How to start a business in the UAE?

start a business in the UAE

Starting a company, whether in the United Arab Emirates or anywhere in the world, is an important decision. It involves research, planning, budgeting, and conceptualization, among other things. In the UAE, you will need to comply with the established regulations and acquire the correct business license for your business. For this reason, in the following lines, we will talk about how to start a business in the UAE.

In this article, you will find information about the process of starting a business in the United Arab Emirates, the advantages of choosing this country for your company formation, and also how we can help you start your business successfully.

  1. Who can start a business in the UAE?
  2. What legal structures does the UAE allow?
  3. How to start a business in the UAE?
  4. Benefits of the formation process of a business in the UAE
  5. How can we help you start a business in the UAE?

1. Who can start a business in the UAE?

Starting a business in the United Arab Emirates is quite easy; actually, anyone can do it. This is because the government of the country has offered different incentives to new and experienced entrepreneurs.

The first thing to know is that for most types of companies (apart from the sole proprietorship) you will need an Emirati partner to own 51% ownership of the company (if you decide to set up on the Mainland). After that, you will need to go through the process of registering and licensing your business. Keep in mind that in some cases you will have to meet the minimum capital requirements.

If you decide to establish your company in a free zone of the country, you will be able to enjoy the many advantages that this zone offers. For example, 0% corporate and personal taxes, exemption from export and import taxes and you will also be able to maintain 100% foreign ownership.

2. What legal structures does the UAE allow?

One of the first things to consider when starting a business is the type of company you want to form. As in any country, the United Arab Emirates has several legal corporate structures. Some of the most common are the following:

2.1 Sole proprietorship

The entrepreneur can maintain 100% ownership of this type of company. For this reason, the person can maintain full control over the profits and operations. Although all nationalities can create a sole proprietorship company, only GCC and UAE Nationals can have an industrial or commercial company.

2.2 Civil company

Professionals such as accountants, lawyers, and doctors can start a civil company in the country. For this type of business, an Emirati partner must own 51% of the shares of the company.

2.3 Limited Liability Company (LLC)

In a Limited Liability Company, there must be between two and fifty shareholders. As such, each one is liable only for their percentage of shares. In addition to this, the profits and losses are divided between all the shareholders depending on their holdings.

In this type of company, once again, 51% of shares must be owned by a UAE national. Furthermore, an LLC with more than seven partners must create a board with at least three shareholders.

2.4 Foreign Company Branch

A foreign company can establish a branch in the country. In this situation, the parent company has 100% ownership. However, all goods must be imported through a local trading firm.

2.5 Free Zone Company

Every company created in a free zone must have two to five stakeholders. While there are a lot of advantages of choosing a free zone for your business, you should know that these companies cannot trade directly with the UAE market. Therefore, there are different requirements to create a business there. For example, some legal entities do not require any minimum capital. However, some others require a minimum capital from AED 1,000 to AED 150,000.

2.6 Freelance work

Working under the freelance modality in the UAE is extremely easy. You must register your business in a free zone with an application form, bank reference, CV, and notarized Registry Identification Code Form. You can also apply for a visa.

3. How to start a business in the UAE?

The steps to create a business in the United Arab Emirates successfully are the following:

3.1 Select a business activity

When selecting the business activity for your company, you must take into account the practicality of the chosen activity in relation to the UAE market. Also, before opening a company in the country, make sure you do a thorough research on the profitability and the feasibility of the activity. Then you can decide  when to start a business in the country.

3.2 Select the jurisdiction

The country’s market is divided into different economic zones: Free zone, Mainland, and Offshore. Each jurisdiction has its own regulations and rules about the business setup. They also cater to different business needs. Selecting the jurisdiction of your company will depend on the requirements and the nature of your business activity.

3.3 Finalize the legal form/company structure

Choosing the legal form for your company is one of the most important decisions when starting a business in the UAE. It sets the tone to manage the profits and losses and how you should organize your assets and resources. It is advisable that you decide on the legal form in the initial stages of planning, this will help provide a layout for your company.

You will not be able to apply for a license until you decide on the legal form. Some of the company structures under which you can register your business in the UAE are the following:

  • GCC company branch
  • Holding company
  • Sole Establishment
  • Limited Liability Company (LLC)
  • Free zone company branch
  • Local company branch
  • Foreign Company Branch

3.4 Get approval for your business activity and the company name

The Department of Economic Development (DED) is the entity in charge of approving the trade name for your company before proceeding with the process of setting up your company in the UAE. Along with your company name, the DED must approve your selected business activity.

Once you receive the approvals, you will need to submit the documents to apply for a trade license and open your company.

3.5 Apply for a trade license

There are several types of licenses in the United Arab Emirates, the main four are the following:

You can apply for any of these licenses if you plan to start a business on the Mainland. If you decide to establish your company in a free zone, the licensing structure is different and depends directly on the business activity of your company.

