1. Decide exactly what the company is going to do
Start by looking at the business model. What are you providing? Consulting services? Selling software? Trading goods? Running an e-commerce business? Holding investments? Providing professional services?
The business activity you choose affects the licence you'll need and the free zones available to you.
The UAE Ministry of Economy reckons this is the first general step because the business activity determines the licence and permitted legal forms.
2. Compare free zones
Don't choose a zone simply because its advertising has the lowest number. Compare:
- Permitted activities
- Licence type
- Visa eligibility
- Office requirements
- Banking considerations
- Location
- Renewal fees
- Regulatory requirements
- Access to your intended market
A free zone that costs a bit more but fits your business properly can be cheaper than moving to another structure later.
3. Select the legal structure
The available structure will depend on the free-zone authority.
Common structures include free-zone establishments and free-zone companies, while some authorities also offer branch structures for existing companies. The number of shareholders and whether an existing foreign company is involved can affect the right structure for you.
4. Reserve the company name
The proposed company name must comply with the relevant authority's naming rules. Do this before printing materials, buying a domain around an assumed company name, or building a brand around something that may not be available.
5. Prepare the documents
The exact requirements will vary, but the application can involve shareholder identification documents, application forms, business information, corporate documents where relevant, and other authority-specific paperwork.
Some activities may require additional approvals.
6. Apply for the licence
Once the authority approves the application and the required fees and documents are completed, the company receives its licence and incorporation documents.
The licence should match what the company actually intends to do.
7. Arrange visas and workspace if required
A free-zone company can provide a route to UAE residence visas, subject to the applicable authority and immigration requirements.
Visa needs also affect your budget.
A founder who only wants a UAE company for international operations has a different cost structure from a founder relocating to Dubai with employees and family members.
8. Open the corporate bank account
Company incorporation and banking are separate decisions.
Having a UAE licence doesn't mean every bank will automatically approve an account.
Banks assess the business, shareholders, expected transactions, source of funds and other compliance information. First things first, sort out a solid business plan & supporting documents - banking can't be treated like an afterthought.
9. Tie up those tax & compliance registrations
Just because you're in a UAE free zone doesn't mean you can ignore UAE corporate tax.
The UAE Ministry of Finance makes it clear, all Taxable Persons - and that includes Free Zone folks - need to register for Corporate Tax and get a Corporate Tax Registration Number.
That's where many of those "tax-free UAE company" articles tend to get it wrong.
