Starting Your Software Company in Dubai
Written by Roman on May 20, 2007 – 10:47 pm
It is actually pretty easy to start your own IT company in Dubai. There are basically two options:
1). If you want to start your own company in Dubai or any other Emirate in UAE, you would need to have a local sponsor. This is a guy, who is citizen of United Arab Emirates and who, by law, will own 51% of your company. Normally, there are legal regulations that restrict this person from making any decision or affecting your company daily work. You simply pay this guy a certain amount like $3’000-4’000 per year for the sponsorship. As we knew later, this way to start might have very large advantages if your sponsor is an active guy with contacts and he can open many doors for your business. But as a standard case, you will see your sponsor once a year to pay him his money. I heard scary stories about dishonest sponsors, who had cheated the real company owners taking all their money, but I am not sure if it is true or just rumors.
At the moment we started the company this option was not considered seriously – giving somebody 51% of our company sounded just wrong.
2). Option 2 is to open the company in one of the Free Zones in UAE. This is the only way to open a company in UAE and own it 100% for the foreigners. Since we wanted to open IT company, the logical choice was Dubai Internet City. The procedure of getting the Trade License was pretty formal: they asked us for the business plan, certificate about our education etc. I guess they could deny our application at any step, but fortunately we finally got the license. Maybe later I can tell in more details how the whole procedure of license issuing looked like.
Another interesting opportunity opening the company might be to go to Ras Al Khaimah Free Zone. It is much cheaper to open the company there, and if you plan working alone you can easily do it from home as your virtual office will be in the Free Zone anyway. This way you might save some cash on your office space.
UPDATE: Disclaimer - here are pretty many questions in the comments on this post. By no mean you would consider my answers as legal advice. For all issues related to business opening, taxations, etc, you would consult with the respective Free Zone and/or legal adviser.
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November 6th, 2007 at 9:16 pm
Can I work from France and register my company in Dubai ?
November 6th, 2007 at 10:08 pm
To start company in Dubai or UAE you would need to stay here at least until you get a license. It might take you some weeks. As citizen of France you get 60-days visit visa automatically on arrival, so it would not be a problem.
After you have our license, nobody really cares where you are located as you can send cheques for your license extension by post. In this case Ras Al Khaimah Free Zone is better option than Dubai.
November 17th, 2007 at 2:23 am
Hi there, very interesting read your blog.
I had a question, when you register your business in RAK, I read on their site you are only allowed to carry out business within the zone. Outside, ie. in Dubai you will have to work through an agent.
How does that work for you? Which license did you exactly register?
Many thanks
Robert
November 17th, 2007 at 9:00 am
Robert - I think you may carry your business outside the zone, depending on what you do. If you are in software, and you do not need to have a proper office in Dubai, then you can simply work from home, nobody cares as you have an official office desk in RAK. I have several friends who work like this.
If you need to have an office in Dubai, then you have two options:
1). Get branch license in Dubai - it will allow you to rent an office in Dubai.
2). Close your license in RAK and open in Dubai Internet City, if you are in software too. This is where we have a license now.
January 19th, 2008 at 12:03 pm
Hi gud to see all the infromation in here,,,iam thinking my ways to initaite something in dubai at the moment,i have was working out couple fo things but not into a final stage so just thought of seeking some infromation from the net,and happy to see some useful stuff,i want to start something small to get a feel of how it goes and then proceed further,letsee how it goes…
January 19th, 2008 at 12:51 pm
Lishoy, good luck with your new venture!
March 12th, 2008 at 7:16 am
Hi ,
I have a customer from abu dhabi who needs a website created. My business is registered in India.
They have an association of some sort and need a website like a forum. Do I need a trade license to accept this project ?
They will own the website, i will only be maintaining it.
thanks !
poornima
March 13th, 2008 at 2:01 pm
Any company in UAE may purchase a service from another company in any other country. If your customer from Abu Dhabi purchases the web site development to the company in India, then you just do your job in India paying all your taxes over there. Your customer may have transferred your payment from UAE to India then.
Btw, double check how they will pay you as it is pretty common that companies have difficulties making bank transfers abroad for some reasons.
March 30th, 2008 at 5:35 pm
Dear Sir,
We are a Textile Mnaufacturing unit in India and we want to open our office in Dubai/ Free Zone to sell our products globally. We intend to sell to European and other Asian countries from there. Can you advise what would be BEST option available to us? Also, please help us with how can proceed and who can help us get all the licence?
Await your kind reply!!
Kirttee Khaitan
March 30th, 2008 at 5:56 pm
Kirttee Khaitan - there are several options in Dubai and UAE for companies like yours to open an office. It depends on your ambition and how much you plan to invest. In Dubai it is more expensive, but more presticious for your customers in the Middle East. In other areas of UAE it is cheaper, but sometimes customers have concerns if you hold a license from “the middle of desert”.
Send me e-mail to roman dot konovalov at gmail dot com, I will update you with more details.
April 14th, 2008 at 2:19 pm
Hi Roman,
I trade in the stock and forex markets and am looking to buy a property in dubai to get a resident visa. i can open a bank account and trade online.. do i need to get a license ??
Thanks in advance..
April 15th, 2008 at 11:36 am
If you stay in Dubai living in your house and trading online on behalf of your personal name, then probably you wouldn’t need any license.
If you want to trade as a company, then you need to have a license to get a company registered and get company bank account.
In any case, it is better to ask for more details the lawyer here in Dubai, or consult with the Business Council of your home country in UAE.
April 23rd, 2008 at 4:41 pm
Hi roman ,
first of all thank you for the info published here.well we r a software co in india and planning to market our products in dubai and other areas.we have almost finalised to open a virtual office in RAK freezone i have the foll doubts
1) using this license we can market our products anywhere in UAE ?
2) Market for IT in dubai ?
3) If we intend to sell our products to local clients,then do we need to appoint local agents ?
April 23rd, 2008 at 4:58 pm
Hi parag,
1 - yes, you can market and sell your products in UAE as long as it is allowed by your license. Normally you get a license for certain activities.
