Every day that goes by, more and more USA-based businesspeople, investors, and entrepreneurs are looking to relocate their corporate operations to Dubai. It is because conducting business in Dubai is simple and gives new startups and well-established companies tons of advantages. If you want to relocate your USA Business to Dubai, UAE, you must meet certain requirements, get some initial permits, provide certain documentation, and go through a thorough process. Read on to find out the complete process that you need to follow to do so.
Reasons to Move USA Business to Dubai, UAE
Following are some of the reasons that will make you move your US business to Dubai, UAE as soon as possible:
1. Political Uncertainty
The political climate in the US can be unpredictable. It is because of the changes in government regulations and policies that have an influence on businesses.
2. Complex Regulations
Doing business in the US can be difficult because of the complicated regulatory framework in the country, which might involve federal, state, and municipal restrictions.
3. High Tax Burden
One of the highest corporation tax rates in the world is found in the US, which can be a substantial financial burden for companies.
4. Litigation Risk
The corporate climate in the US is very litigious, with a significant chance of expensive and time-consuming lawsuits.
5. Skilled Labor Shortage
In some US industries, there is a lack of trained workers, making it challenging for employers to find competent candidates.
6. Healthcare Costs
The high cost of healthcare in the US can be a burden for employers who offer health insurance to their staff.
With a huge number of established enterprises and recent entries, the US has one of the most competitive business environments in the world, making it challenging for new businesses to establish a presence.
8. Currency Fluctuations
The US dollar is a significant currency, and changes in its value can have an effect on companies that conduct business abroad.
9. Labor Laws
The US has tough labor rules that make doing business challenging, particularly for small and medium-sized organizations.
10. Environmental Regulations
Businesses must abide by stringent environmental standards in the US, which can be costly and time-consuming to implement.
11. Intellectual Property Protection
In the US, protecting intellectual property can be difficult and expensive, requiring specialized legal expertise.
12. Market Saturation
In the US, several industries are very saturated, making it challenging for new companies to compete and gain market share.
Benefits of Moving USA Business to Dubai, UAE
1. Government Support
The Dubai government supports international companies and offers a number of programs and initiatives to draw in foreign capital.
2. Tax Incentives
Dubai is a desirable location for firms because it provides a tax-free business environment with no personal or company taxes.
3. High Standard of Living
Dubai offers a high standard of living, as well as first-rate housing, healthcare, and recreational amenities, making it a popular location for foreign employees.
4. Diverse Economy
A variety of opportunities are available for businessmen in various industries thanks to Dubai’s diversified economy, which places a heavy emphasis on tourism, real estate, financial services, and technology.
5. Strategic Location
Dubai serves as a hub for global trade and business due to its location at the intersection of Europe, Asia, and Africa.
6. Modern Infrastructure
Modern ports, airports, and motorways are just a few examples of Dubai’s well-developed infrastructure, which makes it simpler for companies to operate and move goods.
Things to Consider When Moving USA Business to Dubai
Entrepreneurs can heavily increase their profits by relocating their US business to Dubai. It is advised that you consider a few factors before moving your US firm to the UAE that will help in the smooth operation of your business both now and in the future. You must consider the following:
Given how important a factor location is to your business, you should think carefully about it. Where is your business, store, or warehouse located? Where will you operate your business? Is there a port nearby? What is the distance to other Emirates? Is it located within Dubai or outside its borders? All these things matter a lot.
Decide the budget that you are willing o spend on moving your business from the US to Dubai. Verify whether or not it is okay to use the budgeted amount of money for this task.
Obeying Rules and Regulations
Check to see if your business is operating in accordance with Dubai’s government rules and regulations after you’ve established it in the country.
You must carry out your current business operations in Dubai that you do in the US. You need to check if you’re capable of doing that or not.
Take a look at Dubai’s banking alternatives available in the Emirates. Verify that your business license covers a variety of banking solutions. If not, you should think twice before moving your business to Dubai.
