Dubai is known for its impressive skyscrapers, tax advantages and lucrative business. It is therefore no wonder that the emirate is also attracting the interest of numerous German founders and startups looking to set up a company in Dubai. But at the same time, the question arises as to which legal regulations and requirements actually apply in the United Arab Emirates. The following article highlights the most important aspects and provides valuable tips for successfully setting up a company in Dubai while maintaining your residence in Germany.
Key findings
- Germany and Dubai do not have a double taxation agreement, so the actual place of business in Dubai must be proven.
- There are different types of companies in Dubai, including Mainland Company, Free Zone Company and Offshore Company, each offering different benefits.
- Setting up a company in Dubai requires specific documents, a local business address and staff.
- The tax advantages in Dubai are attractive, but all business must be managed from Dubai.
- Cultural differences and bureaucratic hurdles can pose challenges, but they can be overcome with the right preparation.
Requirements for setting up a company in Dubai
Necessary documents
Various documents are required to set up a company in Dubai. These include:
- Passport copies of all shareholders
- Proof of residence (e.g. a current bill)
- Bank reference letter
- Business plan
Business address and premises
A valid business address is mandatory in Dubai. This can be either in one of the many free zones or on the mainland. The choice of business address also influences the type of company that can be established.
On-site staff and operations
To run a company in Dubai, it is necessary to hire local staff . This can be done through local employment contracts or by hiring expats. A cost calculator can help you better calculate the personnel costs involved.
Tip: A well-structured business plan and choosing the right business address are crucial for the success of your company formation in Dubai.
Legal framework in Dubai
In Dubai, there are special legal requirements for setting up a company. Depending on the legal form chosen, different rights and obligations can arise. It is important to find out in advance exactly which regulations apply to the respective company form.
Dubai is known as a tax haven . Tax exemption for most companies is one of the main reasons why many founders choose Dubai as a location. There is no income tax and no VAT, which significantly reduces the financial burden.
Germany and Dubai do not have a double taxation agreement. This means that the actual place of business in Dubai must be proven. This requires own premises, staff and a business address on site. All business must definitely be managed from Dubai.
Company formation process in Dubai
Step-by-step instructions
To start a company in Dubai , you should follow the following steps:
- Determine the type of company (e.g. Mainland, Free Zone or Offshore).
- Choose a company name and check its availability.
- Prepare the necessary documents (e.g. passport copies, business plan).
- Submit the application to the relevant authority.
- Open a bank account in Dubai.
- Apply for the necessary licenses and permits.
- Rent business premises or an office.
- Recruit staff and start business operations.
Administrative procedures and permits
Various administrative procedures and permits are required to set up a company in Dubai. These include:
- Submission of application to the Dubai Department of Economic Development (DED) for Mainland Companies.
- Applying for a license from the respective Free Zone Authority for Free Zone Companies.
- Registration with the Dubai Chamber of Commerce.
- Obtaining a business license and other specific permits depending on the business activity.
Costs and fees
The costs and fees for setting up a company in Dubai can vary depending on the type of company and location. Here is an overview of the typical costs:
| Cost type | Mainland Company | Free Zone Company | Offshore Company |
|---|---|---|---|
| Registration | 10,000 AED | 15,000 AED | 8,000 AED |
| License fees | 12,000 AED | 20,000 AED | 5,000 AED |
| Office/rental costs | 50,000 AED/year | 30,000 AED/year | No |
| Visa fees | 5,000 AED | 3,000 AED | No |
There are many benefits to setting up a company in Dubai, including tax relief and a strategic location, but it is important to do your research on the different types of companies and their requirements to make the process smooth.
Types of companies in Dubai
Mainland Company
A mainland company is suitable for companies that want to trade within the United Arab Emirates (UAE). A local partner is required who holds the majority of the shares. This company form offers great tax advantages and is comparable to the German GmbH.
Free Zone Company
The Free Zone Company is ideal for companies that want to benefit from the tax advantages in Dubai but do not plan to do business within the UAE. This company form allows 100% foreign ownership and offers simplified company formation.
