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starting a business in dubai as a foreigner

Starting a Business in Dubai as a Foreigner or Non-Resident? Here’s What You Need to Know

Starting a business in Dubai as a foreigner is possible given that the UAE has launched several initiatives that promote foreign investment. However, if you want to have a smooth entry into the UAE market, you should follow the right steps.

In this article, you will learn more about how to start a business in Dubai as a foreigner. Furthermore, if you are wondering why should you start business in Dubai as a foreigner, you will see all the reasons.

Can You Have Full Ownership of Your Company in Dubai?

Starting a business in Dubai as a foreigner 

First of all, you may be wondering: Can Foreigners Start A Business In Dubai? The truth is that across the UAE you will find many different types of businesses run by foreigners. So, as a foreign investor, you can start your business easily.

However, when it comes to starting a business in Dubai as a foreigner there is another crucial question. You may be wondering if you may have full ownership of your company.

This matter is highly important for investors, as they do not want to split the shares with another one. In this regard, the law regarding full ownership has changed over the years.

Previously, it was only allowed for some activities in the professional sector and for companies established in the Free Zone. However, with the latest amendments, foreign investors can now have 100% ownership of their businesses according to the following:

  • Natural and legal persons can now establish a company and get total ownership in Dubai mainland.
  • It is required to have a Local Service Agent (LSA) which is different from a sponsor, as an LSA does not have shares in your company.
  • It is only allowed for 1,061 economic activities, so you have to check if you qualify.

Which is the most profitable business in UAE?

If you are starting a business in Dubai as a foreigner, you may be considering the most successful business opportunities, as this allows you to increase the likelihood of success.

The good news is that, since Dubai is a thriving city with a solid economy, almost any type of business is bound to succeed. You just have to make good entrepreneurial decisions so you can increase your popularity and profit.

However, there are some sectors that are on the rise, and it is worth considering them if you plan to operate in Dubai:

  • Ecommerce
  • Education & Training
  • Retail and Fashion
  • IT Services
  • Real Estate
  • Tourism
  • Food and beverage
  • Art
  • Health and wellness

Why Consider Dubai for Your Business Venture?

In the UAE there are 7 Emirates, and more than 40 free zones. As you can see, there are many options for you to start your business.

However, why should you start business in Dubai as a foreigner? This enchanting location has a promising market and it is considered a commercial hub in the Middle East. Therefore, if you want to take advantage of your business location, then Dubai is your go-to option.

The following are the best reasons why you should set Dubai as the location for your business:

  • Strategic location in the Middle East
  • Easy connectivity to Africa, Asia and the Gulf
  • Top infrastructure
  • Friendly policies for businesses
  • Safe living environment
  • Access to technology and innovation
  • Lucrative city

Exploring Free Zones: What Are the Perks of Setting Up Shop There?

In Dubai, there are around 26 Free Zones where investors can establish their businesses. So, if you want to set up your business in a free zone, instead of in Dubai Mainland, you can access additional benefits.

Some of the perks of free zones are the following:

  • No import and export taxes
  • No currency regulations
  • High level of confidentiality
  • Total ownership of your business, regardless of the economic activity
  • No limitations on trade
  • Several office and warehouse options
  • Easy incorporation process
  • Excellent infrastructure

Let’s Talk Business Structure: How to Set Up Your Company

When starting a business in Dubai as a foreigner, you have to decide the structure of your business. This means that you have to take into account the following:

  • Business activity: what activity do you want to carry out? Is it on the list of permitted activities? Do you need to add more than one or two business activities to your license?
  • Purpose of your company: set clear goals and prepare a business plan on what you want to achieve.
  • Operational aspect: do you plan to operate locally or online? Have you considered what type of office do you need?
  • Corporate structure: consider the type of legal entity you want to incorporate by doing extensive research.

Checking Out Your Options: What Are the Legal Structures for Foreign Businesses in Dubai?

