This article discusses this newly launched initiative for business people, their benefits, and the process of obtaining one.
What is a Virtual Company License?
A virtual company license enables overseas entrepreneurs to establish and operate their companies virtually in Dubai without the need to relocate to the UAE physically. It allows them to manage their business digitally, including signing documents, without maintaining a physical office space.
With the collaborative efforts of prominent entities in Dubai, including Dubai Economy, the General Directorate of Residency & Foreigners Affairs (GDRFA), the Supreme Legislation Committee, Smart Dubai, and the Dubai International Financial Centre (DIFC), the virtual company license was introduced in the UAE to facilitate virtual business operations, promote entrepreneurship, innovation, and ease of doing business.
Benefits of a Dubai virtual company license
The Virtual Company License offers a range of benefits to those looking to establish their presence in the region: -
- Cost-Effectiveness: Since Virtual company licenses eliminate the need for physical office space, the overhead costs, such as rent, utilities, and maintenance expenses, are reduced, making it a cost-effective option for those operating on a limited budget.
- Flexibility: The unparalleled flexibility of VCLs allows easy management of operations from anywhere in the world. Digital nomads, freelancers, and small businesses can leverage this flexibility and gain access to co-working spaces, networking events, mentorship programs, and financial incentives that are designed to support entrepreneurship and innovation.
- Global Reputation: The robust regulatory framework and infrastructure of Dubai create a business-friendly environment for businesses. By acquiring a Dubai Virtual Company License, businesses can enhance their credibility and reputation and attract more clients and partners.
- Online Business Operations: VCL enables digital management of all business-related tasks, such as document signing and submission. Signatures obtained during the process are recognized as valid in the UAE.
- Low Startup Costs: The reduced initial costs and administrative burdens of VCL make it an attractive scheme for entrepreneurs seeking business expansion.
- Access to Opportunities: Dubai has become more accessible for executing virtual business ideas, opening doors to new clients, markets, and investment possibilities.
- Inclusion in the Directory of Virtual Businesses: Virtual companies can be a part of the virtual city and connect with a diverse range of businesses.
Eligibility criteria for virtual company registration in Dubai
The eligibility criteria for VCL are outlined below: -
- Residency Requirement: For individuals not residing in the UAE or entrepreneurs from other countries.
- Ownership Criteria: A national or tax resident of an approved country such as India, Pakistan, Saudi Arabia, China, Russia, North America, South Africa, Nigeria, and others.
- Business Activity Restrictions: Business activities from pre-defined sectors are permitted, and they may vary based on specific regulations and policies.
- Background Checks: Background verifications by Dubai government authorities to ensure compliance with regulatory requirements.
Applying for a Dubai virtual company license
Virtual company registration in Dubai mandates the issuance of a Virtual Company License. The application process is explained below –
Register the company
Visit the official website of Dubai Virtual Commercial City to initiate the registration process. Fill out the online registration form with the necessary details such as your name, contact details, date of birth, passport information, and your previous experience. The trade license name of the company and the description of the intended business activity must also be mentioned in the form.
Upload the documents
Next, upload the required documents for the Virtual Company License.
- Valid passport of the business owner
- Proof of Address, such as a utility bill, bank statement, or a valid rental agreement
- Tax Residency Certificate confirming that you are not a UAE resident and are eligible for the license
- Curriculum Vitae (CV) or Business Profile specifying your professional or entrepreneurial background.
- Clear explanation of the activities you plan to carry out
- Bank Account Details as proof of your existing business transactions
- Signature sample for Digital Identity Verification
Track the application status
Once you have submitted the application successfully, the Dubai Government authorities will carry out the authentication of the provided information via a background check. This particular step can take a while to complete. Therefore, make sure to submit accurate information. Once the screening process is complete, the owner will receive an email notifying them whether their application is approved or rejected.
Confirm your identification at VFS Global
Upon approval, the owner will have to make a personal visit to VFS Global for identification and passport verification. A visit needs to be pre-booked through their website or via email. A nominal charge needs to be paid as a service charge for this step.
Pay the license fee
After the identification at VSF Global is successfully validated, owners will have to pay the license cost via ePay, the VCC’s official payment gateway in Smart Dubai, based on the license validity as specified in the company registration form.
Cost of a virtual company license in Dubai
The actual cost can vary depending on several factors, such as the chosen package and additional services. However, the cost typically covers the license fees, government fees, and other administrative charges associated with the business setup in Dubai.
To know the exact figure, get in touch with our experts.
Key points to consider while applying for a Dubai virtual company license
The following points need to be taken into consideration while applying for a virtual company license in Dubai –
- Visa Considerations: A virtual company license does not qualify the business owner for a residence visa in the UA. They need to follow the relevant immigration regulations and procedures of the UAE government to obtain a visa.
- Taxation: Virtual companies in Dubai can be subject to corporate income tax, individual income tax, and social taxation, depending on their location and any international tax agreements they are bound to.
- Bank Account Opening: A virtual company license may facilitate access to business bank accounts in the UAE; however, the final decision to open an account rest with the banks, their policies, and criteria.
- Ownership and Compliance: Virtual companies are typically sole establishment structures that are not subject to local ownership, directorship, or auditing requirements in the UAE.
- Value-Added Tax (VAT): Virtual companies with revenue exceeding AED 375000 per annum may be required to register for VAT with the Federal Tax Authority and fulfill the responsibility of VAT registration and compliance. They will be subject to the standard VAT rate of 5%, and no income taxes shall be levied on non-financial entities.
Conclusion
Thus, virtual company registration in Dubai is an exciting opportunity for ambitious entrepreneurs who want to make a profit without significant capital investment. To make your entrepreneurial journey even smoother, our business setup experts are here to assist you through the complexities of the process. From company registration to PRO services, they will help you acquire your Dubai Virtual Company License without any hurdles.
Reach out to us today!
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