Eight Basic Steps to Setup Your Business in Dubai
Contributed by PMC Solutions
07 February, 2020
You should not take more than a week to setup a company in the UAE once you have completed all your legal processes.
But you need to consider some factors necessary in the process before you initiate your legalities:
1. Type of business activity
The type of business activity will determine the kind of trade license you require.
Whether it's business, professional, industrial or commercial licenses, the foundation for your activities will be defined. While choosing, however, remember that certain activities such as food trading, jewelry trade, veterinary operations, and legal consultancy require additional approvals from other government departments.
The Dubai Department of Economic Development (DED) has a list of more than 2100 operations from which you can choose.
You can contact the DED if you can't locate your particular business activity in there. Each free zone has its own formalities and approval.
As a foreign citizen, you need to opt for a business license and location in one of the many free zones of the UAE if you want 100 percent legal ownership of your business.
Each free zone caters to specific kind of business activity and hence determining your business activity in the initial stage will help you find your best option.
There are more than 45 free zones in the UAE with distinct activity classifications.
If you need a local trade license, you have to get a license from the Department of Economic Development (DED).
The DED permit comes with certain limits on share of ownership for foreigners depending on various legal structures under DED.
3. Legal Structure
Depending on your location and business activity, there are rules for your company formation.
For instance, if you're planning on a legal consultancy firm, this can only be achieved as a business branch or as an independent company.
This activity is not permissible for a sole proprietor. Each free zone has its own business structure constraints and you can view them on the respective free zone's official site.
4. Trade Name
Your trade is a very significant component of the legal process. Ideally, the name of the company should show the nature of the business unless it is another company's branch.
All trade names rules can be viewed on the official website of the DED.
5. Share Capital
Minimum share capital is generally specified in the Memorandum of Association of your suggested company. Most of the time, you don't need to pay minimum capital.
It would be best to shortlist some offices with the expenses and other information once you have your legal processes and forms ready to go. Once you get your legal formalities out of the manner, this would imply a definite way forward.
In free zones, you will get help in finding suitable locations as per your needs along with assistance in setting up electricity, internet, water and other facilities.
You need to employ a manager to supervise activities in most legal forms of the DED and have him available on board before your business is registered.
But you may not be permitted to employ at all in other instances. For instance, Intelaq license holders (license for home-based Emirati company owners) are not permitted to employ employees, but may employ contractors.
8. Local Support
Having a local sponsor is compulsory for DED licenses and this is an excellent support for foreign business owners.
Having a local partner for free zone companies can support the business growth.
This is not compulsory, however, and Dubai as a business destination offers simple set-up regulations for all entrepreneurs irrespective of nationality.
Looking for a trusted consultant for business setup in Dubai?
« Go Back to Articles