Offshore Company
An offshore company is often offered by agencies, but is less recommended because it is almost impossible to get a bank account for this type of company. This type of company is mainly suitable for holding companies and also offers tax advantages.
Living and working in Dubai
Maintain residence in Germany
Many entrepreneurs choose to maintain their residence in Germany while working in Dubai. This offers the advantage of continuing to have social security in Germany while benefiting from the tax advantages in Dubai. It is important to find out about the legal framework and the requirements for residency in both countries.
Visa and residence permit
To emigrate to Dubai you need a visa and a residence permit. There are different types of visas, depending on the type of activity and the length of stay. A work visa is required if you want to take a job in Dubai. There are special investor and business visas for entrepreneurs.
Cost of living in Dubai
The cost of living in Dubai can vary depending on your lifestyle. Here is an overview of the average costs:
| category | Average cost (monthly) |
|---|---|
| Rent (1-room apartment) | 5,000 - 10,000 AED |
| Groceries | 1,000 - 2,000 AED |
| transport | 300 - 800 AED |
| School for children | 2,000 - 4,000 AED |
Living in Dubai offers many benefits, including tax-free income and a high quality of life. Moving to Dubai with your family can be an enriching experience, especially if you can navigate the cultural differences and bureaucratic hurdles.
Advantages of living in UAE
Living in the United Arab Emirates offers numerous advantages, including:
- Tax-free income
- High standard of living
- Modern infrastructure
- Diverse business ideas and opportunities
Emigrating to the UAE can open up many new opportunities, both professionally and personally.
Common challenges and solutions
The bureaucracy in Dubai can be a challenge for foreign entrepreneurs. It is important to be well informed in advance and to seek professional help if necessary.
- Necessary documents and permits must be submitted on time and in full.
- Regular updates on legal changes are essential.
Cultural differences can impact day-to-day business operations. Understanding local business etiquette and culture is critical to success.
- Show respect for local traditions and customs.
- Build networks and relationships to gain trust.
A strong business network is very important in Dubai. Networking can open doors and create new business opportunities.
- Participation in local business events and trade fairs.
- Membership in chambers of commerce and business clubs.
A well-built network can make the difference between success and failure.
Starting a business in Dubai can be full of challenges, from legal hurdles to cultural differences. But don't worry, we offer comprehensive advice and support to help you get started. Visit our website for detailed information and use our cost calculator to plan your expenses in advance.
Conclusion
Setting up a company in Dubai offers numerous advantages, particularly tax relief and an attractive business environment. However, it is important to be thoroughly informed about the legal regulations and requirements. Germany and Dubai do not have a double taxation agreement, which means that the actual place of business in Dubai must be proven. This requires your own premises, staff and a local business address. In addition, all business must be managed from Dubai, which makes actual emigration necessary. Careful planning and support from specialised consulting firms can help to avoid unnecessary mistakes and make the establishment process smooth.
Frequently Asked Questions (FAQ)
Is it necessary to be resident in Dubai to set up a company in Dubai?
In principle, you do not need to be resident in Dubai to set up a company. However, you may need to provide proof of a company location before setting up.
What types of companies are there in Dubai?
There are three main company structures in Dubai: Mainland Company, Free Zone Company and Offshore Company. Each has its own advantages and disadvantages depending on your business model.
What tax advantages does Dubai offer?
Dubai offers significant tax advantages, including no income tax and no corporate tax, making it particularly attractive for entrepreneurs.
What documents are required to set up a company in Dubai?
The necessary documents include a valid passport, a business plan, proof of business address in Dubai and, if necessary, other specific documents depending on the type of company.
How much does it cost to set up a company in Dubai?
The cost of setting up a company in Dubai varies depending on the type of business and specific requirements. There may be costs for licenses, permits and consulting.
Can I keep my residence in Germany if I set up a company in Dubai?
Yes, it is possible to maintain residence in Germany. However, proof of actual business location in Dubai must be provided and all business must be managed from Dubai.