One of the most crucial elements of relocating a business to another country is visa issuance. It’s also essential to obtain visas for you, your staff, and your family. To relocate your company to Dubai, you will need visas for them.
Free Zone vs Mainland: Which Economic Zone Should You Choose?
Here are the major differences that you should consider when choosing a jurisdiction for moving your US business to the UAE:
What is a Free Zone?
Each Emirate has a designated autonomous authority region known as a “Free Zone.” The Free Zone Authority (FZA) is the regulatory agency that oversees the operation of free zones. It sets its own rules for how it must run the free zones.
For investors wishing to establish their business in the area, free zones offer a variety of appealing packages and advantages, including 100% foreign ownership and an atmosphere free from income taxes.
Any business registered within one of the UAE’s 40+ free zones is referred to as a free zone company. A free zone company cannot conduct business on the mainland since it is only permitted to conduct business inside the free zone and outside the United Arab Emirates.
In a free zone, an investor can typically establish three different corporate entities: a branch of a business concern, a free zone company (FZC), and a free zone establishment (FZE).
Benefits of Setting Up a Free Zone Company
Following are some of the benefits that you can get upon moving your US business to the free zone of Dubai or the UAE:
100% Expat Ownership
The UAE allows foreign investors to possess 100% of the companies they establish in free zones. Due to this, business owners can retain their earnings and even remit their profits back to their native country.
No Income Tax
Income tax is not applicable to free zone businesses. For corporation tax, the company will only be exempt if its business is located outside of the United Arab Emirates or if its overall net income is less than AED 375,000. This is in keeping with the most recent corporation tax law, which imposes a 9% corporate tax on businesses with net income greater than AED 375,000.
Duty Exemption for Import and Export
Free Zone businesses don’t have to pay import and export duties. In this way, businessmen will be able to promote seamless trade outside the UAE.
State-of-the-Art Technology and Infrastructure
Businesses moved into the free zones of Dubai can enjoy state-of-the-art technology and infrastructure. Moving a business in the free zones will prove to be cost-effective, especially for startups and SMEs.
What is a Mainland?
The mainland is a specific region where investors and businessmen can conduct business. It is the area in Dubai that is regulated by the Department of Economic Development (DED) and lies outside the free zones. All three types of Mainland trade licenses are issued by the DED which are:
A mainland company is a legal entity for conducting business that has been authorized by the Department of Economic Development and registered with the Ministry of Economy (DED). A sponsor who resides in the UAE is necessary for the formation of a mainland corporation.
A mainland business in the UAE is not limited to trading and is allowed to carry out business both inside and outside of the country.
Trade and service activities will have different shareholding patterns. the foreign national would be entitled to own 100% of the business in a setup for a service activity. Whereas in a Trade Activity structure, the shareholder (a UAE native) would own 51% while the ex-pat shareholder would own 49% for specific activities.
Benefits of Setting Up a Mainland Company
Following are some of the benefits of setting up a company in the UAE mainland:
Income Tax-Free Environment
Companies on the mainland enjoy the same tax exemptions as Free Zones. This enables business owners to keep all of their earnings and boosts the profitability of their company.
No Geographical Restrictions
Mainland enterprises can conduct business both inside and outside of the region, in contrast to Free Zones, which are limited to trading only within the boundaries of the authorized Free Zones.
More Business Activities
Comparatively speaking, mainland businesses engage in greater business activity than businesses conducted in free zones. This can help in the expansion of the economy by enabling business owners to explore a variety of opportunities.
100% Ex-pat Ownership
There is a sponsor required for mainland enterprises which must be a national of the UAE. However, ex-pats are permitted to own 100% of certain commercial and service activities and types of companies.
Ease to Open a Corporate Bank Account
A corporate bank account is simple to open and obtain for mainland businesses.
Major Differences Between a Free Zone and a Mainland Company
Here are the key differences between both types of companies:
Scope of Business
A mainland business is permitted to carry out operations both inside and outside of the UAE. Free Zone businesses are limited to operating exclusively within that Free Zone’s boundaries and outside of the United Arab Emirates.
