How to start a business in Dubai: step-by-step guide
Starting a company in Dubai is straightforward if the established guidelines are followed accurately. Outlined below is a guide to the several steps involved in the process:
1.Selection of business activity: When choosing a corporate activity, the practicality of the activity in the UAE market must be considered. A feasibility and profitability study is ideal before deciding when to start.
2.Selection of Jurisdiction: Decide between the UAE’s various economic zones, including the Mainland, Free Zone, or Offshore. Each jurisdiction has its own laws and caters to different industry needs.
3.Finalization of company structure: The choice of the legal structure impacts the management of profits, losses, and resources. Some legal structures include limited liability companies (LLCs), civil companies, sole establishments, local branches, GCC branches, foreign branches, free zone branches, and holding companies.
4.Approval of trade name and activity: Approval of trade name and activity by the Department of Economic Development (DED) is crucial for a seamless process. Once approval is granted, documents must be submitted to apply for a trade license.
5.Licence Application: The UAE offers a choice of several main types of licences, including commercial, professional, tourist or industrial, when operating on the mainland. The licensing structure in free zones is different and depends on the type of activity.
6. Registration of establishment: Registration and licensing are simultaneous processes that involve obtaining necessary approvals and submitting required documents as per the DED.
7.Identification of a local agent: A local partner may be required, depending on the legal structure of the company and its activities.
8.Provision of external approvals: Provide additional documentation and approvals from other government or non-government agencies as requested by DED.
9.Preparation of a Memorandum of Association: To overcome the complexities involved in the preparation of the MOA, it is advisable to seek expert advice to ensure the MOA is drafted following the UAE government’s mandates.
10.Office rental: An office unit can be rented or shared in a center, depending on the trade activities and requirements. However, the choice of office space is important as it determines the number of visas that can be requested from the DED.
11.Procurement of a tenancy contract: Tenancy contracts are agreements between the business owner and the real estate agency whose office or workspace is rented. Ejari is the online system established and governed by the Real Estate Regulatory Agency, ensuring fairness and transparency between both parties. The tenancy contract is required to activate this account, which is critical in facilitating visa issuance for family members and employees.
12.Acquisition of initial approval: The initial approval from DED is mandatory to commence business. It confirms that the UAE government has no objection to the setup and that the application process can continue successfully.
13.Collection of trade license: Once the initial approval is complete, the trade license can be collected after the submission of a series of documents, including the MOA, trade license application, government forms, trade name reservation certificate, approvals, tenancy contract, Ejari, passport copies, No Objection Certificate (NOC), and any additional requirements by the DED, if necessary, along with the relevant fees.