Crypto Tax Haven: How to Set Up a Company in Dubai

As working remotely has become more of an established norm and entrepreneurs are generating life-changing income through this new blockchain and crypto revolution, many are finding themselves looking for new frontiers in which to expand their empires and minimize their tax obligation. 

Last year here at the Coin Bureau, we ourselves were on a similar journey and made the decision to uproot the business from our London HQ and set up shop in Dubai, and we have team members who have documented their experiences in moving to crypto-tax friendly Portugal and what it's like living in Dubai. 

Because we have been through the process ourselves and are always looking to help out the crypto community in any way that we can, we wanted to bring you an article on how to set up a company in Dubai. 

In preparation for this article, we have teamed up with a friend of the channel, CEO of Wealthy Expat, and relocation expert Rafael Cintron to help give us some expert insider knowledge and advice on the process of setting up a company in Dubai.

Rafael and his team at Wealthy Expat have helped more than 500 crypto investors move to Dubai and pay 0% taxes. Their YouTube channel has over 100,000 subscribers and has been featured on Coin Bureau Clips discussing the best countries for crypto investors.

Rafael has been living in Dubai for over 3 years. He has paid 0% taxes on his crypto thanks to the strategies he will mention in this article.

There are multiple benefits to establishing a company in Dubai that come with great opportunities. Here's a quick rundown of what they include:

• Business Opportunities

Dubai's liberal regulatory environment and pro-business governmental policies position it as one of the best countries in the world for conducting business.

• Tax Benefits

With 0% tax on capital gains and income, if you're a regular trader or DeFi user, Dubai helps you keep the profits you make. Couple this with Dubai's business-friendly ecosystem where VAT is just 5% and you have an attractive country for new companies.

• Aviation Hub

Dubai is centrally located for easy air travel to Europe, Asia, the Middle East and parts of Africa.

• Access to International Markets

Dubai's commercial hub offers quick access to international markets for new companies looking to develop their business and gain new clients. As such, Dubai is ranked 16 out of 190 economies globally on the ‘Ease of Doing Business index. 

• First-class commercial spaces

Rentable co-working places are accessible, adaptable and inexpensive.

How to Establish a Company in Dubai: Step-by-Step Guide 

Establishing a company in Dubai, UAE, typically includes several stages: choosing the location and a business structure, registering the company, paying the required fees, and acquiring a license. You will also need to obtain a visa and residency permit in Dubai if you wish to open a bank account since it is largely impossible to open a bank account in the UAE without residency. 

If you don't want to push your luck and have a six-month adventure trying to start a company, find a way to do it through licensed agencies assisting in every step. People often complicate the setup process, but, in reality, it is rather easily done with the right agent. In this case, the whole process usually takes less than 30 days, and getting a license is possible in only 4-5 or 10 days, depending on the company type.

In this article, Rafael Cintron from Wealthy Expat covers the following:

• Preparing for Company Formation
• Choosing a Business Structure
• Registering the Company
• Obtaining Pre-Approval
• Acquiring Visas and Licenses
• Opening Bank Accounts

Preparing for Company Formation

First, you need to decide what type of business you intend to start since it will determine where you will establish your company: a free zone or a mainland. 
 

Dubai Company Formation: Free Zone

Incorporating a free zone company will not take you an eternity. Typically, you only need about 7-10 days to get your license. Another pleasant fact about it: You can benefit from paying 0% taxes. Owning this kind of business means you don’t pay any personal income, capital gains, or corporate taxes. You can become the only boss and employ yourself as a general manager, CEO, or director in that company. 

Please note that the UAE has launched a 9% tax applicable to a lot of free zone companies, set to be imposed on January 1st, 2024 to most companies in the UAE. Please consult an expert on the specific requirements for your company. 

If you feel more international, this type of company is suitable for you. You are welcome to do business outside the UAE, but trading with locals is not an option. Free zone companies operate in such areas as advertising, digital content production, game or software development, PR, web design, online education, etc.

