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United Arab Emirates (UAE) is one of the favorite destinations for international businessmen thanks to its favorable fiscal environment, political stability and administrative agility. Pero opening a company here is not as automatic as many believe. As consultants and managers specialized in company incorporation in Dubai, we see The same errors almost daily committed by entrepreneurs who come without information or without adequate advice.
In this article, we share the most common errors and, most importantly, How to avoid them so that your company in UAE is not only created correctly, but also works successfully and with legal certainty.
One of the most common mistakes is choosing the wrong area out of ignorance or out of wanting to save costs in the short term.
- The Free Zones they are ideal if you are going to operate internationally or bill from Dubai but without local customers (within the UAE)
- The Mainland It is necessary if you want operate directly in the local market, sign contracts with Emirati companies or have a physical store, for example.
- You won't be able to issue invoices within the UAE (in many cases).
- You will have banking or visa restrictions.
- You'll have to migrate the company later (more expensive and complex).
Take a good look at your business and your market before choosing. We help you select the right jurisdiction for your objectives.
Many think that opening a company in Dubai is just a procedure to obtain residency. Pero There are more and more controls on the part of the authorities.
- Real economic activity (customers, revenues, bank movement).
- Contracted physical or virtual office.
- Basic accounting in order.
If your company doesn't operate and has no substance, Can you lose your visa or that they don't renew it for you.
If your goal is to reside in the UAE, make sure that your company has a legitimate activity or uses another route such as the Golden Visa. We will advise you on the right migration strategy.
It's very common to hear: “You don't pay anything in Dubai.” Pero I am a it's not quite true.
- There is a Corporate Tax of 9% about business profits greater than AED 375,000 (~90,000 € per year).
- There are agreements for the exchange of tax information with many countries (including Spain).
- If you as a natural person reside outside, You could tax benefits in your country of tax residence.
Define your tax residence, your volume of income, and structure the company correctly. The key is in tax planning, not tax evasion.
Although many Free Zones do not require auditing for small businesses, Yes it is mandatory to keep accounts and file reports with the authorities if certain limits are exceeded or if you want to access tax benefits.
- Annual financial statements.
- Tax returns (for Corporate Tax if applicable).
- Documentation for the Economic Substance Report or for the ESR if you operate in regulated sectors.
Outsource your accounting with a specialized local firm. We offer complete accounting adapted to Emirati regulations and with an international focus.
Every economic activity must have a specific license. Choosing an inappropriate or overly generic category can result in:
- Refusal by banks to open accounts.
- Problems with the visa (if your occupation does not match the activity).
- Penalties if a discrepancy is detected.
Clearly define your business model and make sure you get the right license. There are more than 2,000 possible activities and each free zone has its peculiarities.
Yes, it is possible to open a company in Dubai from abroad with a few clicks. But that doesn't mean you're doing it right.
- Many portals offer standardized packages that they don't take into account your international tax situation.
- You risk being poorly structured, not being able to operate properly or having problems with banks and visas.
Lean on an agency with local experience, who speaks your language and understands your objectives. We don't just set up companies, we design efficient and safe structures for each client.
Setting up a company well in Dubai is an advantage... if you do it wisely
Setting up a company in the Emirates can be a brilliant decision if properly structured. Pero Making mistakes in the first steps can cost you much more in the medium term: loss of visa, banking problems, tax blocks or fines.
