The United Arab Emirates, particularly Dubai is home to thousands of businesses. Many international companies have chosen to make it their home or at least have a regional headquarters in Dubai, not to mention the many homegrown businesses and startups that have sprung up in Dubai.
If there is one thing that all businesses need it is an IT company to handle their IT needs, so Dubai has become a lucrative market for IT companies. These companies are not only providing IT solutions to businesses inside and outside Dubai but also taking part in research and Innovations.
Add to it the friendly business environment that Dubai provides, it seems like a great place to set up your own IT company. So, in this guide, we will not only tell you why opening an IT company in Dubai is a great idea but we will also tell you how you can do it effectively and efficiently.
Benefits for IT Companies in Dubai
From its geographical location to its friendly business environment, Dubai has many things going for companies and businesses, and here are just some of the benefits you will get for setting up an IT company in Dubai.
Perfect Geographic Location
If you look at the map you will notice that Dubai is perfectly located between the larger Asian continent and the continents of Europe and Africa. This makes it an ideal location time zone-wise for an IT company that wants to do business internationally.
You start your day by conducting business with the Asian market and end the day by conducting business with European and African markets and if you still have fuel left in the tank then the American markets are not far behind.
Almost No Taxes
Historically Dubai and UAE as a whole had no Taxes, but over the last few years, they have introduced value-added and corporate taxes at 5% and 9% respectively. These taxes are already really low, yet they may not even apply to you if your company is set up in a free zone or it doesn’t meet the requirements.
So essentially you will be paying no taxes at all and even if you have to, they won’t affect your bottom line too much.
Friendly Government
When it comes to foreign investment and businesses, the governments of Dubai and UAE are very friendly as their whole goal is to attract as much foreign investment as they can. Having a friendly government means not only is it easy to set up a business but also easy to run it.
Booming IT Ecosystem
As mentioned before, Dubai already has a thriving IT Ecosystem, and while it might seem like competition at first, if you know how to run your business effectively then it is an advantage as everything you need is readily available.
Easy Access to Skilled Workforce
Dubai is home to talented and skilled people from all around the globe and its strict yet friendly visa policies make it a friendly place to find employees who are highly skilled and experienced in the IT sector. With the IT sector in Dubai already booming, you will have no shortage of employees.
Excellent Infrastructure
In terms of quality of life, UAE is one of the highest-ranking countries and Dubai has an excellent infrastructure for its residents. Everything you need to effectively run your business is readily available in Dubai.
Best Locations to Open an IT Company in Dubai
When it comes to choosing a location for your business, you can either set it up in the mainland or the freezones. On the mainland not only will you require a local sponsor who would own 51% shares of the company, but you will also have to potentially pay taxes.
This means Freezones are the best options for an IT company for not only you will have complete ownership but also no taxes. Now all that is left is to choose the right location and here are a few good options.
- Dubai Internet City (DIC)
- Dubai Silicon Oasis (DSO)
- Dubai Science Park (DSP)
- Jebel Ali Free Zone (JAFZA)
All these are free zones and are built exactly for your needs. If you really want to go on the mainland then Jumeirah Lake Towers (JLT) is perfect for a small to medium IT company and if you are a big spender then Sheikh Zayed Road will serve your needs.
Costs Associated with opening an IT Company in Dubai
If you are in the free zone then as mentioned before you don’t have to worry about taxes. The other big cost is the license fee which starts at around AED 15,000. In addition to that next big expense can be the visa fees for your employees, add to that other random fees and you are looking at AED 30,000 to 50,000.
Documentation Required for Opening IT Companies in Dubai
To set up your IT company you will need the following documents.
- Copies of valid passports
- Copies of visas (For foreigners)
- A detailed Business plan
- A Lease Agreement
- Banking and Financial details
- Trade License
- No Objection Certificate (NOC) from your sponsor (If applicable)
- Memorandum of Association (MOA) (If applicable)
Note: These are just some of the documents that you may need, in addition to specific documents to your case.
Steps to Opening an IT Company in Dubai
If you have done all your research and have all the necessary documents needed to register your IT company, you need to follow these steps.
- Legal Trade Name: You start by selecting an appropriate legal trade name, that meets the government’s requirements.
- Suitable Business Location: Next you need to find a suitable business location, preferably in one of the free zones, and lock it down with a lease.
- Business Structure: Next you need to decide what kind of corporate entity your business is. It is a sole proprietorship or a limited liability corporation (LLC) or some other business structure.
- Articles of Association: Here you will get all your ducks in a row, from deciding on a business model to outlining the purpose of your company and other necessary details.
- Trade License: Once you have all your business details finalized you need to apply for a trade license, which means filing an application and doing all the necessary paperwork.
- VAT Registration: Depending on the size of your business and its location you will need to register for VAT.
- Corporate Bank Account: Lastly you will need to open a corporate bank account to manage all your finances.