3.6 Register your company

The registration and licensing process of a company are simultaneous. However, the entire documentation and approval process goes through several stages. At this point, you will need to obtain all approvals from the appropriate government entities as requested by the DED. The required documents are different depending on the type of company and the activity.

3.7 Find a local agent (if required)

To start a business in some areas of the UAE you will need a local partner. This agent must be a UAE National only. Finding a trustworthy local agent can be a tiring process, especially for a new entrepreneur looking to start a business.

A business setup consultant, like Connect Zone, can connect you with companies that offer corporate sponsorship where you can obtain authorization to maintain 100% of the ownership.

3.8 External approvals

The Department of Economic Development may seek approval from other government and non-government agencies, depending on the business activity. For instance, some businesses may be asked to get approvals from specific banks, embassies, the municipality, etc.

3.9 Memorandum of association (MoA)

The Memorandum of Association is one of the most important documents when starting a company in the United Arab Emirates. Therefore, before drafting the MoA make sure you have professionals in the area to advise you. This document must be done in accordance with the regulations of the country.

3.10 Rent an office

Depending on the nature and needs of your company, you can opt for a shared workspace in a business center or an office unit. Office space can also determine the number of visas you can apply to the Department of Economic Development.

3.11 Tenancy contract or Ejari

When you start a business in the UAE, you might need an Ejari. The tenancy contract is the agreement between you and the real estate agency whose shared workspace or office unit you intend to rent. Ejari is an online system managed by the Real Estate Regulatory Agency (RERA). This system ensures transparency and fairness between both parties involved in the tenancy.

You must submit the tenancy contract and a few more documents to activate your Ejari account. This system is of the utmost importance since you need it to renew visas for your employees and family members.

3.12 Initial approval

Before obtaining your license to start operating in the UAE, you must obtain initial approval from the DED. This approval indicates that the government of the country does not object to you starting a business in the UAE. If you do not get this approval, you cannot continue with the application process.

3.13 Collect the trade license

To obtain your trade license, you must submit the following documents:

  • Trade license application
  • Initial approval certificate
  • Tenancy contract
  • Relevant government forms
  • Ejari registration certificate
  • No Objection Certificates for partners (if any)
  • Passport copies of partners
  • External approvals (if any)
  • Other requirements by the Department of Economic Development (if any)
  • Trade name reservation certificate

All these documents must be delivered to the DED along with the necessary government fees.

4. Benefits of the formation process of a business in the UAE

4.1 Business hub

Location-wise there is no other country more attractive than the United Arab Emirates to do business. It is one of the most profitable business hubs in the Middle East and in the world. Due to its geographical location, trade with Africa, Europe, Asia and the East coast of America grows every day.

The ease of accessibility to such huge markets offers you an excellent opportunity to start your business and trade internationally.

4.2 Zero-tax policy

The UAE offers hassle-free business opportunities thanks to the total exemption from all taxes including income, custom, personal and corporate tax. Also, you will be able to enjoy complete export and import tax exemption, zero currency restrictions, and full repatriation of profits and capital, which can benefit your business to grow faster.

The only tax that some companies must pay is 5% value-added tax. It was created in 2018 and is valid only for certain business activities. To keep your business profits without giving any income or business tax to the Emirates government, you must establish your company in a free zone. This will also allow you to give extra liquidity to your company and improve profitability.

4.3 Flourishing economy

The UAE is one of the countries with one of the fastest-growing economies in the world. With an outstanding per capita income and a remarkable annual trade surplus, this country is one of the best economies in the Middle East. The companies established here enjoy highly stable financial situations and financially favorable conditions.

In addition to this, investments in the United Arab Emirates have increased rapidly in recent years. This investment of foreign capital has further strengthened the country’s economy. Thanks to the business-friendly conditions and strong economy, hundreds of companies, conglomerates, and booming startups have moved their facilities to this country to expand internationally.

5. How can we help you start a business in the UAE?

With more than twenty years of experience and more than a thousand satisfied clients, Connect Zone is the right business setup agency to accompany you in the process of forming your company. Our professionals are trained to carry out all kinds of legal and administrative procedures that your company may need.

When forming a company in the UAE, you must comply with the rules and regulations of the UAE. We will take care of fulfilling each one of them. Additionally, we can help you get an office space in one of the best business centers in the country. Our PRO services for your company can do many things for your advantage, and we can as well facilitate the application process for your visa.

Do you want to know more about Connect Zone and the process to start a business in the UAE? You can easily contact us at +971 43 316 688. Send an email at contact@connectzone.ae with all your questions and our team will quickly reach out to you.

Lastly, if you are interested in finding out about new job offers for you, The Talent Point is the platform for you. You can send your CV to many companies, organizations and agencies on thetalentpoint.com. Another way to do so is by sending an email with your resume to contact@thetalentpoint.com.

