Setting up a company in Dubai while maintaining residency in Germany is an attractive option for many entrepreneurs. Dubai offers numerous advantages such as a competitive tax system, a strategic geographical location and impressive business opportunities. However, there are also some challenges and legal frameworks that must be considered. In this guide, you will learn everything you need to know about the requirements, tax aspects, legal framework and practical steps for setting up a company in Dubai.
Key findings
- It is possible to set up a company in Dubai and maintain residency in Germany, but it requires an adequate presence in Dubai.
- Setting up a company in Dubai offers significant tax advantages, but requires compliance with certain tax obligations in Germany.
- Choosing the right company structure and free zone in Dubai is crucial to the success of the company.
- A local managing director and business premises in Dubai are necessary to meet the requirements of the German and Dubai authorities.
- Thorough advice and support from experts can make the start-up process much easier and avoid legal pitfalls.
Requirements for setting up a company in Dubai
Required documents
To set up a company in Dubai , various documents are required. These include:
- Passport copies of all shareholders
- Proof of residential address
- Bank reference letter
- Business plan or description of business ideas
Requirements for the managing director
To set up a company in Dubai , it is necessary to appoint a managing director. This person does not necessarily have to be based in Dubai, but it is an advantage. The following requirements must be observed:
- Minimum age of 21 years
- No criminal record
- Proof of sufficient qualifications and experience
Office and business premises
A physical office is required in many cases to set up a company in Dubai. The requirements may vary depending on the type of business:
| Business form | Office requirement |
|---|---|
| Establishing a freezone in Dubai | Office within the free zone |
| Mainland | Office in any district |
A well-equipped office can significantly impact business success.
Tax aspects when residing in Germany
Avoid double taxation
The lack of a double taxation agreement between Germany and the UAE can lead to tax challenges in some cases. For example, shifting tax residency to Dubai can be difficult for those with unlimited tax liability in Germany and German nationals, which means that the right to tax often remains with Germany. Nevertheless, there may be scope for employees who give up their German residence and are only subject to limited tax liability in Germany so that the income earned in the UAE is not subject to tax in Germany.
Tax advantages in Dubai
Even if individuals do not pay income tax in Dubai, they should still find out about the tax obligations in their country of origin or residence. In some countries, the so-called worldwide income principle applies, which states that all of a person's income is taxed, regardless of where it was earned. It is therefore advisable to familiarize yourself with the tax laws of your own country and, if necessary, seek professional advice.
Tax obligations in Germany
Relocating your residence to Dubai can be associated with various challenges and risks, particularly with regard to tax aspects such as exit tax, foreign tax law and relocation of functions abroad. It is therefore extremely important to seek professional advice in advance in order not to overlook any tax risks.
Important: Even though Dubai is considered a tax-free paradise, entrepreneurs should not underestimate the tax obligations in Germany. Thorough planning and advice are essential to avoid tax disadvantages.
Legal framework in Dubai
There are various types of company in Dubai that are available to foreign entrepreneurs. These include setting up a free zone company, a mainland company or an offshore company. Each of these forms has its own advantages and disadvantages that should be carefully considered.
The legal requirements for setting up a company in Dubai are varied. It is important to be aware of the specific rules and regulations in order to avoid legal problems. This also includes adhering to the cultural customs of the Arab-Muslim and Indian cultures.
Foreign entrepreneurs must adhere to certain regulations in order to be successful in Dubai. This includes choosing the right company structure and complying with local laws. Careful planning and advice are essential here.
Dubai stands for impressive skyscrapers, tax advantages and lucrative business. It is therefore no wonder that the emirate also arouses the interest of numerous German founders and startups in establishing a company in Dubai.
Practical steps to start a company
Selection of the free zone
Choosing the right freezone is crucial to the success of your company formation in Dubai. Each freezone offers different benefits and requirements , so it is important to choose the one that best suits your business model. Use a cost calculator to compare the financial aspects of the different freezones.
