Start a Business in Dubai
Estimated reading time: 13 minutes
If you’re already living in Dubai, you already know that it has slowly developed into a popular destination for entrepreneurs over the past decade. Dubai sits in close proximity to North Africa and some European powers making it an ideal destination for companies looking to conduct business in the UAE.
For foreign investors, the process of starting a business in Dubai is relatively straightforward as long you are informed of the procedures, rules, and regulations involved. As a foreigner start by asking around about the most selling commodities before starting a business in Dubai.
How Can I Do Business in Dubai
Anyone can do business in Dubai as long as they have the right documentation and live in the city legally. To capitalize on the numerous investment opportunities in the Dubai tourism or industrial sectors, you can rely on numerous agencies set up that assist international entrepreneurs in obtaining licensing, making visa applications, and submitting business incorporation formalities.
Setting up a business in Dubai for foreign business owners requires you to familiarize yourself with the habits and practices of the locals to develop a good and informed business strategy. This means knowing their customs, religion, and language to avoid using offensive language. Thus having a local sponsor or setup agents who previously registered businesses will come in handy.
On the other hand, obligations are described in this step by step guide. Here, you’ll also find pertinent information about the company setup. It includes company registration, cost requirement, company formation process, and company growth, among other relevant information relating to company activities in the middle east.
How Can You Start a Business in Dubai?
There are several key steps required to start new businesses. The most important step, nonetheless, is ensuring that you comply with the department’s requirement’s whether you’re buying a business in Dubai, want to function as a supplier or desire to undertake complex operations. If you’re determined to start a business, here’s what you need to prepare.
1) Decide on an activity
Before even registering your own businesses as a foreign investor, you should first decide what product or service you want to offer. Of course, business opportunities/options are numerous; you have to narrow them down to one.
In this city, your choice of business activity often determines the location of your own businesses. If you choose well, you can start trading and eventually experience some business growth.
The Department of Economic Development already has a list of activities under which your company can fall, and you can go ahead and consult them. Note that your choice of activity will determine your legal form, initial approval, documents required/required documentation, special considerations, and the entire process of starting a business.
2) Choose a suitable location
In company formation or setting up your own business structure, positioning is everything. Depending on the type of product you’re selling, you can choose to either set up your business in one of the many free trade zones or on the mainland. Setting up your business in a free zone (a strategic location) for foreign investors comes with a few benefits. Note that there isn’t only one free zone; there are many free zones for your selection.
Some of the advantages you enjoy when doing your business activity include getting full ownership of your business and operating the business without having to pay any tax, which translates to high profits.
For mainland businesses, you cannot have full ownership of your mainland company since you’ll be required to get a partner (UAE national) during company setup who will have 51% ownership of your company. In general, mainland companies face certain restrictions or factors which increase the cost of operation. In most cases, however, the profits justify the costs.
3) Choose a company name
Company name decision-making for overseas entrepreneurs should be easy. You only need to adhere to the UAE’s strict naming conventions. There are a few guidelines that investors ought to follow when choosing a company name. Any trade name you choose ought to be relevant to the activity of your company and should not have any international organization’s name. It is prudent to always do a name search and ensure no other company has the same name in order to swiftly secure a commercial licence.
4) Apply for a trade license
Like in any other country with a high level of economic development, operating an a business in Dubai is not possible unless you have the correct document, including a trade license. In other free zones, having a business plan is a must as well. Here’s when the inputs from a real estate regulatory agency, relevant government authorities, company formation specialists, and company formation experts are relevant in securing business licenses.
To register your trade name, you’ll, for example, input your full name, including surname, submit your contact information, state your nature of business, and provide some logistics and other relevant paperwork.
Submitting applications for business licences also necessitates submitting your personal tax information, home situation, number of visas, and important person’s phone access, among other things, for it to be approved.
5) Open a bank account
For you to get a corporate bank account, you must be a holder of a company license. It helps to prove that your company is legal in the Emirates and you are also fully authorized to carry out any business activity. Then, you can open a bank account with many banks, including Barclays, HSBC, and Citibank, with a company license. See Banks in Dubai.
