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Which type of Dubai company should I choose to get bank + VISA? DMCC or other?

D

digitalrazor

Mentor Group Gold
Jun 7, 2025
3
0
1
35
Europe
#1
Hi,

I’m currently based in Poland and planning to set up a company in Dubai. I’m also looking to obtain a visa, Emirates ID, and open a local bank account.

In the past, I had a very frustrating experience with banking in Hong Kong (even before 2020), and I want to avoid running into similar issues. This time, I’m looking for a reliable solution—not necessarily the cheapest—just something that actually works, especially when it comes to opening a bank account successfully.

My business is in e-commerce. I don’t require a physical office or residence, though I understand this might affect banking eligibility. I’d appreciate your advice on the best company type (mainland vs. free zone, etc.) that gives me the highest likelihood of setting up a functional and compliant business with proper banking access.

I also have a question regarding VAT. I know the UAE applies a 5% VAT on transactions between local companies. Would it be legally acceptable to move stock through an EU-based company—for example, by having the UAE entity sell to the EU company, which then sells to the end customer back in the UAE? My goal is to remain fully compliant and steer clear of any regulatory hurdles.

Looking forward to your recommendations.
 
#2
digitalrazor said:
I also have a question regarding VAT. I know the UAE applies a 5% VAT on transactions between local companies. Would it be legally acceptable to move stock through an EU-based company—for example, by having the UAE entity sell to the EU company, which then sells to the end customer back in the UAE? My goal is to remain fully compliant and steer clear of any regulatory hurdles.
Click to expand...
I think VAT is only applicable if the goods are in the UAE? Are your customers in the UAE?
 
#3
digitalrazor said:
In the past, I had a very frustrating experience with banking in Hong Kong (even before 2020), and I want to avoid running into similar issues. This time, I’m looking for a reliable solution—not necessarily the cheapest—just something that actually works, especially when it comes to opening a bank account successfully.
Click to expand...
Sorry to hear. What happened? You had issues with banks in Hong Kong or Poland? Because to be honest, the reputation of UAE is very, very low in the EU.

digitalrazor said:
Would it be legally acceptable to move stock through an EU-based company—for example, by having the UAE entity sell to the EU company, which then sells to the end customer back in the UAE? My goal is to remain fully compliant and steer clear of any regulatory hurdles.
Click to expand...
What are you selling? Physical or digital goods? In any case, this most likely won't help.

Physical Goods
VAT is normally due where goods are. If you sell from UAE to EU but the goods remain in the UAE, you most likely won't qualify for a VAT exempt supply as the goods remain within the VAT area. If a EU owns goods in the UAE, the company will be subject to UAE VAT rules most likely and will have to register for VAT.

Digital Goods
Most coutries by now have VAT rules that tax digital goods with a very low / no threshold. If an EU company is selling digital goods to UAE B2C, they will owe VAT as any UAE business.
https://www.anrok.com/vat-software-digital-services/united-arab-emirates
 
#4
I encountered issues with Hong Kong banks , all my applications were rejected. As a result, I was left with a Hong Kong company without a bank account, rendering the setup effectively useless.

Regarding transactions between Dubai and the EU, I’m referring strictly to B2B digital goods. Our intention is to sell to a buyer based in Dubai, but due to the 5% VAT, they are reluctant to proceed with a direct purchase.

We’re considering using an EU-based company as an intermediary. The idea would be to sell from our UAE company to the EU entity under a 0% VAT B2B transaction, and then sell from the EU company to the Dubai buyer, again as a B2B deal with 0% VAT.

However, we’re concerned this structure could be interpreted as tax avoidance under UAE regulations. Would this raise legal or compliance issues with the authorities in the UAE?
 
#5
You still have the Hong Kong company? Banking is difficult but generally possible if you show some connection to the market. EMIs may be easier to start with. At least when you have a local visa, there should not be any issues.

B2B where all companies are registered VAT payers? Why would they be reluctant if they get back the VAT right away?

I don't think there will be any big issues in regards to tax avoidance as essentially you are not avoiding anything.
 
#6
No I don’t have HK company. It’s closed since years.

Not exactly.

Here’s the structure of the transaction:
  1. SELLER (UK company)
    → 2. MY UAE company (Dubai)
    → 3. MY EU intermediary company
    → 4. BUYER (UAE company, also in Dubai)
The key point is this: if we skip the EU intermediary (company #3), a 5% VAT would typically apply between company #2 and company #4 (both based in the UAE). By routing the goods through the EU entity, we effectively structure the transaction to avoid the 5% VAT, achieving a 0% VAT setup.

This could potentially raise red flags with UAE authorities, as it might be seen as VAT avoidance—since the stock temporarily leaves the UAE and then re-enters solely to circumvent the local VAT obligation.

Back to the topic. Which free zone company should I chose in Dubai to setup reliable bank account? DMCC? IFZA? Or other? What’s the biggest issue when opening bank account in Dubai these years?
 
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