Mainland Company Formation in Dubai & the UAE

Mainland Company Formation in Dubai

Over the years, more and more people decide to start a Mainland Company Formation in Dubai and the United Arab Emirates, due to the many benefits that it brings when doing business. New entrepreneurs see in Dubai and the UAE the opportunity to make favorable long-term investments, achieving eventually, growth, and expansion of their economic power.

In this article, you will learn everything you need to know about the Mainland Company Formation in Dubai. At the same time, you will learn about the services of local agents, the costs of opening a Company in Dubai, and the economic benefits you might get from a Mainland Business Setup in Dubai.

  1. What is a Mainland Company in Dubai?
  2. How to start a company in the United Arab Emirates?
  3. What is the cost of a Business Setup in Dubai?
  4. Who are the local service agents in Dubai?
  5. Benefits of opening a Mainland Company in the UAE
  6. Differences between a Business Setup in Dubai and a Company in the Free Zones
  7. How can we help you to obtain more information about the Mainland Company Formation process?

1. What is a Mainland Company in Dubai?

Firstly, Mainland companies in Dubai are those that have a license to operate from the Department of Economic Development corresponding to the Arab Emirate where the company is located.

This license allows you to do business, both in the local market and outside the UAE, without any restrictions.

2. How to start a company in Dubai and the United Arab Emirates?

2.1 Establish the productive activity

The first thing you must have for a successful Mainland Company Formation in Dubai or opening a company in dubai is the productive activity to which you are going to dedicate yourself, this will define the type of license to which you must apply.

There are six types of professional licenses: Industrial, occupational, agricultural, commercial, tourism, and professional.

The United Arab Emirates has more than two thousand productive activities to choose from, and companies can engage in more than one activity at a time.

2.2 Choose the legal form

After defining the productive activity, you must apply for a legal form, to identify possible laws or regulations within the UAE.

An investor can choose between the following legal forms:

  • General partnership
  • Limited partnership
  • Public Joint Stock (PJSC)
  • Private Joint Stock (PrJSC)
  • Limited Liability Companies (LLC)
  • Civil Company
  • GCC Company Branch
  • Foreign Company Branch
  • Local Company Branch
  • Free Zone Company Branch
  • Holding Companies
  • Establishment only

 2.3 Register the brand name

Every Mainland Business Setup in Dubai must have a distinguishable name that represents the essence of the services offered.

Investors can register the name through the Department of Economic Development of the relevant Arab Emirate.

Things to consider before registering your brand name:

  • The name must contain, at the end of it, the acronym of the chosen legal form. These can be: LLC, EST, PJSC, PrJSC
  • Must represent the moral values and public order of the country, accordingly
  • It has to be related to the chosen productive activity
  • Names of religions or any political entity are not allowed
  • Cannot be previously registered

During the application process, you will be given a receipt or a transaction number, which will be used as a reference when you pay.

It is important to note that the Economic Development Department corresponding to the area where the Mainland Company is located will be in charge of registering the trade name. While the Ministry of Economy registers the trademark. Also, the trade name certificates are renewable.

2.4 Initial approval

Reaching this point means that the Government does not present problems for another Mainland Company Formation in Dubai.

This allows you to continue the steps to open the company, however, you still cannot carry out the chosen productive activity.

Those foreign investors interested in setting up a Mainland Company in Dubai or the UAE must obtain approval from the General Directorate of Residency and Foreign Affairs before receiving initial approval.

Another key point is that some productive activities may require other types of approvals directly related to the type of business it is.

This may include activities related to legal affairs, security affairs, and financial securities and commodities.

2.5 MOA and LSA

Depending on the legal form of the company, a Memorandum of Association must be completed or signed, or a Local Service Agent in Dubai must be hired to carry out certain procedures.

The memorandum of association is required for the following businesses: Limited partnership, Limited Liability Companies (LLC), Public Joint Stock (PJSC), and Private Joint Stock Company (PrJSC)

At the present time: The courts, law firms in the United Arab Emirates, and public notaries make and certify the Memorandum of Association.

2.6 Choose the location of your company

In the UAE, all companies are required to have a Business Center to operate, and all must be governed by the requirements of the corresponding Department of Economic Development.

In addition to this, investors must provide rental agreements for offices and warehouses. Some Emirates require these agreements to be certified.

