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Limited Liability Company Registration in Dubai Internet City (DIC) Free Zone, Dubai. Service offer

The Emirate of Dubai is located on the Arabian Peninsula, in the south of the Persian Gulf. Among the seven emirates that make up the UAE, it is the most populated one and second largest after Abu Dhabi. Dubai has more than 20 free zones. The Dubai Internet City (DIC) is the North Africa’s and Middle East’s biggest information and communication technologies (ICT) centre. Since 2000 it has successfully established a thriving ecosystem for technology-related entities and was one of the pioneers in embracing the vision of Dubai as a knowledge-based economy. The DIC is home to more than 1,600 companies, including several ones from the Forbes top lists and most dynamic and successful technological SMEs and startups that include all elements of the ICT value chain.

Major advantages of doing business in the UAE

No corporate tax;

Stable banking system;

Ability to work with US dollars;

Quick company registration;

Ability to create substance in the country of registration;

Ability to obtain a residence visa for the company’s shareholders and employees.

Budget for setting up business in DIC Free Zone

Services
Fees* (USD)
Company registration in DIC Free Zone, including[1]:
-licence,
-rent of smart desk office,
-company formation services, and
-E-channel registration.
This fee is applicable in the case of:
- company with a single shareholder;
- type of licence – service;
- office – smart desk.
Other options – upon request
23 500
E-channel deposit (refundable, returned in the case of licence revocation)
1 370
Obtaining a residence visa
This is the cost of one visa, including:
- payment of all government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport);
- preparing necessary documentation;
- accompanying the applicant and transport costs (trip to the hospital and migration authority).
The cost of visa does not include a deposit USD 685 which is payable additionally. Refundable upon cancellation of visa
4 200
Assistance with bank account opening (irrespective of the outcome of application)
Corporate account (for legal entity)
2 500
Total:
32 255

*5% VAT applies

Company registration

Company registration in DIC includes the following steps:

1) Selecting

company name to be checked for availability (at least two names), which name:
  • must not be identical or similar to the name of an existing company;
  • can use Latin characters

company structure (director, shareholders, and manager);

type of licence:

DIC issues licences for carrying on business in the following segments:

  • Software – activities related to developing, installing and/or modifying software products of the company or of a third party.
  • Internet and Multimedia – activities related to developing and/or distributing Internet or multimedia content. Other activities may include distributing goods or services via the Internet, such as by providing an online platform and acting as an intermediary between multiple companies or multiple individuals. Additional activities may include providing different applications through a network.
  • Telecommunications and Network – activities related to developing, installing, modifying, and/or operating networks or providing relevant services designed for operating network-based applications or services. Manufacturing physical components within the Free Zone and direct sale of physical components and goods in the Emirate’s market is not permitted.
  • IT Service – activities related to developing and/or providing standardized repeatable IT-based services, which may also include security solutions, localization, training and corporate learning.
  • E-commerce (Internet sales) – activities related to providing individual services and products to third parties through electronic media such as an Internet search engine, portal, website, social media etc. for the purpose of facilitating sales activities.
  • Data Centre - Companies conducting activities related to providing Data Hosting, Processing, Distribution, and Disaster Recovery solution. This activity includes cloud computing, hybrid and on-premises data centres.
  • Gaming & E-Sports - Companies involved in designing, developing, creating, publishing, organizing and promoting any interactive and electronic/digital games software and hardware related to gaming & E-Sports.
  • Advertising & Communication - Entails the process of publishing promotional material through online platforms such as social media, search engines, websites, and any other program that can be accessed digitally. Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising (including web banner advertising), and mobile advertising.
  • Media and Marketing Services - Provision of a number of advertising related services, including sales promotion, market research, PR and event marketing.

2) Paying fees

3) Providing documents for directors / shareholders / attorneys

(either originals or notarized copies):

  • internal and international passports;
  • proof of address (unless the internal passport contains an address stamp);
  • CV;
  • copy of the passport page with a UAE entry stamp.

The shareholders need to additionally provide:

  • personal data in the form of a letter: phone, email, residential address, country of residence, mother's name, marital status, religion, and citizenship.

The shareholders will need to sign a Client Questionnaire Form for completing compliance procedure, and a Contract for administration.

