Have you ever sat at your identikit desk, doing a mindless job, counting down the hours until Thursday? Do you think longingly about being your own boss, about really contributing to the economy? It might be time to start your own business in Dubai! Setting up a business in any country can be a daunting task as rules, regulations and requirements will most likely differ from your home country. So for all the budding entrepreneurs, here all the information you need to know for a successful new business setup in Dubai.
Business Setup in Dubai: Mainland vs. Freezone
Business owners have the option of setting up a business in Dubai in either the mainland or a free zone. The main difference between the two is the ownership rules.
To start a business in the mainland areas of Dubai, foreign nationals needed to have a UAE national to act as sponsor, owning a 51% share of the business. This rule has since changed after the introduction of the 100% foreign ownership law in 2018. Now, foreign nationals can consider a new business setup in Dubai without having a UAE national act as a sponsor.
If foreign nationals want to start a business in a free zone aka free trade zones in Dubai they will have 100% ownership of the business, however, these companies can only conduct business and trade with companies outside the UAE. To know more about free zones in Dubai, check out our feature on the difference between free zones and freehold areas in Dubai.
Steps to Setting up a business in mainland Dubai
Here is a complete guide to starting a business in Dubai’s mainland areas.
Benefits of a company setup in Dubai’s Mainland
- You have the option of conducting business anywhere in the UAE
- You have an unlimited number of visas available to you
- You have a greater choice of commercial activities to license
- The first thing you will need to do is, of course, decide what your business is and what type of license it needs. Currently, the DED has over 2,100 business license types available, split across tourism, industrial, commercial and professional. Depending on the type of business you choose, you might require a different set of approvals.
- The next step is to determine what type of legal entity (legal form) you intend to set up (such as LLCs, branch, SME etc). Depending on your type of business, however, the type of legal entity you set up might differ.
- Once you’ve decided on the above, it’s time to decide on your trade name and to apply to register it. This can be done via a lawyer, a DED service centre, Happiness Centres and the Business in Dubai app. Keep in mind that you will need to make sure that your proposed name follows the guidelines such as being related to your license type.
- Next, you will need to apply for initial approval from the DED. If you intend on setting up a company dealing with commodities, securities or legal services, you will require additional approval.
- Following approval, you will need to approach an authorised entity (such as the DED or a law firm) to draft your business’ MoA, and then sign your LSA or Corporate Agent agreements. Once again, these requirements depend on the legal form of your business.
- It’s now time to find an office space in Dubai as all businesses in the city require an actual physical address. In order to register for Ejari online, you will require your initial approval certificate along with your tenancy agreement and other documents. Only once you obtain this attested Ejari document, can you go ahead with obtaining your actual business trade license.
- Depending on the type of business you are setting up (for example, a business type out of control of the DED) you might have to apply for additional licenses from your business type’s governing body.
- Now, all you have to do is submit all your documents to the DED or Happiness Lounge and you can get to work running your very own business!
Setting up a business in a Dubai freezone
The main difference between setting up a business via the Dubai Economic Department (DED) in Dubai and in a freezone is that a freezone business allows you 100% ownership of your operation, with no need to be sponsored or partner with a UAE national. However the type of business you set up and costs will depend on the freezone you apply to, along with processes.
Benefits of company setup in Dubai’s freezones
- Enjoy 100% exemptions on import and export taxes
- Enjoy 100% repatriation of profits and capital
- Less bureaucratic licensing procedures
If you’re interested in setting up a business in Dubai and would like to meet some likeminded individuals, why don’t you check out some of these co-working spaces, many offering networking and angel investor events. And don’t forget to check out the latest office space prices in Dubai to start planning your new business finances!
Disclaimer: The above information is subject to change. Up to date and additional information may be obtained from the Department of Economic Development