2 - didn’t get the question. Market for IT in Dubai what?
3 - you can sell yourselves as long as you have somebody on place to meet with the customers, provide the support and company bank account in UAE. It’s up to you if it agent, partner or your branch office in UAE.
April 24th, 2008 at 1:08 pm
Thanks a lot for the reply.. i meant the software market potential in UAE ?…
April 24th, 2008 at 5:42 pm
parag, you are asking questions that are too general. It depends on your niche. As an example, if you are working on IT consulting and custom software development, I would really think twice before stating this business. Also I think that you would learn the market potential for your niche much longer before you even started spending money for opening a company here.
Otherwise the software market potential in UAE is OK
May 10th, 2008 at 2:57 am
Hi, maybe you can help me…
I own a company of air conditioning and climatization in Portugal and i would like to open one of the same kind in Dubai, but i don’t know where should i go to get the information of how to do it!
Should i speak to a embassy or any other place?!
Do you think that is viable to open in Dubai a company like mine?!
Thank you…
May 10th, 2008 at 10:10 am
Nuno - embassy is definitely the right place to start from.
Otherwise, if you want to own 100% of your company in UAE, you might think about Ras Al-Khaimah Free Zone (http://www.rakftz.com/) or Jebel Ali Free Zone (http://www.jafza.ae/).
UAE is pretty warm place, so I guess that air conditioning business would work fine here. But you understand that competition would be tough and you would make a proper market research before you start here.
As an option, you might probably think about local partners and distributors on the market to avoid the headache with opening your own office in UAE.
May 11th, 2008 at 3:32 am
Thanks for the quick reply.
Now i have onether question!
I own these company but i can open in UAE another kind of business diferent of that i own.
In your opinion what are the best business we can open there whitout a large quantity of money?
May 11th, 2008 at 8:41 am
Nuno - do you mean business other than air conditioning? Any kind then. It is like in any part of the world, you can open any company here. Required investments depend on what exactly you want to do, so it is difficult for me to answer such very general question.
May 19th, 2008 at 4:57 am
Hi there,
We are looking at setting up on a free zone in Sharjah.
would you know if we can trade freely between other free zones since the free zones are not part of the UAE?
May 19th, 2008 at 9:57 am
Hi Steve,
Yes, you can freely trade between other free zones as well as within entire UAE. The only thing is that you might need to pay 5% tax on goods you import into the country.
May 22nd, 2008 at 11:07 pm
Hi Roman,
Good blog, I’m glad I found it.
I’m interested in exploring your reply to parag in which you stated “…if you are working on IT consulting and custom software development, I would really think twice before stating this business”.
My plan was to start operating as a free-lance high end IT strategy consultant in Dubai and eventually develop that into a business following a particular consulting business model I’m working on. I would be a UK registered consultant to begin with whilst I established the company / acquired the licence.
My query is two-fold:
1. Am I correct in assuming I can work from the UK whilst I set up the company?
2. Why do you warn about setting up a consultancy - is the market saturated or is the licence difficult to acquire?
Thanks
May 24th, 2008 at 9:32 am
Hi Simon,
Thank you. Answering your questions:
1). Yes, you can. In this case your customers from UAE would pay you as you were a normal foreign company from abroad. In our practice it’s might be difficult sometimes though. As an example, we recently got a customer in Saudi Arabia, and they refused to pay as bank transfer to our account in Dubai. Instead, they preferred to pay to a local company that was our agent in the country, and then the agent transferred money to Dubai.
Another issue is how you would find your customers if you stay in UK? It might probably work if you, for instance, have good relationships with any UK company based in Dubai.
You actually can stay in UK and set up the company here if you get somebody in UAE who will do all the setup work. There are many companies that can help with that. The best option for you is probably to ask British Business Council in Dubai to help you with it. If they can’t, they would at least point to the right firm that could help.
2). I mean that market is saturated, especially by cheap guys from the Subcontinent. Unfortunately, people in this part of the world do not always understand they get what they pay for, but I hope it will be changed in the future.
Although it is not easy to get IT consultant job here, sometimes it might work very well. I know a guy from Germany here in Dubai, who didn’t even think about starting up his own company until he got asked to help with some IT stuff to another German company. Now he works with German companies only setting the German rates for his work, and business seems to go very well.
I believe you will not get any difficulties with getting license with your consultancy; it would be ok to acquire.
May 26th, 2008 at 8:05 am
Hi Roman,
Real cool blog! Well, I have a question.
I recently started a Manpower Consultancy Service here in Bangalore, India. We basically place specialized Beauticians and Hairdressers in some of the top saloons here in India.
We plan to come to the Free Zone there and set up a branch office so that we could place beauty professionals working not only here from India but globally. I need to contact the Beauty saloons there and find out the requirements though.
1. How can I find out the requirements first? Should I come on a visit visa and explore and then make my decision?
2. Which free zone would you recommend I set up my branch office?
Any suggestions???
Warm Regards,
Arun Matt
May 27th, 2008 at 2:51 pm
Hi Arun,
I am in software business, so I don’t want advising your for the area I have no knowledge about. Definitely, visit to UAE will answer many of your questions. As an options for setting up a company you might consider Ras Al Khaimah Free Zone or Jebel Ali Free Zone.
Good luck,
Roman
May 29th, 2008 at 3:10 pm
Roman, first of all..As I read this page I could not stop but admire your patience and genuine responses.
I am shiv..into organisational behavior..
I want international exposure..so I want to come and live in Dubai..
Does budying a property in Duabi, lets say a studio, atumoatically qualify me to a residence visa..?
If yes, is the process easy and quick?
Or should I approach any agents/lawyers for the same..?
Please do answer..and thanks roman
May 30th, 2008 at 10:36 am
Hi Shiv,
Yes, if you buy an apartment in Dubai, you will get residency automatically. As far as I know this process is not much different than getting visa from your employer. Any real estate agency you chose to buy an apartment from would be able to explain you details of the process.
June 10th, 2008 at 9:41 am
Dear Roman,
I want to open Software Company in UAE, as you suggested RAK Free Zone is the right option. However I need few clarification from you.
