Venturing into the exhilarating realm to start a business in Dubai is an extraordinary choice for aspiring entrepreneurs and investors from around the world. It orchestrates meticulous planning, visionary conceptualisation, scholarly research, astute budgeting, meticulous setup, and resolute decision-making, among other vital components.
Moreover, it summons the compass of expert guidance and assistance to navigate the intricate path of selecting the perfect trade license, particularly for aspiring entrepreneurs. Fear not, for within these words lies the gateway to unravel the essential steps towards launching a thriving business in the radiant landscape of Dubai, UAE
The UAE stands as a sought-after haven for investors and entrepreneurs alike. Not only does it extend a warm welcome to those seeking to start a business in Dubai, but its favorable tax policies and business-friendly environment have fortified its position as a thriving business hub in the heart of the Middle East.
Moreover, the government has diligently established rules and regulations that nurture and support the aspirations of business owners, further enhancing the entrepreneurial landscape.
Why Start a Business in Dubai?
Dubai and the UAE extend a warm embrace to entrepreneurs worldwide. Last year witnessed a remarkable surge, with over 20,000 new businesses taking flight in Dubai alone. It comes as no surprise that ambitious overseas entrepreneurs initiated a significant portion of these ventures. With foreign nationals comprising approximately 80% to 90% of the UAE’s workforce, the nation stands as a global melting pot of talent and opportunity.
Discover the myriad reasons that draw countless entrepreneurs from around the globe to the UAE and Dubai in pursuit of their business dreams. Delve into the captivating array of main benefits that await:
1. Low tax
Revel in the UAE’s remarkable tax landscape, where both personal and corporate incomes enjoy the luxury of a 0% tax rate. While it’s important to note the introduction of VAT in January 2018, set at a modest flat rate of 5%, the overall tax burden remains remarkably low, amplifying the allure of doing business in the Emirates.
2. Economic Vitality
Behold the Emirates, the proud dwelling of the Arab world’s second-largest economy. With a robust GDP of approximately AED 692 billion, trailing only behind Saudi Arabia, its grandeur knows no bounds. This thriving economic landscape embodies not only size but diversity, presenting boundless opportunities across a spectrum of industries. Whether venturing into healthcare, hospitality, technology, or trade, the stage is set for entrepreneurs to forge their path and thrive in this vibrant economic realm.
3. The exceptional quality of life
Revel in the UAE’s noteworthy position, ranked 23rd in the esteemed Best Countries Index. Standing shoulder-to-shoulder with nations like Spain and Ireland and surpassing the likes of Portugal and Greece, the UAE offers an enviable standard of living. Prepare to immerse yourself in a realm of boundless opportunities, where a remarkable quality of life awaits your entrepreneurial spirit.
4. Igniting startup success
Within the Emirates, a flourishing ecosystem of startup incubators and funding initiatives await, dedicated to propelling business growth at an accelerated pace. Prepare to tap into a wealth of support and resources as you embark on your entrepreneurial journey in the vibrant landscape of the UAE.
5. Sponsorship
One of the most enticing advantages of establishing your entity in a free zone and Mainland is the absence of a requirement for a local sponsor. In this realm of boundless possibilities, you can realise your dream of 100% foreign ownership without the necessity of a UAE national as a partner or sponsor. Enjoy the autonomy to shape your business destiny without constraints.
If the prospects of starting a business in Dubai pique your interest, you stand alongside a multitude of aspiring entrepreneurs. The process of company formation in Dubai can be navigated with ease when you adhere to the steps outlined in this comprehensive guide.
How To Start A Business In Dubai– The Formation Process
While starting a business in Dubai is already deemed comparatively easier, the experienced professionals at Shuraa Business Setup take it a step further. With their expertise, creating a business account becomes a seamless process, alleviating any complexities. Moreover, they diligently handle the intricate paperwork and other crucial matters on your behalf, allowing you to focus on what truly matters – bringing your entrepreneurial vision to life.
1. Select a business activity
Before opening a company in Dubai, conduct meticulous research to assess the feasibility and profitability of your venture. Armed with these insights, you can confidently determine the opportune moment to commence your business in the captivating landscape of Dubai, UAE.
