Starting a Business UAE: A Comprehensive Guide to Company Setup in Dubai

Starting a Business UAE is relatively simple. Almost everyone can do it. This is because the government provides numerous advantages for starting a business there. The most important thing to remember is that, except for sole proprietorships, most types of businesses require an Emirati partner who owns 51% of the company. After that, you merely need to register and license your business.

In some situations, you may need to meet minimum capital requirements. The finest aspect of launching a business in the UAE is the availability of free zones. These are distinctive places that are popular among foreign investors. This is because they provide 0% corporate and personal taxes, as well as 100% foreign ownership and import and export tax exemptions.

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Starting a Business UAE

Starting a Business in UAE may not be a bad idea. The local government is supporting investment and entrepreneurs in various ways, so now is a great moment to become involved. The Emirates is also quite straightforward for foreigners to conduct business in. It is simple to establish a firm, and with the government now offering long-term permits for investment, business in the UAE is thriving.

The Emirates has undergone enormous changes during the last few decades. It has evolved from a fishing and pearling nation into a financial powerhouse with a varied and strong industry base. Furthermore, the country boasts a stable political structure, robust capital flows, business-friendly taxation, and open trade regulations. As a result, the country has become a more popular destination for investors.

If you are thinking about starting a business in the UAE, there are various factors to consider. To begin, consider the most popular sectors. You’ll also want to look into what services are missing or what products customers are yearning for. The automobile and aerospace industries, as well as oil and gas, are currently thriving. Similarly, there is room for expansion in food and beverage, marketing, and advertising.

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Legal Structures for Businesses in the UAE

If you intend to start a business in the UAE, you must first decide what type of firm you will establish. Like any other country, the Emirates has a variety of legal business structures. Listed below are a handful of the most common, as well as their prerequisites.

Sole Proprietorship

This type of company is entirely controlled by one individual. Because of this, that individual has complete control over operations and profits. Although any nationality can establish a single proprietorship firm, only UAE and GCC citizens can establish a commercial or industrial corporation.

Civil Company

Professionals such as doctors, accountants, and lawyers can establish a civil company in the UAE. Emirati nationals must control 51% of the company.

Limited Liability Companies (LLC)

An LLC must have between two and fifty shareholders. As a result, each person is only liable for their proportionate part. Furthermore, earnings and losses are distributed among shareholders based on their holdings. Again, a UAE national must possess 51% of the shares. Furthermore, an LCC with more than seven partners must form a board of at least three shareholders.

Foreign Company Branch

A foreign corporation may open a branch in the UAE. In this situation, the parent business owns 100% of the firm. However, all goods must be imported via a local trade firm.

Free Zone Company

Businesses operating within a Free Zone require two to five stakeholders. While there are numerous perks and incentives for establishing a business in the UAE Free Zones, it is important to note that these enterprises cannot deal directly with the UAE market.

As a result, the conditions for starting a firm in each location may change. For example, twofour54 Abu Dhabi requires no capital. However, the Dubai Airport Free Zone requires a minimum share capital of AED 1,000, whereas a KIZAD LCC needs AED 150,000.

Freelancers

It is surprisingly simple to start a freelance business in the UAE. To register in a Free Zone, you must submit an application form, CV, bank reference, and a notarized Registry Identification Code Form. You will be able to apply for a visa.

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Starting a Business in Dubai as a Foreigner 2024

Dubai is home to international entrepreneurs. Every year, an increasing number of foreign investors and businesspeople visit the emirate to take advantage of its great business climate. The long-term visa, which allows foreigners to stay in the UAE for extended periods and perhaps retire here after their careers, is one of the most recent reforms. Non-residents can also establish a corporation in the UAE and manage it from anywhere in the globe with the correct support.

Let’s start with the essentials. Yes, many foreigners do open up shop in Dubai. Over 80% of the people are immigrants, and many own their enterprises. Dubai actively encourages foreign investment and entrepreneurship. The emirate has a high number of setup agents and company formation specialists who were founded to help international business owners with licensing, visa, and business incorporation requirements.