1. Local sponsorer required or not.
2. How much I need to pay to open the company (virtual office)
3. What will be the renewal cost . What will be the renewal period.
4. Will I get work permit VISA.
5. Shall I sponsor for my employee. If Yes how many.
Advance thanks and regards
Perumal.G
June 10th, 2008 at 12:12 pm
Perumal,
My answers are below:
1. No - RAK FZ will be your sponsor in case you open your company there.
2. Last year it was arong 30,000 AED including the first year license and all your visa fees.
3. About 15,000 per year for your license.
4. Yes, you will get work permit in UAE.
5. Yes, you shall sponsor my employees. Opening a company in Free Zone will give you couple more visas for your employees. The exact number of visas you request will depend on how large office space you will need. In case you ask for a virtual table I doubt if you get more than one extra visa. It’s logical - where your employees will work if you have only one table that is even virtual?
I believe that sales guys at RAK FZ will be able to answer your questions in more details.
June 12th, 2008 at 5:08 pm
Dear Roman,
Thanks a lot for your response.
Regards
Perumal.G
June 14th, 2008 at 11:39 pm
Hi Roman,
I am from India I have a doubt on some Queries, If i started an IT firm or something else. in RAK
1) Is it compulsory to have I hold Graduation.
2) Is it need correct business take part in there I mean i have business in India so can I do virtual business for Accounting purpose I hope u got it.
3) Is it more complicated Law and regulation to setup a company and have more complicated things to use that company for Accounting purpose in India.
Please reply me
June 15th, 2008 at 8:10 am
Hi Ramu,
These are my answers:
1). I am not sure if you have to have certain education. They ask for your CV, but as far as I know they do not ask for a copy of your diploma.
2). Sorry, I am not sure I understand what you mean
3). I am nor familiar with rules and regulations in India, so it is difficult for me to compare. What I can say that it is more difficult than in Sweden where you can open your own company over the Internet. But still it is not very complicated in UAE either, the whole process is pretty straight forward.
Good luck!
June 15th, 2008 at 10:36 am
Hi Roman,
I mean is it need to perform actual business in the company when I starts a company in UAE. Or else can I make fault business i mean cash flow by writing down some bills by my own so i can use it for my business purpose. By that way can I show business turnover in UAE ?
Thanking you
June 15th, 2008 at 11:32 am
Hi All,
Am planning to start up as a freelance recruitment consultant.Need to know the following:
1.Should i get a license?
2.Do i need to register somewhr??
Please provide me with the complete details.
Regards,
Ezhil.
June 15th, 2008 at 12:31 pm
Ramu - theoretically, nobody cares if you do any real business in UAE or not. I know that Free Zone might ask you about your financial statements but I’ve never heard it ever happened in reality.
The reason why they do not care much about your business is that you have to pay your license fee and rent (even for virtual table) early. Also, you must keep a certain amount cash on your bank account, unless you do not want paying certain charges to the bank.
If you don’t pay those fees and charges, then - as everywhere else - your company might get closed and your visa might get cancelled.
June 15th, 2008 at 12:33 pm
Ezhil - are you talking about UAE? If yes, then you must have a license, and I guess Free Zones might be an option too. I am in software business, so sorry that I have no idea how it works with recruitment.
June 26th, 2008 at 8:39 pm
hello sorry i wanted to know whats the procedure of setting up a new company in dubai. i currently have a business of premium audiotext setup under my personal name . i wanted to setup a company in these freezones and have my payment recieved from eu usa canada and south america to a company bank account in dubai from where i can tranfer to various account globally. how much will it cost me to setup this kind of company . i dont need an office there or any employees . just need a company name and bank account to recieve my revenu and make payment to the businesses i work with. i currently live in pakistan and the situation here is kind bleek business wise so any tip will help. thank you
June 26th, 2008 at 8:45 pm
As I wrote above, to setup a company in RAK Free Zone (about 100 km from Dubai), it will cost near 30,000 AED the first year, and near 15,000 every following year.
But I believe you would need to visit UAE to setup this company, or ask somebody here to arrange it for you.
July 15th, 2008 at 6:52 am
Hi mr.Roman! As for the start, I would like to thank your generosity in helping to answer these question!
There goes some more:
I´m an manager in a software company here in Brazil, and we were thinking about opening an office overseas at UAE for the purpose of avoiding the excessive taxation in our country (27% +).
The company would mainly act as a “interface” between the company in Brazil and our clients troughout the world.
Quetions:
1) Is the only tax i would pay that 30k + 15k /year? Not any other tax “embedded”?
2)How much money you estimate to be needed, if i ask for 4/5 employee visas?
3)the offices NEED to be out of residential areas, AKA, in the specified zones, or could i use a house (or part of it) as a office?
Thanks again, and keep up the good work ^^
Congrats
July 15th, 2008 at 10:41 am
Gavazzi,
30K + 15K is not actually taxes - they are expenses associated with company start up and licensing. 30K is for RAK FZ, in Dubai Internet City it will be more expensive.
If you plan having employees, then RAK FZ is not good option for you as it is pretty far away from Dubai. But if it is OK for you, then it probably might work fine.
Office rent is pretty expensive here. For example, 700 sq. ft. will cost you around 50K USD per year. Having your license from Free Zone, you must have an office there too.
Geographically, it is not much different from residential area and zone as they are very close to each other.
July 22nd, 2008 at 5:29 pm
Hi Roman
I saw your help forum here while searching about opening a company in Dubai. I’m intersted in opening a MEP (Mechanical, electrical , plumbing) company in Dubai. It involves Installation of MEP works in new buildings. Yes I do know about 51% sponsor that we need to find to register the company.
1) I wanted to ask that if we register our company in Dubai’s freezone , can we still work outside the freezone ? I mean can we work on Government contracts ?
2) Someone told me that if I dont want a sponsor as a partner in the company, then I will have to pay some amount of tax to Dubai Government. Is that right ? And if it is then how much is that percentage of tax ?
Thanks alot ..
