Just at the beginning of 2019, Dubai’s economy has expanded by 2.1% with total GDP reaching USD 56.7 billion within the first 6 months of the year. Further, in 2020, it’s predicted that GDP will rise to 3.8%. The growth prospects have attracted ever-increasing numbers of entrepreneurs into the city. Fortunately, if you’re thinking of setting up a business in Dubai the process is relatively simple.
Dubai is the number one city and commercial capital of United Arab Emirates. Dubai provides vast business opportunities and innovative commercial modules for enterprises from around the world. International exposure and an investor-friendly government are just two of the factors that motivate entrepreneurs to start a business in Dubai. Start-ups in Dubai also get perks on investments and tax advantages when compared to other countries.
But irrespective of the approachable business setup procedures, it can be difficult for a new entity to understand the process of setting up a business. Below are the steps for starting a business in Dubai:
Determine Business Activity
When you decide to do business in Dubai, you need to know that there are certain limitations. Not all business activities are allowed in the UAE! Various consents are required before you start your business in Dubai. Thus, the first thing to do business is to decide whether your business fits in as per the Dubai standards.
Legal Form of Business
Company setup in Dubai is determined by the shareholding structure. This will also distinguish the legal form of your business. The shareholding structure must be in cohesion to your business operation and preferred jurisdiction. Here are the shareholding structures that you could opt for:
- Limited Liability Company
- Sole Proprietorship
- Civil Company
- Public Shareholding
- Private Shareholding
- Joint Venture
Partner With A UAE National
To start a business in the Dubai mainland, it is a mandate to partner with a UAE national. The challenge is to find a trustworthy and reliable UAE business partner. It is stated that the UAE local partner will hold 51% of partnership. In terms of freezone, civil company or operatorship, would require a local service agent, who would work for a nominal fee. It is best to get into an agreement with a silent partner- this will assure security and complete control on your business.
Trade Name Registration
You need to give a name to your company as per the standards mentioned by the Department of Economic Development (DED). The trade name acts as an identity of your business, and thus DED emphasizes on associating the name as per the license type. It takes around three days to register a trade name, and it is valid for a period of six months.
Selection of Business Activates
In Dubai, only a few commercial activities are not permissible, some activities have restrictions, while others are completely prohibited! According to the Law No. 13 of 2011, the Dubai DED is the accountable body to decide, regulate, classify, permit and license all the economic activities. However, this is not applied to freezones and offshore business setups.
Rent a business premise (EJARI)
Having a physical existence is obligatory for every business in Dubai. The tenancy agreement, Real Estate Regulation Authority (RERA) documents, and EJARI needs to be submitted, following which the initial approval is granted by the DED.
Prepare MOA/LSA
Drafting the Memorandum of Association (MOA) or the Local Service Agent (LSA) agreement is yet another important task. The MOA specifies the share of limitations and liberty every partner has within the company, while the LSA describes the role of the agent and fulfils the compliance that will be performed. MOA/LSA are legal documents and should be drafted with the help of a legal advisor. They also need to be translated in Arabic.
12. You need to collect your business license to start your activity
A payment voucher or transaction number will be provided by the DED on submission of the all the listed documents. The final payment needs to be made to collect the business trade license. Once you collect your trade license, you become a full-fledged business entity.
Based on the preceding details, it is evident that Dubai company registration is an extensive process! Nevertheless, you can make it quick and cost-effective by appointing a business setup consultant. With a knowledgeable business consultant, you won’t waste your money on unwanted documents. Also, as they are well-versed with the procedure, company formation can be instant. So, all the best with your business!