Choosing the Right Location for Your Business in the UAE
Whether you’re making your first foray into the business community in the United Arab Emirates or starting your next venture, choosing a location for your business is one of the most consequential decisions you will have to make. You might be asking, what are the 7 emirates in the UAE? Or, you may be farther along in the process and wondering what jurisdiction will best drive you towards achieving your goals. Throughout our experience in assessing clients interested in UAE company formation, the factors involved will lead you to make the right choice or a significant mistake. What are our main criteria? We’ll walk you through these questions.
The questions you should ask when you’re going to register a company in the UAE
In our previous articles about various company formation options in the UAE, we have gone into depth about the intricacies that make the UAE a business-friendly jurisdiction. Not every area offers the same choices when it comes to the corporate structures you can use. To improve your understanding of the decision-making criteria, we’re revealing the main points you should take into account when determining where you will register your business.
What is the ultimate purpose of your company formation in the UAE?
Everyone who comes to us at Europe Emirates Group has a unique answer to this question because from this answer comes many of the other details that go along with it. Perhaps you are considering a move to the UAE to maximise your corporate group’s expenses and simplify your tax structure with the help of double-taxation agreements. Or, you might want to enter the UAE or any of the other countries that are part of the Gulf Cooperation Council. And, if you’re looking to forge your global footprint with the UAE as your headquarters, you will have unique end-goals that will lead us to perhaps radically different solutions for your company formation.
Foreign investors have two primary options for setting up a company in the United Arab Emirates. If you are looking to conduct business inside Emirati territory, you would need to set up a Mainland company. There are also numerous free economic zones, known as Free Zones, scattered throughout the seven emirates. There are some limited offshore options available, but the most predominant types are Mainland and Free Zone companies.
What activities are you planning to carry out?
How do you choose the right location for your mainland company? How do you know what Free Zone is the right fit? The answer to this question stems from the idea of activity licences. Most of the Free Zones have a focus in an industrial niche, so if you are in finance, chances are that the Dubai Media City Free Zone will not offer the activity licences you need. However, if you had incorporated in Dubai Media City by accident, you would have to liquidate your entity before you start the process again because most jurisdictions inside the UAE do not permit domicile transfers from one Free Zone to another.
Where are you planning to carry out your activities?
Do you need access to a Free Zone with easy access to a port? Will you need to be located on Sheik Zayed Road in Dubai? Or would Sharjah make more sense? Every place where you could register your company in the UAE has separate territorial access. How does this work in practice? If you are only looking to do business outside the UAE, a Free Zone will make more sense, whereas if you need to enter the local market, you would require a Mainland company. From there, you would evaluate the various emirates to decide where to go.
How are you planning to commercialise your services or products?
Are you an e-commerce business, or is your main point of sale through brick-and-mortar retail locations? Are you looking to access government tenders? These considerations, and more, are some of the points to consider. Brick-and-mortar points of sale in the UAE may lead to you opting for a mainland business, whereas a firm re-exporting product would benefit most from a Free Zone due to the available customs duties savings.
What commercial space may you need for your activities?
If your company wants to have an office in Dubai, then your place of registration should be the Dubai Mainland or one of Dubai’s Free Zones. Some Free Zones will require an office space as part of your company licence, and that will depend on the particular free economic zone you are examining. Not every Free Zone has the same set of amenities. If you need warehouse space and optimal logistics, there will be some Free Zones that are better suited for your needs. If you need an office, you will also have to take that into account as you narrow down the Free Zone choices with the activities you can have.
Ready to evaluate the right location for your UAE business?
Our UAE company formation experts at Europe Emirates Group are ready to assist you in choosing the right UAE jurisdiction for your enterprise. If you would like to go over Article 255 of the UAE Company Law, or start the process right away, do not hesitate to contact us.
Fee Generation Manager, Europe Emirates Group