July 23rd, 2008 at 7:49 am
1 - I don’t know much about mechanical work, but in case of software, you can work for any company inside or outside the Free Zone.
2 - not true: there is no taxes in Dubai at the moment. Maybe people call “taxes” the fees they pay for their license, office, high rent, etc. But these fees you pay whether you have a local sponsor or not. Maybe people mess the things with Saudi Arabia, where foreigners may start up their own business without having a local sponsor, but they have to pay something around 20% of their income as tax.
There are discussions at the moment to introduce VAT and income tax, but I am not sure when it will be implemented.
July 24th, 2008 at 8:09 pm
Hi
I have a software services company in India.
I want to open a representative office in UAE.
I am looking at RAK Free Zone.
What type of license do I need to take?
Branch, FZE, FZECo, Ltd, LLC ?
What are the main differences between these licenses?
July 24th, 2008 at 10:01 pm
Rao,
I guess the best option for you would be to give a call to RAK FZ sales office - they will give you all the details about different options.
July 30th, 2008 at 10:03 am
Dear Roman!
We are going to open a cement works in Dubai.
But unfortunately we did not know how it goes and where we can get full info.
Please, Can you help us in such situation???
Best Reards,
Daly
July 30th, 2008 at 10:10 am
Try calling Jebel Ali Free Zone or RAK Free Zone.
Sorry, this blog is about software business, not cement works.
August 6th, 2008 at 6:18 pm
Dear Roman,
Can a company be registered in UK or the Isle of Mann and run a slaes operation based in Dubai?
August 6th, 2008 at 7:18 pm
If you need to have a presence in UAE to sell your products then you must get a license for your company branch. Otherwise, if you can sell your products remotely then branch office is not needed - for example, shareware software.
Another option is to find a local distributor to sell your products.
August 18th, 2008 at 3:53 am
Dear Roman,
I have a registered company in India. I want to open a VoIP minutes reseller company (or basic branch or virtual branch) branch in any part of UAE. We purchase the minutes from UK. I want to resell that to across the world. Please give me a better solution.
August 18th, 2008 at 6:47 pm
I guess it is better to call any of FZs and talk to their sales people - some time back VoIP was not allowed in UAE, but I don’t know how the situation is now. Good luck!
September 10th, 2008 at 9:55 am
I applaud you for all your efforts. I actually got all my questions answered by going through all the text here. Thanks!
September 13th, 2008 at 8:34 pm
Impressive work and very informative me too as me plan to open a branch office for my software product marketing in dubai. Thanks a log Roman.
Roman can you specifically describe which business Apps are all time high these days in UAE. I really appriciate for this.
September 13th, 2008 at 10:02 pm
Knowing what software has high demand is one of the major questions you have to find a right answer for before coming to the market. Working with the specialized medical software, particularly with Clinical Decision Support, I am not much aware of any business applications. Probably CRM, ERP, but this is just my assumption.
Anyway, good luck with your business, Zahid.
September 17th, 2008 at 9:39 am
Hi Roman,
The messages have been very helpful. However I have a question regarding setting up an internet business. I would like to earn revenue from services offered on the site (subscription based) and also through advertisements placed on it. Please advise on legal procedures such as
1. setting up the company,
2. getting and depositing payments from clients,
3. marketing the website all over UAE (probably the Ministry of Information has a requirement regarding this),
4. selling the services to companies around UAE.
Please try to answer all that you can based on your experience or experience of other people at DIC.
Thanks in advance!
September 17th, 2008 at 10:18 am
1 - if you plan selling over the Internet, you can register your company in your home country, or in any of the offshore areas. If you need a physical presence, then RAK FZ is the cheapest option.
2 - I would assume that Internet based business would have Internet based payment. The problem is that people here seem to be afraid paying by credit cards over the Internet. Otherwise, you would need to collect cheques from your customers, or ask them paying to your bank account.
3 - not aware of anything like that. I know that Ministry of Health has certain requirements for healthcare related web sites, but I ‘m not sure there are any requirements for any other web site in UAE. You probably would ask any of web design compnaies to double check it.
4 - knowing how to sell your product is probably 75% of the successful business. It’s only you who is able to answer your question. The first thing you would ask yourself is “why my future customers would want to buy my products?” - answering this question honestly for yourself will help avoiding a lot of disappointments.
Good luck!
October 16th, 2008 at 7:02 pm
Hi Roman
We may get a small dredging contract in Dubai.
How quickly can i set this up as the project will start in January 2009?
Where do i find a sponsor?
Great blog!
October 16th, 2008 at 8:22 pm
In RAK FZ it might takes 2-3 weeks to get everything ready. In this case you do not need to have a sponsor.
October 22nd, 2008 at 2:03 pm
Hello Roman,
You have been doing awasome job by answering all the queries.
We have a IT company based in India and are now exploring opportunites to open a office in UAE purly to rip the benefits of a FZ they have on offer.
As I understand from your replies, the initial registartion in RAK FZ will cost around 30k AED and recurring annual fees of approx 15K AED for license renewal.
I have a few questions to ask you, will appreciate your advice:
1) Any other recuring expenses we should mke provision for when we cme to RAK FZ, eg: Annual Filings, Audits, Any other statutory complainces, etc.
2) How easy or difficult it is to have a bank a/c opened for companies registered in RAK FZ which only use table space or are virtualy located?
3) Does RAK FZ share the company ownership information with anyone, or is kept confidential?
4) Can you confirm if transfering funds into and out of the FZ registered companies is as easy as they claim it to be, ie. without any ristrictions?
5) Can you advice any good consultant who can help us in our registraton process and complainces later on?
Cheers!
October 22nd, 2008 at 7:38 pm
1) No, as far as I know. 15K AED includes license and flexi-desk per year. Of course, if you want to get more than one person employed, you would need to add here expenses for the office space.
2) No difficulties at all. Before starting a company, you would need to show at least 100K on your personal bank account anywhere in the world - it might be a letter from your bank that confirms you have this money. Otherwise I haven’t heard about any complications.
3) I don’t know, it is better to check with them.
4) It is your company, your bank account, and your money. Nobody cares what you do with them, as long as they do not assume it is money laundry, I guess.