Nonetheless, it is critical to remember that opening bank accounts in international markets comes with currency restrictions. The main currency inside the UAE is the AED. However, in recent years, USD usage has been rising in popularity, having a positive effect on business. Expert advice or a free consultation about such restrictions in the UAE market is critical.
more under UAE Ministry of Economy’s
Required documents to start selling products in Dubai
Companies operating in free zones are subject to the rules of the free zones in which they operate. As such, the documentation (such as a commercial license) required will vary depending on the free zones you apply to. The following items may be required for foreign entrepreneurs looking to make money:
- A strategy
- A duly filled application form
- A replica of your existing trading license/registration certificate (if you are an existing company, applicable for local companies only)
- Coloured passport copies of the company’s shareholder(s) and the new company’s chosen Manager/Director
- Specimen signatures of the company’s shareholder(s) and the new company’s designated Manager/Director
- Financial records for the previous two years that have been audited
Before getting all the permits and business licenses, you first have to go to the authorities tasked with issuing those respective documents in the different free zone. Some of these authorities include:
- Dubai Development Authority – Issues licenses by industry cluster
- Ministry of Economy – Offers Trademark registration
- Dubai Customs – No objection certificate issuance
- General Directorate of Residency and Foreigners Affairs (abbreviations GDRFA) website – Visa applications
Before investing in Dubai, you first have to get a visa. The visa application process is quite straightforward than in most places in the world. It can be done online by visiting the General Directorate of Residency and Foreigners Affairs (GDRFA) (opens a new window) website.
As stated earlier, in the free zone, you get full ownership (100% ownership) of your company, whereas, in the mainland, you will have to get a business partner who will own 51% of the company. In this case, you can opt to choose to contact a startup agent who can walk you through each stage while also providing advice or helping you out.
How to Set Up Business in Dubai Free Zone?
Once your company documents are all set and you have ascertained your eligibility to start running your company in Dubai, set it up. Luckily if you are more interested in the free zone area, by now, you know, in Dubai, there are multiple of them where you can set up your company.
The main benefits of trading in the free trade zone is that individuals are excluded from paying all types of taxes. Each of these jurisdictions in the Emirate has its respective authority, which you should be aware of. While free zone companies in Dubai benefit from operating in these locations, owners must always have the proper permits and approvals to start and operate a company. It is worth noting that there are limitless venture options to choose from, including in the healthcare, import, innovation, technology, export, rent, wealth and tourism industries. Most ventures and business activities in Dubai tend to do just fine, if well researched.
While you might be fixated on your initial idea, it’s okay to be open-minded in order to thrive. Expert/ professional advice, for instance, on potentially lucrative ideas or the complexities of the formation process, can prove valuable.
As a foreigner, setting up a business the free zones requires the following;
Specify the category of business venture you want to start
The first step entails specifying your venture. These jurisdictions have slightly different rules, and you need to first understand them to know your rights to get started or launch your business. In such zones, your company can exist either as a Free Zone Company (FZ Co.) or a Free Zone Establishment. The difference between these two types of ventures lies in how many shareholders a business has and whether the shareholders are legal or natural.
Get your paperwork done
The next steps include getting your paperwork done for business registration. Like in any other country, trading in Dubai is not possible without the correct documentation. In this case, here are the main documents that you must produce and process to set up your Dubai free zone LLC.
- A business card
- A fully filled license form
- Articles of Association and Memorandum of Association
- Copies of passport
- A business plan, and
- Banking and business details of a partnering investor, if they exist
With these, the Arab Embassy or the Gulf Cooperation Council would be more than willing to approve your business start in the Dubai free zone. The department of economic development has made the process and requirements simple and easy so as to attract more and more investors, both locals and foreigners. It is important to understand that the entire process will take about four weeks only to be completed.
Look for an office space
Finally, look for an ideal office space. First need to factor in the number of employees you’ll hire, that is, your staff size and the types of services you’ll offer in the regional market, business activities and your starting capital, among other things. In general, it is dependent on the nature of your business in Dubai mainland or free zone.
Depending on your preference, you could decide to either purchase or lease office space. Different zones have different office packages, equipped with different aspects, for you to choose from. Take your time looking for one to ensure everything is within your budget but still get a strategic office space ready for use. Remember, simplicity is key; a simple, high-quality space with a unique touch would make your employees happy in the end (although sometimes it makes sense to go over the board).