Tax breaks, ease of launching a business, quick procedures, a thriving economy, and political stability are just a few advantages for foreigners beginning new firms in Dubai and other UAE emirates. The short answer is that expats can establish a new business in the UAE. If you are interested in these benefits but are unsure whether it is possible to start a business in the UAE as a foreigner.

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What to Know Before Starting a Business in Dubai as an Expat or Foreigner

Before we go into how to start a business in Dubai as a foreigner, it’s necessary to understand how the emirate operates. The city has garnered international recognition as the Middle East’s economic hub. Its unique geographical location allows easy access to suppliers in the Gulf, Asia, and the African subcontinent. Furthermore, 90% of the city’s population is made up of international expats.

Furthermore, Dubai’s great infrastructure, safe living environment, tax-friendly legislation, and visionary leadership that promotes technology and innovation make it ideal for entrepreneurs to prosper. Starting a business in Dubai as a foreigner allows you to reside in such a profitable city.

Corporate Structure

One of the first decisions you must make when launching a business in Dubai as a foreigner is the type of company you desire. This will be determined by many elements, including the nature of your firm, its goal, and operational issues, among others. There are two main types of corporate structures to choose from: Limited Liability Company and Sole Establishment.

Jurisdiction

In Dubai, you can open your shop on the mainland or in one of the several free zones. When starting a business in Dubai as a foreigner, you may be wondering what the difference is between the mainland and the free zones.

Mainland

Operating a corporation in Dubai Mainland allows you to trade both locally and internationally. Company establishment is a very systematic procedure. Additionally, you can obtain a business license within a day.

Free zones

Setting up a business in a free zone is relatively inexpensive and advantageous for new firms. Dubai’s most well-known free zones are Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), Dubai Media City, Dubai Silicon Oasis, Dubai International Financial Center (DIFC), Dubai Healthcare City (DHC), and Dubai Multi Commodities Center (DMCC).

However, because each free zone is administered by its authority, the rules and regulations for enterprises, as well as the schedule for business setup requirements, may differ.

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Types of Trade Licenses

The Department of Economic Development (DED) in Dubai issues all business permits in the emirate. There are four sorts of business licenses that you can pick from, depending on your business:

Commercial License

This license is required to do trade business in Dubai.

Professional License

This license is required for every service-oriented organization.

Industrial License

This license is required for all manufacturing and packaging activities.

Tourism License

In this situation, the company’s creation is examined by both DED and the Department of Tourism and Commerce Marketing (DTCM). The latter is responsible for issuing this company license.

Read more: Tax Exemptions UAE: Guide to Corporate Tax Exemptions and Registration in the United Emirates

Steps to Starting a Business in UAE as a Foreigner or Expat

Setting up a business in Dubai is simple if you understand the rules and regulations enforced by the government. To begin a business in Dubai as a foreigner or non-resident, undertake these steps:

Decide your Business Kind

One of the most crucial considerations you must make as a foreigner when starting a business in Dubai is what type of business you want to build. The activity you select will determine the structure of your organization. You can establish a sole proprietorship, which permits you to be the sole owner of your business. You can also register a limited liability corporation (LLC), which is the most prevalent type of business structure in Dubai and allows you to have a separate legal entity.

Select a Business Name

Trade name reservation is a requirement for company registration. Your company name must reflect the type of business you operate. Shuraa’s legal consultants can assist you in selecting a name that is not already registered, does not offend the public, and is appropriate for your business activity.

Apply for a Trade License

A license is required to start a business in Dubai as a foreigner. The trade license may be obtained directly from the various free zone authorities or the DED.

Business Registration

Once you’ve completed all of the requirements outlined above, you can register your firm with the appropriate government and begin your operational operations in the UAE. Registering entails obtaining all necessary paperwork, including identity proofs, trade licenses, permissions, bank accounts, and so on. Only after registration does your business become a legal entity in Dubai.

