A Step-By-Step Guide To Setting Up A Business In Dubai
Are you thinking of starting your business in Dubai? Congratulations, you have chosen one of the best business ecosystems in the world for your new endeavor. Dubai is more than mere a city of architectural marvels– it is one of the most fertile grounds for new businesses. This is just one of the many things that make the commercial capital of UAE the best place to live and work. And as for starting up a business here, there’s no question that there’s a lot of potential to be tapped here in Dubai. So, if you are eager to set up your own enterprise, this article will help explain what you need to know and do to get your company registered and off the ground.
We have equipped this article with necessary links to guide you about the process and documentation required. Take a good look at the below before you kick off the actual process- the good news, though, is that on average, if you are ready with all required documents, it takes less than 10 days to start your company in Dubai. So, let’s start!
What you need to know beforehand
As you commence with the actual process of registering your business, here is what you should be aware of beforehand to make things less complicated.
Economic zone and ownership: As soon as you are prepared to set up your company, you must find out what business zone or ownership type would best suit you. Dubai Economic Department has a list of over 2100 (business) activities you can choose from. Follow this link for details on business activities: https://bit.ly/2pFAZgv
For deciding upon the zone, you must know that Dubai offers different types of economic zones for operating a business: Free Zone, Off Shore and Mainland, all of which offer different advantages depending on your business type and activities. Here are the two main zones that entrepreneurs use most commonly in the Emirate:
- Free Zone: Offering the luxury of 100 percent foreign national ownership, Free Zones are Dubai’s way of attracting and encouraging foreign investment by making it easier to set up business and easing down the immigration and labor processes. There are around 45 Free Zones in the UAE, of which around 25 are in Dubai, each of which caters to specific categories of business. You can find out more about the concept of Free Zone and register for it here: https://bit.ly/2GqOydU.
- Mainland: If you want to operate in Dubai mainland, you have to register with Department of Economic Development (DED), which will then issue you with a Dubai business license.
Types of licenses: Based upon the kind of business activity, you will be required to first identify the type of license you need. Again, DED is responsible for the issuance of license. Mainly there are three types of licenses you can look at: Commercial (for Limited Liabilities Company or LLCs) License, Industrial License, and Professional License.
Need for local sponsors: For starting any kind of business in UAE under a DED license, you need a local sponsor, or an agent, or a partner. However, this is not mandatory, but having local support can help you in many ways. So, do a little research and find out how your business will benefit with this addition, in case it is not a compulsion for your kind of business.
Now that you know about the background and requirements to start with the official procedure of registering your company, here’s how you go about to apply and obtain a business license in Dubai.
Getting your business registered
1. Select the category of business: The first step you have to be sure about is the type or category of business you have. In case you find it difficult to define your business and cannot find your type in the official lists of the business activities as per DED, you can enquire directly at : Department of Economic Development (DED).
2. Find the right legal form: Contrary to what the name suggests, this is NOT a legal document or a form to be filled. The location and type of your business decide what the make-up of your firm will be and this depends on the Free Zone or the area of operation you select. You will have to check which business activities match which legal forms. Use the same link as above for details.
3. Choose a trade name: This is an important part of the entire setting-up-business cycle in Dubai. You are expected to select a trade name that matches the kind of services your company plans to offer. You then have to pay trade name reservation fees within 72 hours of receiving this voucher. All the rules and regulations related to trade name can be found here: https://bit.ly/2pD7We9.
4. Minimum investment: Different businesses have different requirements; however, it is not compulsory in majority of businesses to have an initial investment.
5. Begin with initial approvals: At this point, you must obtain a kind of “no-objection” from DED and use a number of channels for the same. You can visit one of the Service Centers or explore Happiness Lounge and you can also use the following link to use the online services for the same: https://bit.ly/2IRSrXS.
6. Prepare agreements and select premises: Based on the legal form of your business, you might need to create and sign a Memorandum of Association (MOA) or a Local Service Agent (LSA) / Corporate Agent agreement with a local support (UAE national). Also, at this stage you will have to finalize a physical address for your company.
7. Submit documents and get a license: Before heading to the last step of the journey of registration of your business, make sure your type of business does not require any additional approvals. Once everything is done, you just have to submit all the documents and process all the payments. You have to pay for your trade license within 30 days of receiving a payment voucher. In case of non payment for six months, the transaction is automatically cancelled.