Starting a business in Dubai, UAE, presents many unique advantages. These include a favourable tax structure, state-of-the-art infrastructure, and a diverse workforce. No one can deny the city’s appeal to entrepreneurs and investors globally.
Located strategically between Europe, Asia, and Africa, Dubai offers unparalleled access to global markets. The city’s business-friendly policies make it an ideal place for both new ventures and expanding companies. The UAE’s government has created an environment that supports and encourages business growth.
In essence, Dubai is the perfect region for business success because of its strategic location, supportive policies, and modern amenities. In this blog, we will discuss how you can open a company in Dubai with proper steps and some bonus tips.
Types of Business Setups in UAE
Before understanding the process of setting up a business in Dubai, it is important to learn about the different types of business setup options in the UAE. Each business structure has its own set of pros and cons.
A. Mainland Company
Starting a company in Dubai, UAE, on the Mainland offers you the most flexibility in terms of business operations. Key features include:
- Ability to trade freely across the UAE
- Eligibility to bid for government contracts
- Some restrictions on foreign ownership in certain sectors (although recent changes have relaxed many of these restrictions)
B. Free Zone Company
For those looking to start a company in the Free Zone, this option offers several attractive benefits:
- 100% foreign ownership
- Tax exemptions and customs duty benefits
- Operations are limited to within the Free Zone or international borders except for the Mainland
C. Offshore Company
An offshore company setup is ideal for:
- International trade and asset protection
- Operations restricted to outside the UAE
Steps to Start a Business in Dubai, UAE
Setting up a business in Dubai offers many advantages to entrepreneurs, such as 0% personal income tax, low corporate tax rate, 100% foreign ownership (except for a few activities), no currency restrictions, and more.
However, the process of starting a business in Dubai involves several steps. Find below the 7 Key Steps to start a company in Dubai:
- Find Your Business Activity
- Opt Your Business Location
- Decide Your Company Name
- Apply For Initial Company Approval
- Complete the Company Incorporation Paperwork and Apply for License
- Open a Corporate Bank Account
- Obtain Trade License after Approval
Although the principal steps are listed above, it is necessary to break each step down in detail to understand the in-depth process of establishing a company in Dubai.
Let’s break them down them one by one:
1. Choose Your Business Activity
As the first step, you must research the market to understand feasibility and profitability. The activity you choose must also be compatible with UAE regulations.
This step is crucial as it will determine many aspects of your business setup, including the type of trade licence for your business.
2. Select a Jurisdiction
Decide whether you want to start a business in the UAE mainland, in a free zone, or as an offshore entity. Every jurisdiction has its own pros and cons. Therefore, carefully consider your business needs and long-term goals when making this decision.
3. Determine Your Company Structure
The next step is to choose a business structure for your company.
Dubai offers multiple options, including:
- Limited Liability Company (LLC)
- Civil Company
- Limited Liability Partnership
- Branch of a Foreign Company
- Branch of a Free Zone company
- Branch of a local company
- Sole Proprietorship
- Branch of a GCC company
- Free zone company branch
- A holding company
Choose a business structure based on your business requirements and preferred ownership structure.
4. Prepare Required Documents
To start a business in Dubai, UAE, you’ll need to gather several documents:
- Passport copies and photographs of shareholders and managers
- Application forms
- Memorandum of Association (MoA)
- Documents of Local Service Agent (LSA)
- Business plan
- Other specific documents based on your business type and jurisdiction
5. Get Approvals for Company Name and Activity
Getting approval for your business name and business activity is essential to register your business in the UAE. Submit your chosen company name and business activity to the Department of Economic Development (DED) in Mainland and relevant authority if you are in a Free Zone. Ensure that the business name follows all the necessary guidelines to avoid getting rejected.
6. Apply for a Trade License
You can choose from various types of trade licences in the UAE:
- Commercial
- Professional
- Industrial
- Tourism
The process for obtaining a trade licence varies depending on whether you’re setting up your business on the mainland or in a free zone.
7. Register Your Company in Dubai
This step requires you to submit all required documents to the relevant authorities. The business registration process involves getting your applications approved and receiving the trade licence. This is the most crucial step to officially register your company in the UAE.
In some cases, the registration authority may need you to get additional approvals based on your business activity. You may need these approvals from the government as well as non-government agencies, such as a specific bank, Municipality, or embassy.
8. Open a Corporate Bank Account
After receiving your trade licence, you can now open a corporate bank account. This is essential for starting a business in Dubai, UAE, as it separates your personal and business finances.
