Dubai has evolved as one of the main cities for corporates, business minded professionals, and investors in the Middle East, with expatriates making up most of the population. The government of Dubai encourages international entrepreneurs to invest in this fast-growing city by implementing innovative facilities and providing various incentives. The steps for company registration in Dubai have been simplified even more by the government. Startups and established corporations alike benefit from the flexible policies and modern infrastructure. Another reason why the United Arab Emirates, particularly Dubai, is a good place to open a business is because taxes are low in all except three sectors: oil, banking, and tobacco industries. So, if you have lived in Dubai for a long time, or even if you are relatively new to the city. It is easy to invest, you will have no difficulties setting up your company in Dubai.
Type of company:
This factor will decide the type of Dubai trade license you’ll need. You may need a commercial, professional, or industrial license, depending on the nature of your business. Dubai’s Department of Economic Development (DED) provides over 2100 different activities to select from. Keep in mind, however, that certain business activities (such as food selling, jewelry trading, veterinary activities, and others) require additional permits from various government authorities.
According to your type of business and location, there are rules and legal forms related to each company and business activity. For example, if you want to form a legal consulting firm, you can do it either as a subsidiary or as a stand-alone entity. In Dubai, it is not allowed for a sole proprietorship business to have such flexibility. Furthermore, each free zone has its own set of regulations on starting business.
Legal jurisdictions on businesses:
- Free Zone: If you are a foreign national who wants full ownership of your business, a free zone license in Dubai is the way to go. You can own 100% of your business in a free zone, and you don’t need to be sponsored or associated with a UAE national. However only businesses based outside the UAE are permitted to do business and trade with the freezone companies. However, if you want to operate locally, you need to apply for a dual license or look for a local distributor, especially in the mainland who will help you to deal with local companies.
- Mainland: Foreign nationals are permitted to establish businesses in the mainland. For commercial licenses and businesses, the old law states that you need a UAE national as a local sponsor, but the recent law amendment allows a foreign national to open a company with 100% foreign ownership. If the business activities involve consulting, or services then a professional license is required, and a foreign investor has to find a UAE national as a local agent, but the UAE sponsor will not have any share in the business.
Steps for establishing a business in the Dubai Mainland
- Choose a Trade Name: Once you’ve decided to start a business in the mainland, the first step is to choose a trade name. Unless you’re a branch of another company, your company name should reflect the nature of your industry or trade. On the DED’s official website, you can find all of the rules related to trade names.
- Preliminary approval: The next step is to apply for DED pre-approval, which is a type of NOC (No Objection Certificate). Additional approvals are required for a trading company that deals in commodities, securities, or legal services. Initial approvals establish the details of the partner/owner, the nature of the company, and the selection of the company’s manager.
- Documents & Agreements: A Memorandum of Association (MOA) / Local Service Agreement (LSA) / Corporate Agent Agreement of your new company is required, depending on the legal structure of your business. A minimum share capital requirement may be required in various cases.
- Workplace: After you’ve completed all of your legal paperwork and forms, you’ll need to decide where you’ll work based on your jurisdiction. To get your official business license, you’ll need an attested Ejari contract. However, if an investor opts for an instant license, no office leasing agreement is required for the first year of business registration.
- Submit all papers and pay for the license: Once you’ve completed the previous stages, all you have to do now is submit all of your paperwork and pay for your license. Payment for the trading license must be made within 30 days after the receipt of a payment voucher
While establishing a business in Dubai, a range of paperwork and legal acts are required in order to comply with the local government. If you want further assistance in establishing a business in Dubai, Avyanco Business Consultancy can help you. We offer fully tailored business setup and registration services that are unique to each company or office. Our team of company formation specialists includes company setup advisors, seasoned lawyers, PRO executives, offshore experts, and operational staff to make your company setup in Dubai as simple as possible. Our foundation is built on trust and reinforced through continual innovation, productivity, and invention. Rest assured that Team Avyanco will take care of all processes and legalities while you relax and await the completion of the business setup.