UAE is one of the most sought-after business hubs to start a business in Dubai. Statistics show that trade volumes between Global and the UAE have grown from $180 million in the 1970s to $60 billion in 2019 and are projected to reach the $100 billion mark by 2030. This shows that being a vital part of the region’s expatriate community, foreign entrepreneurs have left a lasting impact on their respective industries in the Middle East.
Foreign entrepreneurs turn to Dubai with their business ideas as it’s not just the environment that is feasible for businesses to profit there, but also because setting up a business in Dubai enables them to hire global talent and be better connected with other parts of the globe.
So, if you’re a foreign entrepreneur who wants to set up a business in Dubai, this blog will walk you through all there is to know about starting one. It covers everything from benefits to documents and the steps for setting up a business in Dubai.
Top Advantages of Establishing a Business in Dubai
Dubai continues to attract entrepreneurs and investors from around the world due to its strategic advantages and business-friendly environment. Here are the top benefits of establishing a business in Dubai:
1. Dubai geographic advantage for business
Dubai’s central location between Europe, Asia, and Africa provides businesses with access to more than 2 billion consumers. This strategic geographic advantage makes it a global hub for trade and commerce, offering seamless connections to international markets.
2. Business-friendly environment in Dubai
Dubai offers a highly business-oriented climate, with streamlined processes for company registration, visa approvals, and licensing. The UAE government continuously works to simplify regulations, making it easier for foreign investors and entrepreneurs to operate.
3. Dubai tax advantages for businesses
One of the most appealing aspects of starting a business in Dubai is the zero corporate and personal income taxes in most sectors. Businesses can maximize their profits without worrying about high tax rates, and free zones offer additional tax exemptions.
4. Dubai world-class infrastructure
Dubai boasts world-class infrastructure, including advanced transport networks, modern telecommunications, and top-notch logistics facilities. Businesses benefit from easy access to ports, airports, and highways, supporting efficient operations.
5. Dynamic Economy
Dubai has a diversified and dynamic economy, with strong sectors in trade, real estate, tourism, finance, and technology. This economic diversity provides stability and opportunities for businesses across various industries.
6. Special Economic Zones
Dubai is home to several free zones and special economic zones, offering benefits like 100% foreign ownership, tax exemptions, and simplified legal procedures. These zones are ideal for businesses looking to operate with minimal restrictions.
7. Support for Entrepreneurs
Dubai provides extensive support for entrepreneurs, including access to incubators, accelerators, and government-backed funding programs. The government actively encourages innovation and startups through various incentives and initiatives.
Documents required for Start a Business in Dubai
Following is a list of basic documents you need to start a business in Dubai:
- Completed Application Form
- Business Plan
- Copy of Existing Trade License/Registration Certificate (if already in operation)
- Passport Copies of all shareholders and the appointed manager
- Registry Identification Code Form (RIC) for the appointed manager
- Specimen Signatures of shareholders and manager
- Title Deeds (if involving property ownership)
- Letter of Intent
- Financial Reports or Bank Reference (as required)
Additionally, there can be a requirement for a few special documents depending on your business type. Experts at the Bizinvestfirm can help you with those.
How to Start a Business in Dubai: Step-by-Step Guide
Dubai offers an attractive business environment for entrepreneurs due to its strategic location, tax incentives, and business-friendly regulations. Whether you’re a local or an international investor, starting a business in Dubai involves a few essential steps. Here’s a detailed guide on how to get started:
1. Identify the Nature of Your Business Activity
The first step is to define your business activity. This will determine the type of license you need—whether commercial, professional, or industrial. It’s crucial to select the right business category to ensure compliance with Dubai’s laws.
2. Determine Your Company’s Legal Structure
Choose a legal structure based on the size, ownership, and type of business. Options include:
- Sole Proprietorship
- Limited Liability Company (LLC)
- Branch Office
- Free Zone Entity Each structure has different ownership, liability, and financial requirements.
3. Register the Trade Name
Select a unique trade name for your business that complies with UAE naming conventions. The name should not violate public morals, and it must align with the business activity you intend to pursue.
4. Apply for Initial Approval
You must obtain initial approval from the Department of Economic Development (DED) or the relevant authority in the free zone. This approval confirms that the UAE government has no objection to your business setup.
5. Create Local Service Agent (LSA) or Memorandum of Association (MOA)
For certain business structures like an LLC, you will need to draft and sign a Memorandum of Association (MOA) or a Local Service Agent (LSA) agreement. These documents define the roles and responsibilities of the partners and are essential for mainland businesses.
6. Choose Your Business Location
Select the appropriate jurisdiction for your business. You can operate from the Mainland, a Free Zone, or Offshore. Your business location will impact your legal obligations, ownership rights, and market access.
7. Apply for Additional Government Approvals
Depending on your business activity, you may need specific government approvals from authorities such as the Ministry of Health, Dubai Municipality, or Dubai Customs.
8. Submit Required Documents
Once you have all approvals, submit the necessary documents to the DED or free zone authority. These include your trade name certificate, MOA/LSA, initial approval, passport copies, and other relevant paperwork.
9. Open a Business Bank Account
Opening a corporate bank account is essential for managing your company’s financial transactions. Choose a reputable bank in Dubai and meet their requirements to successfully open an account.
10. Pay Fees and Collect Your Business License
Finally, once you’ve submitted all documents and paid the required fees, you will receive your business license. This officially allows you to start operating in Dubai.
What is the Cost of Starting a Business in Dubai?
Estimating the exact cost of starting a business in Dubai can be challenging, as it varies depending on several factors. Each business is unique, and various elements, such as company size, location, structure, and licenses, impact the total cost.
Key Factors Influencing Business Setup Costs in Dubai:
- Company Size: Larger businesses with more employees generally incur higher setup costs compared to small or solo enterprises.
- Business Location: The location of your business plays a significant role. Free Zones, Mainland, and Offshore have different fee structures and benefits.
- Legal Structure: Costs vary based on whether you’re setting up a Limited Liability Company (LLC), Sole Proprietorship, or a Branch Office.
- Visa Requirements: The number of visas required for investors, employees, and dependents will affect the overall cost.
- License Fees: Different types of business licenses—commercial, professional, or industrial—come with varying fees.
Typical Cost Range for Starting a Business in Dubai
In general, the cost of starting a business in Dubai can range from AED 15,000 to AED 50,000, depending on your specific business requirements and setup preferences.
Start Your Business in Dubai with Bizinvestfirm
Setting up a business in Dubai is straightforward. But, it can get challenging if you’re going through the process for the first time. Business setup experts at the Bizinvestfirm can assist you at every step to make the registration process seamless for you.
Our experts are proficient and well-versed in all the legal requirements. We will take care of everything from application to gathering documents and getting your license. All you need to do is get in touch with us!
