Dubai can be a great place for starting a business abroad. It’s a leading trading hub that offers a range of benefits and opportunities for foreign investors and entrepreneurs. A new business setup in Dubai doesn’t have to be complicated, but it can involve some decision-making and documentation that can make the process daunting. This guide should help you set up your new business confidently.
Things to know
Before you proceed, you’ll need to know and understand a few things about setting up a business in Dubai. For instance, you’ll have to decide between operating Offshore, over the Mainland or in a Fre Zone. All options come with their own specifications and benefits, but your choice will ultimately depend on your requirements.
About the Mainland Option
The Mainland Option is a great license if you seek a 100% Ownership License with the ability of conducting Business Over the Mainland. Currently you will be able to find lots of Business Activities that can be registered with 100% foreign ownership.
The Department of Economic Development (DED) issues the licenses for new businesses in Dubai. The options include the following:
- Commercial license – This is for businesses that involve the buying and selling of goods or trading activities. It can cover businesses related to sales, import and export, general stores, travel and tourism, real estate, and logistics.
- Industrial license – This is issued to manufacturing businesses that transform natural resources and materials into final products.
- Professional license – This is issued to service providers, craftsmen, and artisans.
About the free zone companies
If you want complete ownership of your new business setup in Dubai, consider applying for a license in one of the free zones. The concept of free zones was introduced by the government to encourage foreign investors to start businesses in the city. They are special economic areas where business owners can enjoy zero taxation and other ownership benefits. However, you’re not allowed to trade directly with the local market in the UAE.
Currently, you’ll find more than 30 free zones in Dubai and each is generally focused on specific industries and provides licenses to businesses that belong to those industries. Some of them are DMMC (Dubai Multi Commodities Centre), DIC (Dubai Internet City), and DIFC (Dubai International Financial Center).
An offshore company may register in a free zone and get the same benefits and it’s allowed to conduct business activities outside the UAE, not inside. There are no requirements for the minimum capital deposited before incorporation. However, you’ll need a sponsor if you decide on this new business setup in Dubai and your ownership of the company will be limited to 49 percent.
Decisions to consider
Certain decisions are involved in your new business setup in Dubai. For instance, you’ll have to decide on your business activity or the nature of your business before you can qualify for a license. You also have to decide on a free zone, which will depend on your business activity. Of course, you will have to pick a company name that must conform to the strict naming conventions of the UAE before you apply for initial approval with the DED. You’ll also need to open a corporate bank account and find an appropriate office location before applying for final approval.
You can always get help
There are business setup consultants who can back you up and help you navigate the process of a new business setup in Dubai. They can give advice on free zones, assist in company registration and LLC formation, conduct business analysis and development, and do research on your behalf. They can also assist with contract preparation, creating holding companies and trusts, and finding potential business partners.