As soon as your company is established, you may immediately want to obtain a long term permit to stay and do business in the UAE. But apart from that, to grow your business, you may also want to hire a manager or a certain number of employees and provide them with long term permits too. As we already mentioned, these long term permits would be UAE resident visas, that are usually issued to business owners for three (3) years and for two (2) or also three (3) years to employees. The number of resident visas you, as a business owner can apply for, is limited. This is where it is a high time to introduce such term as a visa quota. Remember, as long as you have a company, you are subject to a visa quota. In other words, there is always a certain number of resident visas you can apply for. To be able to structure your business properly and plan recruitment process, you must know exactly, how this visa quota is calculated and how you could increase it, should your company grow very fast, requiring significant additions to your team. In this chapter we will have a closer look at a visa quota subject and we will discuss all important facts to provide a complete and trouble-free guide with respect to visa quotas for your company in the UAE.
The visa quota or the number of allowed resident visas firstly depends on the size of your office space. Generally, visa quota is calculated based on the number of square meters assigned to each person sponsored by the company. The basic requirement for companies which choose to use physical office space is approximately 9 square meters per person. However, you may rent a warehouse instead of a physical office. What’s then, you may ask? In this case scenario, a different visa quota calculation principle shall apply. If your business carries out its functions renting a warehouse, a larger space per person would be required, which might be well around 15 square meters per person. Therefore, if you want to have 10 people working in your office, then the space should be of at least 90 square meters. If, however, you need to recruit 10 people to work in a warehouse, then the space should comprise of approximately 150 square meters.
Now that you know, what the visa quota is and that you require a working space of a certain size to be able to employ more people, it is a right time to look at different types of companies in the UAE and learn, how their visa quotas are calculated. As we discussed it earlier, there are local companies, companies in free zones and offshore companies. Since offshore companies do not have any physical presence in the UAE, they also do not allow you to apply for resident visas. So let’s exclude them and we will focus our discussion on free zone and mainland companies only, as the rules with regards to visa quota there vary.
Shall we start with a free zone then? Let’s try. Do you remember the second chapter of the course? We discussed there the first feature of free zones, which is they allow to avail from flexi-facility or a flexi-desk, which is even not a full-time working space, but rather a chair and a desk in a business center for use up to 5 to 6 hours per week. Such option does not exist in the mainland. So, if you choose the flexi-desk office option for your business, it already comes with a specific visa quota. This specific visa quota varies from one free zone to another. To give an idea, the Dubai Multi Commodities Centre (DMCC) allows up to a maximum of three visas for the flexi-desk option. Umm Al Quwain Free Trade Zone (UAQ FTZ), can provide from zero up to two or three visas, depending on the package you choose. And Fujairah Creative City or Sharjah Media City can even support you with a 6 visa quota. Hence, the number of resident visas you would be able to apply for in a free zone having rented a flexi-desk would depend on your choice of a particular free zone.
Now let’s pretend that you rented a flexi-desk in Fujairah Creative City, applied for your resident visa and hired two assistants, for whom the remaining visa quota was used. And then suddenly you find out you need to expand and you require additional visas. In this case, you have two options, how to solve the matter. One would be to apply for a higher number of visas, as Fujairah Creative City offers a company package with 6 resident visas and with no need for physical office space. The other one would be to move to a physical office space, which would be large enough to accommodate all employees (approximately 54 sq.m.). As such, planning your company formation process, pay attention to the visa quota assigned to each package. Free zones offer, for example, packages with no visa quota at a minimum cost, then with one visa, then 2, then 3 and so up to 6 with flexi-desk or flexi-office, but the number of visas for each package and the maximum with flexi-desk rent is always determined by each free zone authority individually. And this is where another important thing you need to bear in mind comes: although all free zone authorities allow for the upgrade of registration packages, some of them do not accept downgrades. Therefore, remember to ask this, when placing your query with a free zone authority.
Now let’s go back to a local company. As we mentioned before, in this case you can not avail of flexi-facilities and you need to rent a physical office space no matter what. As such, visa quota is always calculated based on the size of the rented commercial property. But what if the half of your office are sales people, which is often the case in real estate industry or event management. And they almost never stay in the office. And you extremely need additional administrative staff, but extra office space is not required, ‘cause you have it. What to do then? In this case you will need to apply for visa quota increase. To complete the process successfully you will need to provide a sufficient reason for your request, as we just did it in the example with sales people. It is also important to know and remember that such applications are reviewed on a case by case basis and they would be subject to approval.
We have just reviewed with you the subject of visa quotas and how they are calculated. Another important thing most people are not aware of, is visa allocation mechanism. This is rather applicable to free zones in those cases, where you rent a flexi-desk or flexi—office. What do we mean?
If a company opted for a company registration package with flexi-desk rent and a quota of 2 visas, in some free zones it is mandatory for those two visas to belong to either shareholders or to a shareholder and a manager. To further clarify, let us take an example. Say you are the owner of a company, where you are also a director and a manager. So all three positions are taken by you. You know that you have two visa quota and you used only one, so you decided to hire an assistant. But at the moment you tried to apply, you learnt that you would be not able to submit your request, unless you either appoint the employee as a manager or as the second shareholder, or you rent a physical office space of the appropriate size. Another example would be, when you work at a company in the UAE and you have a resident visa from the company. Then you register your company and you do not use any visa quota at all. The time comes when you need an assistant and you learn that you cannot hire him or her, since 2 visas can be distributed between the shareholder and the manager only. Since you are the shareholder and the manager in a company and you have your own resident visa, you would not be able to use the two quota at all, unless you rent an office space or appoint future assistant at least as a manager. So what do you take from this example? Two things: 1) ask how visa quota is allocated in the free zone you have a particular interest in. Many of free zones are very flexible in this regard and you can either use quota for yourself and employees or for employees only. Still there are cases, where there is no flexibility at all, you shall better know it earlier than later.
If you look at local companies now, the visa quota allocation process works differently for them. As soon as your mainland company is formed, you need to apply for your visa quota with the Ministry of Labor. You literally submit a list containing detailed information about the future number of employees, their positions and gender. Request for visa quota allocation is associated with a certain fee. What you should know here, is that if in the future you want to add new positions, or instead of male workers you want to recruit women, you will need to cancel first the previous quota and apply for the new one, incurring relevant fees again. So think carefully when applying and plan everything accordingly, as this will help you to minimize your business expenses in the future.
We tried our best in providing you with the wide-ranging aspects relating to visa quota and visa allocation. Hope you enjoyed the topic and we invite you to further explore the resident visa topic in the coming chapter.
If you want to know more about Dubai freezone company formation, feel free to get in touch with our professional consultant team and we would be delighted to assist you and help you to compare Dubai freezone company setup costs and help you to find that free zone, which would suit your business needs the most.
Disclaimer: Business Boutique UAE-Consultants.com is not affiliated with any particular government or legal entity. Business Boutique does not give professional legal advice nor any other professional advice subject to a public office in the government. This article merely sets out a simple and basic idea as to the reasons of Dubai freezone company setup and Dubai free zone company formation cost. Business Boutique in no way holds nor imposes any official governmental or legal authority and the article herein is only to be taken as a guide. All further governmental or legal issues should be addressed to the corresponding authorities.
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