Your new company will not be left without a shelter as there are zillion locations to choose from, i.e., more than 40. Dubai Maritime City, Dubai World Trade Centre, Dubai Design District, Dubai Science Park, Dubai Silicon Oasis, Dubai Media City, and many others are among them.

Whatever free zone you choose, there will be various office space options: you can rent or own them. They are usually partially or fully equipped, depending on your needs. You can also purchase property in such zones to build your office facility or factory.

On top of that, you will find different useful services and facilities in Dubai's free zones, including IT support, high-speed Wi-Fi, manufacturing facilities, meeting rooms, warehouses, modern equipment, infrastructure, and technologies.

Dubai Company Formation: Mainland 

Mainland companies are located outside the free zones and are subject to paying 9% corporate tax if your income is over 375,000 AED a year (about $100,000 USD) and you sell inside the UAE and 5% VAT tax. 

Always dreamed of selling products to wealthy Emiratis? Then this option is most suitable for you. It involves doing business in Dubai and the UAE in general and allows you to trade with locals. Offer high-quality services, and your business will flourish; It can be a car rental company, grocery store, driving school, consulting or travel agency, cleaning or catering services, etc.

Wealthy Expat helps entrepreneurs and investors to set up their businesses in Dubai. Book a call with the experts to learn more about it.

Choosing a Business Structure

Another essential step you have to take is to determine the type of legal entity. The license you receive will depend on the nature of your activity. 

Dubai Business Structure: Free Zone 

The type of business you have is correlated with the free zone it is located in. The list of activities you are allowed to be engaged in is determined by a particular free zone. Whatever type of activity you choose, note that offering camel rides in a free zone is not something you should aspire to. The most common licenses you can get are related to commercial trade, media, manufacturing, innovation, eCommerce, warehousing, education, and other areas.

It is also necessary to specify what your company’s business structure is. Generally, you can choose among 3 legal business forms: 

• Free Zone Limited Liability Company (FZ LLC)
• Free Zone Company (FZ Co.)
• Free Zone Establishment (FZE)

Dubai Business Structure: Mainland 

If you set up a mainland company, there are more than 2100 business activities you can opt from and find the most suitable for your case. Generally, there are commercial, industrial, occupational, tourism, agricultural, and professional licenses. 

The legal structure of your business can be one of the following:

• Limited Liability Company (LLC)
• Public Joint Stock Company (PJSC)
• Private Joint Stock Company (PrJSC)
• Holding Company
• Civil Company
• Sole Establishment
• Branch of a GCC Company
• Branch of a Local Company
• Representative Office of a Foreign Company

Registering the Company

The first step here is to give the trade name to the new company. You must ensure it does not copy or sound very similar to some other company name. It also must reflect the nature of the services you provide. But you shouldn't use swear words in your company name even if you really want to. Unfortunately, such a name will not be approved.

Also, your trade name must indicate the form of legal entity you have, e.g., LLC or PJSC. 

The Department of Economic Development (DED) and the Ministry of Economy in the UAE must approve the trade name and trademark. In the case of a free zone company, the approval of a trade name can depend on a free zone authority.

Interested in establishing your company in Dubai? Check out the Wealthy Expat's YouTube channel with lots of helpful videos.

Obtaining Pre-Approval

Once you fulfil all the applicable conditions and collect the required documents, you will receive initial approval to establish the company. It is up to the Department of Economic Development to decide if your business will get it. Some activities may require additional permits from other local authorities according to the nature of your business.