The first step in how to start a business in Dubai as a foreigner is to decide which type of company you would like to incorporate.

Every type of entity has its advantages, so you have to decide which one better suits the nature of your business. In addition, some of these business structures are only reserved for UAE Nationals or GCC nationals, so keep in mind that as a foreigner you may have some restrictions in this matter.

The business structure available is the following:

  • Sole proprietorship: foreigners need an LSA to open this type of company when it is aimed at the commercial or industrial sector. If it is in the professional sector, it is not necessary.
  • Limited Liability Company (LLC): This is the most used form of company. It can be formed with at least 2 shareholders and a maximum of 50.
  • Branch of a foreign company: it is not a separate entity from the parent company, but a dedicated outlet in the UAE.

Where to Base Your Business: Navigating Jurisdiction in Dubai

Once you have considered the nature of your business and the type of legal entity, the next step will be to decide on the jurisdiction.

When starting a business in Dubai as a foreigner you have two main options: Mainland or Free Zone. You could opt for Dubai Mainland or any of the Dubai Free Zones. Since this may be a tough choice, you have to consider the following:

  • Market access: mainland jurisdiction offers a broader audience as you are allowed to operate within the UAE. Whereas with a free zone company, you can only trade internationally.
  • Target market: if your customers are mainly local, then you should opt for a mainland setup. But, if your clients are predominantly global, then you have to opt for a free zone.
  • Legal requirements: consider which legal framework is more suitable for your business as there are different regulations across free zones.
  • Ownership: if you want full ownership, consider if your economic activity is allowed for 100% control in the mainland. If not, then you better opt for a free zone.
  • Costs: free zone costs tend to be fixed whereas mainland are variable.

Finding the Right License: Understanding Your Options

After you have considered the jurisdiction where you want to incorporate your company, then you need to evaluate the type of license you will need.

When starting a business in Dubai as a foreigner you have the following licenses available:

Ready to Dive In? Here Are the Steps to Kickstart Your Business in Dubai as a Non-Resident

Having an overall view of all of the requirements for starting a business in Dubai as a foreigner will help you navigate the incorporation process easily.

By knowing all the steps, you have to go through, you can prepare your documentation and decide the best route for your business.

Step 1: Figure Out What Type of Business You Want

First of all, you have to think about what type of business you want to launch in the UAE. Consider the following:

  • Business activity
  • Jurisdiction
  • Legal structure
  • License type

In case you want to incorporate an LLC in Dubai, you may have to submit different documentation than for other type of legal structure.

Step 2: Pick a Catchy Name for Your Venture

Once you have decided on the type of business, you have to choose a trading name. Keep in mind you have to follow the regulations established, which are the following:

  • The name cannot be already registered or in use by another company
  • It must comply with your business activities
  • You have to include the acronym of the business structure you have selected at the end of the name
  • It should not violate the public order or values of the country

Step 3: Get Your License Sorted

If you are in a Free Zone, apply for the business license directly to the respective authority, and if you are in Dubai, apply at the DED.

Keep in mind there are the cheapest trade licenses in the UAE, so you do not have to exceed your budget to start operating.

Step 4: Register Your Business and Get It Officially Incorporated

Next, you have to prepare your application form for registering your company. Make sure to gather the documentation required to submit it too. Ensure you have the following:

  • Business documentation
  • Identity proofs
  • Trade license
  • Permissions

Step 5: Secure Your Business Visa to Get Going

As a foreign investor, you need to have a residence visa to be able to work and live in the UAE. You can apply for a long-term visa and also for your dependents and members of your company.

Lastly, you also have to consider opening a business bank account in Dubai so you can manage your finances efficiently.

Breaking Down the Costs: What to Expect When Starting a Business in Dubai as an Expat

When it comes to starting a business in Dubai as a foreigner, you have to consider the costs so you can prepare your budget in advance.