Obtain a Business Visa

A business visa makes it easier for businesses to enter and exit the country. Furthermore, it allows three of the senior corporate executives to petition for residency. Those who want to start a business in Dubai as an expat can obtain a long-term visa for themselves and their dependents. You can obtain a visa by contacting the local embassy. Furthermore, anyone who wishes to relocate to the UAE to start a business is entitled to apply for a business visa.

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The Cost of Starting a Business in Dubai as a Foreigner

A trade license can cost between AED 15,000 and AED 25,000 to start a business in Dubai as a foreigner or expat, with the ultimate cost depending on criteria such as business kind, location, and other required papers. Also, if you choose a foreign name (non-Arabic) for your firm, you must pay an additional price of AED 2000.

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Approvals Required for Starting a Business in Dubai as a Foreigner

In Dubai, specific firms must obtain licenses from several government organizations. For example, if you want to build a restaurant in Dubai, you must obtain food and safety permission from the municipality. Similarly, to conduct any industrial activity, you must lease or rent factory space with a required minimum area. Still not sure how to start a business as a foreigner. Contact UAE company formation professionals at Shuraa Business Setup.

Their expert legal corporate consultants will assist you in determining the optimal corporation structure and selecting an appropriate jurisdiction. However, they will also walk you through your alternatives and explain the procedures. To schedule a free consultation, call +97744081900 or message us on WhatsApp at +971507775554. You may also contact us via email at [email protected].

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Steps to Start a Business UAE on the Mainland

An investor can apply online to launch his or her firm on the UAE mainland in as little as 15 minutes. Conventionally starting a firm needs some stages, regulations, and approvals from the Economic Department and other government agencies. This post describes such processes and the investor’s route to launch a business on the UAE mainland.

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Starting a Business UAE Online

The UAE government created the Bashr service for launching a business. Bashr is a single online platform that helps investors start businesses in the UAE in about 15 minutes. This platform connects with federal and local government bodies that offer commercial license services. Read more about Bashr.

The Department of Economic Development Dhabi offers investors a quick license service, allowing them to launch their enterprises online and obtain commercial licenses without having to visit a service center. Starting a business often takes several steps, including identifying a business activity.

• Choose a suitable legal form.
• Registering a commercial name.
• Applying for initial permission.
• Drafting a Memorandum of Association and a local service agent agreement.
• Choose a company location.
• Obtain extra government approvals.
• Submit your documents and pay the fees.

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Establishing an Offshore Corporation

If you are thinking about starting an offshore company, there are numerous important advantages and disadvantages to consider. Offshore incorporation is a simple process in all of the world’s major offshore financial hubs and tax havens. They can bring numerous benefits to both the organization and its leaders.

Our handy guide contains more information about the advantages and disadvantages of forming an offshore business, such as privacy and decreased tax responsibility. This also discusses how to register, set up, or incorporate your business outside of your home country.

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Administering Your Business in the UAE

If you own a business in the UAE, you must keep meticulous records of everything related to your organization. Of course, the most crucial aspect of this is maintaining up-to-date accounting records by UAE legislation. This contains annual accounts, general ledgers, purchase day books, tax invoices, credit and debit notes, and VAT ledgers.

Together, these should display all business transactions and provide an accurate financial overview of the organization at all times. In addition, the accounts must be preserved at the company’s headquarters for at least five years. After that, you can keep the digital copies.

However, there are certain limitations. For example, capital asset records, such as those for machinery and furnishings, must be kept for at least ten years. Similarly, real estate records should be retained for at least fifteen years. If you operate in a Free Zone, such as the Dubai International Finance Centre (DIFC), you may face additional obligations.

You will also need to pay attention to preparing invoices. This is because firms in the UAE must provide specified information on each invoice. This includes:

• The recipient’s name, address, and tax number.
• A unique invoice number.
• An issue date or date of supply.
• Price per unit provided quantity/volume.
• The tax rate and due amount in AED.
• Payable Gross Value in AED.

