In the ever-evolving landscape of Dubai, it's hardly astonishing that the construction and building contracting sector is flourishing.
With both governmental and private stakeholders continually exploring fresh and inventive construction endeavors, individuals possessing the expertise to manage these ventures are in great request. if you’re looking to launch a construction business, now is a great time to get started in Dubai.
Why Construction Business in Dubai, UAE ?
Despite the disruptions experienced across the global industry due to the pandemic, the construction sector in the UAE maintained its value at USD 101.45 billion in 2020. It is projected that by 2027, this amount will climb to USD 133.53 billion, indicating a Compound Annual Growth Rate (CAGR) of 4.69% over the next five years.
In the year 2022 alone, the UAE government has committed a minimum of USD 1.4 billion to various construction projects, with substantial additional investments anticipated from private sector investors. Currently, the UAE is actively engaged in a wide range of projects, including solar parks, railway systems, and the construction of numerous residential units, all aimed at facilitating further immigration of employees and investors.
For entrepreneurs operating within this sector, the opportunities are exceptionally promising. Thanks to the well-established visa, relocation, and company formation procedures in the UAE, armed with the right knowledge and support, you could potentially secure contracts in a matter of weeks.
Types of Construction Business Licenses in Dubai, UAE
Dubai offers a variety of construction business licenses, each subject to its own set of regulations and prerequisites. These licenses includes:
Landscape Gardening
Designed for the enhancement and organization of cottage grounds, villas, parks, and gardens.
Concrete Works and Foundation
Covers crack reinforcement with concrete, foundation and wall construction, and concrete casting for warehouses and industrial floors.
Construction of Metal Structures
License for installing steel and metal structures, including frame structures, hangars, exhibition stands, and pavilions.
Construction of Special-purpose Facilities
This license caters to the construction of pipelines, electric power substations, airports, sewage disposal plants, and seaports.
Facade and Finishing Works
Covering the external or internal wall cladding of residential, commercial, and industrial premises with various materials.
Construction of All Types of Facilities and Buildings
This license is granted for constructing diverse structures, including residential buildings, production areas, villas, warehouse premises, and malls.
Maintenance of Facilities on a Turnkey Basis
The final license type involves the supply of decorative elements, construction materials, furniture, and equipment for both under-construction and existing facilities.
Benefits of Construction Company Set up in the UAE
Dubai's construction sector ranks among the most lucrative industries in the region. It boasts iconic skyscrapers like the world's tallest, Burj al Khalifa, and the highest residential building, Marina 101.
Dubai stands out in the GCC's skyscraper competition, with landmarks such as Princess Tower and Burj al Arab.
The Dubai government is actively pursuing tourism industry growth through ambitious projects like Palm Jumeirah and Deira Island, opening new avenues for construction businesses.
Massive investment projects in transportation infrastructure, like the Dubai International Airport expansion and Abu Dhabi International Airport renovation, offer substantial opportunities for construction companies.
Dubai's construction sector presents profitable prospects for all types of building establishments. With growing projects and opportunities, a prosperous future awaits those who seize them.
Steps to Establish a Construction Company in Dubai, UAE
The procedure for setting up a construction company in Dubai is uncomplicated, expeditious, and cost-effective. Below are the steps to follow when forming the company:
Your first task is to select an appropriate name for your new construction company. Dubai has specific naming regulations to adhere to. Avoid names that resemble well-known companies or contain offensive language. While you can use your name for the company, it should be your full name without any abbreviations. Ensure that your chosen name is available for registration with the relevant department.
You have two options for establishing your construction business in Dubai: a free zone or the mainland. Each jurisdiction has its own advantages and disadvantages. In a free zone, you can have 100% ownership, while in the mainland, ownership is limited to 51%, with the remaining 49% assigned to a local sponsor. The required approvals and licensing procedures also differ between the two. Choose the economic zone that aligns with your business requirements.
Free zones have their independent jurisdiction authorities, so you must approach the relevant authority to apply for a construction license in the free zone. To apply for a mainland license, you should visit the Department of Economic Development. Different business activities require additional approvals and distinct licenses. Create a list of your planned business activities and be aware that a construction license falls under the commercial category.
Next, apply for the necessary permits. If your company operates in a free zone, you'll need a G+1 permit. Otherwise, apply for a general building permit. Additionally, submit applications for any extra approvals, such as environmental and civil works licenses, which may be required.
Apply for visas for yourself and your family members, domestic staff, and close relatives, if needed. Visa applications may require various tests, including blood tests, medical examinations, chest X-rays, and more.
Opening a bank account is essential for conducting business activities that involve financial transactions. The process is straightforward for locals but can be more complex for foreigners. Business setup consultants in Dubai can assist with this process, helping you choose the most suitable bank and ensuring a smooth application process, reducing the risk of rejection or delays.
Looking for a seamless business setup experience? Trust Smart Zones® Dubai to pave the way.
Special Approvals for Opening a Construction Company in Dubai, UAE
Obtaining permits and clearances from various government departments is a prerequisite for establishing a construction company in Dubai. Here are some of the mandatory ones:
- Water and Electricity Department: This department provides essential utilities, so obtaining clearances from these authorities is imperative.
- Drainage and Irrigation Department: This permit is required for services related to liquid waste management.
- Building Department and Dubai Civil Defense Authority: Both authorities ensure compliance with construction regulations. A Building Completion Certificate, essential for legal building status, must be acquired from these entities. Additionally, a civil works permit is necessary for pre-foundation activities. To obtain a building permit, applicants must approach the relevant authority and submit design drawings for the proposed building. An environmental license, issued by the appropriate authority, is also essential.
- Roads and Transport Authority: A permit from the Roads and Transport Authority is necessary to access the internal and external road networks for transportation purposes.
- Dubai Civil Defence: An NOC from Dubai Civil Defence (DCD) is required for government entities like the Dubai Airports Company.
Required Documents for Construction Company Setup in Dubai, UAE
To complete your company registration in Dubai, the following documents are required:
- A copy of the passport for both shareholders and directors.
- A copy of the national identity card for directors and shareholders.
- Recent bank statements, credit card statements, or utility bills that display the names and residential addresses of the directors and shareholders.
- The initial approval receipt along with all previously submitted documents.
- A copy of the lease contract, which must be attested by the Real Estate Regulatory Agency (RERA) in Dubai.
- The memorandum of association, duly attested.
- Any necessary approvals from other relevant government entities as may be required in your specific case.
Cost of Establishing a Construction Company in Dubai
The initial expense for establishing a construction company in Dubai amounts to AED 23,000. Nevertheless, this serves as a foundational amount. Additionally, you should consider expenses related to visas, office space, staffing, as well as the expenses associated with securing all essential permits and authorizations.
For a comprehensive quotation and an itemized breakdown of the expenses associated with initiating a construction firm in the UAE, please don't hesitate to reach out to the Smart Zones UAE team.
Dubai's construction sector is thriving, with significant governmental and private investments. Despite global disruptions, the sector maintained a value of USD 101.45 billion in 2020, with further growth projected. The government has committed substantial funds to various construction projects, making it an opportune time for entrepreneurs in the construction industry.
Dubai offers various construction business licenses, including Landscape Gardening, Concrete Works and Foundation, Construction of Metal Structures, Construction of Special-purpose Facilities, Facade and Finishing Works, Construction of All Types of Facilities and Buildings, and Maintenance of Facilities on a Turnkey Basis. Each has its regulations and prerequisites.
Dubai's construction sector is highly lucrative, with iconic landmarks like Burj Khalifa and ambitious projects such as Palm Jumeirah and Deira Island. The UAE government's investments in transportation infrastructure also offer substantial opportunities. Dubai's business-friendly environment and well-established procedures make it an attractive location.
To set up a construction company in Dubai, choose a company name, select a location (free zone or mainland), submit a license application, obtain building permits and additional approvals, secure visas, and open a bank account. Different business activities may require additional permits and clearances.
Several government departments require permits and clearances for construction companies, including the Water and Electricity Department, Drainage and Irrigation Department, Building Department, Dubai Civil Defense Authority, Roads and Transport Authority, and Dubai Civil Defence. These ensure compliance with regulations.
To complete the registration process, you'll need copies of passports and national identity cards for shareholders and directors, recent bank or utility statements, the initial approval receipt, a lease contract attested by RERA, the memorandum of association, and any necessary approvals from relevant government entities.
Want to know more, talk to Smart Zones® Dubai advisory team they will be happy to help. Ready to invest in your future?