The starting a business in Dubai as a foreigner cost varies depending on several factors, such as the following:

  • Type of legal structure
  • License and activities
  • Location and jurisdiction
  • Business size

In this regard, incorporating a company can be as cheap as AED 10,000 and the price can go up to AED 35,000.

There are low-cost business setup options in Dubai, so you can save money while incorporating your desired company.

Navigating Approvals: What You Need to Launch Your Business as a Foreigner in Dubai

Can Foreigners Start a Business in Dubai? Yes, they can, as Dubai welcomes investors. However, keep in mind that to run your company you may need additional approvals.

Some businesses need governmental permits to operate in Dubai, and these may be the following:

  • Dubai Municipality: approval for food businesses.
  • Dubai Tourism and Commerce Marketing: this is for cafes or hotels.
  • DED (Department of Dubai Economic Development): NOC for required businesses.
  • Dubai Police General Headquarters: for businesses selling liquor.
  • Telecommunication Regulatory Authority: type approval.

If you are not sure about how to get approvals, business setup consultants can assist you in your company’s formation. This way, you can relax while they take care of the most complex legal paperwork.

Don’t Go It Alone: Why Seeking Expert Assistance Is Key

Starting a business in Dubai as a foreigner requires having extensive knowledge about the procedures to follow.

For this reason, seeking assistance from experts can be a great option to improve your success. In addition, experts can help you minimize risk when navigating UAE Labour regulations.

Some of the areas where experts can assist you are the following:

  • Deciding the best legal structure based on your business
  • Choosing the type of activities, you can carry out in the UAE
  • Deciding the proper jurisdiction based on your target market
  • Assisting in incorporating and registering your company

Also, they can help you with starting a business in Dubai as a foreigner cost, as they can provide cost-effective solutions.

What’s the Deal with Local Sponsors? Do You Really Need One?

In some cases, depending on the nature of your business, you may need to appoint a local sponsor. In other cases, you may need support from a Local Service Agent.

You need a sponsor in the following sectors:

  • Oil production and exploration
  • Banking in finances
  • Water and electricity
  • Fishing
  • Printing and Publishing
  • Commercial agency
  • Medical retail and pharmacies
  • Road and air transport

On the other hand, you need a LSA in the following scenarios:

  • When you are incorporating a company in the mainland and need a commercial or industrial license
  • In some economic activities where 100% ownership is allowed but only with an LSA.

Getting a Helping Hand: What Support Is Available for Foreign Entrepreneurs in Dubai?

The Ministry of Economy in the UAE supports foreign businesses by implementing different initiatives. Some of them are the following:

  • Government programs by entities supporting start-ups, and SMEs
  • Residency programs
  • Instant licenses
  • Tech support
  • Support for female entrepreneurs
  • Consultation and mentorship
  • Project launch assistance
  • Loan assistance

Gathering Your Paperwork: Essential Documents for Starting Your Business in Dubai as a Foreigner

The documentation you need to start your business is the following:

  • Passport copies for each shareholder.
  • Passport-sized photograph
  • UAE Residence Visa (if applicable)
  • Emirates ID (if applicable)
  • MOA and Certificate of Incorporation

Bringing in Talent: Are There Rules About Hiring Foreign Employees?

starting a business in dubai as a foreigner

To hire foreign employees in your company, you need to comply with the following:

  • Registered business: your company has to be legally registered in the UAE.
  • Business license: you must have a valid business license.
  • Quote: You should apply for a quota for foreign employees, as in the UAE you also must hire UAE nationals.
  • Contract: both parties should sign the contract and it must be in Arabic and English.
  • Work permit: you should apply for a work permit for employees overseas.
  • Visa: you have to sponsor the residence visa for your employee.

Starting a business in Dubai as a foreigner can be daunting. There are many regulations to follow and if you are not familiar with them, you may face non-compliance issues. For this reason, it is useful to have experts backing your decisions.

Contact us now to help you set up your business smoothly, so you can expand confidently to the UAE as a foreign investor.

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