy firm can assist you in overcoming this challenge.
UAE long remained a tax haven for all types of businesses. But this freedom is unfortunately not available now. The government has implemented 5% VAT on most of the businesses in mainland areas as well as several free zones. Even several well established businesses are finding it difficult to manage their revenues according to this newly implemented tax. For this purpose, you need complete information about the ratio of tax on your type of business and manage your profits wisely. In this case also, a firm providing VAT consultancy services in Dubai and UAE can prove helpful for both startups and already established businesses.
Unless you are working as a professional in any of the free zones, you will be required to hire employees for your company. As company owner, you will be responsible to provide visas to your employees. Even after selection of your employees, they will not be allowed to work in the absence of work visa. There is a complete procedure for this purpose. Sometimes, it becomes difficult for startups to complete the procedure in time that impacts negatively on their newly established businesses. But once you get familiarity with the process, it becomes easier to hire new employees in future.
UAE’s fame as a business hub is well known all over the world for decades. It is the reason that large and small companies from all over the region have their presence in some part of UAE. No matter the type of business you are going to start in UAE, there are extreme chances that you will find one or more competitors in your type of business in any area of UAE.
It means there are huge chances that you will face stiff competition in UAE after starting your business. It is a big challenge. The best way to face this challenge is by providing better product and services to consumers along with marketing in an aggressive but sensible way according to your financial potential.
These are few important challenges face by many new and established businesses in UAE. But facing such difficulties doesn’t mean at all that conditions are not favorable for businesses. In fact there are numerous advantages available in UAE as compared to most of other countries such as political and economic stability, no or low taxes, simple procedure to start business, reputation of UAE, complete assistance from government etc.
You can easily avail all these and numerous other advantages by overcoming few challenges that you face here. We at Riz & Mona advisory can assist you in handling all these issues appropriately. We have already assisted several large and small companies setting up and successfully running their business in all parts of UAE.