How To Start A Business In Dubai: Step by Step Guide to Company Formation

There are numerous reasons why to choose to set up a business or expand your business in Dubai. Dubai by far still remains number one business location in the Middle East.

  • 100% Foreign Ownership
  • Easy Business Setup
  • World-Class Infrastructure
  • Unlimited Potential
Guide to Dubai Business Setup, UAE - Smart Zones UAE

Commencing a business in Dubai or globally is a crucial decision involving planning, research, budgeting, and decision-making. Guidance on choosing the right trade license, especially for new entrepreneurs, is essential.Explore key steps to initiate a business in Dubai, UAE. The UAE, a favored destination for investors, boasts an investor-friendly environment, low tax policies, and business-friendly practices, solidifying its position as a Middle East business hub. The government's supportive rules and regulations further encourage and favor business owners.

Why Business Setup in Dubai, UAE ?

Dubai and the UAE offer supportive business environments, with over 20,000 new businesses launched last year. Remarkably, a significant portion was started by overseas entrepreneurs, as 80% to 90% of the UAE workforce comprises foreign nationals.

The future is promising, with the IMF projecting the UAE to lead Gulf economic growth at 2.5%, surpassing Saudi Arabia's forecasted 0.4%. If starting a business in Dubai intrigues you, rest assured – the process doesn't have to be complicated.

Benefits of Establishing a Business in Dubai, UAE - Smart Zones UAE

Benefits of Establishing a Business in Dubai, UAE

Benefits of Dubai Business Setup in Offshore

  • Flexibility to have a non-UAE, UAE, or corporate resident, as its director or shareholder, also there is no physical office needed in the UAE.
  • Flexibility to maintain UAE or worldwide deposits and bank accounts
  • Offshore companies have strong asset protection jurisdictions, that offer a strong and reliable platform for investors.
  • Double Taxation Avoidance Agreement (DTAA), it states that tax payers can avoid paying tax in two countries- the source country and the residence country.
  • Lawsuit protection in an Offshore company formation save your possessions in case of legal judgement.

Benefits of Dubai Business Setup in Mainland,

  • Being registered as a Dubai mainland company means you have no restrictions regarding who you can trade with or where you can trade in Dubai.
  • Dubai mainland registration gives your business the freedom to trade internationally.
  • Freedom to grow your company and team which means you can apply for unlimited visas and expand your business branches to other parts of Dubai.
  • Ability to diversify your offerings and having a Dubai mainland license means that the administrative process is smoother, faster, and less restrictive
  • Mainland registration in Dubai has another potentially attractive feature - it gives you the scope to tender bids for lucrative government contracts.

Benefits of Business Setup in Dubai Free Zones

  • 100% Foreign National ownership of the firm with no requirement of local sponsor.
  • Exemption from personal income tax.
  • Low start up and operational cost.
  • Faster licensing and business set-up can be done when applying for a Free zones license.

Registration Process for a Company Formation in Dubai, UAE

Establishing a Business in Dubai involves several steps:

Embark on the journey of opening a business in Dubai by partnering with Smart Zones® UAE. Our adept company formation specialists will guide you through the business license application and setup process, liaising with relevant government and municipal authorities on your behalf.

When deciding on a business activity for your entrepreneurial venture, consider the practicality of the chosen activity in the context of the UAE market. Before establishing a company in Dubai, conduct thorough research on the feasibility and profitability of the activity. Then, determine the appropriate time to initiate your business in Dubai, UAE.

The UAE market is segmented into different economic zones – Mainland, Free Zone, and Offshore, also known as jurisdictions. Each jurisdiction has its own set of laws and regulations for business setup, catering to different business needs. The selection of a jurisdiction for your business depends on your business requirements and chosen business activity.

Selecting the legal form for your company is a crucial decision when starting a business in the UAE. It establishes the framework for handling profits and losses and organizing resources and assets. Determine the legal form or structure for your company during the initial planning stages, as it provides a blueprint for your company. Business licenses cannot be applied for until the company's legal form is decided. Here are some legal forms or company structures under which you can register your business in the UAE:

  • Limited liability company (LLC)
  • Sole establishment
  • Civil company
  • Local company branch
  • GCC company branch
  • Foreign company branch
  • Free zone company branch
  • Holding company

The Department of Economic Development (DED) must approve the trade name for your company before proceeding with the company setup process in the UAE. Both your company name and selected business activity undergo approval during this stage. After receiving approvals, submit the necessary documents to apply for your UAE trade license and initiate the process of opening a company in Dubai.

There are four types of trade licenses in the UAE, also known as business licenses, to choose from:

  • Commercial License
  • Professional License
  • Industrial License
  • Tourism License

You can apply for any of these trade licenses if planning to start a business in the UAE mainland. The licensing structure in UAE free zones differs and is dependent on your company's chosen business activity.

Company registration and licensing occur simultaneously. However, the entire documentation and approval process progresses through various stages. In this step, obtain all approvals from relevant government authorities as requested by the Department of Economic Development. The required documents vary for each company type and activity.

Previously, opening a business in Dubai required finding a local partner. An Emirati partner/agent must be a UAE national. Finding a trustworthy local agent may be challenging, but a business setup consultant can connect you with companies offering corporate sponsorship, granting you documented authority and 100% ownership of your business.