5) You can to Ms. Elena, her e-mail address is e dot lazareva at rakftz dot com
When we started a process of setup for one of our branches, I was really impressed by how fast and professional way she replies and advices.
Frankly, all these questions would be answered by RAK FZ staff - there contact details are available on their web site.
October 23rd, 2008 at 10:49 am
Hi
I am working as a Freelance IT recuitment consultant and BPO too. Is any way to open an office at free zone(cheaper one like RAK) and operate at home ? As some of friends wish to join if feasible What would be hassels plz inform
thanks
kumar
India
October 23rd, 2008 at 6:30 pm
I guess 90% of the discussion above is about opening a company at free zone like RAK FZ, and then work from some other place - so answering your question, yes, you can.
In this case you get a flexi-desk and one visa. If you want to hire your friend, then you need another visa, and hence you must have a proper office.
November 23rd, 2008 at 5:08 pm
Hello Romoan,
I hope you havent started charging for your advice by now
great blog man and I must say you have been a very patient person…
I got most of my questions answered reading the Q/As…Thanks a lot
November 23rd, 2008 at 5:13 pm
Except for one…i just remembered
Any idea if I can open a company if I am on a work VISA?
November 23rd, 2008 at 11:49 pm
hkaamir - check this article: http://www.khaleejtimes.ae/DisplayArticleNew.asp?col=§ion=theuae&xfile=data/theuae/2008/September/theuae_September445.xml
December 15th, 2008 at 2:10 pm
Tell me if i have a website.. can i do business online in dubai..sales purchase…of information
December 15th, 2008 at 2:29 pm
Vishal - do you mean if you have your web site somewhere, if people from Dubai might go for online shopping on it? Why not? Who cares in this case where your customers are coming from?
The only thing is that you would pay taxes in your own country where your company is registered, I belive.
January 14th, 2009 at 6:01 pm
RAK sucks 4 business.. i don’t advice u guyz..
January 14th, 2009 at 8:32 pm
Moody - arguments, facts and real stories, please.
January 15th, 2009 at 2:25 am
Roman,
You’re right it’s so easy to setup business in U.A.E. and own it 100%.
Media City offers “FREELANCE” type of business setup for media practitioners and cost around 60k+ AED as an initial investment.
I wonder if the RAK FZ has the same thing (FREELANCE Setup)? If there is any, can you please tell me the difference between the two Free zones?
Thanks and more power!
January 17th, 2009 at 1:58 pm
I think RAK FZ does not have a dedicated FREELANCE package, but you definitely can make a company asking for flexi-desk as long as you need one visa only. It’s better to check it with RAK FZ sales team.
January 18th, 2009 at 9:51 am
Thanks for replying,
Flexi-desk? I’m into graphic/web designing. Do they accepts any kind of business especially in media? Just an idea, can you give me just how much do I have to invest if I went for “Flexi-desk” package?
I’m composing an email to be send to RAK FZ and it is based on what you’ve discussed here. Hopefully on the next few days I have a clear picture of what RAK FZ has to offer.
January 18th, 2009 at 9:59 am
Flexi-desk is a working desk that you may use 10 or 12 hours per week. They have flexi-desks in RAK (cheaper) and in Dubai (a little bit more expensive).
The whole idea behind is that you could work from home - I guess as web designer you do not need a real office space, don’t you?
I am pretty sure they accept your kind of business - they even accepted our software development for Healthcare at a time we thought about moving our company to RAK FZ.
As estimate, it might cost you around 35,000 AED the first year, and about 15,000 AED from the second year.
It’s probably better to give them a call to make things faster, then to e-mail.
January 23rd, 2009 at 12:42 am
hello Roman :
to open a SOFTWARE + services reseller for some internet services company
1- i do not need to come to dubai /uae
2- 2 directors Obligatory ? if yes ( me and my sister , or father or mother ) ?
3- i saw you said that in such domain i do not need a “location” and i can register the company here in my country , but i am interested to be registerd in a free zone in UAE so i no more pay taxes
so , do i need to pay a LOCATION ? or i can register a company there without a location ? or with a location from another country “but the company to be registerd in UAE ‘a free zone ‘”
January 23rd, 2009 at 1:01 am
1 - you do have to come to Dubai on a final stage when you will sign the documents.
2 - I don’t know about the requirement to have two directors. I know people who started up their companies alone.
3 - I think you confuse Free Zone and Offshore Zone. In UAE Free Zone you may own 100% of your company being a foreigner, and you will pay at least for a flexi-desk. If you have your business in other country, and your customers agree to pay to your company bank account in UAE, then probably you do not have to pay taxes for the income of your UAE based company. But as soon as you move money to your country, I guess you have to pay taxes. I am not a lawyer so please advice someone who knows better on taxations.
January 29th, 2009 at 3:48 pm
Hello Roman,
Its nice to see ur blog & answering to all. Hope u will answer to me too.
I & my friends running a software institution in India. where we are teaching & also doing the software project of engineering students & also to some shops. I want to start software development firm in RAK . Only thing wat i want to know as i don’t have any big connections over there except my brother is working there in a construction company. after establishing my company wat should i do to get some work?
January 29th, 2009 at 5:52 pm
Shibu - do I understand right that your question is how to find customers? If I knew the correct answer, I guess I would live on such consultations. But unfortunately, it differs from business to business, and from market to market.
When I came here, I knew nobody either: http://www.romankonovalov.com/2007/05/17/the-intrigue-begins/
So it is just a matter of time before you get contacts in a new place. Here is a couple of posts in this post about it:
http://www.romankonovalov.com/2007/09/17/learning-business-environment-in-a-new-country-part-1/
and http://www.romankonovalov.com/2007/09/21/learning-business-environment-in-a-new-country-part-2/
Good luck!
January 30th, 2009 at 10:06 am
Thanks Roman for reply. can u tell me wat type of software work is more in depand, i mean like developing web sites or some software?