Obtaining Pre-Approval: Free zone

When submitting the documents, you will be most often asked to provide the following:

• Completed application form of your specific free zone 
• Business plan (some free zones do not require it) 
• Passport Copies of all shareholders, especially the General Manager 
• Copy of existing trade license/registration certificate (if applicable)
• Title deeds (if applicable)
• Registry Identification Code Form (RIC) for a general manager
• Letter of Intent describing the investment idea and the plan
• Address of office space (virtual/flexible desks available)
• 2 years' audited financial reports or certificate of reference from a bank 

Obtaining Pre-Approval Mainland

At the stage of initial approval, you will need to obtain:

• Memorandum of Association (MOA) or local service agent agreement (LSA), depending on the type of legal business form
• The physical address of your business

Activities that require additional approval:

• Legal services 
• General transport
• Architecture and engineering
• Telecommunication
• Travel and tourism
• Insurance
• General services
• Ship and maritime
• Healthcare
• Gas and oil-field services or operations
• Foreign branches
• Charter trading and air transport

Acquiring Visas and Licenses

So, you were lucky to receive the pre-approval? Now you will have to prepare to pay for this. To get a license, you must pay fees. The amount of money you need depends on the type of the license.

Dubai Visas and Licenses: Free zone

The documents you must submit at this stage include:

• Completed application form for registration
• Board Resolution appointing Manager/Director (notarised and attested)
• Power of Attorney given to Manager/Director (notarised and attested)
• Memorandum and Articles of Association (notarised and attested)
• Specimen signature of Manager/Director (notarised and attested)
• Passport-size photos of Manager/Director
• Share capital information

Dubai Visas and Licenses: Mainland

In order to get the license, you will need first to submit:

• Receipt of initial approval and copies of all previously submitted documents
• Copy of lease contract, duly attested
• Memorandum/s of Association, as required
• Approvals from other government entities, as required

In the case of a mainland company, after paying fees and getting the license, you must register Your Company with the Dubai Chamber of Commerce and Industry.

Residence Visa

The next step is getting a residence visa. It usually begins with acquiring an eVisa (pre-authorization for your residency). It can be done outside or inside Dubai or the UAE. But receiving an eVisa before entering the UAE is highly recommended unless you want to complicate the process. Getting an eVisa takes about 2-3 days. It ensures you enter the UAE on an employment basis, not on a tourism basis. 

Following this stage, you apply for your residency permit. 

The next step is to go through a medical check (ensure you do not have serious communicable diseases). With the help of a good agent, you will likely pass the health examination in 1-2 hours. After the medical test, you get your 2-year residency visa in the UAE if you register a free zone company. In the case of a mainland company, you get a residency for 2 years.

After the residency permit expires, you can decide whether to prolong it for another 2 years or upgrade it to a 10-year Golden Visa.

Once you become a happy holder of UAE residency, you need to get an Emirates ID which usually takes 1-3 days. The ID allows you to open a bank account, rent an apartment, buy a car, use certain services, and do other things related to daily life.

Opening Bank Accounts

Opening a personal bank account is usually possible in 1-2 days. Once you own a personal bank account, you can open a company bank account, for example, using a digital banking platform Wio, in about 1 week. 

If you decide to do it at a physical UAE bank, it may take about 30 days to open a corporate account. The corporate banking experience is typically more straightforward if you have a mainland company but do not expect much from UAE banks compared to other banks around the world, they live in the 1990s. The most reliable banks in the UAE include Emirates NBD, First Abu Dhabi Bank (FAB), and Abu Dhabi Commercial Bank (ADCB).

Rafael and his team assist wealthy expats in moving to Dubai. Contact them for a personal consultation.

The DMCC

The Dubai Multi Commodities Centre (DMCC) is the world's most interconnected Free Zone and the leading trade and enterprise hub for commodities and business services, something that should be on the radar of anyone planning the move to Dubai. 

The DMCC is a government entity that provides a host of services ranging from offering state-of-the-art commercial and residential property and top-tier commodities and financial services to investing in the interconnectedness, infrastructure and services in the area to ensure trade and business can be conducted as seamlessly as possible. 

With over 23,000 thriving companies flourishing in the DMCC business hub, here are some of the benefits provided by DMCC:

• Tax friendly environment
• 100% Business Ownership and Capital Repatriation
• Strategically located in the heart of new Dubai
• State-of-the-art flexible property solutions
• Live and work in one vibrant community
• Fully digital set up and post-setup processes, Online Portal for all services accessible from any device, anytime and anywhere
• Range of services to support your business including your visa, insurance, banking and more
• Flexible solutions covering a wide-range of business activities, property, and structures.
• Business connections through regular networking, and knowledge sharing events.

