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How Can I Start a Business in Dubai Textile City?

Business in Dubai Textile City

Dubai Textile City (DTC) is a free zone that was raised from an agreement that happens in 2000 between Textile Merchants Group and Ports Customs and Free Zone Corporation. It is a free zone like no other that focuses on the textile industry.

Why Was DTC Built?

Texmas built the necessary requirements that will be needed by their members. This includes the buildings, showrooms, storage, offices, and such. Dubai Textile City was completed in 2006. Its exclusive for its members as it was established in the first place to support and promote the textile industry in the Emirate of Dubai. It is one of their goals to show to the world that Dubai is one of the biggest and most convenient textile hubs in the world.

Two Legal Structures in Dubai Textile City

There are three legal structures that Dubai Textile City allows inside their location. The documents and capital requirements are different for establishing these business structures.

  1. Free Zone Limited Liability Company (FZ-LLC)

This is a separate legal entity that has only one shareholder or owner. The owner or shareholder can either be an individual or a corporate entity.

  1. Free Zone Company (FZCO)

This is a legal entity with two or more shareholders. Like the first one, they can be either individuals or corporate entities.

  1. Branch of Foreign or UAE Company

A branch is basically an entity that is under the name of its parent company. It is sort of a representative of an existing company. It conducts the same business and activities as its parent company. The parent company can either be a local company in the UAE or an international one.

Business Activities That are Allowed in DTC

Just like any other location or free zone in the UAE, DTC has its own list of business activities that they allow in their location. Because of this, businessmen should be fully informed about this fact before going forward with their decision to be a part of DTC.

  • Textile
  • Fashion
  • Trading

Dubai Textile City Benefits

DTC has a list of benefits as well as any other free zone in the UAE. The members can enjoy the following benefits and more when they decide to venture in the textile industry:

  • 100% of foreign company ownership
  • 100% corporate tax exemption
  • 100% personal income tax exemption
  • 100% repatriation of capital and profits
  • Custom duties exemption
  • Subleasing options available

Documents Required for Business Setup in Dubai Textile City Free Zone

The general documents that are needed in a business setup in Dubai Textile City would be as follows:

  • Owners/shareholders’ passport copies
  • Manager’s passport copies and CV (resume)
  • Personal information sheet of each shareholder and manager
  • Proof of trade name reservation
  • Proof of initial approval for the business formation
  • Notarized Memorandum of Association (MOA) and Article of Association (AOA
  • Lease agreement (a document) showing a physical address for your new business
  • Capital requirements

There are additional requirements that the government may ask from an applicant after submitting the above documents. These additional requirements of documents can be the following:

  • Board resolution—the board of directors of the parent company (existing company) needs to resolute this document; an expression of the intent of a business set up in Dubai is required; this must also be attested by the UAE Embassy.
  • Your existing company’s certificate of registration/business license/certificate of incorporation—this must be attested by the UAE Embassy.
  • Your existing company’s Memorandum of Association (MOA)—this should be from the place of origin.

How Can You Start a Business in DTC?

A company can only establish a company inside the DTC if they already have an established legal entity as LLC in the UAE mainland. Since DTC does not let anyone have a business setup in Dubai Textile City right away, their LLC company needs to be a member of TEXMAS to get a license in DTC for them to operate inside.

The companies that are inside the DTC are, therefore, members of TEXMAS only.

The license available in DTC is a trading license, and a legal entity can have shareholders that are individuals or corporate entities. The directors need to be individuals only.

The share capital is a minimum of AED 50,000 per shareholder. An audit need not be worried about because it is not required to be filed in the free zone.

A renewal of a company license needs to be done yearly. Like any other authority, there is a penalty if late renewal happens.

Top Business Setup Consultants in UAE

Business setup in Dubai Textile City is a different kind than any other free zones. One cannot simply establish a company inside without having one in the mainland.

FAR Consultants can help you with your business setup plans. Contact us and book a free consultation.