How to start a business in Dubai?

How to start a business in Dubai?

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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.

6 steps to start business in Dubai
6 steps to start business in Dubai

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.

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.

Top 5 reasons to start business in Dubai
Top 5 reasons to start business in Dubai

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 is home for expo 2020 site. Expo 2020 is also considered to be 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.

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

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.

Author Bio

Published By Salman Saleem

Senior SEO Expert At KWS ME

The user-centric business setup and support focused content of KWS Middle East is driven by SEO professional Salman Saleem.

Setup a business in UAE

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