A 7-Step Guide To Setting Up A Company In Dubai!
Move your business to Dubai!
Starting up a new company in Dubai is becoming quicker and easier each year, as the UAE works towards diversifying itself from a purely oil-based economy to one built on tourism and startups.
According to a report published in 2013, SMEs accounted for over 95% of all the establishments in Dubai, with micro-firms representing a huge 72% majority of the overall businesses in the city 5 years ago.
Today, these numbers have swung even more in favor of startups, and experts are predicting that almost 200,000 new companies will set up in the city before the 2020 Dubai Expo.
What’s the process?
A company setup in Dubai follows these 8 simple steps:
1. Choose a business license
The nature of your business’ operations and activities will determine what kind of license you’ll need. Primarily, there are 4 major categories of licenses as listed below, which cover a huge range of 2100+ different activities:
- Commercial
- Industrial
- Professional
- Tourism
Do keep in mind that while most business activities can be directly registered with the DED, there are certain cases that require approval from multiple authorities in Dubai. Examples include:
- Road transport activities which require approval from the Road and Transport Authority
- Oil-related services must be approved by the H.H. The Ruler’s court and the Department of Petroleum Affairs
- Legal activities which are overseen by the Legal Affairs Department
2. Select a legal structure
The legal structure of your business decides what kind of ownership you enjoy, the share of your profits (in case a local is involved), the customers you can market your products to, where your business will be allowed to operate, and much more.
It’s essential that you fully understand all the different legal forms available in the city before you select one. You won’t be allowed to change your decision later on.
Some of the major legal forms are:
- Sole proprietorship
- Limited Liability Company (LLC)
- One Person Company
- Partnership Company
- Branch/Franchise of a foreign organization
- Branch/Franchise of a local organization operating in the free zone
Here, the most important factor will be to decide between operating in the free zones or on the mainland. We recommend getting in touch with a professional business consultant in Dubai for more detailed information on the matter.
3. Come up with a trade name
The government of the UAE has specified very strict guidelines that must be followed when choosing a trade name in any of the 7 emirates. You can find the complete list of rules and regulations here.
In certain situations, the local authorities might also charge you an extra fee in case the name contains a certain word, such as “gulf”, or words from a foreign language.
A few important things to keep in mind:
- The registration fee must be paid within 72 hours after the voucher is issued
- Trade name certificates are only valid for 6 months
- Reservation will cost around AED 620
- The DED reserves the right to cancel registration in case the name matches that of another brand or company.
4. Apply for initial approval
The initial approval certificate confirms that the DED has no objection to your business plans and it allows you to get the remaining registration processes completed.
You can apply for the approval through:
- The online eServices portal
- The Business in Dubai mobile application (available on all major platforms)
- Dedicated service centers spread across the city
- Professional business consultants and law firms
- The ‘happiness lounge’ at the DED
5. Draft the MOA
Depending on your legal structure, you may need to partner up with a UAE or GCC local who will be given at least 51% ownership of the business.
Both parties will need to draft and sign a Memorandum of Association which should mention the exact share of ownership, details of profits, and other legal technicalities.
An MOA is required in case your business is operating as a:
- Limited Liability Company
- One Person Company
- Private Shareholding Company (Private Joint Stock Co)
- Public Shareholding Company
- Simple Limited Partnership
- Partnership Company
- Civil Company
6. Reserve an office space
Every new company setup in Dubai must purchase and reserve a dedicated office space before the registration process can be completed. In most cases, a tenancy contract with the landlord will serve as sufficient evidence.
We recommend giving this task a sufficient amount of time. You’ll need to keep your target audience and nature of products/services in mind, as your office’s location will play a significant role in the potential success or failure of your company
7. Gather the forms and complete the process
Once all the legal technicalities have been taken care of, you’ll need to get all your documents attested from the relevant authorities and submit them to the DED.
The license will be issued within 7 working days, after which your business can start operations.
Congratulations! You now have your own company in Dubai. Enjoy the profits.