DED may request additional approvals from other government or non-government agencies, depending on your business activity. For instance, some businesses may need approvals from the municipality, specific banks, embassies, etc.

Understanding the complexities of a Memorandum of Association (MoA) is crucial to starting a business in Dubai. Before drafting the MoA, seek expert advice. The MoA should comply with the UAE government's mandates and consider your business interests before initiating a company in Dubai.

Depending on your business needs, choose to rent an office unit or opt for a shared workspace in a business center. The office space can also determine the number of visas you can request from the Department of Economic Development (DED).

When starting your business in Dubai, you may need an ejari. This tenancy contract is the agreement between you and the real estate agency for the office unit or shared workspace you intend to rent. Ejari is governed by the Real Estate Regulatory Agency (RERA), ensuring fairness and transparency. Submit your tenancy contract and additional documents to activate your Ejari account, crucial for obtaining or renewing visas for family members and/or employees.

Before receiving your business license to start a business in Dubai, obtain initial approval from DED. This approval indicates that the UAE government does not object to your business establishment in the UAE. Without this approval, you cannot proceed to the next steps in the application process.

To obtain your UAE trade license, submit the following:

  • Memorandum of Association (MoA)
  • Trade license application
  • Relevant government forms
  • Trade name reservation certificate
  • Initial approval certificate
  • External approvals (if any)
  • Tenancy contract
  • Ejari registration certificate
  • Passport copies of partners
  • NOC for partners (if any)
  • Other requirements by the DED (if any)

Complete the process by opening your corporate bank account for your Dubai Business with Smart Zones® UAE. This final step paves the way for the successful opening of your Business.

Remember that the process may vary depending on your chosen jurisdiction and business activities. Consulting legal and business experts familiar with Dubai's business setup landscape is highly recommended.

Operating since 2013, Smart Zones® UAE provides on-going support to obtain Business Services License in Dubai, UAE.

Looking for a seamless business setup experience? Trust Smart Zones® Dubai to pave the way.

Documents Required to Start a Business in Dubai, UAE

Companies established within free zones are subject to the regulations of their respective free zones. As a result, the documentation needed will vary depending on the specific free zone to which you submit your application. The required documentation may encompass:

  • Completed application form
  • Business plan
  • Copy of the current trade license/registration certificate (if applicable for local companies)
  • Colored passport copies of the company’s shareholder/s and the designated Manager/Director for the new company
  • Specimen signature of the company’s shareholder/s and the appointed Manager/Director for the new company
  • Two years’ audited financial reports for corporate entities or a certificate of reference from the personal bank of the individual shareholder
  • No Objection Certificate (NOC) from the current sponsor (for individuals)

Submitting incorrect documents can lead to immediate rejection. Our consultants at Smart Zones® UAE ensure you have the right documents, avoiding any complications in the process.

Cost of Establishing a Company in Dubai, UAE

While numerous factors come into play, you can anticipate a trade license to be priced in the range of AED 15,000 to AED 25,000. However, this figure is more of an approximate estimate. The costs for establishing a company in Dubai vary depending on factors such as the chosen location, whether premises are acquired, the size of the workforce, and various other considerations. You can contact Smart Zones® UAE

For instance, the expenses associated with company formation in Dubai's free zones are often considerably lower compared to establishing a presence in the mainland. Similarly, if you decide to utilize a co-working space instead of securing a permanent office, your setup costs are likely to be reduced.

Asked Questions (FAQs)

Choose your business activity, Find a Free zones, Choose a company name, Get your documents in order and apply, Open your corporate bank account

In most free zones you can have two activities under one license.

Under the single license, you are allowed to manage 10 activities. However, you have to ensure that you engage yourself in the activities that have been labeled in the DED standards.

The cost of the business setup varies from free zones to Mainland. It also depends on the activity that you have selected. So there can be no 100% estimation on how much you would have to pay.

In the UAE free zones, you will not require extra time to setup the business. In the free zones, it takes about 3 to 10 days to setup the business. You have to ensure that all the documents are legal and the authorities have attested them. In case you do not have the consultants to provide you the required help, it might take more than a few weeks to setup your business because legal procedures often take time when you do them yourself.

The Mainland of UAE consists of various potential jurisdiction for new company setup. Few of the top locations in the Mainland is Sheikh Zayed Road, Business Bay, Deira, Al Qusais, Al Quoz, etc.

The following information is required for issuing the Trade License in the UAE. Business Category & Activity to be performing, Nationality & number of business owners, Trade Name and other requirements (business owner profile, passport no. etc.) indicated in the application form, Once the application is submitted, register the Trade Name, rent an office space and prepare other conditional documents (Certifications, Memorandum of Association, etc.)

No provision to issue residency visa, No provision to trade within UAE, An offshore company cannot lease or rent a local premise in UAE

Yes, an Offshore Company can open a Bank Account in the UAE. The company owner will have to visit the UAE to do the paperwork with the bank. The bank will be assessing the business activity, company profile and take a decision.

PRO Services are very much required for companies in the UAE, be it small or large. There is a regular requirement of submitting legal documents to the various government authorities and helps a lot in setting your foot right with having the right clearances made for operating the business.

Get in Touch

Want to know more, talk to Smart Zones® Dubai advisory team they will be happy to help. Ready to invest in your future?

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