Ownership of Businesses
Expats are permitted to own 100% of their mainland company under certain commercial and service activities. On the other side, foreign investors can benefit from full ownership in a Free Zone since a UAE national is not necessary as a sponsor for it.
The requirement for a Free Zone is established by the Emirate in which the company was founded. On the flip side, The legal structure of a UAE mainland company determines the capital needed for a mainland firm.
Visa eligibility is not subject to any limitations for mainland UAE businesses. Visas are typically provided to Free Zone businesses in quantities between 1 and 6. Nevertheless, depending on the free zone’s authority, the visa packages could change. Unlike free zone visas, which are valid for three years, a work visa issued to a mainland corporation is only good for two years.
Business Setup Approvals
A number of government agencies, including the Ministry of Economy and the Department of Economic Development, must approve mainland businesses. However, a corporation operating in a free zone would need to abide by the rules established by the free zone authority.
Required Documents to Move USA Business to Dubai
- Copies of passports of partners
- Online pre-approval application form
- Relevant government forms
- Copy of your passport, UAE residence visa, and Emirates id if applicable.
- A utility bill, invoice, or any other proof of residential address in the country of residence
- Copies of parent company documents
- Initial approval certificate
- Third-party approvals for some regulated business activities
- Details of an office address (required after registering your company)
- Other requirements by the DED (if any)
- General manager’s passports and utility bills
- External approvals (if required)
- Exit letter or No objection letter from the current jurisdiction
- Ejari registration certificate
- Copies of the Ultimate Beneficial Ownership (UBO) director and shareholder
- Memorandum of Association (MoA)
- Trade name reservation certificate
- NOC for business partners (if any)
How to Setup a Business in Dubai, UAE?
Although it is relatively simple to start a business in Dubai, business setup consultants can make setting up a business in Dubai very easy. They will take care of the process, documentation, and other concerns of establishing the business.
Key Steps to Start a Business in the UAE
- Choose a business activity
- Choose a jurisdiction
- Finalize the company’s legal form or structure
- Issue approval for your business activity and name
- Apply for your trade license
- Register your business
- Find a local agent (if required)
- Issue your external approvals
- Prepare your Memorandum of Association
- Rent an office
- Get the Ejari and tenancy contract
- Issue the initial approval
- Collect your trade license
1. Choose a Business Activity
Firstly, consider the viability of the activity with respect to the UAE market when choosing a business activity for your startup. Be sure to thoroughly examine the viability and profitability of the venture before establishing a business in Dubai. Then, select when to launch a business in Dubai, United Arab Emirates.
2. Choose a Jurisdiction
The Mainland, Free Zone, and Offshore economic zones are used to divide the UAE market. Jurisdictions are another name for these economic zones. Every jurisdiction has a unique set of rules and laws governing how businesses are established. They also provide facilities for various commercial requirements. The jurisdiction you choose for your business will, however, depend on your needs and the nature of your business operations.
3. Finalize the Legal Form or Company Structure
When setting up a business in the UAE, selecting the legal form for your company is crucial. It establishes the framework and tone for handling profits and losses as well as how you should allocate your resources and assets. Choose your company’s structure or legal form during the early stages of planning.
This will assist in giving your business a layout. You must choose your business’s legal structure before you can submit your license application. Some of the legal formats or business structures that you can use to register your company in the UAE are as follows:
- Holding company
- Limited liability company (LLC)
- Free zone company branch
- Sole Establishment
- Foreign company branch
- Civil company
- GCC company branch
- Local company branch
4. Get Approval for Your Company Name and Activity
Before you can proceed and begin the process of setting up your company in the UAE, the Department of Economic Development (DED) must authorize the trade name for your business. Your chosen business activity is also approved at this step, along with your company name. Following the approvals, you will need to submit the necessary paperwork to apply for your UAE trade license and start the process of setting up your business in Dubai.
