The Emirate of Dubai has long felt that a business idea should not be constrained by one’s location of residence or employment. That is why, as part of its Investment Week launch, Dubai announced the establishment of a new virtual commercial license. The program aims to increase foreign direct investment (FDI) in Dubai. What distinguishes this new Dubai commercial licensing program? We’ll go over it.
The Virtual Company License will provide freelancers and businesspeople from all over the world with accessibility to a regulated e-commerce ecosystem, allowing them to effortlessly collaborate with Dubai-based businesses while also exploring new markets and investment opportunities digitally.
What is Dubai Virtual Commercial License?
The Dubai Virtual Commercial License aka the Virtual Company License is a program that enables investors from all over the world to organize all business-related actions online, including document signing and digital submission and have them be legally binding in the UAE. In layman’s terms, it’s a new guideline that permits foreign entrepreneurs to start a firm in Dubai without having to buy a home there.
The new virtual license in Dubai is open to foreign companies from more than 101 countries and covers a wide range of industries, including creative industries, technology, and services. The new Dubai Virtual Company License intends to comply with Article 3 of His Highness Sheikh Mohammed’s 50-Year Charter, which calls for the creation of a Virtual Commercial City in Dubai.
Director-General of the Dubai Economic Department, Sami Al Qamzi, announced the project during Dubai Investment Week.
“The virtual license scheme corresponds with the third article of Dubai’s 50-year charter, which promises policies and initiatives that will ensure progress, growth, and Dubai’s sustainability and prosperity.”
The program’s founders believe that this new virtual trade hub would attract at least 100,000 businesses from around the world. The project aims to keep the Emirate’s position as one of the top 10 FDI destinations throughout the last decade.
The project, which allows investors from all over the world to operate digitally in Dubai without having to physically visit the city, will boost business confidence and open up new frontiers for Dubai’s and the UAE’s competitiveness and growth.
Requirements for Obtaining Virtual Company License in Dubai
The following are some of the requirements for obtaining a virtual commercial license in Dubai.
- Residents of the United Arab Emirates are not eligible to apply for a Virtual Company License.
- Owners of virtual firms in Dubai must be citizens or tax residents of one of the 101 countries that have been approved. Canada, India, Pakistan, the United States, Russia, China, Saudi Arabia, Japan, and other countries are included. (For a complete list of recognized nations, go to the VCC’s official website.)
- Only pre-defined business activities are permitted to establish a virtual firm in Dubai. Service activities connected to printing and advertising, consultancy, computer programming, allied activities, and design activities in jewelry, fashion, and interiors are among the predefined sectors.
Owners of virtual businesses in Dubai should keep in mind that their business will still be subject to corporate, personal, and social taxes of the country in which they are located. If the revenue from virtual business in the United Arab Emirates exceeds $100,000 per year, the business will be subject to 5% Value Added Tax (VAT) in the United Arab Emirates Best. This means that Dubai virtual company license holders will be required to register the company with the UAE Federal Tax Authority.
Another important thing to note is that the Dubai Virtual Business License does not automatically provide physical access to the UAE through a business/visitor/residence visa to any member of the company. The same goes for opening a business bank account in the UAE. Opening a bank account will be at the discretion of the commercial banks.
How to Apply for a Virtual Commercial License in Dubai?
The overseas company owner must apply for a Virtual Company License in order to establish a virtual business in Dubai. The procedure for acquiring the Dubai Virtual Company License is outlined below.
Register the Company
To begin the virtual company registration process, go to the official website of Dubai Virtual Commercial City. You’ll need to complete the online company registration form here. Here you will provide information such as name, contact information, date of birth, passport information, and any past experience with Dubai, if any, must all be submitted. The owner must also provide the company’s trade license name and the business activity they intend to engage in.
Submit the required Documents
The next action is to provide the papers listed below. The following is a list of documents that must be uploaded online in order to obtain a Virtual Company License.
- Photocopy of Passport.
- Evidence of address.
- Evidence of tax residency.
- A recent photograph of the company’s owner with white background.
It is important that all the documents submitted are not old than 3 months and the passport has more than 3 months to expire.
Tracking the application
The information provided in the application will be sent for authentication after it is submitted. The authentication is done by the Dubai government through a background check. This virtual company license verification phase might take up to a month, so make sure all of the information you give is correct. The owner will receive an email following the screening procedure informing them of their approval or rejection.
Following approval, the owner must visit VFS Global in person for identification and passport verification. VFS Global visits must be scheduled in advance by visiting their website or sending an email to firstname.lastname@example.org. A service charge of EUR 75 (AED 300) plus relevant taxes in the selected country is required for this step.
Payment for the Virtual Commercial License
Owners must pay the Dubai Virtual Company License fee after properly authenticating their identities at VSF Global. The cost can be paid through the VCC’s official payment portal, ePay, which is offered by the Dubai Government’s Smart Dubai. The charge for a Virtual Company License is determined by the license validity selected in the online company registration process.
Benefits of Virtual Company license in Dubai
The virtual commercial license of Dubai can enhance the work and life of entrepreneurs in a number of ways.
- It reduces the administrative and operational costs of the business. This helps the business to focus on investing in its product and service.
- Manage your business operations online.
- It provides the opportunity to benefit from Dubai’s business industry.
- It also provides the opportunity and access to new clients, markets, and investments.
The Virtual Company License came into existence as a joint initiative of Dubai International Financial Centre (DIFC), Dubai Economy, Smart Dubai, General Directorate of Residency and Foreigners’ Affairs (GDRFA), and the Supreme Legislation Committee, focuses on three main sectors:
- Creative Industries
- Technology Industries
- Service Industries
If you are operating in the following sectors and think you can benefit from the virtual commercial license of Dubai, then contact us for help and further assistance.