Interested in setting up a business in the world's most connected Free Zone? Register with the DMCC!

DMCC Crypto Center

The DMCC Crypto Centre stands as an all-encompassing environment tailored for enterprises dedicated to the advancement of web3 and blockchain innovations, along with an array of supplementary services that enhance value. 

This establishment offers a complete package catering to the demands of crypto ventures and visionaries, facilitating the establishment and expansion of their endeavors. With an existing community exceeding 600 enterprises engaged in the realm of web3 and blockchain, the DMCC Crypto Centre proudly represents the most concentrated cluster of cryptocurrency firms in the region. Since its inception in May 2021, the center has consistently bolstered its member base, forging numerous strategic alliances with influential stakeholders in the industry.

Here are some of the reasons blockchain and Web3-focused enterprises choose the DMCC Crypto Center:

• Mentorship and acceleration (Through ongoing programs facilitated by TDeFi, Brinc and others)
• Access to funding (from our ecosystem partners, Brinc, DWF Labs, Ghaf Capital)
• Token issuance and listing support (from ByBit, our listing partner)
• Access to potential clients (On-going meet ups with the web3 community and the wider 23k members across all sectors)
• Grants and technology support (Boba Network and Ankr)
• Collaboration opportunities (with our ecosystem members)
• Business setup and regulatory support (dedicated team of experts, and support from the regulator VARA)

License Activities Available

Non-regulated   (DMCC License only)

• Blockchain as a service
• Metaverse Service Provider
• Crypto Proprietary Traders
• Crypto Mining

Regulated  (DMCC License + VARA License)

• Virtual Assets Advisory Services
• Virtual Assets Broker-Dealer Services
• Virtual Assets Custody Services
• Virtual Assets Exchange Services
• Virtual Assets Lending-Borrowing Services
• Virtual Assets Management-Investment Services
• Virtual Assets Payments-Remittances Services

Dubai Golden Visa

Dubai's ‘Golden visa’ is a long-term residence visa which enables serious investors or talented non-natives to live, work or study in the United Arab Emirates (UAE) while enjoying exclusive benefits.

The Dubai Golden Visa might be applicable to you. If you're a non-UAE resident who is an investor, entrepreneur, scientist, outstanding student and graduate or a humanitarian pioneer you may be eligible for the Dubai Golden Visa. The eligibility criteria is as follows:

Investors:

Real estate investors can apply for a Golden visa, also known as the Real Estate Golden Visa if they can fulfil any of the following conditions: 

• Own a property that is worth at least AED 2 million. 
• Purchase an off-plan property investment from any approved local real estate company with a value or equivalent shares in the property of not less than AED 2 million.
• Buy a property with a loan from a specific bank.

Entrepreneurs:

Entrepreneurs or investors can obtain a Golden visa with the following eligibility criteria:

• Own or partner with a company/start-up registered in the UAE that generates revenue of at least one million.
• Founded a company that was sold for a total amount of not less than AED 7 million.

Exceptional Talents:

• Individuals with specialized qualifications and talents in the fields of culture, art, sports, and technology, regardless of educational qualification, salary, or professional level. The visa requires a recommendation or approval from a federal or government entity. 
• Researchers or scientists can apply for a Golden visa based on a recommendation from the Emirates Scientists Council. 
  Individuals must have a Ph.D. or Master’s degree in any discipline—technology, science, engineering, life science, or natural science, along with research achievements in the specific field.
• Professionals or highly skilled individuals with high qualifications and experience in all disciplines can apply for a Golden visa if they can fulfill the below conditions: 
• Valid employment contract, classified at the first or second occupational level as per the Ministry of Human Resources and Emiratisation.
• Hold a Bachelor’s degree or equivalent. 
  Individuals must have a monthly salary of not less than AED 30,000.
   

