HOW TO START A CONSULTANCY IN DUBAI

April 24 2019

After trading, consultancy is the second-most popular business activity in Dubai. 100% ownership is also allowed for a consultancy license in Dubai. 

Business consultancy relies on intellectual capital, rather than physical share capital. It is no surprise then, that many expatriates in the UAE start off on their own, after a few years of experience in the region. A consultancy license in Dubai offers many benefits for such entrepreneurs. 

What is considered a consultancy activity?

The Dubai DED licenses business consultancies in Dubai. It has many activities that fall under the consultancy license, and some of them are as below:

Management Consultancies (7320-00)

Information Technology Consultants (7210-03)

Internet Consultancy (7210-04)

Marketing Research & Consultancies (7413-01)

Tourism & Recreation Consultants (7414-11)

Sport Research & Consultancies (9241-21)

Energy Projects Consultancy (7421-73)

Computer Consultancies (7210-01)

Human Resource Consultants (7414-06)

You can look through the complete list and descriptions of the activities here.

In a consultancy activity in Dubai, the DED considers individual ownership and liability. In other words, corporate ownership is not allowed. There are options of setting up in a free zone in Dubai, where a consultancy activity would be required with corporate ownership.

Are there any special approvals required in order to setup a consultancy in Dubai?

Since this is a professional activity, the DED insists on a relevant attested degree in some specialised consultancy activities. 

Also, the manager of the License would have to take an exam (the Management Skills Placement Test) in the American University of Dubai (AUD), the cost of which is AED 2,100. It is an online multiple-choice-questions-based test and is a 100-mark test. 60% is the passing criteria.

 

What kind of legal structure can I form for a consultancy in Dubai?

The DED considers consultancy activities as Professional Licenses. Consultancies come under the License Activity Group: Consultancy -D- management, information as well as marketing.

The main feature of a Professional Company is that 100% foreign shareholding is permissible (very few exceptions); however, this form of a company can be formed only by an individual or a group of individuals (corporate shareholding is not allowed).

These companies can bid for Government contracts, as opposed to free zone companies, which are usually not allowed to do so. Businesses can be registered anywhere in the mainland; a wide range of choice – from the lanes of old Deira to the shining towers of Business Bay.

There are two legal structures available:

Sole Proprietorship  

A Sole Proprietorship is a business owned by an individual who takes 100 % control of the business including its operations and keep all of its profits. The sole proprietor will also be responsible for all financial obligations of the business.

The owner who is engaged in consultancies must obtain a scientific qualification for the selected activity.

Owner(s): Any individual of any nationality can own a professional-type sole proprietorship. However, a Local Service Agent( LSA) is required if the owner is a national of a country other than the UAE or GCC.

Manager(s): Only one manager is allowed to be appointed as per DED business regulations.

Capital: Sole proprietorship does not require a business capital.

Trade Name: The trade name should be associated to the commercial activity of the business. There are a few regulations on permissible trade names for companies licensed by the Dubai DED. You can read our blogpost about selecting a trade name for your company, for more details. 

Civil Company

​​A Civil Company takes the form of a business partnership. This legal structure is mandatory for professional activities such as doctors, lawyers, engineers and accountants.

Activities:

There are no restrictions on nationalities of partners in a professional license.

Owner(s):

A Civil Company can be owned by professional partners of any nationality. A UAE National will be required to act as a local service agent, to liaise with the Government departments and labour ministry.

A civil company can practice consultancy activities but must be 100% owned by professional partners of the same type as the business’s activity.Download a comprehensive list of Consultancy activities allowed by the Dubai DED here.

Manager(s):

A civil company can appoint only one manager.

Capital:

The capital need not be a specific amount. It would have to be mentioned in the Memorandum of Association.

Trade Name:

The trade name will have to mention the activity of the firm. There are a few regulations on permissible trade names for companies licensed by the Dubai DED. You can read our blogpost about selecting a trade name for your company, for more details. 

