Dubai has long been considered one of the most attractive business hubs in the world, offering unparalleled opportunities for entrepreneurs looking to set up businesses in the UAE. One popular method for quick business setup in Dubai is through the purchase of a shelf company. Shelf companies are pre-registered entities that are available for sale, and they offer entrepreneurs a fast track to start operating in Dubai without the need for going through the lengthy registration process from scratch. Here, we explore the advantages of buying a shelf company Dubai, as well as the steps involved in the process.
Understanding Shelf Companies
A shelf company, also known as a ready-made company, is a business entity that has already been registered and is typically unused or dormant. These companies are created by service providers and kept “on the shelf” for resale to entrepreneurs. A shelf company may have no trading history, making it a blank slate for business owners. Once purchased, the business owner can immediately begin operations, giving them a significant advantage in terms of time and convenience.
In Dubai, a shelf company is commonly available for sale as a Limited Liability Company (LLC) or a company in a free zone. These companies come with a pre-registered legal structure, enabling quick access to licenses and other regulatory approvals.
Advantages of Buying a Shelf Company in Dubai
There are several compelling advantages to purchasing a shelf company in Dubai, especially for entrepreneurs who want to avoid lengthy administrative procedures and start trading as soon as possible.
Quick Setup and Immediate Operations
One of the biggest advantages of buying a shelf company is the speed at which you can start your business. Since the company is already registered and has obtained its trade license, there is no need to go through the lengthy steps involved in business registration, such as choosing a company name, selecting a business activity, or waiting for approval from the relevant authorities. Once you purchase a shelf company, you can begin operations almost immediately, saving time and money in the process.
Established Business Identity
A shelf company comes with a pre-existing business identity, including its registration number and trade license. This can be particularly useful for companies that wish to appear established and trustworthy from the outset. A new business, especially when seeking clients or investors, may face skepticism. Having a shelf company helps to avoid this issue, as it appears more credible and may be better received in both local and international markets.
No Need for a New Entity Creation
Starting a new business from scratch in Dubai involves multiple steps, including applying for a business license, setting up a legal structure, securing office space, and obtaining approvals. By purchasing a shelf company, entrepreneurs can bypass these time-consuming steps. While the company itself will require certain changes such as updating the company’s name and structure to fit the new owner’s needs, the main legwork of registering a new company is already done.
Access to Business Banking and Financial Systems
When buying a shelf company in Dubai, the company already has a trade license, meaning you can immediately begin the process of opening a corporate bank account. This is a crucial step in setting up your business as it allows you to handle transactions and manage your finances from day one. In some cases, banks may prefer to deal with companies that have a longer registration history, and purchasing a shelf company allows you to immediately gain access to banking facilities without additional hurdles.
Process of Buying a Shelf Company in Dubai
While buying a shelf company in Dubai is a streamlined process, it still requires careful attention to detail. Below are the key steps involved in purchasing a shelf company.
Step 1: Choose a Reputable Service Provider
The first step in purchasing a shelf company is to choose a reputable company formation service provider. These professionals specialize in the sale of shelf companies and are familiar with the legalities and regulations involved in setting up a business in Dubai. It’s important to ensure that the service provider is well-established, offers transparent terms, and has a solid track record in helping entrepreneurs acquire shelf companies.
Step 2: Select the Right Company Structure
Shelf companies are available in various structures, including LLCs (Limited Liability Companies) and free zone companies. The choice of structure depends on the type of business you wish to conduct and whether you plan to operate within Dubai, the wider UAE market, or internationally. Free zone companies are often more suitable for businesses that do not need to engage in direct trade with the local market, while LLCs allow broader access to the UAE’s mainland market. Consulting with a service provider will help determine which structure best suits your business needs.
Step 3: Review the Shelf Company’s Details
Once you’ve selected a suitable shelf company, it’s important to review the company’s details. This includes checking the trade license, reviewing the company’s registration status, and ensuring there are no existing liabilities or legal issues associated with the company. Even though shelf companies are typically dormant, conducting a thorough due diligence process is essential to ensure that there are no hidden risks.
Step 4: Purchase Agreement and Transfer of Ownership
After reviewing the shelf company, the next step is to enter into a purchase agreement with the service provider. This agreement outlines the terms and conditions of the sale, including the price, the process for transferring ownership, and any necessary changes to the company’s structure, name, or business activity. The service provider will assist you in transferring the ownership of the company and updating the necessary records with the relevant authorities.
Step 5: Change of Ownership and Company Details
Once the purchase is finalized, you will need to update the company’s details with the Dubai Department of Economic Development (DED) or the relevant free zone authority. This includes changing the company name (if desired), updating the ownership records, and altering the business activity to reflect the new owner’s business plans. This process is typically simple, as the company is already registered and operating.
Step 6: Begin Business Operations
Once the company’s details have been updated, you can begin your business operations. You will need to complete additional steps, such as obtaining visas for employees, applying for relevant permits, and opening a corporate bank account. With the shelf company already having a trade license, these processes are expedited.
Considerations Before Buying a Shelf Company
While buying a shelf company offers many advantages, there are a few considerations to keep in mind. It’s important to ensure that the company has a clean legal and financial history and is free from any debts or legal disputes. Additionally, while the shelf company can help expedite the process, it still requires careful attention to the specific requirements of your business, including obtaining any necessary permits and licenses specific to your business activity.
Conclusion
Buying a shelf company in Dubai offers a convenient and fast way to establish a presence in one of the world’s most dynamic markets. By purchasing a ready-made company, entrepreneurs can bypass the usual bureaucracy and regulatory requirements that come with starting a business from scratch. With the right service provider, careful due diligence, and a clear understanding of your business goals, purchasing a shelf company can be a highly effective strategy for gaining a foothold in Dubai’s thriving business landscape.
