Getting Up and Running in Dubai DIFC: An Overview
MitGlobal Dubai Sports is proud to provide an overview of how to get up and running in Dubai DIFC. We will explore all the information necessary to get started including starting a business in Dubai DIFC, the advantages of setting up in the area, the regulations and rules, and any other related topics.
Dubai DIFC is one of the fastest growing and best regulated financial and business hubs in the Middle East. It is an international, world-class business centre, providing a solid infrastructure for companies of all sizes and from all countries. We will examine these benefits, as well as the numerous investment opportunities and incentives that are available to those setting up in Dubai DIFC.
In addition, we will cover important regulatory requirements and guidelines that need to be considered and adhered to, such as implementing best corporate practices and the need for company directors and representatives. Once the specifics of Dubai DIFC are understood, we will go into more detail on effective business strategies, costs associated with setting up a business in Dubai DIFC, along with support available to companies.
By the end of the article, you will have the information necessary to successfully build a business in Dubai DIFC. MitGlobal Dubai Sports looks forward to providing you with an in-depth overview of this developing business economy.
Types of Entities
When it comes to setting up a business in Dubai, DIFC has made it quite easy for entrepreneurs of all kinds to establish a presence in one of the most sought-after financial hubs in the world. The first decision that is taken is to decide on the type of entity.
The main type of entity available to foreign investors in the DIFC is the Free Zone Establishment (FZE). FZEs are suitable for both small- and medium-sized business activities, as they have limited liability and single ownership. They also offer exemptions from any import or export duties.
The Free Zone Company (FZC) is the natural step up from an FZE, as they offer more flexibility in the number of owners and the legal form of ownership. FZCs also offer the same exemptions from import and export duties.
A branch office can be established in the DIFC when the parent company wants to open a separate legal entity to conduct business. It should be remembered that the liability of the branch office is connected to the parent company, therefore the latter will be held responsible for any losses incurred.
Last but not least, the DIFC also provides a range of other legal forms, such as representative offices, trust companies, and limited partnerships between the parent companies and the DIFC.
Opening a business in Dubai DIFC requires a license. While requirements may vary depending on the type of business or activity, obtaning a license is a mandatory process for any company interested in setting up in the DIFC.
In the DIFC, there are three types of licenses categorized as financial, professional, and ancilliary. Financial licenses are given to entities rendering financial or investment services. Professional licenses are given to niche services such as legal consultancies or architecture firms, while ancilliary licenses are given to companies serving tertiary services like logistical support or catering.
The application process for a Dubai DIFC license can be complex and, as such, it is recommended to contact a licensed business setup consultant who will be able to guide you through the process.
The cost of obtaining a license varies depending on the type of business, but is largely impacted by rental costs and other business-related fees. Rental fees, license fees, and security deposits may have to be paid prior to obtaining a full-fledged license.
Setting up Business in Dubai DIFC
Setting up a business in Dubai DIFC offers many advantages for companies wanting to operate in the region. It is not just about the investment opportunities which Dubai DIFC offers, but also about the corporate governance structure for foreign and local companies. Companies who establish their base in Dubai DIFC must understand the local corporate laws and regulations to ensure their operations follow all regulations set by the governing bodies.
Shareholders and directors who establish their business in Dubai DIFC take on all responsibilities related to compliance with corporate regulations, i.e. filing accounts and declarations, preparing paperwork, following expatriation processes and additional company reporting requirements. It is important that all legal documents produced meet the local standards.
Employees of companies based in Dubai DIFC need to abide by corporate laws and regulations, as well as DIFC regulations, including severe disciplinary action if any regulations are not met. Employees are expected to maintain a high level of professionalism and to act in accordance with the company’s goals and values.
In addition to the corporate governance structure of Dubai DIFC, companies must also meet certain financial obligations. Companies are expected to establish a proper accounting system, accurate reporting and filing of taxes, as well as set up a reliable bank account. All these activities must be completed in line with the relevant laws and regulations.
Finally, companies must be mindful of the ongoing operations of the businesses. This includes staying focused on the core objectives of the company, considering any changes in the local laws and regulations, and having an effective strategy for the development of the company in the Emirate.
Taxation: Exemptions, Treaties, and More
Dubai International Financial Centre (DIFC) offers a number of tax incentives to businesses based in the free zone. Most importantly, income and corporate taxes are exempted in DIFC, which makes this a highly desirable place to do business. Additionally, DIFC also features double taxation treaties with many countries around the world, lowering taxes and encouraging global investment.
Tax exemptions are not just limited to income and corporate taxes. DIFC also features an array of other exemptions, including stamp duties, capital gains taxes, and withholding taxes. Businesses may also benefit from tax holidays, which provide a certain leniency when it comes to paying taxes. This makes DIFC a great place to get up and running quickly and with minimal tax burden.
Furthermore, DIFC boasts its status as an Authorized Economic Operator (AEO). This allows businesses to apply for concessions and exemptions on customs duties, helping to keep costs down. Additionally, businesses in DIFC are able to make their goods and services more competitive in international markets, as the AEO status grants businesses enhanced safety, security, and speed when it comes to international trade.
Contacts and Resources
Dubai International Financial Center (DIFC) offers the best in business contacts and resources. Relevant government agencies and business support organizations are available to help businesses succeed in the DIFC.
The DIFC Authority is the regulator and operator within the center. They provide investments and facilitate other services related to business and government operations. The services are tailored to meet the needs of businesses within and outside of Dubai.
The Dubai Chamber offers services and programs to support businesses of all sizes within the DIFC. They provide legal advice, banking and financing options, market knowledge, and other services to help businesses succeed within the DIFC.
The Dubai Financial Services Authority (DFSA) is the financial regulator in the DIFC. They are responsible for providing the resources and guidance to ensure businesses operate within the legal and regulatory parameters of the DFSA.
For businesses outside of the DIFC, there are several government support programs to help them succeed. There are programs such as the International Business Center, which is designed to help businesses establish an international presence. Additionally, the Invest in Dubai program helps foreign businesses form a entity in Dubai.
The Dubai Chamber, DIFC Authority, and DFSA offer resources and contacts to businesses within or outside the DIFC. In addition, government resources and support programs can help foreign businesses establish a presence in Dubai and succeed in the DIFC.