The UAE is transforming into one of the most remarkable and successful economies of the world. In the last four decades, Abu Dhabi and Dubai have become much more than just a local trading communities. You can start a business in Dubai to make the most of the available corporate and industrial opportunities there.
Dubai is an attractive place for the foreign investors and puts very few restrictions on them for business formation. Government of Dubai provides open business culture with lowest possible tax rates, state-of-the-art infrastructure, and plenty of prospects. Dubai offers flexible and investor friendly business laws, easy access to flights and travel, and diverse human resource to hire.
This is why Dubai has become a hub of trade, business, travel, industry, tourism, education and other prospects. You can set up a business in Dubai to make the most of the potential of the UAE’s market. You can opt from 2000+ licenses and more than 34 free zone jurisdictions in Dubai.
Conducting market research is key before launching a new business in Dubai. Preparation of necessary documents, acquiring business license, finding premises, and trademark registration are important as well. This guide takes you through the basics of understanding business environment in Dubai.
6 step process to start a business in Dubai
These are the basic steps to start a business in Dubai.
- Step 1: Undergo extensive research
- Step 2: Determine business type and activity
- Step 3: Choose company jurisdiction
- Step 4: Select trade name, share capital, and business premises
- Step 5: Itemize business cost
- Step 6: Get business registration with license
Now, we briefly look upon the procedure to start a business in Dubai.
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 prospects 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 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: Choose company jurisdiction
Pick the appropriate jurisdiction for your business in Dubai. You can choose Dubai mainland if you want to serve the customers onshore. Or, you can pick a free zone, if your clientele is international. Another available option is 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, finalize suitable business premises according to your budget. KWS ME 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: Get business registration with license
Obtaining license and registration involves documentation procedures, acquiring approvals and visits to government authorities. Our professionals at KWS ME are aware of all government regulations. They have experience of registering thousands of companies in Dubai with these legal documents.
- Copies of the partners’ passports
- A copy of the company name
- Memorandum of association (MOA)
- Articles of association (AOA)
- A cheque of AED 50,000 as guarantee.
- NOC from DED
- Letter signed by the Dubai national partner declaring their trust in you
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Securing NOC as employees to establish business in Dubai
If, you are currently working in Dubai as an employee and want to start a business in Dubai. Then, first and foremost what you need is to obtain NOC. To do that you, the employee must acquire the following documents.
- File a formal request with the Dubai Trade Portal
- Gain approval from the DED to obtain NOC
- Submit the documents mentioned above along with these
- Pay the NOC issuance fees
Once the NOC is obtained, your current place of employment will keep a copy or in some cases the original in their records. In case, the company not giving their approval. The employee still has the option of doing business by setting up a business in there spouse’s name.
Top 5 reasons to start business in Dubai
As a global trading hub, the UAE provides investment opportunities to foreign investors in many sectors. Real estate, logistics, construction, food-service, hospitality, and financial services are some of the lucrative sectors in Dubai. World’s most leading companies have their offices in Dubai and across the UAE.
These are the motives behind establishing a business in Dubai.
- Strategic location
- Growing and diverse economy
- Logistics and infrastructure
- Human capital, energy mix, and financial resources
- International trade opportunities
Next, we take a brief look on these reasons.
Strategic location
Dubai is now known as “world’s next door neighbor” due to its key strategic location. It provides access to 2.2 billion consumers of three regions i.e. Middle East, Asia and Africa. It is a city with cosmopolitan culture which provides access to world’s leading economies. 1/3rd of world’s population is within four hours fly time and 2/3rd of world’s population is within 8 hours.
Growing and diverse economy
In terms of economic performance, Dubai is growing immensely and it has been very successful in the GCC region after reducing the trade of its oil and increasing trade of non-oil high level commodities. Dubai GDP is growing at a steady rate; in 2016 it was recorded as 2.9%. The city also attracted large amount of foreign investment with FDI reaching at AED 25.5 billion in 2016. Also trade is the cornerstone of Dubai’s economy and contributes towards almost 29% of Dubai GDP.
Logistics and infrastructure
Dubai provides world class infrastructure to foreign investors coming to start business in Dubai. Its roads are wide with disciplined traffic having centralized monitoring system by high technological cameras and radar system. Dubai metro is world’s largest driverless train having more than 70 km of magnetic tracks. Government is also working on connectivity with Etihad Railways which will connect trade and industrial zones across UAE and meet freight and passenger needs.
Project of GCC railway is also under construction which will connect 6 countries of Gulf Cooperation Council (GCC) making transportation of goods easy. Along with land, Dubai also provides best air transport and air cargo facilities. It has two airports; Dubai International Airport and Dubai World Central. Dubai International Airport has world’s largest cargo hub which is called as cargo village.
