Thinking about starting a new business in a foreign country can be daunting. But they say that behind every successful business lies their risk-taking. If you think you will risk everything to start a business and make it successful, Dubai is the right place for you. This country is full of hundreds of success stories. Would you like to be on the list? If the answer is yes, let’s get to the heart of the matter and get confused. We will be discussing the simple steps you need to follow for setting up business in Dubai with ease in this post.
The Process of Setting up a Company in Dubai
Dubai Department of Economic Development (DED) handles the establishment process in the country. Below are the steps which you need to follow for setting up a business in the UAE:
Choose a Business Activity
Once you have decided on the type of business it will be easier to get the license you need because the license will ultimately be determined by the type of business you choose. Also, you should be aware that not all activities are allowed in the UAE. Different departments need to permit you before starting a business in Dubai. With that said, the first thing you need to do is decide if your company meets Dubai standards.
Choose the Jurisdiction
Dubai offers mainland business premises, free zone business locations and offshore business offices. One should be aware of these jurisdictions available in Dubai before starting a business. Once you understand the pros and cons, it will be easier for you to choose the one that seems feasible for your type of business.
Select a Business Structure
Dubai offers different types of business structures to its business owners. That way, once you’ve completed the main survey across all types of business units, you have plenty of options. Depending on the location and type of business, there are rules for the composition of your company. For example, if you are planning legal advice, it can only be done as a branch company or as a stand-alone company. The types of business structures offered in Dubai are;
- Limited Liability Company
- General Partnership
- Partnership en Commendam
- Professional Company
- Sole Proprietorship
- Joint Venture
- Public Shareholding Company
- Private Shareholding Company
Find a Local Sponsor
This step is useful if you decide to start your business in the continental UAE. The challenge is to find a reliable and trustworthy business partner from the UAE. It is stated that the local partner in the UAE will hold 51% of the partnership and the remaining 49% can be owned by the entrepreneur. As for the freeze zone, the company requires a local service representative to work for a small fee.
Register Trade Name with DED
In this step, you need to decide on the company name. Names should not be compared with existing companies in UAE. Once you have completed the name, you must register it with the DED. Trade name registration takes about three days and is valid for six months.
Approval of Business Activity
Several commercial activities are not allowed under the DED Act. According to Law 13 of 2011, the DED in Dubai is the competent authority that decides, regulates, classifies, approves and licenses all economic activities. However, this does not apply to free zones and offshore business solutions.
External Approvals for the Business
There are several external approvals that you may need to obtain if your business is restricted by law. These permits must be obtained from non-governmental and semi-governmental institutions for setting up business in Dubai.
Get an Office Space
When starting a business in Dubai, renting a commercial space is a must. The lease agreement, documents from the Real Estate Regulatory Authority (RERA) and EJARI must be presented, after which the initial approval by DED is carried out.
Get an Initial Approval from DED
Pre-approval is the primary approval given by DED to register your company in Dubai. Therefore, before registering a company, you need to get pre-approval by filling out an application form and attaching supporting documents and submitting them to the authorities. You can start your business at this stage and proceed with obtaining your commercial license.
Draft a Memorandum and Articles of Association or LSA
This step is another important task. The MOA determines the proportion of restrictions and freedoms that each partner has in the company, while the LSA explains the role of the agent and implements the compliance that must be met. The MOA/LSA is a legal document and must be prepared with the help of legal counsel. They also need to be translated into Arabic.
Registration of Your Business
To complete this step, you will need to fill out an application form. If it is filled correctly, attach the required documents. Send to DED for approval. You will receive an approval/reject notification in about a week.
Submit Application for Business License
As soon as a company is registered with DED, business licenses are processed and can be collected accordingly. Business licenses are mainly issued depending on the type of business and the jurisdiction of the business. The most famous licenses for starting a business in Dubai are commercial license, industrial license and professional license. It takes about a week or so to get a trading license after you get your first one.
Pay Fee and Collect License
After filling out the license form and submitting the documents, DED issues a payment receipt. Final payment must be made to obtain a business license. As soon as you receive your trading license, you will be a fully-fledged company.