Setting Up A Business In The UAE: 8 Vital Considerations

March 29 2019

Setting Up A Business In The Dubai: 8 Vital Considerations

Business Setup in Dubai can be accomplished in less than 8 days. Once you have sorted all your legal procedures, it should not take more than a week to start your business.

Before you begin your legal formalities, however, you must consider some of the key elements needed in the overall process.

1. The Type of Business

The license required for the business setup in Dubai depends on the activity that you are into. Be it commercial, professional or even industrial license, these will define the basis of your operations.

However, when selecting, always remember that certain activities like jewellery/ food trade, legal consulting, veterinary activities require more approvals for other government officials and departments.

The DED or Department of Economic Development in Dubai has a list of more than 2,100 activities that you can choose from. In case you are unable to find your core choice of business, you can get in touch with a qualified company formation specialist. Each of these free zones has their own rules and regulations as well as the respective approval formalities.

2. Ownership of the Business

As a foreign entrant into the country, if you would like to have 100% ownership after business setup in Dubai, then you need to opt for a certain type of license and location in one of the many available free zones in the UAE. There are certain kinds of activities that each of these free zones specializes in and once you have narrowed down the free zones you are interested in, it will help you clear your first step and find your best available option. In case you wish to go through business setup in Dubai mainland or need to operate your business in the mainland, you will need to get a license from the DED which comes with certain restrictions on the share of foreign ownership.

3. Legal Forms

Depending on the location and type of your business, there are certain rules regarding the make-up of your venture. For example – if your business setup in Dubai is for a legal consultancy firm, this can be initiated only as a branch of a company or as a stand-alone entity. A sole proprietor, in this case, is not allowed to take up this type of activity. Each free zone has its own limitations regarding the company structure and it is recommended that you approach a company formation specialist to advise you on the nuances between the free zones.
You can also read this article on ownership options for an LLC company in Dubai. 

4. Getting a Trade Name

Your trade name is an integral part of the legal process for a business setup in Dubai. Ideally, the business name should point toward the nature of business, unless it is a branch of another venture. However, keep in mind that there are DED rules pertaining to the trade names you are allowed to take up. Some words require specific approval, for example, and you must ensure that your company name can be phonetically translated into Arabic.
More tips on naming your company here.

5. Share Capital

In the Memorandum of Association of your proposed company, a minimum share capital is usually set. In most cases of business setup in Dubai, you need not pay the minimum capital at the time you set up the company.

6. Company Premises

Once you have gone through and prepared the legal procedures and forms for your business setup in Dubai, you can then proceed to choosing the right office space. That would mean a clear path forward the moment you get your legal formalities out of the way. In the free zones, you will get help to find the suitable premises as per your requirements along with help in setting up other important features to the space like electricity, internet, water and other key amenities.

7. Employees

The DED will mandate that you recruit a manager to oversee operations and get him ready to be on board before your registration for business setup in Dubai is approved. But in other cases, you may not be permitted to hire at all. For example, in the case of a license for home-based Emirati business owners or Intelaq license holders, they are not permitted to hire staff but they can engage with contractors. For free zones, each zone has its own specific rules and regulations for the structure of the business, but in all cases, a locally-based manager will be required. 

8. Local Support

It is mandatory for DED licenses to have a local agent, partner or a sponsor and this gives great support for expatriates. Free zones which have a local contact can help to take the business forward effectively. However this is not compulsory and Dubai as a business destination prides in providing an easy –set up for all businessmen irrespective of their nationality.

Have you decided on setting up a company in Dubai? Contact us to help you through the process!

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