It is used mostly by Asian and African cargos. Dubai World Central is located on south district which was home for expo 2020 site. Expo 2020 was a source of greatest business opportunity for entrepreneurs all over the world. DWC is functioning but it is also in developing phase. Once complete, it will be world’s largest airport and multi-model logistics hub having capacity of 160 million passengers and 12 million tons cargo per year.
Dubai has three sea ports Jebel Ali port, Port Rashid and Port al-Hamriya. Jebel Ali port is the largest sea port of middle east which is also undergoing expansion. Afterwards, it will become world’s largest port surpassing ports of shanghai and Singapore.
Jebel Ali port is access point for over 90 shipping services which connect 140 ports of the world. Also, it connects to Dubai expressway system and DWC cargo village. According to a research by Arabian Supply Chain, the Jebel Ali port is the busiest port of Middle East.
Human capital, energy mix, and financial resources
Human capital
Dubai has availability of human resources from more than 200 countries. It is quite easy to get workforce whether interns or professionals for sector. For example, engineering, information technology, designing, fashion, health care, academics etc. Also, labor force is readily available in Dubai quite easily.
Energy mix
The UAE is widely known for its abundance in petroleum, natural gas, oil and petrochemical products. These energy resources are all available at very economic price in Dubai. Electricity is readily available for all industrial, manufacturing, and services sectors; with Dubai never facing any power outages.
Financial resources
Dubai International Financial Center (DIFC) is the premier financial market of the Gulf region. It is competing with global financial hubs like New York, London and Singapore. DIFC is preferrable location for investors, financiers and accountants.
International trade opportunities
Dubai hosts 4 to 6 trade shows or international exhibitions every month. Participation in these events will provide people with the opportunity to network with global companies and make strong connections. In the terms of import and export, Dubai is a prominent city across the MENA region.
Dubai provides access to 1.5 billion people within 3000km range. According to Dubai Customs, foreign trade of Dubai in 2016 amounted to AED 1,276 billion. Thus, it sustains the position of trade as the cornerstone of the economy of Dubai.
As per the Dubai Chamber of Commerce report, a record number of 26,707 new business licenses have been issued by it. There is 9% increase in year-on-year membership in Dubai Chamber of Commerce. The growing numbers indicate that Dubai is an ideal investment destination for global entrepreneurs.
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4 Ways to decide now is right time to start business in Dubai
All entrepreneurs and investors seek the most excellent time to start a business in Dubai. However, skepticism during even the best of times, can cloud the ideas for business in the UAE. Here’s how to determine if now is the right time to establish a business setup in Dubai.
- Inquire whether your business idea is in demand
- Decide whether you can tweak business idea to match new demands
- Seek funding to help start the new business in Dubai
- Hunt for talent to get the business idea off the ground
Let us explain these ways for you.
Inquire whether your business idea is in demand
Supply chain concerns and a lack of domestic manufacturing for high-priority products and for services can impact their delivery. Now is the perfect time to create the kind of innovation and change that better helps in solving such issues. The million-dollar question is whether your business idea fulfills the right role or not in these dire times.
If it does, then hurry and find ways to stimulate its launch. Otherwise, then it is beneficial to wait until the business environment is more conducive to your proposal. If your business idea is in high-demand, contact the companies or even individuals that want what you plan to provide, once you are open for operations. Reach out to government and private investors to fund your business setup in Dubai and identify a winning business strategy that will bring your offering to the market more swiftly.
Decide whether you can tweak business idea to match new demands
If, your business idea either big or small is not quite ready for launch just yet. Consider whether it satisfies the new demand with some minor adjustments or a pivot. If you can redirect your business vision, it is well worth putting in the unavoidable but nevertheless necessary extra research. Rather than waiting for the next sound economic cycle to return.
Business owners and budding entrepreneurs will need to investigate ways to modify and remodel their pre-designed business plan. Evaluate capital requirement, resources, skills and everything else that is necessary to get business setup in Dubai off the ground. Assess the competition, both immediate and long-term, for better chances of success in the UAE.
Besides, they must also evaluate the funding available on hand to make the pivot possible. You may even be able to revert to your original idea later on once the economic circumstances are much better. For now, though, consider the sort of response you receive from your potential investors and your target audience.
Therefore, ascertain the viability of your pivoted business idea in Dubai. If that evaluation demonstrates viability, then you can advance with the launch of your business setup. Otherwise, you will want to put your plans on hold until further notice.
