Setting up Business in Dubai
Among the 7 emirates of the UAE, Dubai is most popular as a Business Centre. It provides lucrative business options for foreign investors to grow at fast pace in the global competitive environment with strong infrastructure, latest technologies, vibrant economy, great quality of life with no tax burden on foreign investors and 100% repatriation of profits.
Following are the main steps based on general rules that need to be followed before starting a business in Dubai:
Explore a business activity
In order to select a legal form and type of licence, whether commercial, industrial or professional, etc. expat has to choose a business activity for establishing a business. Industrial, commercial, professional, tourism, agricultural and occupational license are available in Dubai. An entrepreneur can select more than one business activity. There are more than 2,000 business activities to choose from in Dubai. UAE vision to diversify beyond the oil economy means that new businesses that contribute to this vision will be looked upon favourably.
Choose a business location
Having settled on an industry, you have to decide whether to launch in the mainland or in a free zone. Setting up business in free zone will benefit you in terms of 0% corporate and personal tax, 100% company ownership, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption. All businesses in the UAE must have a physical address to operate. The business premises and location must comply with the requirements defined by the respective emirate’s Department of Economic Development or Free Zone Authority as well as the land planning regulations of the local municipalities.
Office and warehouse rental agreement must be provided. Some emirates require the agreements to be attested. In Dubai, the agreement must be registered with Ejari.
However, Some Free Zones allow foreign investors to have virtual offices to operate a business Theron.
Select the legal form
Based on the Business activity and location selected, one can choose available legal forms that rely mainly on the business needs of entrepreneur. Selecting the legal form is must to be familiar with applicable laws and regulations. In the UAE, a foreign investor can select any one of these legal forms:
- Sole proprietorship
- Civil Works Company
- Limited Liability Company
- Representative office
- Branch of a foreign company
- Branch of a free zone company
- Free zone LLC
- Free zone establishment or FZE
- Branch Office of FZ LLC
Register the trade name
A trade name is the identity of the business. It separates one business from another. It also characterizes the nature and the form of the business.
Things to be considered while selecting the trade name:
The trade name must:
- be followed by the business structure acronym (legal form of the company) such as: LLC, EST, PJSC, PrJSC, FZE, FZ LLC
- be well-matched with the required type of business activity and the legal status of the company or business entity
- not comprise names of any religion, or governing authority, nor names or logos of any external bodies
- not have been earlier used.
- not disturb the public sentiments or the public order of the country
- not include offensive language are forbidden words.
Initial approval
At this stage, Investor needs to submit filled application form along with complete paper work relating to incorporation. Some free zones may also require you to provide a business plan. After getting initial approval from the UAE Government/ Free Zone Authority, the investor can proceed further to set up a business. Some activities require additional approvals from government entities related to that particular business before applying for the initial approval.
MOA and LSA
Depending on the legal form of a business, a completed and signed Memorandum of association (MOA) or a local service agent agreement (LSA) of the business is required.
Notes:
- UAE-based law firms, courts and notary public prepare and attest MOAs and agreements.
- Businesses owned completely by non-GCC residents require a local service agent from the UAE. Appointing the local service agent will be under an agreement attested by the notary public or the court.
Issuance of the business license
After completing the above steps, investor can collect the business license from service centres of the economic departments or through their websites.
Open a bank account
Once the license has been issued, you will have all the documentation you need to open your corporate bank account. You can choose an UAE Bank or Global Bank after satisfying specific criteria set by that particular bank. To deal in International Business, it’s better to open a multicurrency bank account. At the time of Bank a/c Opening, Submitting Emirates Card of one shareholder is must. For that, minimum one resident visa is required. Visa will renew in every two years.
It’s time to start your business!
After completing above steps, you will be ready to start the business activities. Setting up a company in the UAE is very systematic and done in an orderly manner.