Many companies are interested in setting up their business in Dubai due to various reasons such
as the low corporate tax rate, 100% foreign ownership to expats, and the overall business
friendly environment.
Basic steps involved in setting up a business in Dubai are as follows-
- Documents preparation
- Business License
- Visa Process
- Corporate bank account setup
The license is issues by DED (Department of Economic Development).
There are 3 types of licenses1. Commercial license- It is basically when the goal of the business is buying and selling of
goods. For example- Import and export, Sales, Logistics, travel and tourism and general
stores, real estate, etc.
- Industrial License- This license is given where the business deals with Manufacturing
Activities from natural resources to final goods. Example-manufacturing of textile, metal,
paper, etc. - Professional license- The businesses which are service providers, artisans or craftsmen
get this license. Example- Medical services, beauty parlors, repair services, etc.
Setting up a business in Free zone has its own advantages.
The business people want to establish a business in free zones manly because it provides 100%
foreign ownership to the company and no UAE national is required as a sponsor or partner. Even
the corporate taxation rate is very low. 9% corporate tax is to be applied to UAE businesses on
profit above 375,000 AED. Further, it provides 100% repatriation of profits to home country
without any currency restrictions.
However, Free Zone entities don’t allow to get into direct trade with UAE local market.
To set up a business in a free zone first you have to check what the nature of business activity is.
The DED website provides with the list.
Then you have to select the free zone as per the business activity. There are approximately more
than 30 free zones in total in UAE.
Selecting a name for the company is a crucial part of setting a business in UAE. There are many
guidelines in respect to selecting the name, it should follow all the guidelines. For instance the
name should not harm anyone’s religious feelings, it should not contain abusive words, it can be
a person’s name only if he is a partner in the business.
You need to get an initial approval that DED has no objection with the business setup in UAE.
Following documents are needed for initial assessment-
- Business registration, licensing form
- Passport or ID copy
- Resident permit or visa copy
- Article of Association of the company
Finally a corporate bank account is to be opened in the name of the business.
For setting up a business in UAE, a physical office location is a must. So before setting up a
business one should also look for office locations.
After all the requirements are done a final approval is required. You have to submit all the
documents, location address, legal information, initial approval receipt, lease contract from
RERA, duly attested service agent contract, approval from all concerned government entities
Finally the payment for license is to be made through an approved payment channel.
It seems that the process of setting up a business in UAE is very complex and time consuming,
that’s not exactly the case. However, it is always better to ask for professional advice from a
trusted firm.