Business Setup and Company Formation-Cultures and Legal Framework

Business Setup Company Setup Dubai UAE
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If you’re an entrepreneur planning to expand your horizons by starting a company overseas, the UAE is probably the best place to do company setup in Dubai The United Arab Emirates (UAE) has been considered a major business hub as it attracts global investors from all over the world to do a business setup. While company formation in the UAE isn’t as easy as it may look, you need to learn about the culture and the structures of businesses in the country if you want to start building your own.

Business Culture in the UAE

The country’s local government is encouraging investment and startups in many ways, making it the perfect place to build a startup. The Emirates is also comparatively easy for foreigners to do business in, and company formation in the UAE is actually pretty straightforward. In fact, the UAE announced in 2019 that it was allowing 100% foreign ownership in 122 economic activities across 13 different sectors. Most notably, these include growth sectors such as renewable energy, logistics, hospitality, food services, and manufacturing.

Although conservative and hierarchical, the local business culture in the country is also quite easy to navigate. Of course, you need to maintain appearances, and face-to-face communication is greatly valued. You better start nurturing those personal and professional relationships as they can come in handy with your negotiations.

Legal Structures for Businesses in the UAE

Like any other country, the Emirates has its own varying legal corporate structures. If you’re planning to start a business, knowing these structures is a must. Below are some of the most common, including their requirements:

 This type of company is 100% owned by just one individual. This gives the owner full control over operations and profits. Although all nationalities are allowed to create their own sole proprietorship company, only UAE and GCC nationals can have a commercial or industrial company.

Professionals such as doctors, accountants, and lawyers can open a civil company business in the UAE. An Emirati national must own 51% of the business.

  • Limited Liability Company (LLC)

If you plan to build an organization with multiple shareholders, then an LLC might be what you’re aiming for. This requires between two to fifty shareholders that are each liable only for their percentage of shares. When it comes to profits and losses, everything is divided between the shareholders based on their holdings. Please do take note that an LLC requires 51% of shares to be owned by a UAE national.

  • Foreign Company Branch

A foreign company may establish a branch in the UAE, but it must be owned 100% by its parent company. Any goods sold by the company must be imported through a local trading firm.

  • Free Zone Company

In the case of a business operating in a Free Zone, they are required to have two to five stakeholders. There are many benefits of setting up a company in the UAE Free Zones. However, they cannot trade directly with the UAE market.

  • Freelancers 

Perhaps the smallest unit in this list, making it also the easiest to set up. You only need to register in a Free Zone with an application form, CV, bank reference, and notarised Registry Identification Code Form.


This is just the tip of the iceberg when it comes to setting up a business in the UAE. Of course, there are many more considerations to look at, such as taxation, obtaining a business license, as well as business banking in the UAE. The culture and legal structures should give you an idea of what the climate is for setting up a business in the country.

Vigor Business Center helps you simplify the formation of your business by providing professional counselling and advice. We are company formation experts providing business setup services in Dubai and the UAE. If you’re planning to start a business in those countries, rely on Vigor Business Center to help you set everything up. Contact us today to get started!