Starting business in Dubai is a wonderful opportunity for those looking for a promising venture and a thriving economy to start from. The government of UAE has made the procedure of business setup less complicated so as to attract the foreign investors. In fact, attracting and retaining the foreign talents has become a part of government’s long vision and agenda. You will find diverse types of business setup in UAE thriving who belong to many industries such as finance, IT, health, education, agriculture, e-commerce and more.
While you will get top tier infrastructure, tax incentives and benefits, a diverse talent pool, and many more advantages in the nation, at the same time, it is essential to know the legal requirements involved in starting a venture here. This blog will be your all-in-one guide where you will get to know the process of company setup Dubai, along with the process, cost, and everything else you should know.
Legal requirements for business setup in Dubai
Before going into the process, let us walk you through the documents that must be with you for starting and running a business in UAE. Like in any nation, in UAE also, you would need to have certain documents that are much important for operating legally in the nation. Here is the general list of documents needed for business setup in UAE:
Passport:
A passport is a legal document that a nation’s government issues to the individuals that serves as proof of nationality and identity. Generally, you will need to have your passport with validity of minimum 6 months for starting business UAE.
Visa:
Visa is a document issued by the UAE government that allows an individual to enter and stay in a nation for particular period of time. In UAE, you can get many visa options such as investor visa, business visa, green visa, student visa, work visa and the infamous golden visa.
Business plan:
You must have a business plan well prepared which would highlight your business’s vision, mission, objectives, operations, financial projections, target market and more. As part of license application for your business setup in UAE, you would need to provide your business plan. It also helps to raise funds from investors.
Tenancy contact:
Tenancy contract, also referred to as “Ejari,” is issued by the Land Department. It is an agreement between the landowner and tenant. If your business is obtaining a commercial property on lease, then you must sign such agreement with the property owner which must clearly highlight the rent, duration of lease, responsibilities of each party. Ejari is required for obtaining registration and business license in UAE.
Initial approval certificate:
For doing any type of business in UAE, you must first secure an NOC from the Department of Economic Development (DED). This certificate is very essential for going ahead with the business licensing process.
Board’s resolution and Power of Attorney (POA):
A boards resolution on decision such as company’s name, appointment of a manger, must be provided. Along with that, you may need to provide POA, which is a legal document that authorizes a person (such as manager), to handle all the legal and financial transactions on behalf of the company.
Trade license:
A trade license, also called the business license, is a special permit that allows the conduct of business within the nation’s boundaries. All business must mandatorily hold the appropriate trade license. Depending on the activities, it can be a commercial, professional or an industrial license.
Trade name approval:
All businesses must get a trade name registration certificate from the DED for the approved name. While selecting the business name, the UAE conventions must be kept in view. Also, the name must be unique, trendy, and easy to remember for better recognition.
No objection certificate (NOC):
You may need to get a no objection certificate in case you are partnering up with local sponsor. For example, if during your employment in UAE you decide to start a business, then you must get an NOC from the employer as proof that he has no objection against you doing business. Similarly, in case your visa is sponsored by someone, like spouse, you will again need to get NOC from them.
Articles and Memorandum of Association:
AOA and MOA are two foundational documents of any company. The MOA includes the basic details about the company like its capital, powers, objectives and an AOA highlights all the rules and regulations governing the company. These essential documents must be duly notarized.
Emirates ID:
An emirates ID serves as an identification document in the UAE for all its residents and citizens. The ID contains essential details about its holders like his personal details. DOB and also photo. Emirates ID is needed for business registration and license issuance in UAE.
Bank statement:
Bank reference letters or statements are needed as a proof of financial soundness of an individual when starting a business setup in UAE.
Tax registration certificate: Businesses must be registered with the Federal Tax Authority (FTA) in UAE. For doing so, the business must first register for Value Added Tax (VAT). The FTA will issue the tax registration certificate to you after that.
LSA agreement: Certain businesses, especially professional ventures, need partnering up with local service agent (LSA) who facilitates the administrative and government related procedures while setting up a business in Dubai. If may or may not be needed depending on your business nature.
