Setting up business in the UAE is easier than anywhere else in the Middle East and North Africa (Mena). According to the World Bank’s Ease of Doing Business 2020 report, the nation ranks 16th. With numerous free zones, excellent infrastructure, no taxes, low import duties, and a strategic location, the UAE scores far ahead of its neighbors.
Before setting up a company in Dubai you have to go through various legal entities of the company. Once all the legal procedures are sorted it would hardly take a week for setting up business in the UAE. The legal obligation can be a troublesome procedure if not considered properly. So before settling the legal formalities, you need to consider some of the basic elements for starting a business in Dubai.
But before you start your legal formalities, you need to consider some elements required in the process:
1. Determine the type of business: Determine the type of entity you wish to incorporate in Dubai. The type of business depends on the business activity that you choose. The basis of the company and operation defines the license would be commercial, industrial, or professional. However, while choosing, remember that certain activities such as food trading, oil, and gas, business, ornament trading, and legal consultancy require further approvals from other governmental departments. You can choose from the 2100 activities listed on the website of the Department of Economic Development (DED) in Dubai. While selecting, remember that each free zone has its own rules and regulations that you should obey.
2. Select a trading name for your business: Your trade name is a major part of the legal procedure. The company name should ideally indicate the nature of the business unless it is a branch of another company. Trademark registration is a very crucial entity for avoiding the imitation of the company. All the rules regarding trade names can be seen on the DED official website.
3.Determine ownership: You will need to first obtain a license and location in one of the many free zones of the UAE if you want 100% ownership of your company. There are more than 45 free zones in the UAE with different categories of operations, so you have enough options for choosing among them.
If you need to operate your business locally or that you need a local license. Then you have to get a permit from the Department of Economic Development (DED). The DED license comes with specific regulations and restrictions on the share of ownership for foreigners, based on different legal structures under DED.
4. Designate share capital: Minimum share capital is usually set out in the Memorandum of Association of your proposed company. In most cases, you do not need to pay minimum capital at the time of setting up. The MOA includes the details of shareholders and the company and needs to be notarized with the Department of Economic Development.
5. Secure premises: Depending on your business needs, you can rent an office space or opt for a co-working space. This would mean a clear path forward once you get your legal formalities out of the way. In free zones, you will get assistance to find premises suitable to your requirement along with help to set up electricity, internet, water, and other amenities
6.Tenancy contract and Ejari: A tenancy contract is a contract between the company and the real estate agency whose office space or co-working space you intend to rent. Ejari is the online registration system initiated by the Real Estate Regulatory Agency and requires all Dubai rental or lease contracts to be recorded on this portal.
7.Hire Employees - In many legal forms of the DED, you have to hire a manager to monitor operations and have him ready to be on board before you send your registration for approval. However, in other situations, you may not have the approval to hire him at all. For instance, some companies aren’t allowed to hire staff but can employ contractors. When it comes to free zones, each one of them has its own set of particular regulations dealing with the structure of the business.
8. Local Support- According to the DED website, it is compulsory to have a local agent, sponsor, or partner, and this is excellent support for foreign nationalities. For free zones, it is not mandatory to have support. But local contact can help to take the business forward easily and effectively.
Are you ready to be an entrepreneur and start your own business in Dubai? Concept Advocates and Business consultants will make the process easy and fast for you. Call us on +971 4 353 0020 or you may email us at firstname.lastname@example.org.