Setting Up a Company in Dubai: Why It Is Preferred?
Dubai is one of the leading trade centers in the Middle East and the world. The corporation tax, which varies between 0% and 9%, a VAT rate of 5%, the right to 100% foreign ownership recognized in free zones, and double taxation agreements with over 70 countries offer attractive opportunities for investors. The city’s location at the crossroads of Europe, Asia, and Africa makes it a unique logistics hub for global trade. Additionally, a strong banking system, modern office facilities, and high living standards also stand out among the advantages of starting a business in Dubai.
Types of Companies That Can Be Established in Dubai and Their Characteristics
Dubai company types consist of three main models: Mainland company, Free Zone company, and Offshore company. Mainland companies provide broader trade freedom, while Free Zone companies offer tax and ownership advantages to foreign investors. Offshore companies are preferred mainly for international trade and asset management. This diversity ensures that types of companies in Dubai offer suitable solutions for both small entrepreneurs and large-scale investors.
1. Mainland Company (Dubai Mainland Company): Advantages and Disadvantages for Investors
Dubai mainland company is licensed by the Dubai Department of Economy and Tourism and grants investors the right to trade both within the UAE and in the global market. The main advantages include the opportunity to participate in government tenders, a wide operating scope, and a strong presence in the local market. However, the requirement to lease an office and more comprehensive licensing processes are important points to consider. Therefore, Dubai mainland company is a suitable option, particularly for entrepreneurs who want to be active in the local market.
• Who is it suitable for? Entrepreneurs looking to be active in the local market and enter government tenders.
• Cost: Between 10,000 – 20,000 USD.
• Advantages: Trade freedom within the UAE, ability to do business with government institutions.
• Disadvantages: Office leasing requirement, more comprehensive licensing process.
2. Dubai Free Zone Company: The Most Popular Option for Foreign Investors
Dubai free zone company is one of the most preferred types of companies due to its fast setup and low-cost benefits. It grants investors 100% foreign ownership rights, offers tax exemptions, and stands out with modern business infrastructure. This structure is ideal for entrepreneurs looking to operate in e-commerce, logistics, technology, and finance sectors. However, these companies need to operate through distributors or agents to conduct direct trade on the mainland of Dubai. Dubai free zone company emerges as the model most frequently chosen by foreign investors.
• Who is it suitable for? Foreign investors focusing on global markets such as e-commerce, technology, logistics, and finance.
• Cost: Between 5,000 – 15,000 USD.
• Advantages: 100% foreign ownership, tax exemptions, fast and low-cost setup.
• Disadvantages: Cannot sell directly on the mainland of the UAE, need for distributors.
3. Dubai Offshore Company: International Investment and Tax Advantages
Dubai offshore company does not have the right to trade within the UAE but offers significant opportunities for investors in international businesses. The low-cost establishment process, tax exemptions, and high privacy standards are the most notable features of this model. Dubai offshore company stands out as a strategic choice, especially for entrepreneurs engaged in global trade and investors looking to secure their assets.
• Who is it suitable for? Entrepreneurs aiming for international trade, investment, and asset protection.
• Cost: Between 4,000 – 8,000 USD.
• Advantages: Tax exemptions, low establishment costs, high privacy.
• Disadvantages: No right to trade within the UAE.
Models to Consider When Setting Up a Company in Dubai: Mainland, Free Zone, Offshore
Choosing the right model when establishing a company in Dubai is critical for achieving business goals. Mainland companies provide trade freedom both locally and globally, while Free Zone companies primarily offer advantages to foreign investors. Offshore companies stand out due to the tax benefits they provide for activities carried out outside the UAE. Therefore, choosing a company in Dubai should be based on the investor's sector, budget, and target market.
Dubai Company Costs and Required Documents for Establishment
The cost of setting up a company in Dubai varies depending on the chosen model. Free Zone companies can be established for an average of 5,000 – 15,000 USD, while this figure can rise to 10,000 – 20,000 USD for Mainland companies. Offshore companies are established at lower costs, ranging from 4,000 – 8,000 USD. Required documents include a passport copy, proof of address, company agreement, and commercial license application. Dubai company costs can vary based on the area of activity and choice of free zone.
Guide for Turkish Investors to Set Up a Company in Dubai
For Turkish investors, opening a company in Dubai is extremely easy due to strong bilateral trade relations. The process consists of selecting the type of company, applying for a license, preparing necessary documents, opening a bank account, and completing visa procedures. Turkish entrepreneurs particularly benefit intensively from the advantages of setting up a company in Dubai in sectors such as health tourism, finance, e-commerce, and construction.