2. Select the jurisdiction
Within the UAE market, you will encounter a splendid array of economic zones, each with its distinctive charm—Mainland, Free Zone, and Offshore. These distinguished jurisdictions encompass a unique tapestry of laws and regulations specifically crafted for business setup.
Tailored to cater to diverse business needs, selecting the ideal jurisdiction for your venture hinges upon careful consideration of your business requirements and the nature of your chosen business activity. Prepare to undertake a transformative journey, where the perfect jurisdiction awaits to nurture and elevate your entrepreneurial aspirations.
3. Finalise the company structure/legal form
The choice of legal form for your company stands as a pivotal decision. It lays the foundation for managing profits, losses, and resource allocation while shaping the overall structure of your enterprise. During the initial stages of planning, make a definitive choice regarding your company’s legal form, as it serves as a guiding framework for your organization.
Be mindful that your business license application hinges upon this crucial decision. Explore the diverse array of legal forms and company structures available to register your business in the UAE, each holding unique potential for your entrepreneurial aspirations.
- Limited liability company (LLC)
- Sole Establishment
- Civil company
- Foreign company branch
- Free zone company branch
4. Get approval for your company name and activity
Before advancing with your company’s setup process in the UAE, it is imperative to obtain the seal of approval from the Department of Economic Development (DED) for your chosen trade name. During this pivotal stage, not only does your company name undergo scrutiny, but your selected business activity also awaits approval.
Once these crucial approvals are secured, you will mark on submitting the necessary documentation to apply for your esteemed UAE trade license, marking the commencement of your enthralling journey towards opening a remarkable company in the vibrant realm of Dubai.
5. Apply for your trade license
There are three types of licenses in the UAE, also called business licenses, that you can choose from:
- Commercial Licence
- Professional Licence
- Industrial Licence
Should your entrepreneurial aspirations lead you to the bustling UAE mainland, rest assured that you can apply for any of these esteemed trade licenses. However, it’s important to note that the licensing structure within the UAE free zones operates under a distinct framework, intricately tied to the specific business activity your esteemed company chooses to undertake. Embrace the diverse licensing landscape, where possibilities abound, paving the way for your business to flourish in the radiant embrace of the UAE.
6. Register your company
The company registration process goes through various stages, including documentation and approval. The business owner has to arrange all the requisite documents and get all the approvals from relevant government authorities as requested by the DED.
7. Get your external approvals –
Companies may have to secure additional approvals from other government or non-government agencies such as the municipality, banks, embassies, etc. depending on specific business activities.
8. Prepare your Memorandum of Association –
Preparing the Memorandum of Association(MOA) of the company is a complex procedure as it needs to be drafted as per the UAE government’s mandates. Hence, to avoid any errors, it is better to seek expert help in MOA preparation.
9. Rent an office
The requirement for an office space totally depends on your business needs. Hence, you can either rent an office unit or opt for a shared workspace based on your requirements. The office space you choose will also determine the number of visas you can apply for.
10. Get the tenancy contact & Ejari
A tenancy contract is an agreement between the business owner and the property owner of the hired office unit. Ejari, an online system governed by the RERA, ensures that there is complete fairness and transparency between both parties involved in the agreement.
11. Get the initial approval
Before getting your license, you need to procure an initial approval from the DED indicating their consent for you to start a business in the UAE. Without this approval, you may not be able to proceed to the next steps in the application process.
12. Collect your trade license
To receive your trade license from the DED. You need to submit a few mandatory documents that include the trade license application, Memorandum of Association (MoA), Tenancy contract, Trade name reservation certificate, Ejari registration certificate, Passport copies, and more.
Types of Business License in Dubai
The three main types of licenses are offered by the Department of Economic Development (DED). As you mark your business journey, in addition to selecting a zone, you must also determine the specific license type required to propel your aspirations forward.
1. Commercial license
Securing a commercial license for your Dubai-based trading venture. For businesses engaged in the dynamic realms of import-export, sales, logistics, travel and tourism, general stores, and real estate, obtaining a commercial license is the key that unlocks endless opportunities. Prepare to mark on your trading odyssey with the appropriate license in hand.