January 30th, 2009 at 10:11 am
Roman I have one more doubt. As you said we can also look for some sponsour who will hold 51% of share which can be a night mare in futz if work goes good. But the positive is that he can get some work fast, is it possible after sometime shifitng the companay to RAK
January 30th, 2009 at 10:49 am
I think it is not much difference from here and anywhere else in regards of required types of software. But don’t forget that it is crisis now and many companies, especially Real Estate, have been closed.
You can move the company from local sponsor to FZ at any but it won’t be real move as you have to close your company with a sponsor, and opena new onein FZ.
To make it easier you would get a non-objective letter from your sponsor that he agrees you opening a company in FZ - it is needed for you not to leave the country for your visa change. I heard rumours that some sponsor do not issue that letter, so you would close the company, leave the country then come back, and only then open a new company in FZ. Think about time and delays with your customer work in this case.
So I guess if you plan to move to FZ at some point, it is probably better to get opened in FZ from day one.
January 30th, 2009 at 3:26 pm
Thanks a lot Roman for all ur kind advice. Jst one more question. as we are running a small company over here, will it be good that i make a 3 or 4 months visiting visa get some work complete that here in india & to start company there instead of trying luck there in starting a new company without any certainty ?
January 30th, 2009 at 4:04 pm
In this case you would be careful not to cross the line between “visiting” and “working”.
Also, some companies do not like dealing with companies abroad - they want you to be here. The majority of companies pay for work by cheques, but it means you won’t be able to get cash from it if you do not have a bank account in UAE. And clients who try saving 10 dollars on a wire transfer, will unlikely pay to a bank abroad is it is more expensive.
But at least, I think it makes sense to visit UAE just to look around and get feeling of the potential for you here.
February 1st, 2009 at 9:06 am
Roman just reading your replies is insightful. You’ve been extremely helpful.
Just a question - I found out a flex desk at rak ftz will cost about 30,000 AED. A friend told me that I can instead register an offshore company at rakftz for just $545!
Well turns out that we need to go through a “registered agent”. And registered agents are charging around $2000.
So I just wanted to ask you if you know a cheaper “registered agent” or a better solution.
Thanks!
February 1st, 2009 at 9:14 am
Sorry.. just wanted to correct something.
The registered agents are charging around $3500. Which sounds absurd because the “actual” fee for the offshore company from rakftz is just $545!
So please lemme know if you know a cheaper agent or a better solution.. Thanks again!
February 1st, 2009 at 9:27 am
I actually don’t how it works with offshore companies in RAK FZ, and what registered agent means. So, sorry, I can’t help with this.
February 2nd, 2009 at 9:37 am
Hi Roman, its very knowlegeable Blog!! keep the good work…
I have a query about internet business..I want to open my own subscription based website.. I have no registered company .
My site is almost done and wantto upload it.. frist 3 months I will not be charging any body and thing… Will palce thr ads for free share information free… in this case since I have no comapny and I m giving free service do I need to register a company for this….
Later based on the response I will Register my company and open a bank account in India and will ask for subscription fee or Adv charges..Will that be legally ok….
Lastly since I will register my company in india and will ask customer to pay by check… Hope thats fine with Dubai Customers and thr willl be no problem for them to either send payment by check or Online bank transer..
you reply will help me alot…. Thanks in advance..
February 2nd, 2009 at 10:20 am
Vinod, I guess you would have your company registered in India and make sure you accept payments online. If you never plan meeting your customers, what is the point of having company registered in UAE?
February 2nd, 2009 at 10:40 am
Yes I m want to do that Only… want to register my company in INDIA But after some time based on response from customers.. As i said I will be providing service for 3 months free of cost… so i want to know is it legal for unregister company a business website but yeah without any monetary transactions…
February 2nd, 2009 at 10:48 am
So you have a web site, and customers might come to you from UAE or any other country. Why would you need to have a kind of registration in evey country you get customers from?
I woud think you only need to have a registered company in India, but it is probably better to consult the lawyer.
February 2nd, 2009 at 10:53 am
OK Thanks for the help..
February 4th, 2009 at 7:53 pm
Hi Roman ,
Can you pls guide me if I need a license to work as a freelance recruitment consultant from home?
February 21st, 2009 at 2:09 pm
Hi Roman,
i am working in Dubai.. Getting married in march .. My wife works in s/w company in India..I want to sponser her and bring to Dubai.. and she is trying to get approval of worl from home from her company.. Can by Uae law she can work from home on sponser visa..
Pleas help it urgent..
Regards
Vishal
February 21st, 2009 at 2:35 pm
Vishal, your wife wants to move to Dubai on your visa, and work from home for her company in India remotely from Dubai? To be honest, I do not see the reason why she cann’t do it.
What technology is she working with?
February 23rd, 2009 at 10:55 am
Java technology
March 4th, 2009 at 7:21 pm
Roman,
You’re blog has given me so much more information than any other UAE websites on this topic, cheers.
I have 3 questions though.
1. I am wanting to set up as a specialised IT consultant (architectural BIM software) with 1 other friend as we have both been made redundant in Dubai, is it better to work as a ‘company’ or as ‘freelance’ , alhto I am not sure if they register freelancers in RAKFZ
2. The capital required to start up the business, does this just need to be moneys in my name somewhere? As I have money back in Australia in a managed trust fund in my wifes name, are they very strict on this? could this be possible to use my wifes cash statement?
3. What have you found the best advertising methods to be in UAE?
Thanks again mate, a great resource you have made here..
March 4th, 2009 at 7:45 pm
1 - recently I’ve heard RAK FZ started to give freelancing licenses. It might rumors, so it is better to check with them.
2 - capital has to be here. When you get a letter from the free zone you go to the bank, open your company bank account and put your capital there. Then your bank account is locked until you get a license. After you show your license to the bank your account gets unlocked and you might use your money again.
So basically, you could borrow the money for a month or two, and then return it back.
But also check with the free zone - for certain types of businesses they might have very little amount of capital required.
3 - it differs a lot. Since we are in healthcare IT, and very specific niche of clinical decision support and drug database software, normal advertising in newspapers doesn’t work for us. The word of mouth is definitely great thing everywhere, I guess.