To open a corporate account:
- Choose a bank.
- Prepare documents, such as your trade licence, company registration documents, passport copies of shareholders, and board resolution.
- Make the initial deposit (if required.
- Finish the KYC process.
Once your application gets approved, you will receive your account details and online banking access. Opening a business bank account in Dubai can take anywhere from a few days to a few weeks, depending on the bank and your business type.
9. Secure Office Space
When setting up a business in Dubai, choosing the right office space is crucial. You have two main options:
- Rented Office: A dedicated space for your business if you need a specific layout or want to build your own company culture
- Shared Workspace: Also known as co-working spaces, a more flexible and often more cost-effective option for startups or small businesses
Whichever option you choose, you’ll need to obtain:
- A Tenancy Contract: This is a legal agreement between you and the property owner.
- Ejari: This is mandatory registration for your tenancy contract with the Real Estate Regulatory Agency (RERA). “Ejari” means “my rent” in Arabic. This registration protects both tenants and landlords.
10. Apply for Visas
When you are starting a company in the UAE as a foreigner, arranging visas is a critical step. You’ll need to secure visas for:
- Yourself as the business owner
- Your family members (spouse, children, parents)
- Your employees
The number of visas you can apply for in the UAE depends on two factors:
- The size of your office space
- The type of business licence you hold
You must also note that visa regulations can be updated by the immigration authority. Hence, it is recommended that you stay updated with the latest requirements. You can also consult with a business setup expert in Dubai, UAE.
Key Considerations and Tips
Here are some additional tips to ensure that you stay on top of your game throughout the registration process.
Understanding Local Business Etiquette
When starting a business in the UAE, it’s important to be aware of local customs and business practices:
- Dress code and cultural sensitivity are important
- Face-to-face networking is highly valued in Dubai’s business culture
Legal and Regulatory Compliance
It is mandatory to comply with all the UAE business laws and regulations. These laws may change over time, so stay updated on their status. You can also consider hiring local experts or business consultants to ensure compliance and avoid penalties.
Costs Involved
The costs of setting up a business in Dubai can range from AED 5,750 to AED 19,999, varying based on:
- Type of setup (mainland, free zone, or offshore)
- Business activity
- Company size
You must also include some ongoing costs here, such as office rent and visa fees.
Timeline
Typically, the process of starting a business in Dubai, UAE, takes about 4-5 working days. However, in some instances, it can take more than a week based on your business type and the approvals required.
Why Start a Business in Dubai?
When you start a business in Dubai, UAE, you get a lot of unique benefits and opportunities that are not readily available in other jurisdictions. Some of those advantages include:
Economic Advantages
The UAE has always been a tax haven with 0% personal income tax and 9% corporate tax. You can get an exemption from corporate tax if you are involved in Qualifying Activities in a Free Zone. Dubai’s economy is both diverse and strong. It provides stability and numerous opportunities for businesses across various industries.
Business-Friendly Policies
The World Bank has ranked the UAE 16th globally for ease of doing business. The government also offers various incentives to encourage foreign investment, including grants, subsidies, and support programs for specific industries. Most importantly, Free Zones offer 100% foreign ownership, giving international businesses complete control over operations. The mainland also now allows you to have full control over your business in the UAE except for a few activities.
Infrastructure and Quality of Life
Dubai is known for its world-class infrastructure and connectivity, with modern transport systems, busy airports, advanced telecom networks, and the latest port facilities. The UAE offers a high quality of life, excellent healthcare, international schools, and a wide range of entertainment options. The city’s multicultural vibe, with over 200 nationalities, makes it welcoming for expats.
Start a Business in Dubai, UAE, with Avyanco
Starting a business in Dubai, UAE, offers almost unlimited opportunities for entrepreneurs and investors. Its strategic location, business-friendly policies, and world-class infrastructure offer an ideal location for business growth.
The process of setting up a business is straightforward. However, it may look complex to budding entrepreneurs and new investors. As each business is unique with its unique requirements, getting the necessary approvals and licences is very important. Therefore, it is advisable to seek professional assistance for a smooth and hassle-free procedure.
Avyanco, a top business setup consultancy in Dubai, can assist you with setting up your business in the UAE. Our consultants will guide you through the entire process to fulfil all legal requirements while ensuring your business compliance with local regulations.
Connect with us today at: Phone: +971 4240 5000 or WhatsApp: +971 50 398 9000 Email: info@avyanco.com
