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A Comprehensive Guide: Setup a New Business in Dubai

A Comprehensive Guide: Setup a New Business in Dubai

Dubai has attracted the attention of foreign investors and entrepreneurs worldwide in the past decade. This is mainly due to the unique business opportunities and innovative commercial modules that the city provides for entrepreneurs and international exposure, and an investor-friendly government. What distinguishes Dubai from other business hubs worldwide is that startups in Dubai also get perks on investments and tax advantages. If you’re planning to setup a new business in Dubai, now is the right time.

Steps to Setup a New Business in Dubai

The process of establishing a business in Dubai is straightforward and only requires the following certain steps: 

Choose a Reliable Company Formation Consultancy Company
Hiring company formation experts can help new businesses, especially foreign investors, avoid mistakes and unnecessary expenses in the business setup process. Our team makes sure that entrepreneurs will have a hassle-free company formation in Dubai and the UAE. 

Choosing the Business Activities
This is a vital step since not all business activities are allowed in Dubai. Also, certain consents and approvals are requested for establishing a business.

Selecting the Right Jurisdiction that Suits the Business Activities Best
Various business jurisdictions are developed for optimizing certain business activities. These jurisdictions are segregated zonally to increase the competence as well as productivity of a business. Dubai offers mainland business setupsfree zone company formations, and offshore business establishments. Business activities and the nature of the business conducted under a company best define what jurisdiction should be selected for running a business.

Choosing the Right Shareholding Structures
Company setup in Dubai requires defining a legal structure for the business. The shareholding structure must be in cohesion with the business operation and preferred jurisdiction. The legal structures for establishing a company are:

  • Limited Liability Company
  • Sole Proprietorship
  • General Partnership
  • Partnership in Commendams
  • Public Shareholding
  • Private Shareholding
  • Joint Venture
  • Shared Partnership
  • SME License
  • Representative Offices
  • Branch Offices
  • Limited Partnership

 

Finding a Local Service Agent 
A business that provides professional services in Dubai Mainland requires cooperating with a Local Service Agent (LSA). Finding a reliable local service agent will help a company in its government dealings and processes since LSAs serve as their representative in these kinds of matters. 

Registering the Trade Name with DED
There are rules and regulations for registering a trade name in Dubai, which should be studied carefully. These regulations are put in force by the Department of Economic Development (DED), and the details of the rules for selecting a trade name can be found on their website. The trade name acts as an identity of the business, and thus DED emphasizes associating the name as per the license type. It takes around three days to register a trade name, and it is valid for a period of six months.    

Obtaining the Approval of Business Activities in Dubai
Only a few commercial activities are not permissible. Some activities have restrictions, while others are entirely prohibited. According to Law No. 13 of 2011, the Dubai DED is the accountable body to decide, regulate, classify, permit and license all economic activities. However, it is noteworthy that this is not applied to free zones and offshore business setups.

Obtaining External Approvals for Businesses (if applicable)
DED dispenses trade licenses to businesses and deals with investors. However, there are occasions that a company may require external approvals for benign registering at the DED. Generally, these permissions are acquired by non-governmental and semi-governmental bodies. 

Renting a Business Premise
Having a physical existence is obligatory for every business in Dubai. The tenancy agreement, Real Estate Regulation Authority (RERA) documents, and EJARI are required to be submitted, following which the DED grants the initial approval.

Obtaining the Initial Approval from DED
The DED grants the initial approval on the submission of all the required documents. The initial approval is also accreditation from the DED for starting a business. A business can become operative at this stage and continue with the process of acquiring the trade license.

Drafting the MoA/LSA for the Business
Drafting the Memorandum of Association (MOA) or the LSA agreement is essential. The MOA specifies the share of limitations and liberty every partner has within the company, while the LSA describes the agent’s role and fulfills the compliance that will be performed. MOA/LSA are legal documents and should be drafted with the help of a legal advisor. These documents are also required to be translated into Arabic.

Following All of the Company Registration and Business License Procedures

In Dubai, company registration and business licensing should be performed in parallel. Once the DED registers the company, the business license will be processed and could be collected duly. Business licenses are provided mainly depending on the nature of the business activity and the jurisdiction of the business. The most prominent licenses for business setup in Dubai are commercial license, industrial license, and professional license. It takes around one week or more to obtain the trade license once the initial approval has been issued. This mainly depends on the business activity and the external documentation. 

The primary and most general list of documents and certifications that are required for business setup in Dubai are:

  • License Application
  • Attested LLC agreement
  • Governmental forms
  • Name reservation certificate
  • Initial approval certificate
  • External departments approval
  • Tenancy contract
  • EJARI registration certificate
  • Passport copies partners and NOC for partners (if any)
  • Dubai Chamber of Commerce and Industry Registration
  • Endorsements from Governmental Agencies (For Gas and Oil Companies)
  • UAE Central Bank Approval and License (For Financial Institutions)
  • Finance and Industry Ministry Certification (For Manufacturing Companies)
  • Economy and Commerce Ministry Certification (For Insurance Companies)
  • Health Ministry Certification (For Medical and Pharmaceutical Firms)

Collecting the business license for starting the business: The DED will provide a payment voucher or transaction number to submit all the listed documents. To collect the trade license, the final payment needs to be made. Once the trade license is collected, a business is eligible to operate.

Choose UAE

Choose UAE‘s Company Formation Specialists can provide professional business setup guidance and assist you in your decision-making by providing well-informed options from the suitable business activity and the right license option. 

Get the most out of Choose UAE’s optimal customer service experience, hassle-free, efficient licensing services with a dedicated account manager.  

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