Starting a business in Dubai is many people’s dream, but most don’t know how to go about it, especially with the number of steps they need to take before establishing it and the aspects they need to consider.
Forming a company in the UAE is a great step that could open up more opportunities and bring advantages to any business.
The UAE is a federation of seven emirates: Dubai, Abu Dhabi, Sharjah, Ras al-Khaimah, Ajman, Fujairah, and Umm al-Quwain. The UAE has the most diverse economy in the Gulf Cooperation Council (GCC). A country that was once reliant on the export of its abundant oil reserves to run its economy now derives only a small portion of its GDP from the same, having shifted its focus to business and tourism. So much so that the UAE is one of the world’s largest business hubs, with Dubai serving as a premier global city and a preferred destination for entrepreneurs, investors, and tourists alike. Research.
Business activity is the basis for selecting the legal form and type of licence, whether commercial, industrial or professional, etc. There are six types of licenses. They are: industrial, commercial, professional, tourism, agricultural and occupational.
Notes:
• An investment/business can have more than one business activity.
• There are more than 2,000 business activities to choose from in the UAE.
The legal form depends mainly on the business requirements. Moreover, the legal form is basis for identifying applicable laws and regulations. In the UAE, an investor can select one of these legal forms:
To learn more about the requirements of each business activity and legal form, check the following pages:
A trade name distinguishes one business from another. It also reflects the nature and the form of the business. An investor can apply for the trade name through the economic department in each emirate, through its website or mobile application.
The trade name must:
During the application process, you will be issued a payment voucher or a transaction number, which you will need to use as a reference when you pay.
Note: the legal form of the business must match the business activity.
• The local department of economic development registers the trade name, while Ministry of Economy registers the trademark.
• Trade name certificates are renewable
Inquire about trade name availability– Economic Development Department-Sharjah.
An initial approval means that the UAE government has no objections to the company establishing itself in the country. It also allows the investor to move forward with the next steps in establishing a business. However, it does not grant the authority to run or practice the business activity.
Before receiving the initial approval, foreign investors must obtain the approval of the General Directorate of Residency and Foreigners’ Affairs.
Before applying for the initial approval, some activities require additional approvals from government entities related to that specific business. These include legal and security matters, as well as financial securities and commodities.
All businesses in the UAE must have a physical address to operate. The business premises and location must comply with the requirements defined by the respective emirate’s Department of Economic Development, as well as the land planning regulations of the local municipalities. Office and warehouse rental agreement must be provided. Some emirates require the agreements to be attested. In Dubai, the agreement must be registered with Ejari.
Depending on the legal form of a business, a completed and signed Memorandum of association (MoA) or a local service agent agreement (LSA) of the business is required. The memorandum of association is required for the following business legal forms:
Notes:
• UAE-based law firms, courts and notary public prepare and attest MoAs and agreements.
• Businesses owned completely by non-GCC residents require a local service agent from the UAE. Appointing the local service agent will be under an agreement attested by the notary public or the court.
In some cases, additional approvals from government entities governing certain business activities are required. The following are examples of such activities sorted by ministry:
Ministry of Interior issues approvals for activities related to general transport – driving schools, fire equipment, alarm and safety systems, used-car dealers, used auto-parts, car rental.
Legal activities and legal consultancy
Architectural and engineering affairs
Telecommunication activities
Insurance activities and insurance consultancy
Health-related activities
Onshore and offshore gas and oil-field services and onshore and offshore oil drilling operations
After completing the above steps, investors can collect the business license from service centers of the economic departments or through their websites.
The UAE is a developed economy that provides a favorable business environment, world-class infrastructure, convenient amenities, flexible government policies, and high-quality services to all incoming businesses, regardless of their country of origin. Business establishment in the UAE is a forward-thinking and perceptive business decision for the following reasons:
