How to Start a Business in Dubai

A step-by-step guide on how to start your own business in Dubai.

You might be thinking about starting your business in the UAE. However, you don’t have the right knowledge or skills to start one. In this article, we will discuss the basic knowledge that you should know before starting up your business in the UAE.

Also Read: How to Handle an Emergency in Dubai

You may have your own property already but in Dubai, there are many businessmen and expats who wish to make it big in the busiest city in the Middle East. Dubai offers companies various options to set up their own companies.

starting a business in Dubai

Guide to Setting up a Business / Company in Dubai, UAE

There are numerous advantages of setting up a business in UAE; some of them are mentioned below:

  • You can start a business in any part of the UAE.
  • The Unlimited number of visas.
  • You will be eligible for more business license in various other sectors.
  • You will be exempted from business or personal taxes.

Government Entities

First of all, you have to contact the Department of Economic Development of the respective state to obtain approval or to register your company name. This can be done by visiting the office or through the E-services option available. Once permission granted, then you can proceed with additional approvals depending upon different business types.

You can contact the Department of Economic Development present in different cities as mentioned below:

  • Abu Dhabi
  • Dubai
  • Sharjah
  • Ras Al Khaimah
  • Ajman
Also Read

In Fujairah, the activities are handled by Fujairah Municipal Authority.

In unique cases, for example, setting up a PrJSC (Private Joint Stock Company), approval by the Ministry of Economy is required first.

Process of Starting a Business

If you intend to start a new business then you need to follow these steps as in order;

1. Cost of setting up a business

Setting up a new business includes raising capital, paying for licenses and work visas. The value to start up new business depends upon

  • The nature of permit required for specific business type, i.e. industrial, commercial or service provider.
  • The legal structure of the company; either it is a company, an establishment or the part of a company.

2. Capital required for a Business

The money needed to set up the business varies depending upon its legal form for example to start a PJSC, at least 30 million AED is required and the minimum amount to be paid in full is 5 million AED.

The minimum capital for other types is not specified by the UAE Commercial Companies Law, while the below-mentioned conditions should be fulfilled in any case:

  • Memorandum of Association should state the minimum capital
  • You should have the minimum money to achieve the business purpose

3. Nationality of Partner

The partner’s nationality is essential to determine the type of business that you can set up. Only a UAE national can set up the following example of a business

  • Joint Liability Company but in case of a foreigner, you must hold the business partnership with the UAE national
  • Basic commandite organisations
  • A sole proprietorship of Industrial or Commercial type
  • Home base business
  • SME business in Dubai

While the foreign nationals except for GCC countries can set up other types of business. However, UAE national should be involved in the following conditions.

  • UAE National partner having ownership of at least 51% of a business
  • In the case of LSA (Local Service Agent) with investor holding 100% ownership of a business.

4. Types of Company that require a UAE national

  • Limited Liability Company
  • PJSC having a minimum of five founders who are UAE Nationals own 30%- 70% of the company shareholders
  • Civil Engineering Company with active operations

5. A Company that requires LSA

  • A professional company with a sole establishment
  • Civil Engineering with no operations
  • Foreign Company’s Branch

A. Setting up Your Business in a Free zone

There are a few contrasts between inland and a free zone. The first contrast lies in the idea of proprietorship, the contribution of UAE nationals as partners or agents, the nature of trade or economic benefits.

If you don’t wish to get yourself involved in a partnership with a UAE national, or you don’t know any UAE National, you can set up a business in a free zone. In the free zone, you are the 100% shareholder of your company.

B. The Concept of a Free Zone

According to the Dubai Multi Commodities Center, a free zone is an assigned land territory where no restrictions or taxes are applied to business, trade or employment in contrast to inland business.

In a free zone, the goods can be imported, exported, handled and manufactured without indulging the customs authorities. But once the goods are transported inside the country from the free zone then, in this case, the customs taxes will be applied. A free zone type includes seaports, national and international airport, border areas etc.

Some of the advantages of setting up a business in the free zone are mentioned below:

  • 100% tax emption on imports and exports
  • You can quickly send and receive capital and profit with additional benefits
  • 0% corporate duty
  • 0% income tax
  • 0% tax on imports and exports
  • Simple licensing and start-up procedures

Armed with the right knowledge and skills, starting a business in the UAE would be easier than ever. We hope that this article gave you the right knowledge & skills to open your own business around the UAE.

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