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How to Start a Software Company in Dubai?

Dubai is home to many large IT firms and there are several opportunities for individuals who want to start smaller IT firms. Starting a software company in Dubai means there are no corporate taxes, and the profits are tax-free if the company is located in the Dubai free zone.

Furthermore, Dubai has the best Internet infrastructure, which allows investors to access a large pool of talented workers. Taking the business environment into account, Dubai is highly regarded, and you can start a software company there and provide services to clients all over the world.

Setting up a software company in Dubai is a simple process once you meet all the requirements. A software company can be registered either on the Dubai mainland or in one of Dubai’s free zones.

Here are the free zones that cater to software companies: Dubai Media City, Dubai Internet City, Dubai Silicon Oasis and Dubai Knowledge Village. 

What's Required to Open a Software Company in Dubai?

Several factors need to be considered before starting a software company in Dubai:

    • • Trade name Reservation: Company formation must begin with reserving a business name. Trade names must follow conventions and cannot contain offensive or blasphemous language.
    • • Location selection to operate the business: Decide whether you want your company to be established in one of Dubai’s Free Zones or on the mainland of Dubai. Depending on where the business is located, the registration process of your company would be completed with the Dubai Trade Register or the free zone authority.
    • • Choose legal entity: You must choose a legal entity, the most preferred being an LLC. You can either open a sole establishment or form an LLC, based on your business activity. Unlike an LLC, a sole establishment will ensure 100% shareholding, whereas an LLC will have 51% ownership by a local sponsor.
    • • Choose a local sponsor (Emirati national) for your business: Local sponsors are mandatory for an LLC company; however, Emirati nationals can act as local service agents for those with professional licenses. An NOC from the local service agent is required to commence your business ventures in Dubai.
    • • Get your trade license approved: You need a license depending on the type of activities that you plan to organize in your company. In Dubai, the Department of Economic Development handles and distributes the software company license. Software companies are able to register for a professional license that allows 100% foreign ownership as well as a sole proprietorship.
    • • VAT Registration: Registration for VAT is a requirement when opening a software company in Dubai.
    • • Rent office space: A registered office address is required for the issuance of trade licenses. As proof of a registered address, ownership agreements or tenancy agreements can be produced.
    • • Open a corporate bank account: Open a current account with a bank in the UAE that is legally recognized.
    • • Once all pre-requisites are met, you can apply for the establishment card, visas and get your business running within a week.
  • • Apply for residence visas: UAE government requires all business owners to have a residency visa. Several documents, along with a fitness test report, are required to get your visa approved in the UAE.

What documents are required to start a software business in Dubai?

The following documents need to be submitted to the Department of Economic Development in Dubai:
  1. Passport copies of the shareholders and passport size photos
  2. Payment proofs of the initial approvals
  3. Copies of the Visa page
  4. Copies of naturalization book (if you have a local sponsor for the software business)
  5. Tenancy contract of the rented office space
  6. Signed Partnership agreements in case if the business is started in partnership. This should be signed in the presence of a notary.
  7. No objection certificates (if applicable) for foreign partners from their sponsors.
  8. Proofs of the security deposit. Partners are required to pay AED 20,000 each as a security deposit for professional licenses and a single investor has to pay AED 10,000 as a security deposit.
A company that’s new to Dubai or the United Arab Emirates may be unsure of how to have its business license formally issued, so it’s a good idea to hire an experienced business consultant. The team at YABS can assist you with the entire process associated with mainland business formation in Dubai. You can always count on our advisors and consultants for assistance.
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