Author(s):George SK,Jibin

COMPANY FORMATION IN DUBAI INTERNET CITY

Free economic zones have made the Emirate of Dubai, in the United Arab Emirates, a popular destination for investment. The particularity of free zones is that they allow foreign nationals to own 100% of the shares in a company, in contrast to the general ownership model in the United Arab Emirates where an Emirati national must possess at least 51% of the shares in a firm/business. If you’re looking to set up a company that deals with information technology in the United Arab Emirates, there is no better option than the Dubai Internet City free trade zone.

Dubai Internet City is the most significant technology business community in the region; it is an information technology park that offers extensive opportunities for investment and for targeting regional emerging markets.It is present next to other free zones such as Dubai Media City and Dubai Knowledge Village. Notorious information technology firms such as Microsoft, HP, Facebook, Google, LinkedIn, Dell, Samsung, Oracle Corporation and Nokia have established themselves in Dubai Internet City.The free zone offers excellent infrastructure and services, but it prohibits general trading activities. A minimum capital of UAE Dirhams fifty thousand (AED 50,000) is required to set up a company in Dubai Internet City.

The Dubai Internet City, a member of the subsidiary TECOM Investments which is open to the public since October 2000, is the most extensive Internet and Communications Technology platform in the Middle East. At a time where e-commerce is becoming a more popular activity, many investors are establishing companies in Dubai Internet City. Other companies in the free trade zone work in sectors such as software development, business services, consultancy, and marketing.

The Dubai Internet City allows the following activities:

Software (the development and installation of software products) Internet and Multimedia (activities related to development and distribution through the internet) Telecommunication and Network (services for the for the operation of network-based applications) IT Service e-Commerce (the sale of products through an online platform)

There is further division to the activities above into the following sub-categories: Consultancy, Developer, Solution Provider, Customer Service and Support Service Provider

The procedure for setting up a company in Dubai Internet Cityis intwo stages:

Stage 1 – Submit the following documents to the Dubai Internet City for approval:

Application for License; Business Plan (including information about the business, the market, competitors and the financial plan); Name of the activity; Passport Copies of Shareholders, Directors,and Managers; CVs of Shareholders, Directors,and Managers; Contact details of Shareholders, Directors,and Managers; The company name cannot contain any of the words “co,” “ltd” or “limited” and must be followed by “FZ-LLC,” it is preferable to add a descriptive term after the name of the company. An example of an acceptable company name is Smith Investments FZ-LLC.

It is important to note that Dubai Internet City provides template documents to facilitate the process of completing reports. Also, if a legal representative is making the application on behalf of a client, a power of attorney must be provided.

Stage 2 – Upon obtaining the approval, a letter of undertaking must be signed by the shareholders. The second set of documents must be submitted:

Application for License; Resolution of Incorporation of FZ-LLC (must be attested); RIC (Registration Identification Code) Form for shareholders, directors,and managers. The submission of the form should be in original notarized copy; Bank reference letter for Shareholders; Proof of share capital from bank or Trust Account deposit receipt; and NOC for the Manager from the current UAE sponsor.

The documents above apply to shareholders who are natural persons, in the case where the shareholders are corporate entities, further documentation is required:

Company Incorporation Certificate (original and notarized) Certificate of Continuity, Existence or Good Standing (original and notarized) MOA and AOA of Parent Company (original and notarized)

Upon the submission of all the preceding documents and accepted by the authority,the authority will issue the license, the visas obtained and the company can open its bank account.