Establishing a business in UAE can never be a bad idea. Even the UAE government encourages investments and startups in the most lucrative ways, making it easy for locals as well as foreigners to start a company in their preferred location. Hence, it can be said that this is the perfect time to get on board with your business plan and gain a foothold in the global market.
Additionally, UAE has certain methods and guidelines when it comes to setting up a new company and the owners have to follow them religiously. So, here are some necessary facts and information on how you can get on with your business setup in Dubai, UAE and what profits you can reap from it.
Legal Structures of Business in UAE
While establishing a business in UAE, you have to consider the type of entity you want to form. UAE offers several options of corporate structures one can choose from according to their business requirements. Given are some of the most common legal forms –
- Sole proprietorship – This structure allows the individual investor to solely own their business and take full control over company operations as well as profits. However, only UAE and GCC nationals can form a commercial or industrial sole proprietorship company, whereas foreign entrepreneurs can solely own only professional ventures.
- Limited Liability Company – An LLC can be formed by 2 to 50 shareholders, wherein each shareholder is liable only for their share of investment in the company. Likewise, profits and losses are also divided according to their percentage of shares.
- Foreign company branch – Any established foreign company can form a branch in the UAE and even take up full control over its operations and profits.
- Free Zone Company – A Free Zone company can be established by a singlr shareholder as well. Although there are many benefits of forming a company in the Free zones, the major drawback is that they cannot trade directly in the local market. And to accomplish this, there are different requirements by the authorities, which a professional business consultant can explain to you.
Steps to Establish Your Company in the UAE
You can follow the below trail for establishing businesses in Dubai –
1. Determine the business activities
The UAE authorities offer thousands of potential activities to choose from. Hence, the business owners can select their desired activities and ensure to list them correctly in the license application form. Any failure or mistake in specification can lead to serious issues in the future.
Therefore, it is advisable to work with company formation specialists who are familiar with the permitted activity list and suggest some of the best activities that align well with your business idea.
2. Reserve a business name
There are certain rules that you should keep in mind while choosing a name for your business. For example, do not use any offensive or blasphemous language in the name. Avoid initials if you naming your company after an individual name. Similarly, do not use any well-known established company name that has already been registered with the authorities.
These are the UAE government’s strict naming conventions that every business owner has to abide by. For better options, you can consult with a company setup expert who can guide you through all the naming protocols and come up with the most suitable name for your company.
3. Pick a location
Further, you have to decide where you want to set up your business – the mainland or the Free zone. And to make a wise decision, it is important to research both jurisdictions, consider their pros and cons, and then conclude with an answer.
For instance, free zones offer a quick and easy incorporation process, ongoing business support, and various financial incentives. However, businesses have restricted access to the local market. On the other hand, Mainland companies can trade anywhere in the UAE as well as across international borders.
Your choice of jurisdiction will depend on the nature of your business. Hence, it is better to take expert guidance and advice on the best approach.
4. Apply for a business license
A business license is of course the major requirement for establishing a business in UAE. The process is simple in both the Free zone and Mainland. However, the only difference is the licensing authority to which you will apply for your business license.
For instance, if you are choosing the mainland for your company formation, you have to approach the Department of Economic Development(DED) for your license. If you are opting for a free zone company formation, then you have to submit your applications with the respective free zone authority.
Additionally, while making your application for the license, you will be required to submit certain documents supporting your request, such as a completed application form, owner’s passport and photograph, and many more. The company formation agents at UAE Expansion can provide you with the full list of documents and even arrange them for submission to the concerned authorities.
5. Apply for the required visas
Once you have acquired your business license, you will need a visa to legally stay in the UAE. Hence, you have to apply for your required visas including your employees’ to the immigration department. Depending on the size of your company and chosen setup you can make multiple visa applications.
Although the process is simply straightforward, you might have to deal with hefty paperwork and get approvals from several agencies. Again, UAE Expansion can help you with this step.
Once you get hold of your UAE visa, you can further request dependent visas for your spouse, parents, children, or domestic workers.
6. Open a business bank account
A business account can help you manage your corporate funds and keep track of your business cash flow. UAE has several local and international banks that provide incredible banking facilities and reliable financial services. Thus, you need to find the one that can satisfy all your business needs and offer you profitable hand-outs as well.
In addition, the UAE follows strict money laundering regulations which often makes it difficult for foreign entrepreneurs to access its banking facilities. Hence, you can work with a professional business setup service provider in UAE to make this process smoother.
Top 17 benefits of starting a business in Dubai
Additionally, there are many compelling reasons why one should consider doing business in Dubai or anywhere in the UAE.
- Minimal, sometimes no taxes
- Vibrant economy
- Promotes great quality of life
- Home to many business incubators and funding drives
- Accelerates business growth with productive schemes
- Inexpensive workforce
- Easy recruitment procedure
- Foreign ownership
- Capital repatriation
- Free transfer of funds
- Custom duty exemption
- Less freight charges
- No currency restrictions
- Single-window service
- Efficient communication procedure
- Liberal government policies
- Affordable energy supply
Planning to establish a business in UAE
While the process of establishing a business in the UAE is not very complex, it does prior knowledge of the overall procedure. Moreover, it can be successful only if your application is complete and free from errors.
Hence, to ensure that, the team of UAE Expansion will handle your application responsibly and assist you in every step of the company formation process, including visa application, corporate account opening, documents submission, etc.
