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How to set up your business in UAE?

setup a business in the uae
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The UAE’s population includes many expatriates making up the majority, it has emerged as one of the topmost destinations for corporates, businessmen and investors in the Middle East region which favor entrepreneurs to setup a business in UAE. The government of the United Arab Emirates extends progressive, forward-thinking policies and numerous incentives to encourage foreign investors to invest in the oil-rich country.

The procedures for setting up a business in UAE have been further simplified by the governing authorities. These relaxed policies and advanced infrastructures support the growth of startups as well as large corporates.

Another reason why the Emirates, particularly the city of Dubai is a fertile ground for businesses is that taxation is at minimal in all but three sectors – oil, banking and tobacco processing. So, after living in UAE for many years, if you are now looking to invest here, then you will not face any problems in terms of setting up your Company even if you are relatively new to the country.

The process of setting up a Business in UAE steps by step:

  1. Type of business:
    This measure will determine the kind of trade license you require in UAE. Depending on the basis of your operations, you may require commercial, professional, tourism or industrial licenses. The Department of Economic Development (DED) in Dubai offers over a range of 2100 activities you can choose from. However, keep in mind while selecting those certain activities (like food trading, jewelry trade, veterinary activities and more) require further approvals from different Government departments.
  2. Legal Structure:
    There are rules regarding the legal structure of your Company according to your type of business and location. For example, if you are planning to setup a legal consultancy firm, then this can be done only as a branch of company or as a stand-alone. It is not permissible for a sole proprietor to take up this activity in the UAE. Moreover, each free zone has its own restrictions regarding company structure.
  3. Business jurisdiction:
    Free Zone:
    If you are a foreign national and want to have full ownership of your company, then opt for a freezone license in UAE. Setting up a company in UAE freezone allows you 100% ownership of your business, with no need to be sponsored or partner with a UAE national. Such companies can only conduct business and trade with companies outside the UAE. However, if you want to operate locally in UAE mainland, then having a local sponsor will be required for professional licenses only. The local agent will not have any involvement or share in your company.
    Foreign nationals can set up a business in UAE mainland. For this, you are required by law to appoint a UAE national to act as a local sponsor in case you want to offer professional services and you need a professional business license. The local agent will only receive minimum fees every year without owning a 51% share of the business for commercial type of license and business as it used to be before. Now an investor can own a UAE mainland company with 100% foreign ownership. Also if the company’s activity is to provide consultancy or Services then Professional license is required where a foreign expat will be 100% owner of the company and a UAE national will become just a Service agent (Sponsor) of the company.

Steps to setup a business in UAE Mainland

  1. Trade Name:
    Once you have decided to set up a business in UAE mainland, then the first crucial step is to select your trade name. The company name should indicate the nature of your business or trade unless it is a branch of another. All the rules regarding trade names are available on the official website of DED.
  2. Initial approval:
    Next, you need to apply for the pre-approval which is a kind of NOC (No Objection Certificate) from the DED. A trading company dealing with commodities, securities, or legal services will require additional approvals. Initial approvals clarify the partner/owner’s details, nature of the business and appointment of manager of the company.
  3. Documents & Agreements:
    Based on the legal form of your business, you need to draft a Memorandum of Association (MOA) / Local Service Agreement (LSA) / Corporate Agent Agreement of your proposed company. In some instances, minimum share capital maybe required.
  4. Work Premises:
    Once all legal documents and forms are ready, you need to select your work premises according to jurisdiction. An attested Ejari contract is required to obtain your actual business license. However, if investor goes with the instant license then no need of the office lease agreement for the first year of the company registration.
  5. Submission of Documents and get the license:
    After the successful completion of the aforementioned steps, you just have to submit all the documents and process the payment. It is required to make payment for the trade license within 30 days of receiving a payment voucher.

A variety of documents and legal actions are required in compliance with the local government, while setting up a business in UAE. If you require further support to setup a business in UAE, then this where Avyanco Business Consultancy comes into the picture. We provide fully customized business set up in Dubai and the UAE, therefore we provide also company registration solutions exclusive to each business or office setup. Our team of experts consists of business set up consultants, seasoned lawyers, PRO executives, offshore personnel and operations staff to ease your business setup needs. Our foundation is based on relationships and sustained through continuous innovation and productivity and trust. Rest assured, Team Avyanco will handle all formalities and legalities while you sit back and wait for the business setup in UAE to be done.Contact us: +971 4 240 5000 mobile: +971 50 398 9000. info@avyanco.com


About the Author


Jashvantkumar Prajapati

(Founder and CEO of Avyanco Group of Companies; Business Setup Consultancy, Avyanco Tax and Accounting LLC, and Avyanco Auditing LLC.)

He keeps a varied portfolio with core expertise in investment management, corporate structuring, commercial law, business consultancy, lead management, business planning and market research. Aspire to help potential entrepreneurs and investors to come ahead and form their companies in highly emerging economies like UAE.