As a dynamic and open economy, Dubai enables businesses anywhere in the world. Recently, the Deputy Ruler of Dubai, Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum announced the launch of the region's first Virtual Company License. The Virtual Company License is a joint initiative of Dubai Economy, Dubai International Financial Centres (DIFC), General Directorate of Residency and Foreigner’s Affairs (GDRFA), Smart Dubai, and the Supreme Legislation Committee, focusing on three main sectors namely creative industries, technology, and services.
With the help of a Virtual Company License, a foreign business owner or investor is allowed to set up a company in the city without actually residing in the United Arab Emirates. Keep reading to find out more about this initiative.
What are Virtual Companies?
Virtual companies are registered in Dubai to the individuals who do not reside in the Emirates, and the owner of the companies must be nationals or tax residents of certain countries.
What is a Virtual Company License in Dubai?
A Virtual Company License or a Virtual Commercial License is a new directive that enables overseas entrepreneurs to digitally set up a business in Dubai without acquiring a residence in the city. This means that the owners of Virtual Company License can manage all their business-related activities, including document signing and submission digitally, and the signatures are legally binding in the Emirates.
Residents of around 120 countries can obtain the virtual company license with whom the UAE has signed double-taxation avoidance agreements. The UAE, through this initiative, aims to have 100,000 companies in the virtual city.
Criteria to Set up a Virtual Company in Dubai
There are three main conditions to be fulfilled before you decide on registering your virtual company in Dubai. They are-
- The applicant of the virtual license must not be a resident of the UAE
- The owner of the company must be a national from any of the 101 approved countries, including India, United States, Pakistan, Russia, Canada, China, Japan, etc.
- The business activities from the pre-defined sectors can set up a virtual company in Dubai. The predefined areas include service activities related to printing and advertising, consultancy and related activities, computer programming, and design activities in fields of fashion, interior, and jewellery amongst others.
Other than this, the owners of the virtual company must remember that their companies will continue to remain subject to corporate, individual income, and social taxation of the country they are based in.
Benefits of Obtaining a Virtual Company License in Dubai
This license will simplify the work and life of business people through provisions of-
- Low costs and administrative burdens to start and grow your company
- Online access to your company
- Access to business opportunities in Dubai
- Access to new customers, markets and investment opportunities
- Participation in virtual companies’ directory
Procedure to Obtain the Virtual Company License in Dubai
Dubai Economy will handle the process to review and approve the license for virtual companies in Dubai through its official website or the offices of VFS Global across 11 locations worldwide.
The steps are as under-
- The first step is to fill an application form online for registration
- A background check will be done, which takes from 1-30 days
- A visit for identification and validation is completed
- Pay the dues and obtain the license
Business Activities Allowed for Virtual Companies
The services or activities allowed under this license are-
- Activities related to printing and advertising
- Typesetting services
- Colour separation services
- Design and artwork services
- Promotional gift preparing
- Greeting card production and distribution services
- Activities related to computer programming and consultancy
- Computer systems and communication equipment software design
- Electronic chips programming
- Social media applications and development and management
- Cybersecurity architecture
- Public networking services
- Cyber risk management services
- Auditing, reviewing, and testing cyber risks
- Managed cybersecurity service provider
- Marketing services via social media
- Activities related to creative design
- Fashion design
- Jewellery design
- Design services
- Calligraphers and painters
- Product design
It must be noted that if the revenue of the virtual company in the UAE exceeds $100K per year, they will be subject to the 5% Value Added Tax (VAT) in the Emirates. This means that a Dubai Virtual Company License holder will be required to register the company with the Federal Authority of the UAE. Another essential thing to note is that the Dubai Virtual Company License does not automatically guarantee physical access to the UAE through a business/visitor/resident visa to any of the company members. The same applies to open a business bank account in the UAE.
We at Business Setup Worldwide are a platform to help start a business in the UAE. We also provide licensing services in the Emirates, including the Virtual Company License, added recently to the list. Should you decide to obtain the same, contact us. We’d be happy to assist you.