When starting a business in the UAE, using administration or accounting software can be beneficial. Quickbooks, SAP, Sage, Tally, and Reachaccountant are among the most popular accounting software in the country. SmartInvoice and TaxPay are two invoice-specific software options.

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Business Banking in the UAE

Setting up a company bank account is crucial. To do this, you must first register your firm and obtain a license. To open a business bank account, you must first schedule an in-person interview with your preferred bank. In addition, you must supply the following documents:

• Completed application form.
• Resolution of the board of directors to sanction the opening of the account and nominate signatories.
• Documents required for incorporation include a trade license and share certificates.
• Memorandum and Articles of Association.
• Passport copies for all partners/directors.

Additionally, some banks may require you to submit company plans, contract invoices, and reference letters. They may also request that all shareholders prove their visa and residency status. When you have all of your papers in order, you will attend the bank meeting.

If everything is authorized at this point, the account will be operational within two weeks. Corporate bank accounts must typically keep a minimum balance. This might be up to AED 1 million, or it could be as low as AED 20,000. In addition, company accounts can support multiple currencies.

Locally, some of the most prominent business banks include First Abu Dhabi Bank, Emirates NBD, and Dubai Islamic Bank. However, you could also choose larger multinational banks like HSBC and Standard Chartered.

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Taxation of Enterprises in the UAE

When launching a business in the UAE, you must remember to register for tax. The country typically imposes two sorts of taxes on businesses: excise tax and VAT. Carbonated beverages, energy drinks, tobacco, and tobacco products all attract an excise tax.

It can also refer to things that are deemed detrimental to the human body. You can sign up for this online at the FTA website. Following this, you must file returns within 15 days of the tax period. Tax rates vary depending on the type of commodity.

• Carbonated beverages: 50%.
• Tobacco: 100%.
• Energy drinks: 100 percent.
• Electronic smoking devices: 100 percent.

Businesses in the UAE also pay 5% VAT. VAT applies to all tax-registered firms in the UAE mainland and Free Zones. If your company’s taxable supply and imports exceed AED 375,000 per year, you must register for this. Otherwise, it is optional. Again, this can be done through the FTA’s e-services department.

After that, you must file a return within 28 days of each tax period.

There are two VAT tax periods. Businesses with annual revenues of less than AED 150 million are required to file quarterly filings. Businesses operating over that amount, on the other hand, are required to file returns every month.

In either event, all enterprises must keep all documents related to VAT invoices and charges. When you obtain your return, pay the taxes by the due date. This must be completed on the FTA’s website. You can, however, pay with eDirham, a credit card, or bank transfers.

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Business Insurance in the UAE

When starting a business in the UAE, you should consider purchasing insurance to protect your organization. There are various types of insurance offered in the Emirates, which pertain to either the firm or its employees. The following are the most effective types of employee insurance: Worker’s compensation covers your organization in the event of work-related accidents and injuries.

Personal accident insurance, while not needed, is valuable for covering non-work-related injuries and accidents. Health insurance: All enterprises in the UAE must provide employee health insurance. Travel insurance, if your workers travel for work, can be quite valuable in the event of travel delays or lost luggage.

Furthermore, there are insurance choices that can be beneficial to specific firms. They are as follows: Marine insurance is critical for protecting your goods and investments if your firm is involved in shipping or anything related to the water. Motor fleet insurance, for businesses that operate vehicle fleets, will insure all cars in the event of damage or accidents; Property insurance protects businesses that own property against fires and other harm.

It is equally critical that all firms carry liability insurance. This is because numerous things might go wrong during the day-to-day operations of a corporation. This insurance protects your organization in the event of mistakes, accidents, and misconduct.

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Hiring Employees When Beginning a Business in the UAE

Once your firm has taken off, you may want to consider hiring employees. You should be aware that many industries must meet municipal employment quotas. For example, some industries are required to employ a particular number of local workers. In banking, the minimum is 4%, whereas in insurance, the minimum is 5%.

