Corporate and commercial
Business Setup and Company Formation
Registering a company is the easy part. The expensive part comes later: the partner who wants out and nothing on file saying what his shares are worth, the licence that does not cover what the business has started selling, the supplier contract signed in month one that nobody read.
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The short answer
Plenty of agencies will complete a registration, and many do it well. What an agency is not engaged to do is tell you whether the structure suits the people inside it, whether the licensed activity matches what you intend to sell, or what your first contracts commit you to. That is the work of a company formation lawyer in Dubai.
On this page
- What a lawyer looks at that a setup agent does not
- Mainland, free zone or offshore
- Getting the licensed activity right
- Constitutional documents, and why the template is often not enough
- Shareholders agreements
- Managers, directors and who can sign
- The contracts you need in the first month
- After the licence is issued
Ten free minutes
Enough to say whether this needs a lawyer at all.
What a lawyer looks at that a setup agent does not
None of these stop a company being registered, and a package price raises none of them. They decide what the company is worth when someone wants out, and where you stand when a counterparty stops paying.
This sits inside our wider corporate and commercial practice.
- Whether the legal form fits the shareholder group, not only the activity.
- Whether the licensed activity covers everything the business intends to sell.
- What the owners agreed with each other, and whether anything records it.
- Who may sign for the company, and up to what value.
- What the first customer, supplier, employment and lease documents commit you to.
Mainland, free zone or offshore
What actually drives the choice
The choice follows your customers, not the package price. Who pays your invoices, and where are they? Do you need to sell directly inside the UAE market, or do your clients sit outside it? Do you want to bid for government work? Do you need staff on your own residence visas? Visa numbers are tied to the structure and the premises and set by the relevant authority, so we confirm yours rather than quote a figure.
Mainland companies
A mainland company is licensed by the Dubai government department responsible for economic activity. It is the usual route for a business selling directly to customers inside the UAE market, taking government work, or opening branches in other emirates. The legal form affects liability, governance and how shares transfer. Foreign ownership is not one flat rule; it depends on the activity, so we confirm the position for your licence category rather than repeat a general statement. Share capital varies by form and activity in the same way.
Free zone companies
Each free zone has its own registrar, company regulations and permitted activity list. A free zone entity often suits regional trade, holding structures and professional services, or a business whose customers sit outside the onshore UAE market. Selling into that onshore market from a free zone entity usually needs a further arrangement, and what that has to be depends on the activity and the zone. Zone rules also change independently of federal law.
Offshore and holding companies
Offshore companies registered in the UAE hold shares, intellectual property and in some cases property. They are not licensed to carry on business in the UAE market, and treating one as an operating company is a common and costly mistake.
Moving an entity between the three regimes later is possible in some cases and not others, and it is rarely a single filing: the licence, the bank accounts, the visas, the lease and every contract naming the old entity have to follow.
Getting the licensed activity right
A trade licence lists activities, and those activities, rather than your website, define what the company may do. A company licensed for management consultancy that starts placing staff with clients, or a trader that starts installing what it sells, may be operating outside its licence without noticing. It surfaces at the worst moment: a bank review, a tender, a due diligence exercise, or an argument with a customer looking for a reason not to pay.
Some activities also need approval from a sector regulator, and which ones depends on what you do. We check the list against what you actually intend to sell rather than the nearest matching title on a form, because the nearest matching title is how businesses end up licensed for something adjacent to their own operation.
Most businesses change what they sell, and the licence has to be amended to match. Your bank may ask about it, some contracts require notice of a change of activity, and tender eligibility can turn on it. Deal with it when the business changes, not at renewal.
Constitutional documents, and why the template is often not enough
The memorandum or articles issued on a registrar’s standard template is a compliance document, drafted to be accepted by a registrar rather than to settle an argument between the people who signed it.
Read one and it is usually silent on what later matters: the majority needed for which decision, how profit is distributed, whether the other owners get first refusal on a transfer, what happens on the death or insolvency of a shareholder, and what happens when two equal owners disagree with no casting vote. None of those gaps prevent registration, and all are cheaper to close while everyone is cooperating. Amendments and transfers also carry their own formalities, including notarisation in some cases.
Shareholders agreements
Settle these before the money moves
A shareholders agreement records what the owners agreed with each other, which the registrar’s documents do not. The conversation is short at the start and long later.
- What each person contributes: cash, equipment, a client list, or work.
- What each receives for it, and when.
- What each is expected to do day to day, and what follows if they stop.
- Who signs for the company, and above what value a second signature is needed.