April 1st, 2009 at 11:30 am
Hi Roman,
WOW. Your blog basically answered most of my questions. Great job! I just wanted to clarify something to make sure i am on the right track.
I have a software company registered in India and want to register a company in Dubai.
RAKFTZ seems to be the correct place because we want minimal cost in Dubai as most of our development and work and staff will be in India.
We want to use the Dubai company only to evade tax in India and keep the money out of India by having our clients send our payments to the Dubai bank account and raising bills from the Dubai office.
This is possible with what you have described here right?
Thanks for all your help.
April 2nd, 2009 at 12:32 am
Sid,
I don’t see a reason why you wouldn’t be able to do that. Nobody requires your physical presence in the country even, after you get you license and bank account opened. With the bank you can do everything over the Internet or phone.
April 2nd, 2009 at 12:14 pm
Roman,
Sounds good. I think very soon I would like to start my own blog and hopefully can profile you someday.
Have a good one.
Thanks again for all your help.
May 7th, 2009 at 7:55 pm
Roman,
Thank you for very informative answers.
There is, however, one question I could not find in the history namely how much it takes to close the company if things do not go according to plan - time/money
K
May 11th, 2009 at 8:00 pm
[…] companies are not allowed to get office space outside such Free Zones like DIC. But in August 2008 we got a call from Dubai Internet City that we would get an office outside the […]
May 11th, 2009 at 8:05 pm
Kol,
I think it is another interesting topic to tell about on this blog.
In our case the company de-registration took around $3,000 and two months. The delay was mainly because my partners in Sweden would legalize and notarize papers at UAE Embassy in Stockholm.
Another story is to get your money back from the free zone for all the deposits you pay in the beginning - it now takes more than a month, and I am still not sure when we gonna receive that money.
August 7th, 2009 at 9:20 pm
Hello Roman,
Is there any difference between Offshore company and Trade free zone ?
August 9th, 2009 at 8:45 am
Greek,
I guess the difference is that you may have no office, and still get your offshore company registered somewhere on BVI. In Dubai free zones, you would need to have an office or at least a hot desk.
Taxes wise probably there is no difference. UAE has no taxes (yet).
September 10th, 2009 at 2:35 am
Hi Roman,
Im sorry for asking for your advice even if its not software minded.
I have interest in opening a sales office in Dubai, in the yacht business. Just to have place to make diff. adm work.
Would it be possible to do this from freezone. If not do you have any suggestions where to look for advice.
If it could be done from a freezone, ref your answer 17/11-08. reg a office at RAK and get a branch license and the close the RAK office.And then rent a Office in Dubai area.
Would this be the way?
thanks a lot, and a pleasure to see all the people you are helping.
B.J.
And offering our products by s
September 10th, 2009 at 11:27 am
B. J.,
I guess, you could get a license from RAK Free Zone, and rent an office in their office tower in Dubai. Having license from RAK Free Zone, it doesn’t mean you must have an office or hotdesk in RAK. Their have office space available in Dubai too.
November 17th, 2009 at 4:05 pm
Roman…Thanks a lot for all your answers…i have gone through all of them it it has been very helpful…
However, I have a few things if you can answer…
- We have a IT company in Hamriyah Free Zone Authority, Sharjah, however, it has restrictions…we can not bid for govt tenders and etc. so we also are looking for some sponsor who would have 51% share in that company.
- The question is what are the position will always be weak when it comes to different issues when compared to the sponsor. Also, if lets say tomorrow the owner dies and someone else steps in as the owner of that company. Now in such a case can you please suggest what and how could we structure the whole thing to save and make our position strong. Can you, else, suggest how or from whom can I get the information?
Thanks
Saya
November 17th, 2009 at 4:08 pm
Just to be more clear…Is there any way to ensure that our position is pretty strong in that company so that we just dont lose everything in future. Atleast we would like to protect out interest.
Please suggest if you can.
November 17th, 2009 at 5:29 pm
Saya, it’s pretty interesting what you said about restrictions of being free zone company. So far we haven’t faced this issue ourselves, and we participated in a few government tenders.
Probably the best way for you to discuss it is to talk to other free zones like DIC FZ and RAK FZ to figure out if they have the same restrictions.
November 19th, 2009 at 8:39 am
Hi Roman
Do you think, if we provide software services to a local company in UAE and we are based out of FZ, the local company on its refusal to make payments can be dragged to the courts of UAE?
Many thanks
November 19th, 2009 at 9:35 am
Also if some foreign company, lets say Indian company sends its software consultants to the local comapny of UAE, will the foreign company have enough legal status to file a case in the courts of UAE?
Thanks Piyush.
November 19th, 2009 at 11:08 am
Piyush,
You are asking interesting questions that I’m not able to answser. It is probably a call for a lawyer to answer this.
Once I spoked to RAK FZ representative, and she told that in some cases it would be difficult to have a court case agains non-paying local company if you’re a Free Zone company.
I’m not sure if it is true as we’ve never had this experience so far. And even if we will in the future, the software license key will be locked for non-paying client.
It also sounds pretty bad if it’s true - in this case people might refuse opeing Free Zone companies.
November 23rd, 2009 at 9:38 am
Roman
One question if you may be aware of. We are thinking of opening up our subsidiary in the local market of UAE. For that we will have to choose the 51% sponsor thingy. But can you think of a way which will secure the interest of the company in case of any unforseen move by the local sponsor. Though I believe the MOU can only give the rights to the sponsore such as in immigrations and registration help, and not giving any rights of operations or management, but having said that, if in future the sponsor dies or any other interest appears from the sponsor, how do we save our interest. Because I believe that the posotion of the foreign company will always be weak in such kind of a subsidiary.
November 23rd, 2009 at 10:00 am
I know that people make special contracts with the local sponsor that does not give him/her rights to do anything bad. It’s worth consulting with a good lawyer how to do it. I think your country would have a kind of Business Council here (like Swedish Business Council, for example) that might give you recommendations whom to ask for assistance.
January 30th, 2010 at 6:34 am
Hi sir,
Thanks for all info.