5. Apply for Your Trade License
In the United Arab Emirates, trade licenses, also known as business licenses, come in four different types. These types are:
- Commercial License
- Professional License
- Industrial License
- Tourism License
If you intend to launch a business in the UAE mainland, you can also apply for any of these trade licenses. The license structure in UAE free zones varies and is also based on the type of commercial activity your company chooses to engage in.
6. Register Your Business
Licensing and company registration are simultaneous activities. However, there are many steps to the overall documentation and approval procedure. You must also get all necessary government approvals during this phase, as specified by the Department of Economic Development. Additionally, the documentation needed varies depending on the business’s type and activities.
7. Look for a Local Agent (If Required)
Before starting a certain business in a certain region of Dubai, finding a local partner can be a must. A UAE citizen alone may act as an Emirati partner or agent. Finding a reliable local agent can be challenging, particularly for an aspiring businessperson trying to launch a company in Dubai. A business setup expert can put you in touch with organizations that provide corporate sponsorship, where you’ll receive full control and official authorization of your company.
8. Get External Approvals
Depending on your business activity, DED may need extra approvals from other governmental or non-governmental organizations. For instance, the municipality, certain banks, embassies, etc. may require some businesses to obtain approvals.
9. Prepare Your Memorandum of Association (MOA)
To form a business in Dubai, it’s critical to comprehend the intricacies of a Memorandum of Association (MoA). Therefore, be sure to get professional guidance before creating the MoA. The MoA should be written in compliance with the instructions of the UAE government. Prior to forming a business in Dubai, it should also take your business interests into account.
10. Rent an Office Space
You have the option of renting an office space or selecting a shared workspace at a business center, depending on your particular needs. The amount of visas you can request from the Department of Economic Development (DED) depends on your office space.
11. Get the Ejari and Tenancy Contact
An Ejari can be necessary if you want to move your US business to Dubai. You and the real estate company whose office space or shared workspace you wish to rent are bound by this tenancy agreement. The Real Estate Regulatory Agency oversees the internet platform Ejari (RERA).
Additionally, it makes sure that both parties to the tenancy are treated fairly and openly. To activate your Ejari account, you also need to upload your tenancy contract and a few other papers. Ejari is crucial because you require it to obtain or renew visas for your employees and family members.
12. Get Initial Approval
In order to start a business in Dubai, you must first receive initial approval from DED. Having this approval proves that the UAE government allows you to launch a business there. You cannot move on to the next stage of the application procedure without receiving this approval.
13. Collect Your Trade License
To get your UAE trade license, you will have to submit the required documents to the Department of Economic Development along with the necessary government fees.
FAQs – Frequently Asked Questions
Can I transfer my business to Dubai?
Yes, you can easily transfer your business to Dubai, UAE from any country.
Can I move my business to UAE?
Yes, any businessman or entrepreneur can move their business or startup from one country to the UAE.
Can US companies do business with UAE?
Yes, US companies can do business with the UAE.
How can I start a business in Dubai from the USA?
There is a certain process to start a business in Dubai from the USA:
- Choose a business structure.
- Choose a trade name and activity.
- Submit application.
- Choose a jurisdiction and rent out an office space.
- Get your license along with all the approvals.
- Register your business with the authorities.
Is Dubai Tax-Free for business?
Yes, Dubai offers taxation benefits to businesses being operated in the UAE.
Do business owners pay tax in Dubai?
Certain business owners owning businesses are exposed to corporate taxes in Dubai. Not every business owner needs to pay taxes in Dubai.
Move your US Business to Dubai, UAE with RIZ & MONA
A USA company can easily relocate to Dubai, United Arab Emirates. If they follow the process mentioned in this guide, American businessmen, entrepreneurs, and investors can do it with ease. For a smooth relocation of your US business, get in touch with RIZ & MONA CONSULTANCY. Contact us right away, and we’ll take care of everything on your behalf.