Dubai: the novel Virtual Company License

It is evident that there is a fierce competition between jurisdictions to attract entrepreneurs, compelling the legislators to adapt to the continuously evolving demands of the businesses to obtain simple and convenient legal solutions for conducting their activities. In response to the major shift from physical to remote business and employment structures in the past decade, many countries digitalized the formalities connected to incorporating and operating legal entities.

For example, the e-Residency project implemented in Estonia allowed foreign individuals to establish and run a company online, conduct banking online, manage documentation online, declare taxes online, etc. without physically visiting Estonia at any time. The e-Residency project of Estonia proved to be so successful that other countries over the world including Lithuania, Ukraine and Portugal introduced similar systems to their jurisdictions.

To keep up with the trend, the Emirate of Dubai recently introduced the Virtual Company License to interest non-resident freelancers and businesspeople worldwide to incorporate in the Emirate of Dubai. The Virtual Company License is a step towards the goal of building a “Virtual Commercial City” in Dubai – a “hub for trade, innovation, and e-commerce”, “designed to make Dubai the first global city for trade in digital commerce”.

Benefits of the Virtual Company License

The Virtual Company License is a combined initiative of a number of Dubai authorities, which allows the non-resident persons to establish and run a legal entity in Dubai without residing there.

Apart from the obvious ease of access to the new Dubai market, the benefits of obtaining the Virtual Company license include enjoying the low costs and administrative burdens for establishing and running the company. The latter is achieved through providing the Virtual Company License holders with online access to all necessary tools to operate the company, including the means to manage and digitally sign documents.

One of the most notable benefits for obtaining the Virtual Company License is having access to significant business opportunities by being allowed to offer goods and services on – a major regional online trading platform operated by the joint venture between two government authorities.

Obtaining the Virtual Company License

In order to obtain a Virtual Company License, an individual must:

a) not be a UAE resident;
b) be a resident of one of 101 approved countries worldwide (including Georgia);
c) conduct one of the location-independent approved activities in the following sectors:
– Computer programming, consultancy and related activities;
– Design activities;
– Service activities related to printing and advertising.

The license does not guarantee physical access to the UAE or opening a business bank account (which remains at the discretion of the banks), but the latter process is facilitated for Virtual Companies.

The procedure of obtaining the Virtual License shall be very simple, quick and hassle-free if all application documents are duly presented.

Taxation of Virtual Companies

Virtual Companies remain subject to any applicable taxes depending on the location of economic activities and international tax agreements. There are no taxes applicable to Virtual Companies in Dubai apart from the VAT in the amount of only 5%, and only the entities which exceed USD 100,000 in total revenue within the UAE are required to register as VAT payers.

Fees for obtaining the Virtual Company License

The fees for gathering all necessary documentation for registration amount to AED 300 (equivalent of USD 91 at the time of writing).

The fee for the Virtual Company ranges from AED 850 (equivalent of USD 260 at the time of writing) for one year or up to AED 2,161 (equivalent of USD 654 at the time of writing) for a three-year license.

Overall, the Virtual Company License is a crucial early step on the way to establishing the Dubai Virtual Commercial City. While limited in the number of permitted activities and countries, Virtual Company License is a highly flexible tool for businesspersons, entrepreneurs and freelancers to enter the Dubai market, manage and run the business remotely and, notably, offer their goods and services to potential customers on Allowing entities which conduct location-independent activities to incorporate and operate in Dubai completely remotely is a unique approach to the issue, which once again reinforces the status of Dubai as a leading jurisdiction for digital businesses both in the region and in the world.

Interested in retaining our firm?

We would be delighted to partner and contribute to your success!

They have trusted us