-I want register a company in free zone and bring goods from europe here and send to other country in middle east.
1-What kind of company i have to register?
2-Should i pay customer taxes 5% if i want send my goods directly to other country(Transit)?
3-I have a company in Europe.Does it matter if i open a new company in free zone or it is better i open same company in FRZ too?is that cheaper to register?
4-it costs 30000uae +15000uae/year ,correct?
5-How much costs office in FRZ?
6-Should i show i have money in my bank account for registering?
7-Do you think i need some people help me?if yes can you give me some mail address contact info.?
Many thanks and i hope you are allways help people.
March 26th, 2010 at 7:37 am
Hello Roman,
First of all, thank you for your helps, reading them helped me a lot.
I am a software developer and i own a company working on a security/privacy related software which is popular among all ages and groups.
This software is supposed to be sold online, so far there is no problem, but as you mentioned correctly, there are many people all over the world (not only in dubai) who are afraid of using their credit/debit card number through the internet.
So we want to sell it as a physical package as well as online, what i want you to help me is that: which is the best way to do this in UAE ? it seems registering a company in RAK is the best way for us in the future, but since we don’t want to risk at first, we want to register an offsore company in RAK or dubai, or rent a sales office or sth similar because we dont need a place to employ any developer, just want to get required lisences and legally sell our software packages in UAE market.
Please tell me, what would you do if you were me?
Special thanks and regards
March 28th, 2010 at 8:05 am
Navid,
What you call as offsore company is actually a company registration in RAK FZ. You can have a company with flexdesk, so you do not get a real office.
If you want to sell your software as physical package, then you need a placec where to store those packages, and you also need a deal with distributors - otherwise how your clients will buy your software packages.
April 2nd, 2010 at 6:46 am
Thank you Roman, I had not access to internet, sorry
But please tell me:
1) Is the only difference, their registration fee? offsore seems to be 10,000 dhs and normal registration 30,000 dhs
2) Do we need any local license to sell our software in RAK and dubai? or only having a company allows us to do so? if yes, what license?
3) and the most important one: “… and you also need a deal with distributors …”, it seems to be the only serious problem we may face, i had been in dubai, sharjah, ajman and i know this emirates, but not RAK fz, but i have never had related experiences. do you have any experience regarding resellers, distributors, … that you can share with me? have you worked with them? or are you one of them?
Regards
April 2nd, 2010 at 6:50 am
“Is the only difference” I mean “Is the most important difference”…
April 2nd, 2010 at 7:08 am
1 - I haven’t found any information about offshore company registration for 10,000 AED. I heard they had a kind of freelance license, but I’m not sure it’s there anymore. This is a good question to ask RAK FZ sales team.
2 - License is something that gives you rights to have a physical presence in the particular Emirate. Having license for RAK FZ means you might need an office only there. You need a branch license to open an office in Dubai. But if you get your flexidesk in RAK FZ building in Dubai, then you do not need to open any local office in Dubai.
Having license in one Emirate does not stop you from selling across the country or worldwide.
3 - We had some experience with retail, I wrote about it here: http://www.romankonovalov.com/2008/05/02/horror-of-software-retail/
April 3rd, 2010 at 7:02 pm
Roman,
1) I found some informations, it seems the registration fee varies depending on the registrar
2) Good informations, but one more thing: I mean is selling a software same as selling for example mobile phone in UAE? I mean doesn’t matter what your software may contain? should it be registered in an organization as a legal software? (I dont mean copyright, something named local license in some countries) or it is just considered as a good because it is a physical package? did you get me? sorry if i can’t explain it clearly because english is not my first language.
3) Roman, we have a world-class software and i want to sell our product to banks, companies and government organizations as well as normal peoples, do you know anyone to act as an agent?
April 3rd, 2010 at 7:14 pm
… considered as a good … –> as goods
April 3rd, 2010 at 7:25 pm
2 - it depends, I guess. You probably will get problems trying to sell Skype-like software, but things like antivirus software - why not.
3 - no, I don’t know. It’s not an easy job to find a good agent, I believe.
April 4th, 2010 at 5:43 am
Thank you Roman, not bad to take a look at this link:
http://www.freezonesuae.com/ras_al_khaima_fze.htm
Somewhere it says the fee is 545 $, am i correct? you can verify better than me. if yes why do we see for example 5000 or 7000 $ somewhere else? what are the differnces?
April 4th, 2010 at 6:24 am
When I open the link, my antivirus shows me Trojan warning.
What they mean by this fee, it’s better to ask them. The only source about fees and payments to start-up a company in RAK FZ you can raly on is RAK FZ sales team.
Registration fee is something you pay for getting your company registered. This is not a license, or office rent, or your visa fees and deposit - all these you need to pay separately.
April 5th, 2010 at 6:03 am
Kaspersky doesn’t show anythig on this page, just shows e.exe is trying to start when i click on ‘freezones cost chart’ button, this website seemed to be famouse, im sorry if it contains something bad.
Yes you are right, 545$ is just a fee for registering, and there might be some extra fees.
Roman I don’t know who you are, you are a man or woman and from where you are but you helped me a lot while i had done nothig for you, and i hope to see you someday in emirates and talk about the world of software and business.
Thank you again
Bests
May 10th, 2010 at 12:04 pm
Hi Roman,
Appreciate your patience in answering all questions honestly.
I am planning to launch some websites with services offered for UAE population. General public will not be charged for any service, but revenue generation through advertisement slots in the site. for this purpose, do I need to register a company in UAE? Can I use my personal bank a/c to recive funds? or paypal online account? please advice
July 31st, 2010 at 7:27 pm
Hi,
AM trying to open IT Company in Dubai Internet City, As its IT Service Industry firm i will have consultants working in different part of UAE who has work permit issued by my company based in DIC. Is this Legal and how many visas can i issue, My requirement in 200 Work Permit.
Kindly Advice
August 1st, 2010 at 9:36 pm
Anim, I guess you need to rent pretty large office in order to get visas. As far as I know, DIC will issue you visa permits depending on your office space. In any case it is better to check with their sales how it exactly works.