Starting a Business in Dubai


Starting a Business in Dubai

Things You Need To Know Before Starting a Business in Dubai

Dubai is the commercial capital of not only the United Arab Emirates, but the entire Middle East. It would not be an exaggeration to say that the city offers excellent business opportunities and innovative commercial models for enterprises from anywhere across the world. Apart from that, the international exposure and investor-friendly government policies also motivate entrepreneurs to think about starting a business in Dubai. New businesses in Dubai also get better perks on investments and tax advantages when compared to other countries.

Now when you are thinking about starting a business in Dubai, then you need to know about certain things. In the following post, we would talk about those things which are absolutely crucial for every entrepreneur should know

  1. You should decide your business activity beforehand:When you are looking to do business in Dubai, you should be aware of certain limitations. Not all business activities are allowed in the UAE! You would need consents from various authorities and departments, depending on the business that you would be doing. Thus, the first thing for starting a business in Dubai is whether your business allowed by Dubai standards and what are the permissions you need for the same.
  2. You need to choose the right jurisdiction:  Business jurisdictions in Dubai are segregated into different zones so to enhance the competence as well as productivity of a business. When you are starting a business in Dubai, you can choose from mainland business setups, freezone company formations, and offshore business establishments. You need to choose right jurisdiction depending on the business activity and the nature of the business you would like to do.
  3. You need to choose the right shareholding structures: You need to know about the shareholding structures that are permitted in Dubai and choose the right structure for your business. This will also determine the legal form of your business. The shareholding structure that you choose should be in accordance to your business operation and preferred jurisdiction. Here are the shareholding structures that you could opt for when looking for starting a business in Dubai:
    1. Limited Liability Company
    2. Sole Proprietorship
    3. General Partnership
    4. Partnership in Commendams
    5. Public Shareholding
    6. Private Shareholding
    7. Joint Venture
    8. Shared Partnership
    9. SME License
    10. Representative Offices
    11. Branch Offices
    12. Limited Partnership
  4. You need to partner with a reliable UAE national:When starting a business in Dubai, in the mainland, you need to partner with a UAE national. According to the laws, the UAE local partner will hold 51% of partnership. There are no such requirements when you are looking start a business in Dubai freezones. However in the freezones, you would require a local service agent, who would work for a nominal fee. With a little bit of help from business consultants in Dubai, you can get into an agreement with a silent partner. This will assure security and make sure that you are in complete control on your business.
  5. You should register your trade name with the DED: When starting a business in Dubai, you need to give a name to your company as per the rules and the protocols put forward by the Department of Economic Development (DED). The DED usually emphasizes on keeping the trade name related to the license type. Usually, it takes around three days to register a trade name, and the registration is valid for a period of six months.
  6. Your business activity needs to be approved In Dubai: As said before, a few commercial activities are not permissible in Dubai. Some other activities might have restrictions, while others are completely prohibited in Dubai! According to the Law No. 13 of 2011, the Dubai DED is the apex body to decide, regulate, classify, permit and license all the economic activities. However, this is not applicable businesses in freezones and offshore business setups.
  7. You need to rent a business premise: According to the laws in Dubai, you need to have a business premise while starting a business in Dubai.  The tenancy agreement, Real Estate Regulation Authority (RERA) documents, and EJARI need to be submitted, to get the initial approval is granted by the DED.
  8. You need to get the initial approval from DED:The DED would give the initial approval on submission of all the required documents. The initial approval is also permission from the DED for starting a business in Dubai. You can start your business at this stage and then apply for getting your trade license.
  9. You need to draft the MOA/LSA for your business: Drafting the Memorandum of Association (MOA) or the Local Service Agent (LSA) agreement is another important requirement for starting a business in Dubai. The MOA specifies the limitations and liberty every partner has within the company. On the other hand, the LSA describes the role of the local agent. MOA and LSA are legal documents and should be drafted with the help of a legal advisor. You would also need to translate both the documents in Arabic.
  10. You need to follow all of the company registration and business license procedures In Dubai: Company registration and business licensing are two things that progress parallel to each other in an ideal situation. Once the company is registered with the DED, the business license will be processed and could be collected duly. Business licenses are provided depending on the nature of the business activity and the jurisdiction of the business of your business. The most common licenses for starting a business in Dubai are:
    1. Commercial license,
    2. Industrial license, and
    3. Professional license.

It takes around one week from the time you get your initial approval to get the trade license. The time varies depending on the business activity and the external documentation. Here is the l list of documents and certifications that are required for starting a business in Dubai

  1. License Application
  2. Attested LLC agreement
  3. Governmental forms
  4. Name reservation certificate
  5. Initial approval certificate
  6. External departments approval
  7. Tenancy contract
  8. EJARI registration certificate
  9. Passport copies partners and NOC for partners (if any)
  10. Dubai Chamber of Commerce and Industry Registration
  11. Endorsements from Governmental Agencies (For Gas and Oil Companies)
  12. UAE Central Bank Approval and License (For Financial Institutions)
  13. Finance and Industry Ministry Certification (For Manufacturing Companies)
  14. Economy and Commerce Ministry Certification (For Insurance Companies)
  15. Health Ministry Certification (For Medical & Pharmaceutical Firms)
  16. You need to collect your business license to start your activity: You would need to get payment voucher or transaction number. This will be provided by the DED on submission of the all the listed documents. The final payment needs to be made to collect the business trade of your license. Once you collect your trade license, you would have no hurdle in starting a business in Dubai.

As you can see, starting a business in Dubai is an extensive process! However, you can make the process quick and cost-effective by hiring a business setup consultant like Arab Business Consultant. With a knowledgeable business consultant, you would be able to take the right steps for starting a business in Dubai. So, get in touch with such a reliable consultant and start your business in Dubai with ease.