Company Formation

The setting up of a new company is called Company Formation or Company Registration. The United Arab Emirates controls the whole process of company formation through its corporate law.

A company in UAE can be formed in any of the following three ways:

  • Mainland – The licensing authority in mainland is the Department of Economic Development of the respective emirates.
  • Free Zone – In Free Zones, the relevant Free Zone Authority will be the licensing authority
  • Offshore – Offshore Authority is the licensing authority in case of Offshore jurisdiction

Types of Business License:

Business Licenses issued in United Arab Emirates (UAE) depends on the business activity of the company and it can be one of the following:

  • Professional – The professional license covers services offered by professionals, artisans and craftsmen
  • Commercial – the commercial license covers all trading and commercial activities performed with an intention of making profit
  • Industrial – the industrial license covers all industrial and manufacturing activities

Tourism –The tourism license covers all activities related to hospitality & tourism.

The common legal forms of business in Mainland, Free zone and Offshore formation in the UAE are:

Sole proprietorship

Civil Company

Limited Liability Company (LLC)


Private Share Holding Company

Public Share Holding Company

Branch of Foreign Companies / Representative Office

Branch of GCC companies

Branch of Free zone company

Branch of Dubai based companies

Branch of UAE based companies

Fact: In commercial & industrial licenses, 51% shares are owned by a UAE National (referred to as local sponsor/partner) and 49% shares are held by the expat partner. In professional license, 100% shares are owned by expat partner and an UAE national is appointed as a Local Service Agent.

For foreign investors to establish a business entity in UAE in one of the 45+ Free trade zones (FTZs) is an attractive option. The key benefit of setting up a company in a free zone is that there is no UAE national shareholding required and the companies can operate within the free zone boundaries carrying out business activities as mentioned in the license. All free zones in UAE offer the following incentives:

100% foreign ownership of the enterprises

100% cent import and export tax exemptions

100% repatriation of capital and profits

No currency restrictions

Corporate tax exemption for 15 years, renewable for an additional 15 years

No personal income taxes

Registered company can lease minimum office space within that particular Free Zone

Company can obtain UAE residence visas for the director, shareholder and also employees of the company through the Free Zone where it is registered

Spectrum Audit is an expert in the Company Formation process. Reach us to have a frills free life in your journey in Dubai or any of the Emirates in UAE. We at Spectrum will assist you in taking care of all the legal procedures involved in the registration process of your company whether in the mainland or any free zone. Reach us today for any kind of assistance,

call us at +971 4 2699329 or email us at to get all your queries addressed. Spectrum is your partner in your success.

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