- How profit is decided on and paid out, and what stays in the business.
- Whether an owner may work in something else at the same time.
Money that went in without paperwork belongs here too: funding from someone not on the register, shares held in a name that does not reflect the real arrangement, or a loan everyone later calls equity.
What happens if a partner leaves
The gap we see most. Three questions decide it. Can the departing owner sell to whoever he likes, or do the others get first refusal? How is the price worked out, by whom, and as at what date? Is he paid at once, or over time and against what security?
An agreement answering those three turns an exit into an administrative step. One that does not turns it into a valuation fight, and that is how most shareholder disputes here begin. Our shareholder and partnership dispute lawyers in Dubai page sets out what follows.
Managers, directors and who can sign
A registered manager’s powers come from the constitutional documents and the registrar’s record. Appointing someone and privately assuming the appointment is limited is a mistake, because a limit that is not written down and capable of being seen by the other side may not protect you against a contract that person signs.
Powers of attorney need the same care. A broad power granted during setup and never revoked is a live document. It should say what it covers and when it ends, and revoking one is a formal step, not a matter of asking for the paper back.
The contracts you need in the first month
A new company signs more binding documents in its first month than in any month after. Our commercial contract drafting and review page covers them in detail.
Customer and supplier terms. Payment terms and what happens on late payment, termination and whether it needs cause, limits on liability, and which law and forum apply if it fails.
Employment contracts and policies. Terms, probation, notice, leave, commission, confidentiality and ownership of what staff create. The registration route differs between a mainland entity and a free zone entity, and our employment and labour lawyers in Dubai page covers the employee’s side.
The lease. Usually tied to the licence, so check the term, the renewal, what happens if the licence is not renewed, and who pays for fit-out and reinstatement.
Ownership of what gets built. The website, the software, the designs and the brand are usually created by someone outside the company, so deal with ownership expressly. A trade name on a licence is also not a registered trade mark.
After the licence is issued
Keep the company’s own records from day one: the share register, signed resolutions, and a minute book that matches them. Record your ultimate beneficial owners with the registrar and keep it current. Diarise the licence, establishment card and lease renewals together, because they fall due in a cluster.
Tax registration and reporting obligations depend on the entity and its activity, and rates, thresholds and deadlines have changed, so we work with your tax adviser on the current position rather than last year’s. We handle the structuring; we do not file returns.
The mistakes that cost money later
- Choosing the jurisdiction on price rather than on where your customers are.
- Accepting the nearest matching activity instead of the one that describes the business.
- Two or more owners and nothing in writing between them.
- An arrangement on the register that does not reflect what was really agreed.
- Signing the landlord’s or the supplier’s document because it was called standard.
- Leaving the share register, resolutions and ownership record to be created later, when a bank or a buyer asks for them.
How we work on a setup matter
Bring a plain description of what the business will sell and to whom, identification for each owner, details of any other UAE entity or employment an owner holds, and anything already sent to you or already signed. Copies are fine.
We agree scope and fee before substantive work begins, and our legal fees and how our charges work page explains the structures we use. Government and registrar charges are separate, set by the authority, and not paid to us.
Questions we are asked about company formation
Do I need a lawyer to set up a company in Dubai?
No. A registration can be completed without one. What a company lawyer in Dubai adds is the part an agent is not engaged to do: whether the form suits the owners, whether the activity covers the business, what the owners agreed with each other, and what the first contracts say.
Can a foreign investor own a company in Dubai?
Yes, and how depends on the route. On the mainland the position changed with amendments to the company legislation and now depends on the activity, so the answer for a trading licence may differ from a professional one. Free zone regimes work differently again and differ between zones. We confirm the treatment for your activity and registrar rather than apply a general rule.
What does it cost to set up a company in Dubai?
Two separate costs. The authority’s charges depend on the activity, the legal form and the premises, and they change, so ask the registrar or an agent for a current quote. Professional fees are quoted separately and we set ours out in writing first. We publish no figure for either, because an outdated number is worse than none.
We registered months ago and signed nothing between the owners. Is it too late?
No, and this is a large part of what we do. Putting an agreement in place while the owners still agree is a negotiation between partners. Doing it after a disagreement is a dispute between opponents, and costs several times as much.
Speak to a company formation lawyer in Dubai
If you are deciding where to incorporate, have been handed documents to sign, or set a company up months ago and never put anything in writing between the owners, the first conversation is short.
Call or message us on +971 50 747 9570, or email help@lawyerindubai.ae with a short description of what the business will do and any documents you have. You can also use the form on our contact page.
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