Outstanding students and graduates:
Outstanding students that have promising scientific capabilities in the UAE’s secondary schools and university graduates from any certified university in the UAE or any of the best 100 universities worldwide can apply for the Golden visa. Eligibility Criteria: Academic performance, graduation year, and university
 
Humanitarian Pioneers:
Members of international and regional humanitarian organizations or associations, as well as volunteers or sponsors of humanitarian efforts, can get a Golden visa. Individuals who are recipients of any humanitarian awards are also eligible for the visa.
 
Frontline Heroes:
Frontline individuals who worked with extraordinary efforts during the crisis, such as COVID-19, are also eligible for a Golden visa.

More information can be found on the UAE and Dubai Government website.

The benefits of the Dubai Golden Visa are as follows:

• Entry visa for six months with multiple entries to proceed with residence issuance
• A long-term, renewable residence visa valid for 5 or 10 years
• Do not need a sponsor
• The ability to stay outside the UAE for more than the usual period of six months in order to keep your residence visa valid
• The ability to sponsor family members, including spouses and children regardless of their ages
• The ability to sponsor unlimited number of domestic helpers
• If the primary holder of the Golden visa passes away. Family members can stay in the UAE until the end of their permit duration. 

Golden visa's aren't exclusive to Dubai, in fact there are 21 other countries in the world that offer Golden Visas; each with their own varying eligibility criteria.

Examples include:

• Switzerland
• The Cayman Islands
• Singapore

The criteria for a Golden Visa in Dubai is largely the same as other countries unless you're eligible for something merit based such as being an outstanding student. Most Golden Visas require a sizeable financial investment into the country. 

Singapore for example, requires you to invest at least SGD 2.5 million in one of the following:

• Approved fund in Singapore.
• Existing business or establish a new business.
• Establish a single-family office in Singapore.

In addition, you must have previous business experience and provide your company’s audited financial accounts. Under these criteria you can gain permanent resident status and after two years of being a permanent resident in Singapore, you can apply for citizenship. However, you cannot be a dual citizen in Singapore.

In comparison, in Dubai to qualify for the 10-year Golden Visa, you have to invest at least AED 10 million in public investments or be a person with exceptional skills and talents. For the 5-year option, you have to invest a minimum of AED 5 million in a property in the UAE. 

Dubai's golden visas are unique in the sense that they aren't solely issued based upon sizeable financial contributions. It's nice to see Dubai offering golden visas based on academic merit or peoples efforts during COVID-19.

Ultimately, if you've got the funds, the golden visa is a great 5 or 10 year residency option for you. If it's financially feasible for you, I would highly recommend.

Additional Resources

If starting a business in Dubai sounds right for you but you're not sure about the culture and lifestyle, you can learn more about moving to Dubai in our article: Crypto Tax-Friendly Countries: Moving to Dubai

Alternatively, if Dubai isn't a feasible option for you there are many other countries with a tax-friendly stance on crypto. Check out our list of the Top Crypto Tax-Free Countries.

If the dream of moving to another country just isn't possible for you or you want to clear your tax obligations before you go, you may want to check out our article on the Best Crypto Tax Software.

Closing Considerations:

I moved to Dubai to save money for a down payment on a house for when I moved back to the UK.  One of the things that surprised me about Dubai is how entrepreneurial everything and everyone is. I was approached numerous times about starting up a new gym in x, y, or z location. One of my friends who taught Pilates was headhunted by a wealthy Indian client who helped him set up a new Pilates studio in Business Bay. Since then, he has successfully expanded across Dubai and now runs 2 different fitness studios.

The vibe of Dubai is work hard, play hard and take chances. If you're thinking about starting a new company and want to be surrounded by like-minded people with an entrepreneurial streak, Dubai really is one of the best places you could ask for.

Dubai Government has all the right measures in place to protect businesses and consumers but doesn't tie everything up in red tape. It actually encourages business start-ups as the ever-growing city is always able to offer vacant office space to would-be businesses.