How To Start A Business In Dubai: A Complete Guide

Posted by Dr. Karl Ruegg on 2018-02-13

The emirate of Dubai is considered a favourable business destination for foreign investors to start their own businesses and companies. Dubai’s booming economy is what makes it appealing to investors to open new branches of their businesses there or start whole new ones. And since the emirate of Dubai is a city that caters to all needs, it is the perfect destination for all sort of business activities to take place and benefit from the ever-growing business sectors.

Here we give you a complete and comprehensive guide on how to start a business in Dubai.

1. Determine the type of business.

Determining the type of business you wish to start in the emirate of Dubai will in return determine the type of business license you can apply for. In Dubai, there are three types of trade or business licenses, professional license, commercial license and industrial license.

After determining the type of your business, you should define all of the activities your business will undertake before applying for a license. However, you should know that not all businesses are allowed in Dubai, while other activities will require more approvals from more governmental entities.

2. Ownership rights.

Foreigners are allowed to start businesses in Dubai with a 100% ownership only in certain locations, Free Zones. There are 45 free zones in the emirate of Dubai and these free zones are special economic zones set up with the objective of offering tax-free, and free customs duty benefits to expatriate investors. However, if an investor wishes to start a business outside a free zone, then a local sponsor, in this case, is a must where the UAE national investor will own 51% of the company which will allow the business to be located anywhere in the city.

3. Choose a suitable and convenient location for your business.

Location, location, location! Set up your business in a location that is easily accessible to your potential customers and is more convenient to your business. Even though Dubai is a city that promises business a lot of profits, but if your customers can’t reach you or if the city isn’t suitable for your type of business, then all your efforts will go down the drain. You can easily find a commercial property for rent in Dubai with help of online portals.

4. Legalities.

Your business type and activity will determine your business’s legal form. It is important for any new business owner to know that any legal form in Dubai takes into account the business type, business activities, the number and the nationality of owners and the ownership options.

However, a certain legal option isn’t open to particular business activities. Hence, you should seek the assistance of a local lawyer who will advise you with what type of business to start in order to have a seamless legal process.

5. Visa eligibility and requirement.

Whether in a free zone area or any other part of the city, you will need to have a residence visa to set up your company. An eligible visa that permits you and your employees to work in the emirate of Dubai is essential to start a business in Dubai.

However, the number of visas you are allowed to get varies according to the size of the office, nature of a business, the category of the employee or the investor.

6. Your company name.

As part of legal process, your trade name should refer to the nature of your business unless it’s a branch of another company. After determining your trade name comes the step in which you reserve your trade name. This can be completed online or in person at the DED. Other conditions for your trade name to get approved is that the name has to be either translated or transcribed in English and Arabic. It also has to be in line with the commercial activities and the legal form of your business. You can name the business after yourself or the other partners only in case of a full partnership, whereas acting partners do not have this privilege.

7. Hiring Employees conditions.

To hire employees, you should issue an “Establishment Card”. The Ministry of Labor will issue this card for you that allows you to hire Emirati employees. You should know that certain business sectors are required by law to employ a given quota of nationals as part of the federal Emiratisation programme. To hire or sponsor any expatriate employees, you’ll need to get the immigration equivalent of  Establishment Card from the General Directorate of Residency and Foreign Affairs. By all means, Visit and tourism visas have no work privileges in the emirate of Dubai.

8. Hire a local registration agent.

Resorting to the assistance of a local registration agent will be of great use to you. These agents won’t only register your company, but also they will take care of everything that has to do with opening your bank account, arrange for an auditor, do your renewals and offer you nominee services. Local agents are also well-connected with the local government bureaucracy and with Free Zone Authorities, all of which will be of great help and will put your business on the right track.

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