Set up a company in Dubai
and take advantage of tax benefits!

A so-called free zone (also known as a free trade zone, duty-free or tax-free zone) denotes a clearly defined and isolated area with certain tax, customs and import regulations that differ from those of the mainland. Free trade zones primarily serve the purpose of providing foreign investors with a 100% foreign-owned company, a simplified incorporation process (compared to incorporation on the mainland) and duty-free import and export of goods.

There are basically three types of company when founding a company in Dubai: Offshore, Freezone and Mainland. There are different possibilities associated with these different shapes:
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1. The offshore company: Although this option of setting up a company in Dubai may be offered by some agencies, it can actually be ruled out from the outset. This is because it is almost impossible to get a bank account for an offshore company.
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2. The Freezone company: This type of company formation is suitable for companies that want to take advantage of the tax advantages in Dubai but do not focus on doing business with customers within the United Arab Emirates.

3. The Mainland company: The so-called Mainland LLC, Limited Liability Company, is comparable to a GmbH in the Federal Republic of Germany. The shareholders can be both private individuals and foreign companies. An authorized managing director or director is required in this case.

An advantage of a company in Dubai can be derived from the inexpensive and founder-friendly Freezone. Compared to many European countries, there are tax advantages for company founders there. The so-called tax havens are particularly suitable for the accumulation of capital.
Another argument in favor of founding a company in Dubai is linked to the numerous government funding offers. For example, the Dubai Startup Hub is maintained by the local Chamber of Commerce and Industry. This promotes the start-up ecosystem and technology start-ups in the country.
Since 2018, the United Arab Emirates (UAE) have also had a uniform value added tax of just five percent. In Dubai itself, companies do not have to pay income tax. In addition, there is no direct taxation on corporate profits or personal income. The only exceptions to this are oil companies and foreign banks. In addition to taxes, customs duties are also low at just four percent. There are also numerous exemptions from customs duties, so that capital and profit can be repatriated back to Germany or Austria, for example. These framework conditions also speak in favor of founding a company in Dubai.

If you need more detailed information or individual advice, please do not hesitate to contact us.

The costs for founding a company in Dubai depend in principle on the chosen location, the purpose of the company and the legal form of the company. In addition, license fees, office rent and legalization and translation costs for incorporation documents must be taken into account.

Yes, you can keep your place of residence in Germany. In order to set up a company in one of the Emirates or in one of the Freezones, you do not need to be a resident of Dubai or the United Arab Emirates (UAE). This also applies to the managing director of the new company, who – depending on the requirements of the responsible licensing authority – must apply for a permanent residence permit (residence visa) for the United Arab Emirates. It is important that the managing director makes at least one entry into the Emirates within a period of six months so that the visa remains valid.