Business Setup Services in Dubai
Business Setup in the UAE
Investors can establish their own online businesses in the State within a very short time that does not exceed 15 minutes. However, establishing a conventional business in various emirates of the UAE by conventional means requires a series of procedures and approvals from the Department of Economic Development and the other concerned authorities for official registration of the entity.
How to Setup Business in UAE?
The UAE is well-known for its supportive business environment. One of the most attractive aspects for entrepreneurs is the opportunity to establish a tax-free zone company. These zones offer various incentives, including 100% foreign ownership, full repatriation of profits, and zero import and export duties. This guide will assist you with your business setup in UAE zones. We will look at the steps you need to follow to set up business in the UAE.
6 Steps to Setup Business in UAE
Step 1: Decide on a Business Activity
Before launching your business, decide on your niche. This crucial decision affects your Free Zone choice and the license type needed.
- Freelancer vs. Company: Working as a freelancer might be cost-effective, but Free Zone options are limited. A freelance company offers more flexibility.
- License Type: You need a license for your business activities. Different Free Zones offer various licenses. Some allow multiple activities under one license, while others have restrictions
Step 2: Choose a Free Zone
Select a Free Zone that aligns with your business needs based on:
- Sector-Specific Zones: Dubai has sector-specific Free Zones like Dubai Science Park (DSP), Dubai Outsource City (DOC), and Dubai Maritime City Authority (DMCA).
- Facilities: Consider the necessary facilities, such as office space and warehousing.
- Location: Proximity to highways, ports, and airports (like Dubai Airport Zone) is crucial for logistics and travel.
Before proceeding, it is essential to research thoroughly and seek expert advice. Understanding the difference between mainland and free zone companies is important to make a well-informed choice.
Step 3: Pick a Company Name and Register It
Choose a suitable name for your business that adheres to UAE’s naming regulations.
- Naming Conventions: Ensure the company name is unique and complies with UAE registration regulations. Avoid sensitive terms and confirm availability.
- Personal Names: If using a personal name, use the full name of an individual who must be a partner and shareholder in the company.
Step 4: Apply for a License
Submit your license application to formalize your business setup. Required documents may vary by Free Zone but generally include:
- Coloured copy of shareholder(s) passport(s)
- Application form
- Business plan
- Board resolution
- Memorandum and articles of association
Submit your application online or at the Free Zone office.
Step 5: Obtain a Visa
You need visas for your employees and dependents (family and domestic workers).
- Procedure: The process includes obtaining an entry permit, taking a medical fitness test, registering as an Emirates ID, and stamping a visa.
- Expert Advice: Seek specialist guidance to ensure compliance with UAE immigration policies.
Step 6: Open a Corporate Bank Account
A corporate bank account is necessary for financial transactions and managing business finances.
- Documentation: Gather key documents, including your business license, certificate of incorporation, share certificates, memorandum and articles of association, and all partners’ passports.
- Bank Selection: Choose a bank based on fees, service offerings, and minimum balance requirements. Consult with a company formation specialist for recommendations and eligibility criteria.
Start your business
The first step is to decide where to establish your business, and what form it will take. You can set up a company either in “mainland” Dubai, or in one of its 20+ free zones – you’ll find information on both options, and the differences between them, below.
Business Setup in Dubai: Mainland vs. Freezone
Business owners have the option of setting up a business in Dubai in either the mainland or a free zone.
To start a business in the mainland areas of Dubai, before June 2021, foreign nationals needed to have a UAE national to act as sponsor, owning a 51% share of the business. This rule has since changed after the introduction of the 100% foreign ownership law. Now, foreign nationals can consider a new business setup in Dubai without having a UAE national act as a sponsor. You can read our guide to find out more about foreigner’s business ownership rule changes.
There are more than 20 free zones in Dubai where you can set up operations. Free zones are generally tailored for one particular sector and have their own rules and regulations.
Free zone companies can only conduct business and trade with companies outside the UAE and other free zones. Companies operating in free zones are exempt from the 5% VAT and 9% Corporate Tax.
Benefits of a company setup in Dubai’s Mainland
- You have the option of conducting business anywhere in the UAE
- You can have different types of business visas available to you
- You have a greater choice of commercial activities to license
Cost of setting up business in Dubai
As you can expect, setting up a business requires a significant upfront investment that will go towards office space, license fees, employee visas and so on. This cost will also differ depending on the actual type of business you intend to start (commercial, industrial, service) and the type of legal formation you will be creating (establishment, company, branch).
How much capital you need for a business in Dubai also varies depending on the form of business. There is no legal requirement for minimum capital for other types of operation, but the initial capital needs to be mentioned in the Memorandum of Association and also be an amount deemed ‘sufficient’ to meet the purpose of the business.
Business start up or investing capital in a new project is very challenging, especially if this is the first step in the field of business. With this in mind, our company AHG provides company formation and investment services to potential investors, helping them to succeed in the difficult task of business start up.