Starting a Business in Dubai? Here’s a Crisp Dubai Business Setup Guide

“Dubai will never settle for anything less than first place.” – HH Sheikh Mohammed bin Rashid Al Maktoum

The pearl of the Gulf and a well-known trading hub of the Middle East – ‘Dubai’ is booming with business and that is no secret. Dubai is long popular for offering numerous benefits for all those who seek to do great business, be it startups or established entrepreneurs. It is an investor-friendly business hub, offering lavish opportunities with flexible openings – attractive enough for business people worldwide. The government has been supportive enough to make business owners feel at ease, with its flexible policies, low tax offerings, and systematic rules and regulations.

Business Setup in Dubai is a dream come true and can be done easily and effectively if you are known to all the nitty-gritty of establishing it. A well-set roadmap is preferred before you start off so that the further course of action is well managed and implemented. It is a vital decision that involves different steps like planning, conceptualization, research, cost factors, infrastructure etc. It needs appropriate guidance for the selection of the right kind of land, license, building, etc.

You just need to get familiar with the various aspects linked with starting off a business in Dubai to have a smooth sail and minimize encountering problems on the way. And that is what this writeup attempts to do, so have a detailed go through and get set go, to set up your business empire in the wonderland.

Key Reasons for Setting up a Business in Dubai

Each year, there are increasing number of new business ventures kicking off in Dubai. Why? Here are some of the evident reasons why Dubai has been the center of attraction for entrepreneurs.

• Dubai proudly offers low tax on business income and that comes out as a major attraction
• UAE has a strong economy and Dubai is one of the strongest since it is diverse, flexible, large and can encompass business of almost all industry segments
• It offers a great quality of life that attracts one and all
• It is the rising land of opportunities offering a great deal of prospects to startups and established units alik
• There is strong government support in the form of relaxed procedures, pre-defined regulations and happy to help spirit

Know This Prior to Incorporating Your Business in Dubai

Here are a few key pointers that you must be aware of, prior to company setup in Dubai:

• You must be clear if you want to set up your business in a free zone or offshore zone
• You need to identify the type of licenses that are needed for your business – commercial, industrial, professional, as the case may be
• You need to ascertain if you need a local sponsor or professional help before you get started
• Kind of business activity to be carried under Trade License
• Will the product or services sold within UAE, or it will be majorly exported? Accordingly, we can identify and suggest whether LLC company or freezone company.
• How many Residency Visa would you require (Promoters + Employee)?
• What is the obligation of office space/ warehouse space?
• In case of the restricted or regulated business activity, approval of which authorities will be required
• Finding the best organisational and legal structure considering the tax planning and structuring
• Impact of VAT, Excise and customs while executing business from UAE and business in UAE

Before initiating the process of company setup, identify the legal structure of the company as follows:

• Corporate Ownership – Specifically for the branch and subsidiary companies of the foreign companies in UAE
• Individual Ownership – For the Individual shareholder, which can be as follows:
  • Sole Proprietor Company – Single Owner Company
  • Partnership Company – Multiple shareholder company
• Mix Ownership – Corporate & Individual can be partners to the company

How to Start Off a Business Setup in Dubai?

• Select Your Industry and Location

Dubai is competent to set up a business belonging to any industry segment. Based on your expertise and experience, firstly, decide which business segment would you like to take up for your startup. It is important to do so and evaluate which areas of Dubai will support the chosen segment. For e.g., free zones support certain business activities while other zones have another kitty of business areas under them. Each has their own specific rules and restrictions to follow.

Once business industry is chosen, it is to be decided if it is to be established in a free zone or a mainland. Both have their own set of advantages. The Free zone offers 0% corporate tax, 100% company ownership and 100% import and export tax exemption. The mainland zone allows you to trade directly with the local and international markets and hence may charge a fee.

• Select an Appropriate Company Name

Dubai and UAE follow certain standardized naming conventions when it comes to company names. Hence, it is best to get acquainted to those first and name the business, accordingly, abiding by all legal conventions. It is advisable not to follow any religion, political party, group, God etc. If it is named after a person, he/she must be a part of that venture. Full names must be used, and no short names allowed. These are just a few of the set rules. The trade name must be registered with the Department of Economic Development (DED). DED focusses on linking the trade name with the license type.

• Choose the Shareholding Pattern

Sharing holding pattern is important for setting up business in Dubai. It must be in sync with the business operations and selected jurisdiction. It could be in various formats – Limited Liability Company, Sole Proprietorship, General Partnership, Public Shareholding, Private Shareholding, Joint Venture, Branch Offices, Limited Partnership and more.