How much does it cost to register a consultancy in Dubai?

Here is a summary of the approximate costs incurred in setting up a consultancy in Dubai:

        AED
Trade Name Reservation Fees           740
Initial Approval           240
Translation Of MOA in Arabic           500
Notarisation Of MOA in Dubai Courts        1,700
License Fees           600
Licensing Accomodation Allowance Fees        1,000
Employee Accomodation Allowance Fess        1,000
Labour Accomodation Allowance Fees           600
Public Waste Related Services Fees        1,000
Service Improvement Fees           400
Smart Social Responsibility Platform Fees        1,500
Government Cultural Fees              70
Innovation Dirham Fees              70
Dubai Chamber Of Commerce Fees        2,000
Ministry Of Economy Fees        1,000
Market Fees (2.5% of the annual office rent)*               –

*The market fee is a factor of the annual rent and will be added to the final DED invoice.

There will be additional fees for non-Arabic trade names (AED 2,000 per annum) and the Management Skills Placement Test as mentioned above.

A consultancy company in Dubai can be registered on a desk space as well. However the desk space allows for only one employee visa apart from two investor visas. Most startup licenses prefer to start initially with a desk space, and then shift to a full office once the business is more well established. 

Click here to enquire about desk space packages for professional licenses in Dubai. 

How much do visas cost for a Dubai consultancy company?

Here are the costs incurred in applying for visas.

Registration with the Ministries of Immigration and Labour – AED 7,700

Investor Visa (applicant inside country) – AED 3,230

Investor Visa (applicant outside country) – AED 2,040

Employment Visa (applicant inside country) – AED 7,000

Investor Visa (applicant outside country) – AED 5,800

How do I register a consultancy company in Dubai?

Documents required

Passport copies of the Partners and Manager

Residence visa/ Visit visa/ Entry stamp /UID report (any one).

Three proposed names for Trade Name Reservation

The process of applying for a consultancy company (Professional License) in Dubai is as follows:

Select business activity

Find a UAE National to act as service agent

Decide the distribution of the shareholding, the profits and losses among the partners and other operational modalities.
Reserve of a new trade name. Click here to know more details on acceptable trade names.

Sign the Partnership Agreement in the Dubai Courts. Click here to access a draft Partnership Agreement.

Rent office space in Dubai. You can choose from business centre desk options as well.

Pay the DED fees and obtain the Professional license.

Contact us today to speak to our consultants who can guide you through the process.

 

Advantages of setting up a consultancy in Dubai

Easy setup – The license can be setup within a few days, sometimes even in a few hours, if you meet the required criteria. You can set up such a license with a desk space, unless more visas are required.

Cost-effective – Unlike many free zones, the Dubai company is economical, since you do not need to commit to a large office space in the first year.

Flexibility of doing business – Unlike free zone companies, Professional companies in Dubai can do business anywhere in the UAE, and in other countries as well. The company can also enter into agreements with Government entities.

Range of locations – Unlike a free zone, which is a designated area, you can set up a Dubai Professional License company in any area of Dubai, including Deira, Bur Dubai, Business Bay and anywhere else on the Dubai mainland.

Options for multiple visas – Dubai companies allow for unlimited visas when setting up on the mainland. The number of visas allowed depends on the office space taken, which is usually calculated at 80 square feet per visa. In some cases, the DED is flexible on this allocation, for example in instances where the Dubai company has a large outdoor sales force.

Sponsor of dependents – The Professional License company can apply for multiple visas for their employees, and the shareholders and employees can sponsor visas for their dependents – spouse, child, parents, maid, cook etc.

A mainland company in Dubai can open bank accounts anywhere in the UAE and operate in a tax-free environment, with 100% repatriation of profits.

We provide turnkey solutions for setup in Dubai, including providing a UAE National sponsorship and desk/office space options.

Speak to one of our experts who can guide you through the process of setting up a Professional License in Dubai, today!

 

 

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