Externals approvals: Certain businesses need approvals from additional and specialized government departments such as Dubai Healthcare Authority, Dubai Municipality, Ministries and so on. If your business also falls in such category, then you would need to get the approvals from them.
Insurance and employee contract: In order to protect your assets and employees, you must provide for the insurance. Also, as per the UAE labour laws, you must provide employment contract according to set standards.
Notarization of essential documents: Many essential documents needed for business license or visas, for example educational certificates, marriage certificates, employment contracts, etc., need legally binding notarization.
Process of business setup in UAE
Now that we have understood the basic requirements and documentation needed for business setup in UAE, let us have a look at the process as well. Here are the steps needed for business setup in Dubai or UAE:
Identification of operations:
Begin by selecting the business activities you want to pursue. In UAE, business activities come under various categories, and there are over 2000 such actives that the DED allows. You will have to identify what category you fall into and what license you would need. For example, selling stationery items fall under the licensed category “stationery and trading of books”. You can add multiple activities under one license if allowed. Of course, then you will have to pay more.
Selection of jurisdiction:
After you decide the operations, next you must choose between mainland, freezone or offshore business setup in UAE. These three are jurisdictions where you can register your business. The mainland comes under direct regulation of DED whereas the freezones have their own regulating authorities. An offshore company can be registered in UAE but cannot conduct trade within the nation. Selecting the right jurisdiction is very essential. Each zone has its own benefits that you must consider.
Deciding the legal structure:
The legal form of the company dictates the operational flexibility, tax liabilities and overall control mechanism of the business. Various business structures are allowed by the UAE government which includes sole establishment, a limited liability company, a private/public joint stock company, a representative/branch office, etc.
Registering the trade name:
Next, you must choose and register a name for your business setup in UAE. The UAE government has provided certain rules and conventions that must be followed while selecting the name. For example, the name must not be blasphemous, nor should it hurt any public or moral sentiment. Similarly, it should not be already taken and must be reflective of business’s nature and legal form.
Getting the initial approval:
Before you can obtain the business license, there is a key step that you must follow. You must get an NOC, an initial approval for doing business in nation, from the DED. Once you secure it, you can go ahead with the licensing procedure.
Securing the office space:
Next comes up choosing and setting up a nice office for the business. In UAE, you can either purchase your space or rent a space. You also get the option to use shared workplaces. It all depends on what is allowed by the jurisdiction you have chosen and type of license you fall under. Also, you will need to get the tenancy contract for the space taken on lease.
Obtaining the additional approvals:
As previously discussed in this article, you may need to get additional approvals from specific government departments for your business.
Business license application:
Once you have all the approvals in hand, you can go ahead with the license application. To do so, you will need to reach out to the relevant authority (DED or relevant freezone authority) and fill and submit the license application form. Along with the application form, you must also submit the relevant documents and pay the necessary fees. Once, you application gets reviewed and approved, your business license will be granted to you.
Get the visas and bank account:
Finally, you must secure your business visa and work visas for employees. You can also get family visa for your family by sponsoring their residency. Additionally, you must also open a corporate bank account for your business with a suitable bank in UAE.
Cost of business setup in UAE
The business setup cost in Dubai starts from AED 12,500* and it depends on the scale, nature, and location of your business. However, it does not necessarily need to be an expensive matter. Low-cost business setup in UAE starts from just AED 6,000* in certain freezones like RAKEZ.
However, you may have to incur additional cost depending on the number of visas you need, office requirement, etc. It is best to get quotations directly from the professional business setup consultants like Dubiz.
Start your business on the right foot
Setting up a company in Dubai needs proper knowledge about the legal landscape of UAE. If you are looking for hassle free and low-cost business setup in Dubai, you can reach out to Dubiz Business Setup in UAE. Not only will they handle your company formation in Dubai end-to-end but also assist you in ongoing UAE legal compliance such as license and permit renewals, corporate tax filing, AML compliance, staying updated as per UAE laws and more.
Reach out to them today for free consultation!