• Finish All Paperwork Related to Incorporation

Now that the major parameters are decided, the paperwork starts off that includes a variety of documents like application for company name, passports of all shareholders, business plans, NOC, letter of sponsorship, Memorandum of Association etc. It depends upon the location and type of business to finalize the list of documents. Not all may be required for everybody.

It is important to get your paperwork checked by relevant authorities and submitted on time. The company license will be issued by the government once application processing is done.

Depending upon the nature of business you are looking to execute, it is required to identify the type of business licenses as under:

• Commercial License for trading activities
• Industrial License for manufacturing activities
• Professional License for service activities

Points to Be Considered While Identifying the Authority Under Which the License Needs to Be Executed

• • Mainland company – Before 1st June 2021, the commercial and industrial nature of business licenses required 51% partnership with local Emirates partner. Professional license to have local service agent i.e. Local Emirate to sponsor the company.
    But after 1st June 2021, Companies in UAE wanting to do Commercial & Industrial business activity have choice to opt for 100% ownership to the company. There are certain limited activities which either involve partnership with local Emirate partner or local service agent. While for Professional license, requirement for local service agent continues.
  • Freezone Company – Freezone companies does not require either local partner or local service agent for any of the business activities.
    In both the above cases if the client is looking to rent a warehouse for trading & storage purpose or for manufacturing & packaging of goods, then considering the nature of business activity, extra approval from Dubai Municipality will be required which approves the plan of warehouse, fire and safety approval and other details.
• Get A Bank Account Opened

Once all documentation is registered and done, get a corporate bank account opened with any local or international bank, as needed. There are many good banks in Dubai – Emirates NBD, Commercial Bank of Dubai, Noor Bank, Abu Dhabi Commercial Bank, Citibank, HSBC, Barclays etc. You need to choose what is best for you. The bank may ask your certain basic questions like your main business segment, expected currency volume, revenue expectation, major customers/suppliers etc.

• Get Relevant Visa Approvals

Once your paperwork is done, apply for the relevant visa category which may include your family, dependents, staff members etc. There are certain set rules for visa applications also. Study them in detail, keep the papers ready and then seek the visa approvals. The visa process includes entry permit, adjusting status, medical fitness tests and registration and visa stamping.

Here you are, all set to start your own dream business in Dubai!

Some Valuable Dos and Don’ts for Company Setup in Dubai

Dos

• Play the perfect role with a perfect dressing, smile and confidence
• Feel positive about your achievements and dreams
• Reach out to people and increase your relationship aura
• Gel well with the new culture, tradition, and way of living
• Choose the apt local sponsor for a great start
• Choose a compatible free zone and a location that is convenient
• Be sure to fulfil all Visa related requirements for a hassle free go through

Don’ts

• Anticipate discussions to execute as scheduled
• Register your business without analysing the pros and cons
• Select your license type without adherence to your business scope
• Partner with a local sponsor without proper legal documents

As We Wrap Up

“You name it, Dubai has it. Or if it doesn’t have it, its building it.” So truly said about Dubai.

The city of Dubai is an attractive land of business openings, and we are no different. It has evolved as a global financial and trading hub motivating businesspeople to start off business in any industry segment they wish to.

Owing to its logistic capabilities and trade facilitation, it has emerged as a gateway to the rest of UAE and the world. Its progressive thinking, flexible strategies and friendliness leaves you spell bound. Abiding by the above points will surely assist in company incorporation in Dubai .

But having an experienced service partner can help kickstart your business with a smooth roll with faster results. We have been recognized as a creditable business setup consultants in Dubai, UAE, and India.

Along with our professional qualified team and expertise to deal in this market, we not only provide the clerical services, but add value by doing the due diligence to requirement of client and providing best solution which is beneficial for them in long term. Our goal is to have long lasting relationship with client where we become their partners in their growth and success.

Key USPs of Horizon Biz Consultancy are,

• Decade long Experience in Company formation in UAE market
• Certified and Well-recognized professionals for complete guidance
• Expert at Taxation of Multiple territory
• One stop solution for all the compliances
• End to end assistance to clients
• Giving in-depth understanding to client about different authority and region to which they can opt for better solution
• Connection with bankers from multiple banks to identify right banking solution

Get in contact with us at Horizon Biz Consultancy to help you set your business at Dubai. We will offer the best of services at each step of your establishment cycle.

Dream your business big in Dubai and leave the rest to us!