Preparation and Submission of Documents for Company Registration

The following documents are prepared for submission to the registration authority:

  • Application for company registration (signed by the shareholder);
  • Business Plan;
  • No Objection Letter (from the sponsor) – where there is a valid UAE visa issued by another company.
Before registering a company, the Free Zone authority must check the shareholders and directors of the company (Security Check). At this stage they may request additional documents, for example, a police clearance certificate. The check normally takes 2 to 4 business days.
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Once the check is done, the company is registered. Upon registration, the Free Zone authority issues the following documents:

  • Certificate of Incorporation indicating the registration number and date, type of licence, details of shareholder and share capital of the company;
  • Licence for the declared type of business (valid for 1 year);
  • Office lease agreement (for 1 year);
  • Share Certificate;
  • Memorandum & Articles of Association.

A company seal is also issued.

The total time to register a company in DIC is 20 days, on average
Upon registration of the company, you can proceed with visas and bank account opening. A company can open a bank account both at a UAE bank and at a foreign bank – please contact your GSL consultant for details.
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IMPORTANT: Since the UAE is not party to the Hague Convention of 5 October 1961, which abolishes the requirement for legalization of foreign official documents, it is necessary to submit the documents of a local company for legalization to the consulate of a country where they will be used

The fees for translation, notarization, legalization and apostille are charged additionally.

Visa application

The UAE does not have such concept as a residence permit. UAE migration rules require the issuance of residence visas, which in practice are similar to a residence permit.

A residence visa can normally be obtained on the following grounds:

  1. based on owning a UAE onshore company – investor visa;
  2. by making an employment contract with a UAE onshore company – work visa.
However, the Dubai Internet City (DIC) does not have investor visas. It issues work visas only

The number of residence visas depends on the business package chosen during registration of the company.

Getting a visa requires purchasing a health insurance from a local insurance company.

A residence visa is issued for 2 years. Upon expiration, a visa can be renewed.

Application for residence visas includes the following steps

(a visa can only be applied for after registration of the company):

1. Opening an Establishment Card (the migration file of the company) – 5-10 days. This document is necessary for the company to be able to apply for residence visas in the future.

2. Submitting documents for a residence visa and obtaining an Entry Permit (permission to enter the country) – 5-7 days.

To obtain a residence visa, an individual must enter the UAE with an Entry Permit.

If at the time of issuing of Entry Permit the applicant is already in the UAE, then in order to complete the issuance of a residence visa without leaving and re-entering the country, it is necessary to change the status of the visa. The service of changing the status of a visa is provided upon request and is subject to additional charges.

3. Visiting the UAE to obtain a residence visa – in most cases, a visa can be obtained within 5 working days.

The applicant needs to:

  • undergo a medical examination (blood test and chest X-ray);
  • submit biometric data (retina and fingerprints scan).

After receiving a passport with a residence visa inserted into it, one can leave the country.

4. Obtaining a resident ID card - ID Emirates.

The card is issued a few days after the issuance of a visa. Personal presence is not required to receive it.

IMPORTANT: One is not required to reside in the UAE permanently, but a residence visa will be cancelled if one stays outside the UAE for more than 6 months
The fees for obtaining a residence visa in DIC start from USD 4 200. Please contact your consultant for more details on the application.
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Company structure

Directors

The director can be an individual. There are no requirements as to the residence of director.

The minimum number of directors is 1, the maximum is 5.

Details of directors are not accessible to public.

Manager

The manager can be an individual. There are no requirements as to the residence of manager.

The maximum number of managers is 1; can be the same person as director.

Details of the manager are not accessible to public.

Members

The minimum number of members/shareholders in a company is 1, the maximum is 7. Both individuals and legal entities can be shareholders. There are no residence requirements.

DIC does not require a company to necessarily have a local shareholder in its structure.

Details of shareholders are not accessible to public.

Share Capital

A company can only issue one class of shares of equal par value. Bearer shares are not permitted.

The capital can be denominated in UAE Dirhams (AED) only. The minimum capital is AED 10 000, a higher share capital can be required for certain business activities.

It is no longer necessary to deposit the share capital into a trust account of the regulator (Dubai Development Authority) prior to registering a company.

Registered Office

Upon registration the company and the Free Zone authority sign an office lease agreement; the address of such office is considered the official registered office address of the company.

DIC offers various office packages depending on the needs of clients in terms of type and number of licences, number of visas, the need for substance and placement in the Free Zone: from smart desk (a separate workstation in first-class business centres) to a proper office.

Subsequent administration of the company

Corporate Tax

Companies registered in UAE free zones are exempt from corporate tax, capital gains tax, property tax and other taxes, except VAT.

VAT

From 1 January 2018, the UAE introduced a Value Added Tax.

VAT as a general consumption tax applies to all transactions with goods and services, unless such transaction is exempted or taxed at 0% rate.

The standard VAT rate in the UAE is 5%

There is no obligation to register for VAT unless sales turnover within the country exceeds the registration threshold, which is AED 375,000 (~ USD 100,000) in the UAE.

