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10 Factors to Consider for Registering a Business in Dubai

Dubai presents an exciting business prospect for budding entrepreneurs all around the world. Over 80% of the population in the Emirate comprises expatriates, making it a melting pot of global culture and businesses. Dubai presents a lucrative business environment with a 0% tax rate, a central global position, and a simple incorporation procedure. This article delves into some of the nitty-gritty of registering a business in Dubai and its associated costs.

10 Factors to Consider for Registering a Business in Dubai


Factors to consider for registering a company in Dubai

Nature of activity
When setting up a business in Dubai, one must first identify the nature of the activity. Based on this, six licenses are available – occupational, tourism, industrial, commercial, agricultural, and professional. One must also identify the nature of economic activity and apply for an economic license accordingly.

Legal structure
Next, one must identify the company’s legal structure. Legal forms of business in the UAE mainland include sole establishment, civil company, limited liability company, public joint stock company, private joint stock company, GCC company, branch of a local company, holding company, and representative office of a foreign company. More information regarding the same can be found on the Dubai Chamber website.

Trade name registration
Next, the company’s trade name must be registered. This name must meet all legal requirements set forth by the government. Some of the rules in Dubai surrounding naming a company include:

  • The name must not violate the public morals or public order of the country
  • It must be followed by the company’s legal form (for example, LLC, FZE, etc.)
  • It must not have been previously registered
  • It must be compatible with the business activity and legal status
  • It should not contain the names of any religion or governing authorities or names and logos of other external bodies

Initial approval
The company must now apply to the Government of UAE for a ‘no objection’ certificate. This certificate allows established companies and start-ups to move to the next stage of business registration in Dubai.

MOA/LSA
Next, one must acquire a Memorandum of Association (MOA, in case of joint ownership/LLC/etc.) or a Local Service Agent Agreement (LSA, in case of sole proprietorship).

Business Location
It is now time for the business to choose its location. All businesses in Dubai are required to have a physical address. One may set up their business on the mainland or look at special free zones. Free zones offer owners special exemptions such as foreign ownership, export and import tax exemptions, repatriation of capital and profits, corporate and personal tax exemptions, and assistance with labor recruitment, sponsorship, and housing. The premises plans for all business locations must meet the legal requirements of the Department of Economic Development.

Other government approvals
Additional approvals may be required based on the nature of one’s business. These are generally required in businesses that involve general transport, legal activities or consultancies, architectural and engineering affairs, telecommunication, travel and tourism, ship and maritime agencies, charter trading, insurance, health-related activities, gas, and oil-field services, and drilling operations.

Submission of documents
All legal paperwork now needs to be submitted to the authorities. In addition to the documents mentioned above, one may also be required to present the following:

  • Completed application form
  • Business Plan
  • Copy of existing trade license or registration certificate
  • Colored passport copies of the company’s shareholders and Manager/Director
  • Specimen signature of the company’s shareholders and Manager/Director
  • NOC from current sponsor (for individuals)
  • Two years’ audited financial statements for corporate entities or a certificate of reference from a personal bank of the individual shareholder

Fee payment and license collection
Once the paperwork is completed, the company must pay the fees and collect the license from the economic department or via their website.

Register with the Chamber of Commerce and Industry
Lastly, the company must register with the Dubai Chamber of Commerce and Industry. The registration can be completed via their website.

What is the cost of registering a business in Dubai?
Setting up a business in Dubai is rather financially profitable for many. Trade licenses here cost between USD 4083 (AED 15,000) and USD 6806 (AED 25,000). However, the actual figure depends on the type and location of the business, the number of employees, and other factors. For instance, working out of co-working spaces instead of a private office may reduce setup costs significantly.

Can foreigners own a business in Dubai?
Dubai is well-renowned for its ease of doing business. As a result, it has become one of the fastest-growing economic centers in the Middle East. This factor attracts many expatriates to set up their businesses. These ventures must align with the UAE Commercial Law and the rules set forth by the Dubai Chamber.

Additionally, unlike other countries where business approvals, registration, and setup can take up to 10 days, one can set up a business in the UAE within four days via the Department of Economic Development. This is particularly advantageous for start-up owners worldwide looking to begin operations quickly. The emirate also offers free business zones, allowing foreigners to maintain 100% company ownership.

More information regarding the legal and practical processes can be found via websites such as the Dubai International Finance Center (DIFC), Dubai Chamber, and the United Arab Emirates’ Ministry of Economy. Alternatively, one may also seek the help of business registration services in Dubai to sail through the process.

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