ByEntrepreneurs from all over the world are located in Dubai. An increasing number of foreign businesspeople and investors visit the emirate every year to benefit from its ideal business environment.
Foreign investors and business owners are warmly welcomed in Dubai. Numerous business setup agents and company formations in Dubai who assist foreign business owners with license, visa, and business incorporation procedures can be found in the Emirates.
The first thing you should do as a foreign entrepreneur setting up a shop in the UAE is become familiar with the business customs and procedures of the region. It will be easier to navigate the process if you are aware of these procedures in advance.
Types of Licences in Dubai
● Commercial Licence
Company formation in Dubai that involves trading or the purchasing and selling of goods is made possible with a Commercial License. Businesses engaged in import and export, sales, logistics, travel and tourism, general retail, and real estate are covered by this license.
- Industrial Licence
Businesses involved in manufacturing operations that convert raw materials and resources into finished goods, either manually or mechanically, are granted an industrial license. Paper, metal, and textile manufacturing are among the industries covered by this license.
- Professional Licence
Companies that provide services or are artists or craftsmen are granted a professional license. Applications for this kind of license are frequently made by companies that provide repair, beauty, and medical services.
Documents required to start a business in Dubai
Businesses created in free zones are subject to the regulations of the specific free zones. As a result, the documents needed will vary depending on the free zone where the application is submitted. Documents required include:
- Filled-out application form;
- Business plan
- Copy of the current trade license/registration certificate (if you are an existing company, applicable for a local company only)
- Colored copies of the passports of the company’s manager or director and any shareholders that have been appointed
- Signature of the appointed Manager/Director for the new company as well as the shareholder(s) of the company
- Two years worth of audited financial statements for the corporate entity or, in the case of an individual shareholder, a certificate of recommendation from their personal bank or an NOC from the current sponsor
How To Start A Company In Dubai
- Choose a business activity
When launching a business, it’s important to determine the nature of the company first. There are over 2,100 business activities available to choose from, all falling into different groups within the industrial, commercial, professional, and tourism space. This makes it easy to start a small business in Dubai or a cryptocurrency business in the UAE. The DED website has the complete list.
- Choose a location
One must choose whether to launch in a free zone or on the mainland. The following advantages come with choosing to set up in a free zone:
- complete ownership of the business
- Complete repatriation of earnings and capital
- No limits on currency, and complete exemption from import and export taxes
- 0% corporate and personal tax
However, you will have to work with a mainland company that will charge you a fee if you want to trade directly with the UAE local market.
However, if you decide to establish a business on the mainland, you have the option to engage in direct trade with both domestic and foreign markets. However, you will have to collaborate with a local partner who will own 51% of your company’s shares unless your business is in the professional services sector.
- Select a name for the business
Make sure a company name is acceptable legally before committing to it, as the UAE has some very strict naming conventions.
It is prohibited to use names that contain offensive language or that make reference to Allah, Him, or any other religious, sectarian, or political organization, including the FBI or Mafia. If you decide to name your company after someone, you must use that person’s full name (no initials or acronyms) and they must be an owner or partner of the business.
● Apply for Initial Approval
Getting the Dubai DED’s initial approval is necessary to ensure that starting a business is approved. You can apply online, in person, or via a third party (legal firm). You might have to submit the documents listed above.
● Draft the LSA/MoA
Working with an LSA (local service agent) is required if you intend to register your business on the mainland. They wouldn’t get involved with any of your business decisions. They only help with license applications and other necessary approvals. Even if your company is located on the mainland, you are not required to give any UAE national a 51 percent shareholding in it.
The Memorandum of Association (MoA), which is based on the model and structure of your company, needs to be signed and established.
- Apply for a business license
Companies on the mainland need to submit an application for a license to the Department of Economic Development, or DED. Businesses in free zones may apply to their own authorities. In addition, once you have your business license, you might need to get additional external approvals from other regulatory agencies.
● Open a Corporate Bank Account
You can now open a corporate bank account after getting approved and receiving all required paperwork back. There are numerous local and foreign banks available in the United Arab Emirates such as HSBC, Citibank, Barclays. Abu Dhabi Commercial Bank, Commercial Bank of Dubai, etc.
- Set Up Your Office Location
All businesses in Dubai are required to have a physical address. Finding a new office space will be easier if you locate it in a free zone.
● Apply For Final Approval
To submit for final approval, you must have all of your paperwork together, including location addresses and legal information. You may need to apply to other authorities for licensing approval. You must submit:
- All of the previously submitted documents as well as the initial approval receipt
- The Real Estate Regulatory Agency‘s (RERA) lease agreement
- A properly attested service agent contract involving a local service agent in the UAE (for civil establishments and businesses owned 100% by non-GCC nationals)
- Approval from other relevant governmental bodies
Once the license has been paid for through one of the several authorized payment methods, your company is ready to operate.