Registration as a VAT taxpayer is required in the following cases:

  • there is reason to believe that the taxable turnover in the next 30 days will exceed the registration threshold (for example, a contract has been made);
  • at the end of the month, the taxable turnover for the previous 12 months actually exceeded the registration threshold;
  • the company receives services to be included in the return using the reverse charge method, in excess of the registration threshold.

It is possible to initiate a voluntary registration after exceeding the threshold of taxable transactions in the amount of AED 187,500 (~ USD 50,000).

Registration with the UAE Federal Tax Administration and allocation of the company’s Tax Reference Number (TRN) takes 20 business days, on average.

Upon registration with the Federal Tax Administration and allocation of the VAT number, a company must quarterly (or monthly in the case of annual turnover exceeding AED 150,000,000 ~ USD 40,830,900) prepare and file a VAT return, and pay the resulting VAT within 28 days of the VAT period end.

Before registering a company, we recommend that you consult a specialist of the non-resident audit department and a tax adviser to assess the company’s tax burden and discuss subsequent administration of the company.
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Financial Statements and Audit

Every company registered in Dubai Internet City must keep accounting records sufficient to confirm its financial position and reflecting up-to-date information about the assets and liabilities of the company. It is also necessary to prepare annual financial statements of the company and have them audited.

The company’s first accounting period begins on the date of incorporation and lasts 6 to 18 months. Every subsequent accounting period lasts exactly 12 months from the end-date of the previous period.

At each reporting date, company directors must prepare financial statements of the company, including auditor’s report, and produce them to the annual general meeting within six months of the financial year-end.

Within seven days after the annual general meeting, the company must submit to the Registrar a copy of financial statements and the auditor’s report[2].

Companies that have subsidiaries (more than 50%-owned) are required to prepare consolidated financial statements for the group.

Before registering a company, we recommend that you consult a specialist of the non-resident audit department and a tax adviser to assess the company’s tax burden and discuss subsequent administration of the company.
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Renewal

The company must annually renew the licence, by paying a relevant fee, and the lease agreement.

The company’s renewal date is the anniversary of the issue of the licence. In the case of late payment, the Free Zone authority reserves the right to charge fines, as well as suspend the licence.

The company renewal costs include renewal of the office lease agreement, of the licence, and the P.O. Box. Upon renewal, an updated licence is issued.

Fees[3]

Services
Fees (USD)
Company registration in DIC, including licence, rent of smart desk office, and company formation services.
The cost of package may vary depending on the number of shareholders, type of licence, and size of office (the office size dictates how many residence visas a company can have).
This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package).
Other options – upon request.
23 500
E-channel deposit (refundable, returned in the case of licence revocation)
1 370
Annual renewal of the company, including licence, rent of smart desk office, P.O. Box, and company renewal services.
This fee is applicable in the case of company with a single shareholder and eligible for 1 residence visa (minimum package).
Other options – upon request.
21 900
Obtaining a residence visa
This is the cost of one visa, including:
- payment of all government fees (Entry Permit, Medical Fitness Report & Emirates ID, Visa Stamping on the Passport);
- preparing necessary documentation;
- accompanying the applicant and transport costs (trip to the hospital and migration authority).
The cost of visa does not include a deposit USD 685 which is payable additionally. Refundable upon cancellation of visa
4 200
Renewal of a residence visa (this is the cost of one visa).
Renewal of a residence visa (visa is issued for 2 years) requires taking the same actions and paying the same fees as upon initial application
4 200
Assistance with bank account opening (irrespective of the outcome of application)
Corporate account (for legal entity)
2 500
Personal account (for individual)
2 500
Compliance fee
250
Keeping company’s accounting records. Maintaining a systematic archive of company documents and providing them to the client upon request
200 / hour[4]
Preparing financial statements, conducting audit and submitting financial statements to the Free Zone authorities
400 / hour
Tax advice on VAT and other matters
300 / hour
VAT registration
1 200
Preparing and submitting VAT returns
200 / hour

[1] The cost of package may vary depending on the number of shareholders, type of licence, and size of office (office size dictates how many residence visas a company can have).

[2] Audited financial statements must also be submitted to the Authority when renewing the licence.

[3] The fees are valid as at November 2022. 5% VAT applies.

[4] The fees for preparing financial statements and conducting audit are charged based on the time spent at hourly rates ranging from USD 100 to 400, depending on the type of work and qualification of a specialist involved, but not less than USD 1 900 – fees for audited financial statements with a minimum number of transactions.

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