Another thing to consider is whether you’ll want to host an office party and if such is allowed within the premise. The type of the party and the number/ range of people coming should be factored in.
Note that you will need to wait for pre-approval for your business license categories and every other document before operating your business in Dubai.
How to Find Business Partners in Dubai?
In business, sometimes, the best way to be more productive is to use combined effort. Partners can help you in applying for relevant visas, other checks, the type of words to use in communication, or suggest you take other steps you might have overlooked. You can learn a lot from them and vice versa.
Note that it is compulsory, or you’re expected to acquire a partner or sometimes sponsors before incorporating a business in Dubai’s mainland, so you need to learn how to find and utilise potential partners for your company’s gains.
In most cases, it doesn’t matter the number of years they’ve been in business in order for the partner to be a perfect fit. While you could always benefit from the expertise of long-standing businesses, sometimes, opening a business requires the help of simple business partners in the same sector. It makes sense for ex-pats or foreign start-ups to look for eligible local partners with minimal requirements to make the business setup smooth.
All citizens in UAE above 18 can become local business partners or even own a business by themselves. Therefore, you can look for a local partner above this age or a Local Service Agent who will handle all the government authorizations required to start and run a business in Dubai. Check whether they stay within your region to grow your entity with ease.
Remember that transparency is key. Your local partner should not be a mafia, affiliated with political groups, or be conducting forbidden activities as they may drag you into their mess.
Some of the best ways to find good partners for your business in Dubai include;
Inquire from others
Assuming you have your business plan ready, a management team, a current sponsor, relevant approvals and resources, premises, sponsorships, and maybe a working prototype, all that is left is finding a business partner.
Whether you are a foreigner or a local, it is wise to first consider the people around you. You can reach out to your immediate contacts, friends, dependents, and family to find out if they know any people looking for co-founders. Inquire from them about what they can add or expect to receive, among other topics.
When contacting them, don’t volunteer too much information during the introduction phase. You could tell them your current sector, what you expect or your vision. Such decisions are usually difficult and may change the way you perceive each other. Thus, ensure they’re based on logic and not emotion.
Almost everyone these days has a LinkedIn account. In UAE, more than there million people use LinkedIn, with an average of more than 200 connections for each. This social media platform brings together professionals from different fields. You can start looking for potential investors on LinkedIn by browsing through different profile names and seeing their interests and subsequently making connections. Once you see a potential partner, approach them with your business information without revealing your trade secrets or products at first. Request them for a meetup to discuss further how you’ll proceed with your partnership.
Find Startup Events and Conferences
Many people seeking to start businesses often have good ideas but lack adequate capital or the means to start. The reason why startup events exist is so that you can present your ideas to investors. In Dubai, many commercial conferences and startup events are usually held every year. For someone seeking a business partner to start a business in Dubai, the best place to find such partners is at conferences and startup or sectarian events.
Join Meetup Groups
Meetup groups are great avenues for exchanging ideas and meeting like-minded people apart from social networking. Most meetup groups tend to focus on sharing ideas and developing skills around a given topic of interest. Connect and talk to the individuals therein, especially residents. You can ask the hosts to refer you. If you want to start a business in Dubai, networking comes handy.
In Dubai, numerous different meetup groups allow you to interact with people from diverse backgrounds. Examples include:
- Dubai business owners
- Dubai business networking
- Dubai business breakfast
- The women’s business network in Dubai
- The Dubai business meetup group, and
- Dubai small business marketing strategy, among others.
In most cases, you can be issued an invite-only invitation designed to limit the number of attendees. If you’ve received one, determine whether you have something in common with the attendees before attending. There will be plenty of these events; you wouldn’t want to enter or attend all.
There is just but to name a few. They are many, and you can search online to evaluate and decide on any that resonates with your personality and business endeavors. In these groups, you are bound to find a reliable and trustworthy business partner.
How Can You Start a Business in Dubai?
- Decide on an activity
- Decide on a suitable location
- Decide on company name
- Apply for a license
- Open a bank account