2.7 Get additional approval from government entities

For the exercise of certain productive activities, the approval of the corresponding Ministry of the UAE is required. Below you can see the Ministries and their activities:

  • Ministry of Interior: Grants permits for activities related to general transportation and driving schools, security systems, car rental
  • Ministry of Justice: legal activities and consultancies
  • Local Municipal Department: Infrastructure and engineering activities
  • Telecommunications and Digital Government Regulatory Authority (TDRA): Activates related to telecommunications
  • Executive Council: Tourism, travel, car clubs, foreign company branches, ship, and maritime agencies
  • Ministry of Economy: Insurance activities and insurance consultancies
  • Local Health Department: Activities related to health care
  • Supreme Petroleum Council: Operations related to the extraction of oil and gas

2.8 Get your business license

After completing the above steps, you can get your license at the service centers of the Departments of Economic Development.

To obtain your license you must present the following documents:

  • Receipt of initial approval and all previously registered documents
  • Memorandum of association duly certified (for all types of companies)
  • The approval of the other government entities according to the productive activity
  • Contractual agreement duly certified by the local service agent in Dubai
  • Copy of the lease contract duly certified by The Real Estate Regulatory Agency (RERA) in Dubai

The license payment must be made within a period not exceeding 30 days, otherwise, the license application will be canceled. Finally, the licenses have an expiration period, so you must renew your license every year, So yes these are the process for Company formation in Dubai 

3. What is the cost of a Business Setup in Dubai Mainland?

The cost of the Mainland Company Formation in Dubai will depend on various circumstances, such as the type of productive activity carried out, the approval and certificates required, and the jurisdiction of the space where the company is working.

However, an estimate of cost would be:

  • Initial approval from the Department of Economic Development: AED 235
  • MOA certification: AED 1200
  • Business license: AED 10000
  • Brand Name Approval: AED 735
  • Rental of physical facilities: May vary, depending on the location
  • Registration to the Ministry of Economy: AED 3000
  • Market rates, the UAE government owns 5% of the office rent and 20% of the warehouse

4. Who are the Local Service Agents in Dubai?

Firstly, the local service agents in Dubai are citizens who act as representatives of those investors planning on opening a company in Dubai.

Secondly, local service agents have no civil responsibilities or monetary ambitions and have no interest in the legal activities, operations, or profits of the company.

5. Benefits of opening a Mainland Company in the UAE

Deciding to invest in the United Arab Emirates has opened the doors of economic growth for many people, and has brought with it multiple benefits.

For example, with the flexibility of location and zero restrictions, Mainland Companies can do business with other companies, inside and outside the UAE, or negotiate directly with the consumer, without any limits.

Also, Mainland Companies in the United Arab Emirates enjoy great manageability in terms of productive activities. If at any time, the investor would like to diversify his company, he only has to register the new activity in the corresponding development department and he can start negotiating.

Another considerable advantage is the opportunity for large deals with the UAE government.

As a matter of fact, the government of the UAE regularly decides to invest in the economic growth of its people. For this reason, as the owner of a major Mainland Company, you can heavily benefit from this type of investment.

6. Differences between a Business Setup in Dubai and a Company in the Free Zones

Over the years, many investors have decided to start their business activities in Mainland Dubai and the Free Zones. Here are some differences between them:

Firstly, Mainland companies can conduct business in the local market, inside and outside the UAE and in any Free Zone with total freedom, and apply for all licenses (commercial or professional) Mainland companies have no visa limit. The Visa eligibility depends on the office space, the larger the office and the more people who work there, the more visas you can get.

In the same way, this type of company needs the approval of different government authorities and the presence of a local service agent in Dubai is mandatory.

On the contrary, companies in the Free Zones can only conduct business in the same Free Zone and inside and outside the UAE. For businesses in the local market, there are several restrictions to take into account.

Products must be imported or exported through a distributor or a person with a Mainland business license. Another key point is that commercial licenses are also included in the restrictions.

Businesses in Free Zones offer 2 visas per office. However, in some Free Zones, they grant from 3 to 6 visas. If an investor wants to increase the number of Visas, they will need to rent more offices or warehouses.

Businesses in the Free Zones do not need a Local Service Agent and do not need the approval of any government entity, since the main objective is duty-free import and export.

7. How can we help you learn more about the Mainland Company Formation process?

Connect Zone, can guide you in every step of the way to start your Mainland Company Formation in Dubai or the United Arab Emirates.

Our team of experts will take care of all the paperwork and legality of the process. We will assume the role of your Public Relations` Officer, to ensure transparency in operations and to maintain your trust and we will help you find the best business centers that adapt to the needs of your company.

In this way, Connect Zone seeks to be your main support and your trusted advisor, your only concern is to focus on starting this new company and this new stage of your life, and achieving all the opportunities that a company in the UAE can offer you.

Would you like to connect with us to learn more about the Mainland Company Formation in Dubai and the UAE? If you have any questions, you can call us at +97143316688. You can also write to our email info@connectzone.ae where you can talk to one of our representatives, who will answer all your questions.

Lastly, if you want to receive more information, you can attach your CV to thetalentpoint.com. You do not need to worry, your information will not be shared or stored in our database.