It is without doubt that Dubai city is among the most popular cities in the world not requiring any special introduction. It is a well known and visited tourist destination and much more! Dubai can be termed to be an investor’s dream and fertile ground to explore new business opportunities. It is not easy to establish business in Dubai, but definitely profitable.

There are several things to be aware of about to kick-start the business in Dubai.

Ownership & Economic Zone

Immediately after determining to establish business in Dubai, the very first step will be to identify the business zone which suits the company. It is possible to select from offshore, free zone or mainland, so as to establish entity, thereby deriving diverse benefits.

Free Zone Company

They are regarded to be the greatest contributors towards UAE’s robust economy and are created in a manner to attract foreign investments in huge amounts, thereby generating jobs in thousands and facilitating state-of-the-art technology within the country. These free zones can be stated to be among the most sought after locations to establish in UAE due to easier tax structures, immigration and labor procedures including business accommodating laws.

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Mainland Company Formation

The mainland company can be stated to be an onshore firm that has obtained license from the DED (Dept. of Economic Development) of related emirate. UAE mainland registered companies can carry out business outside UAE and local market without any kind of restriction.

Read on Dubai Mainland Company Formation  

Offshore Company

The offshore firm can be termed to be a business entity that legally operates outside the registered jurisdiction to minimize tax payment legally.

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Business License types

It is necessary to acquire valid trade license to carry out any type of business in UAE. Dubai licenses are segmented into three parts:

• All types of trading activities are covered by commercial licenses.
• Artisans, craftsmen, services and professions are covered by professional licenses.
• Manufacturing or industrial activity establishment is possible with industrial license.

It is illegal to trade without having valid trade license in the UAE. Those operating without license are subjected to heavy penalties. Also, the license is to be renewed annually.

It is by choosing the business category that the process of setting up a business in Dubai is initiated. In Dubai, there are over 2,100 commercial, industrial, tourism and professional activities.

It is followed by identifying the appropriate legal form that depends upon the proposed location, business activity, owners’ nationality, ownership options and number. Legal forms are to be checked to match particular business activities.

It is necessary to select a trade name, which matches the type of services offered by the company. Next step requires initial approval certification application, which should state that there is no objection from Dubai DED for the business to start.

Owners and partners are to sign a MOA (Memorandum of Association), which depends upon the company’s legal form. In few cases, Corporate Agent / LSA (Local Service Agent) agreement is made between the UAE national in charge to represent the business and the company’s owners.

Physical address is a must for all businesses to operate in Dubai. There should be signing of the tendency contract with the landlord, with registration being done with the Ejari.

Special licensing approvals will be necessary for specific business activities, besides the one to be obtained from DED. In case, additional approvals are required, then it is important to contact relevant government departments.

It is equally crucial for non-UAE nationals to seek UAE national’s assistance to establish a business in Dubai mainland. 51% shares will be owned by the UAE national, while remaining 49% will be owned by the non-UAE national. A new law has been announced recently by the UAE government allowing complete foreign ownership t be held in certain government selected sectors, which will be effective by end of 2019. This however does not apply to offshores and free-zones with 100% foreign ownership.

Finally, there has made announcement with regards to the sectors and activities that are made eligible to allow 100% foreign ownership. Complete control by foreign investors may be allowed across 13 sectors and 122+ economic activities. These sectors tend to include agriculture, space, energy, storage, transport, manufacturing, etc. Production of power transformers, solar panels, hybrid power plant, green technology supply chain, e-commerce transport, cold storage meant for pharmaceutical products and logistics are few activities included within the project. Foreign investors are also allowed ownership in other areas like food services, hospitality, communication and information, technical and scientific activities, professional, support services, administrative services, art & entertainment, healthcare, educational activities, construction, etc.

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