Read More: Commercial License In Dubai
2. Industrial license
Acquiring a manufacturing license for your Dubai-based enterprise. If your business involves the transformative magic of turning raw materials into exquisite final products, whether, through manual craftsmanship or mechanical prowess, a manufacturing license is your gateway to success. Embrace the realm of textile manufacturing, metal fabrication, paper production, and beyond as you start on a journey of innovation and craftsmanship.
Read More: Industrial License In Dubai
3. Professional license
If you are a skilled service provider, an artisan with creative flair, or a dedicated craftsman, the professional license awaits to showcase your talents. From medical services and beauty salons to repair services and beyond, this license paves the way for your professional journey in Dubai’s bustling market. Embrace the opportunity to transform your expertise into a thriving enterprise.
Read More: Professional License In Dubai
Free Zone vs Mainland
Choosing your path: Weighing the Free Zone and Mainland options before your business setup. Explore the unique advantages and specifications of each, allowing you to make an informed decision aligned with your specific requirements.
1. Mainland
In the Mainland, collaboration and networking opportunities abound. Being part of the larger business ecosystem allows entrepreneurs to forge valuable partnerships with local suppliers, distributors, and service providers.
The Mainland acts as a melting pot of diverse industries, creating a fertile ground for cross-sector collaborations and synergies. This collaborative spirit opens doors to new growth avenues, expands market reach, and nurtures the exchange of ideas and expertise.
Read More: Mainland Company Formation in Dubai
2. Free Zone
Exploring Dubai’s Free Zones for 100% company ownership. These specialised economic zones, ingeniously created by the Dubai government, entice foreign investment and grant business owners the freedom they seek.
Embrace full ownership, and relish a 9% corporate tax rate (applicable to UAE businesses with profits exceeding AED 375,000). Revel in the absence of personal income tax. Yet, be aware that conducting direct trade with the local UAE market is prohibited within free zones.
Dubai boasts a diverse array of over 30 free zones, each tailored to specific industries and granting licenses accordingly. Here are a few examples:
- Dubai Multi Commodities Centre (DMCC)
- Dubai International Financial Centre (DIFC)
- Dubai Internet City (DIC)
- IFZA
- RAKEZ
Read More: How to start a business in a Dubai free zone
Steps for Register Company Free Zones
1. Discover Your Business Potential
Whether your aspirations lie in establishing a small-scale enterprise in Dubai or venturing into the exciting world of crypto business in the UAE, a plethora of over 2,100 business activities awaits your selection.
Delve into the captivating domains of industrial, commercial, professional, and tourism spaces, each offering distinct opportunities. Navigate the diverse landscape and unearth the ideal business activity that resonates with your vision. Allow the DED website to serve as your compass, providing an extensive list to inspire and guide your entrepreneurial odyssey.
2. Choose a free zone
With a multitude of options at your fingertips, Dubai presents over 50 distinctive free zones to select from. The nature and essence of your business can significantly influence your choice of the ideal free zone. Often, proximity to businesses within the same sector proves advantageous, fostering collaboration and synergistic growth.
3. Choose a business name
Selecting a name for your business is a vital step, entailing adherence to the UAE’s stringent naming conventions. It is imperative to ensure that your chosen name aligns with the established guidelines, avoiding any language that may be offensive, disrespectful to religion, or associated with political groups or illicit organizations.
Furthermore, if you opt to name your business after an individual, substantiating their role as a genuine partner or owner is mandatory, disallowing the use of initials or abbreviations.
4. Establishing a Corporate Bank Account:
After obtaining the required approvals and documents, you can proceed to open a corporate bank account. In the UAE, you have a wide range of options when it comes to choosing a bank. Some popular choices include NBD Emirates, HSBC, Citibank, Barclays, Abu Dhabi Commercial Bank, Commercial Bank of Dubai, and many others.
Contact Shuraa Business Setup to start a business in Dubai
If you need advice on how to start your business in Dubai, UAE, contact Shuraa Business Setup. We have been helping entrepreneurs form their companies in the UAE for nearly 23+ years now. Also, book your free consultation with our company formation experts today!