Seek funding to help start the new business in Dubai
One of the most significant determining factors will be your capability to obtain funding for your business venture. The hurdle here for all newbie entrepreneurs is the lack of funding now available, due to the continuing global crisis. It is slowly but surely pushing the world into an economic recession.
In general, investment across the world is at an extreme low. However, there are specific corporate sectors and business types in Dubai which are worthy of investment. These include both early-stage companies and later-stage enterprises.
Furthermore, the government of the UAE is doing everything in its power to boost the wheel of the economy. The sole reason for these stimulus packages and grants is to encourage new investors to pump their money into the country’s economy. In turn, it is resulting in the promotion of company formation in Dubai and throughout the UAE.
Hunt for talent to get the business idea off the ground
Another deciding factor is whether you can find the skillful talent to join your company. Depending on the financial status of available talent, they may or may not be ready to work on equity base. Ask potential talent regarding what are their expectations, and can they make sacrifices for the company.
Alternatively, you can hire freelancers who are currently distributing their talent and time amongst many companies. For now, this strategy can get you the needed skills to launch. Later on, if the situation changes and your startup grows, you might be able to persuade them to ditch their other freelance roles and join you full-time.
Start your talent hunt on online job board websites and through tech recruitment bureaus to calculate interest and availability. Be ready to provide a detailed job description of the role and opportunity you are hunting talent for.
Pressing the pause button is wise sometimes
If you determine that this is not the best time for your business idea, then do not feel bad about pushing the pause button. These unpredictable times will surely pass, and you will indeed have another opportunity to start a business. Take this time to reflect, and use it to get more research done, plan and improve your business idea to increase its odds for success down the road when you are ready to launch.
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5 considerations when setting up a business in Dubai
Starting up a business is not a child’s play, more so when it comes to setting up a registered business anywhere, especially overseas. If, you have ever dared to dream of setting up a business in Dubai, UAE or anywhere else in Dubai. Then, you must know about five things that will make or break your business.
- Think upon pros and cons
- Studying the competition
- Deliberation on infrastructure
- Free zone as operational base
- Hiring business setup consultants
Check our list of five most important, but less known things about setting up a business in Dubai.
Think upon pros and cons
Don’t pack your bags just at the mere thought of setting up a business in Dubai. Instead, it would be better if you meticulously weigh the pros and cons of starting a business in Dubai or anywhere else in the UAE. Some countries like the UAE are devoted to helping foreign investors set up their companies here.
For that purpose, Business Setup Consultants are working tirelessly in Dubai and the other six Emirates. Theses business setup agencies assist in both the formation and registration of a business. These organizations help willing investors and entrepreneurs alike in establishing their startup in any of the free zones located in Dubai or any other free zone situated in the Emirate or city of their choice. They even help them by forming their company in the Dubai Mainland if they wish to do so.
Studying the competition
If this is your first time establishing a business setup on a pasture abroad, you must make it a point to analyze the competition. You may scrutinize a few companies in a similar business that you are considering and find out how they are faring out there in the market. If any startups have failed to set up a successful company, it is essential to learn the reason for their failure.
Deliberation on infrastructure
Before starting your own company in the UAE, you must examine the infrastructure. While setting up a business in Dubai, it is vital to check infrastructural determinants. For instance, the speed of the Internet, political scenario, socio-economic stability, and availability of the transportation facilities.
Free zone as operational base
If, you wish to own a business a hundred per cent without any acting partners, or local sponsors in Dubai. Or, you are looking for collaborations with the local companies. Choose free zones as a base of operations for your business setup in Dubai.
There are, however, exceptions – for example, if you are involved in a restaurant business or want to set up a retail store, then choosing free zones might not be the best choice for you. To make the best decision, you should consult with a business setup consultant. Different countries have varying and often confusing rules and regulations for forming a company in their free zones.
Getting free zones business setup in Dubai may be completely different from doing so in Singapore. So, it would be best if you were careful about the processes. As, it is already suggested you should consider hiring professionals to make things simpler for you.
Hiring business setup consultants
Hire a business setup consultant to help you register your business in Dubai. Such a consultant will advise you at every step of company formation. You might get customized services during the whole business incorporation process.
Such a company has specialists who can guide you step by step to establish a new business. It might not be convenient or straightforward for a budding entrepreneur to learn all the subtleties of starting a business in the UAE. So, better than making mistakes and enduring failures, it is always great to take the guidance of such a company formation agent.
Every business needs to expand and spread its demand far and wide. So, you have taken the correct decision of taking your local business to the international shore. Just remember these tips discussed here to be fully prepared to expand your business and brand internationally successfully.