If you intend to hire UAE nationals, there are a few things to consider. First, notify the labor department within 15 days of the employee’s start date. Furthermore, you must provide the same social security and pension benefits as government employees receive. Furthermore, if you have more than 100 employees, you must hire a UAE national to serve as a liaison between the company and the MHRE.

Many mainland-registered businesses opt to hire expat workers. To do so, submit an application to the MHRE and the General Directorate of Residency and Foreigner Affairs in your local emirate. They must meet specific criteria and have a written job contract.

To apply for foreign personnel in a Free Zone, contact the zone’s local administration directly. Although visas are frequently available, aspirants must meet specific criteria. For example, they should be between 18 and 60 years old. Importantly, free zones have visa quotas, while it is possible to request more visas. To obtain a visa for a foreign employee, a corporation must show:

• Business license.
• e-signature card.
• An employee’s color photograph.
• A copy of the employee’s passport.

If you recruit an employee, you must supply certain items. Firstly, health insurance is required. Additionally, it is usual to provide 30 days of yearly vacation and 90 days of sick leave. Foreign employees may also receive a housing stipend, return flights, and schooling for their children.

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Support and Advice for Launching a Business in the UAE

The government provides numerous schemes for financial assistance when launching a business in the UAE. However, these are only available to Emiratis, thus your company’s local partners or owners must apply for them. The Khalifa Fund for Enterprise Development oversees the vast majority of the programs.

Similarly, the Dubai SME provides finance, consultancy, and incubation services to small and medium-sized businesses. In addition, the Intelaq program provides financial assistance to new businesses, as well as legal, marketing, and technical help.

Venture capital and angel investors are also increasingly prominent methods of funding firms in the UAE. You might hunt for people who are specifically engaged in the type of activity your company engages in. Numerous banks provide loans for launching a business in the Emirates. If you can fulfill their credit requirements and repayments, this may be a viable choice.

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Find Office Space in the UAE

There are various sorts of office spaces accessible in the UAE. Traditional offices, on the other hand, are less popular due to their high cost and difficulty in customizing. Coworking spaces are an excellent option for people just establishing a business in the UAE. These provide you with complete flexibility, and many even provide specific business operations like printing, faxing, and receiving mail. In Dubai, popular coworking spaces include Nook, NEST, Our Space, and Letswork. You will also come across worldwide coworking brands like WeWork.

If you have a large number of employees, a serviced office may be a better option. These have the feel of a more typical office space. They do, however, have several advantages that can be beneficial. Staff, including receptionists and assistants, are frequently available for usage without the need for you to hire them.

You might also hire cleaners to keep everything in order and an IT crew to assist with any technical issues that arise. Keep in mind that serviced offices are particularly popular in free zones.

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Business Training Courses in the UAE

The UAE offers a wide range of training courses to help you take your business to the next level. Zabeel Institute provides training in languages, logistics, marketing, and human resources. Similarly, Promise provides a wide range of corporate training courses, including financial management, contract administration, sustainability, and warehouse management. Alternatively, the KPMG Business Academy provides more sophisticated financial courses, including sophisticated Financial Statement Analysis.

Additionally, many government departments offer specialized training to Emiratis. For example, the MHRE maintains a separate National Human Resources Training Sector that provides specialized training to help people flourish in private firms. Similarly, the Ministry of Finance provides extensive financial education.

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Starting a Business UAE is an exciting venture that offers numerous opportunities for local and foreign entrepreneurs alike. Whether you choose to operate on the UAE Mainland or within free zones, understanding the individual chambers of steps involved in company setup is essential. Selecting the right business activity and determining your company’s legal structure is crucial for obtaining a trade license. Additionally, considering the overall cost of various business forms and securing appropriate office space will lay a strong foundation for your success. Embrace these insights to launch and grow your business effectively in this thriving market.