Registration process
The registration process involves several steps:
- Selection of company form
- Submission of the necessary documents
- Payment of fees
- Obtaining the license
A structured approach and the support of an experienced consultant can make the process much easier.
Opening a bank account
Opening a bank account in Dubai is another important step. You will need:
- Corporate License
- Founding documents
- Passport copies of the shareholders
A local bank account makes it easier to conduct business transactions and is often a prerequisite for doing business in Dubai.
Benefits and challenges
Tax benefits
A free zone company offers numerous advantages, including tax relief and complete company control. There is no income tax in Dubai, which is extremely attractive for many entrepreneurs. In addition, profits can be fully repatriated without incurring additional taxes.
Business opportunities
Dubai is a global trade center with excellent infrastructure and a strategic location. Entrepreneurs benefit from a dynamic market environment and numerous business opportunities. The city offers access to international markets and a broad network of potential business partners.
Challenges and risks
The complexity of these processes and the need to comply with all relevant regulations can be challenging for many. In addition, setting up a company in Dubai can be associated with various challenges and risks, particularly with regard to tax aspects such as exit tax, foreign tax law and relocation of functions abroad. It is therefore extremely important to seek professional advice in advance in order not to overlook any tax risks.
Setting up a company in Dubai requires careful planning and comprehensive knowledge of local laws and regulations.
Support and advice
Service providers and consultants
Setting up a business in a foreign country can be complex, so it is advisable to seek support from experts right from the start. They can guide and advise you on choosing the company structure, applying for a license and other necessary steps. An experienced strategic partner can offer close cooperation and support in overcoming problems and obstacles.
Networks and contacts
A strong network is crucial for the success of a business in Dubai. Take the opportunity to network with other entrepreneurs and benefit from their experiences. Networks not only offer support, but also valuable business opportunities.
Testimonials from entrepreneurs
"We decided to emigrate after an hour of consultation and bought a house. The consultation, process and handling were very good." Gina & Mark, entrepreneur couple with 2 children
Ongoing support with fixed contact persons is essential. Whether remotely or on-site, continuous support helps in various areas and ensures a smooth process before, during and after the company is founded.
Our team offers comprehensive support and advice for your company formation in Dubai. Visit our website to learn more and start your journey.
Conclusion
Setting up a company in Dubai while maintaining residency in Germany is certainly feasible and offers numerous advantages. However, it is essential to establish a real presence in Dubai by having an office and a local managing director. This ensures that the company complies with the legal and tax requirements in both Germany and the United Arab Emirates. With the right planning and support, entrepreneurs can benefit from the tax advantages and attractive business environment in Dubai without having to give up their residency in Germany.
frequently asked Questions
Can you set up a company in Dubai and keep your residence in Germany?
Yes. However, it is crucial to establish an appropriate presence outside Germany and especially in the Emirates through an office and a local managing director. This is the only way to create a solid business foundation.
Is it necessary to reside in Dubai to set up a company?
Setting up a company in Dubai does not always have to involve moving. However, it is important to provide the appropriate basis by having an office and at least one local or at least non-German managing director. This can ensure that the model withstands a tax audit in Germany.
Is there a double taxation agreement between Germany and Dubai?
Germany and Dubai do not have a double taxation agreement. This means that the actual place of business must be proven to be in Dubai. Therefore, if you set up a company in Dubai, you will need your own premises, staff and a local business address. In addition, all business must definitely be managed from Dubai.
What tax advantages does Dubai offer?
Dubai offers a competitive tax system with a profit tax of around nine percent. This makes the emirate attractive to many entrepreneurs.
What types of companies are there in Dubai?
There are various types of companies in Dubai, including freezone companies, offshore companies and local companies. Each type has its own legal and tax advantages.
What support and advice is available for setting up a company in Dubai?
There are numerous service providers and consultants who specialize in company formation in Dubai. They can help you choose the right company structure, register it, and take other important steps.