6 Steps to Start Business in Dubai

September 15, 2023

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Dubai is an attractive place to start a business since it welcomes foreign investors greatly and places very few restrictions on them for business formation in Dubai. Government of Dubai provides lowest possible tax rates, state of art infrastructure, plenty of commodities, diverse business opportunities, flexible and investor friendly business laws, easy access to flights and travel, diverse human resource to hire and many more benefits which is why it has become a hub of trade, travel, tourism, education and job opportunities.

If you are looking to setup a business in Dubai, as easy it is for us; it may not be for you. Why? This is because we at KWSME have the knowledge and experience in this industry for over 10 years. We provide all services for a successful business setup in Dubai whether it is conducting market research or preparation of necessary documents, acquiring business license and registration, finding premises, trademarks registration and many more. You do not have to do all by yourself as opting from 2000+ licenses and more than 28 jurisdictions is actually a daunting process. Our business consultants at KWSME will help you achieve your objectives in first attempt.

This guide will take you through the basics of understanding business environment in Dubai and basic steps to start business in Dubai. We have narrated them in 6 points in a detailed manner.

Step 1: Undergo Extensive Research

Starting a business in Dubai requires thorough research of the local market and basic understanding of the region so that you can have an idea of business opportunities in Dubai and determine which areas in the market can be explored further. You must not get into business formation blindly; undergoing extensive research will help you ascertain which type of business has higher probability of success and profitability for you.

Make a strong business plan which should include market research, products and services, competitors, target audience, their behavior and your forecast results. If you have a credible business plan, you might get government support for your project as well.

Step 2: Determine Your Business Type and Activity

The next step involves deciding your business type which will help you in obtaining business license i.e. industrial, professional, or manufacturing. Dubai has unlimited investment opportunities; DED (Department of Economic Development) has listed down more than 2100 activities that you can choose for your business operations. You can go for trade, real estate, consultancy, e-commerce, food chain; clothing store and many more. Select the one that you want to pursue and approve it from DED.

Step 3: Options for Company Formation

There are basically three types of business setup in Dubai available to an investor. These are Mainland Company, Free Zone Company and Offshore Company. Each of these forms is different and requires different setup procedures.

1. Mainland Company:

According to UAE Law, going for mainland business setup necessarily requires a foreign investor to include local sponsor who will have 51% of shares in his company. The rest of 49% shares will be owned by foreign investor. In case of professional service, foreign investor must hire local service agent who will represent company in government office.

There are usually three kinds of local sponsors with respect to fees,

  • Low annual fee sponsors: They will just sign company incorporation documents and the rest of business formation and operational procedures are upon you.
  • Medium fee sponsors: They help in business incorporation and accompany you in your government department visits for company formation. For more detail on types of local sponsors in Dubai, read here.
  • Expensive names: These are the individuals who possess high position in Dubai government or society. You need them for their prestige and they get your work done through their reputation and network.

2. Free Zone Company:

Free Zone Company is the one established in one of Dubai special economic zone which has special benefits. The major difference between this one and Mainland Company is that foreign investor can own it 100% and no local sponsor is required. In order to understand clearly difference between mainland and free zone company, read here.

3. Offshore Company

KWSME specializes in providing complete services for company formation in all these three types. Offshore company is established outside the country of its residence with the intent to make profit. There are numerous benefits of setting up an offshore company.

Step 4: Select Trade Name, Share Capital and Business Premises

Trade name holds special position in legal procedure of business formation. It should ideally describe nature of business. Department of Economic Development has listed down rules for trade name which can be checked in their website.

You have to setup minimum share capital on your company’s Memorandum of Association (MOA). Mostly, you are not required to pay it.

Also select suitable business premises according to your budget. KWSME can also help you finding the best location for your work.

Step 5: Itemize Business Cost

It is essential to itemize your cost so that you can go according to your budget and are not left empty handed in the middle of business setup. Let KWSME help you in your cost itemization. Get more information on cost to setup a business in Dubai in our blog.

Step 6: Business License and Registration

Obtaining license and registration involves documentation procedures, acquiring approvals and visits to government authorities. Our professionals at KWSME are aware of all government regulations and have experience of registering thousands of companies in Dubai.

KWSME is complete business setup solution provider operating in Dubai for more than a decade. We assure a successful start of your company in Dubai. Contact our agents here.

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