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Benefits of Dubai for businesses
The general business benefits that government regulations provide to businessmen include the following.
- No corporate taxation
- Low import duty
- Free Trade Agreements of UAE
- Availability of free zones in which investors can form free zone company, which grants them complete business ownership
Options for jurisdiction of businesses in Dubai
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.
- Mainland company
- Free zone company
- Offshore company
4 Factors impacting timeline for starting a business in Dubai
The UAE ranks among the top international economies which offer significant and attractive business environment. That’s why foreign entrepreneurs are investing in Dubai in comparison to other Middle East locations. Because of the rapid financial growth, more and more investors want to start a business in Dubai.
Among the many factors, these four affect the time requirement for a business to start its operations in Dubai.
Going forward, we discuss these factors which influence the time to begin a business in Dubai.
Corporate activity
Investors investing in a new region have to plan that what type of business activity they will perform there. Making decisions regarding the business activity is the most important and prime step which every business has to take. It affects the time also which is required to setup a business in Dubai.
Every business activity has its own setup procedure and requirements. Time required to fulfill these procedure varies activity to activity. So, one key factor to decide the time for business setup is the activity of the business.
Operational jurisdiction
All businesses have to strategically decide the location from where they will carry out their corporate operations. In the UAE, there are different jurisdiction categories: mainland, free zone, and offshore. Every jurisdiction of Dubai has its own benefits and operating requirements.
The registration procedure for mainland business setup is different from offshore business setup. For offshore company formation there are mostly 3 days required to start a new business. Whereas, for mainland company formation, it may take more than a week. The locations and zones of businesses are another important factor influencing the time requirement to start a business.
Corporate entities
Before starting a company in Dubai every business has to select the appropriate type of the business entity. In Dubai, there are main type of business entities, however ever business category has its sub division. The main four types of entities which operate in Dubai are the following.
- Companies: Limited Liability Company, Civil Company, Joint Venture Company, Public Shareholding Company and Private Shareholding Company
- Partnerships: Simple Limited Partnership and Partnership-En-Commandite
- Branch Office: Branches of foreign companies, civil companies, Dubai & UAE companies, GCC companies and free-zone companies
- Free zone companies: Every type of company has to fulfill certain requirement which varies the time required to form a company.
License types
In Dubai every company has to operate under its related license. There are 3 main licenses in Dubai which varies according to the working structure of the businesses.
- Commercial: This license is required for those companies which are involved in any kind of trading activity.
- Industrial: This license is suitable for those businesses who want to perform manufacturing and industrial activity in Dubai.
- Professional: Every professional like service providers, artisans and craftsmen has to take this license to carry out their operations in Dubai.
Whether, you are operating in a sole proprietorship, partnership, limited liability or providing consultancy. You have to get an appropriate license that meets your operational needs. That’s why time to start your business operations in Dubai differs depending on your license requirements.
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Types of local sponsors in terms of fee for Dubai companies
There are usually three kinds of local sponsors with respect to the fee.
- 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.
- 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.
Conclusion
Dubai is home to more than 200 nationalities. It welcomes people from all backgrounds and faiths. The relaxed environment, cosmopolitan lifestyle, minimal crime rate, high quality accommodation and wide range of recreational activities make it an ideal place to live.
If you are a foreign investor here with the intent to start new business in Dubai, KWS ME will greatly help you fulfill your purpose. We provide all services related to new business formation. Contact our agents for more information.
For further information about establishing your company in Dubai, consult with KWS Middle East. So, please call us on +97180059763, or WhatsApp us on +971509664705. Or send us an email to info@kwsme.com right now.
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FAQs about starting a business in Dubai
These are the answers to the common questions regarding opening a business in Dubai, UAE.
Generally, it takes 1-2 weeks to establish most of the businesses in Dubai. However, all companies in Dubai need to fulfill certain legal requirements and incorporation procedures. So, license regulations for some specific corporate structures and jurisdictions can increase the time of the business setup in Dubai.
The UAE is suitable for both expatriates and local Emirati entrepreneurs. With over 80% expatriate population, Dubai is a hub for foreign investment. With many expats owning their own businesses, Dubai is actively welcoming business owners from abroad.
Normally, business registration in Dubai with licensing costs AED 15,000 to AED 25,000. However, other regulatory permits can increase the operational expenses. Also, entrepreneurs require an investment of AED 50,000 to AED 300,000 in the long run.
Yes! Foreign investors get full business ownership in Dubai. However, some public sector services require to appoint a local Emirati nominee partner. The list of the economic activities with 100% ownership status is available from the Department of Economic Development (DED).
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