United Arab Emirates Business in UAE
Setting up a business in UAE is an appealing concept since it is considered a relatively straightforward process according to the World Bank’s standards. The UAE has seven states, Fujairah, Umm al Quwain, Dubai, Ajman, Sharjah, Ras al Khaimah, and Abu Dhabi.
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UAE is also considered to be among the least corrupt nations. Abu Dhabi and Dubai are the popular states where individuals set up businesses.
Doing business in UAE is an attractive prospect for investors for multiple reasons. For instance, Dubai has thirty free trade zones that enjoy numerous benefits, including confidentiality, property ownership, and tax exemptions.
United Arab Emirates Business Culture
It is vital to understand the business culture in the UAE because misinterpreting it can negatively impact business relations with major clients in a foreign country. This will eventually jeopardize the success of the business. Fundamentally, you must have a good understanding and deep respect for the Islamic religion since it is embodied in every societal aspect, including business.
The business structures in the UAE are often relationship-driven and family-based. Therefore, you have to be prepared to give and accept compliments. Being respectful, patient, social, and indulging in small talk in meetings are crucial for business and building relationships.
Loyalty is also a highly valued aspect of the business culture of the UAE. Generally, the business culture is pretty conservative and is a blend between two cultures. It is worth noting that the weekend falls on Fridays and Saturdays.
Business Investment Opportunities in UAE
There are several investment opportunities in the UAE for both locals and foreign investors. There is transparency in the rules and regulations and plenty of flexibility on the entity options. Some of the decisions foreign investors may have to make include market acceptability of the services or products, entity type, repatriation of profits, licensing, the amount getting invested, and the documents required.
A foreign investor can set up a representative office or branch, sole shareholder companies, and subsidiaries on the free zones and the mainland. They can also partner with local companies or set up joint ventures.
Free zone authority governs free zone areas. Businesses that are set up in these areas care for specific types of industries. 100% foreign ownership is allowed in free zone areas, and all companies established here have to adhere to both the free zone and federal laws.
If you set up a company in the mainland, also known as an onshore company, you can own 100% of the shares. Initially, foreign investors could only own 49% of the shares, while the remaining 51% was held by an Emirati company or national. This change is an excellent welcome for foreign investors who now have the freedom to control and manage the affairs of their mainland companies.
UAE Business Account
There are two major categories of commercial banks in the UAE, foreign bank branches and locally incorporated banks. They are all regulated by the Central Bank to ensure they are financially sound.
Opening a business account in UAE is a relatively straightforward process if you have a mainland company. Note that the identification requirement will vary depending on the activity and size of the business.
Usually, the bank requests information or identification that proves the legal existence of the business. If a corporate body owns your company, you will have to provide all the necessary corporate documents identifying management and the structure’s beneficiary. The documents provided have to be legalized in both UAE and their origin country.
The bank needs to understand the business’ primary customers and suppliers, level of revenue, total deposits and the expected amount of currency, and the primary areas of the business. This approach is part of an initiative against terrorist financing, money laundering, and tax evasion. Below are some of the documents you will need to open a UAE business account.
- Passport copies of authorized signatories and shareholders
- Board resolution allowing the company officer to open the account
- Company articles of association and memorandum
- Share certificates
- Certificate of registration
- Company trade license
Business Directory UAE Companies
When you set up a business in the UAE, it would also help if you add it to the UAE business directory. Generally, the business directory contains several businesses across the different industries, including print & media, sports & entertainment, real estate, legal, shopping, medical, automotive, and restaurants.
Having your business listed in a business directory can help it gain visibility and is also a quick and easy way for potential clients to find your business. Most business directories have an option that allows one to promote their business. It is a great way to build trust with clients because only legally registered businesses in the UAE can appear on the business directory.
There are several business directories you can select from, so it will help to do your due diligence before choosing one. Consider listing with a directory that adds value to your business and can help it gain more traction.
New Business Setup in UAE
You can apply to set up a new business in the UAE in the mainland or the free zone. The process is not complicated, but it involves multiple steps and approvals. Below is all you will require to set up a new business in UAE.
First, you will need to decide the legal entity that the business will take, a Free Zone Limited Company or Free Zone Establishment. The number of shareholders differentiates these and whether they are legal persons or regular persons. Ensure you confirm with the specific free zone authority to determine the type of company they can register since not all zones can register both.
You can set up a branch of your existing foreign or local company in a free zone. The capital requirement may vary depending on the area of free zone you are in. For instance, twofour54 Abu Dhabi has no minimum requirement, while the minimum paid-up capital to form an LLC is AED 150,000 in KIZAD.
The next step will be to select your trade name and check with the respective authorities if the name has already been registered and if it is a permitted trade name.
The requirements for getting a name you chose approved are that:
- It should not have any logo or name of an external body, governing authority, or religion
- Be compatible with the needed legal status or the type of activity
- It is not already registered
- The company’s legal form must follow it
- It should not violate the country’s public order or public’s morals
You will then have to apply for a business license, depending on the type of business you are setting up. The license issued will mention the activities that the company can carry out. Business licenses can include freelancer, media, ecommerce, and warehousing.
After getting a license, you can choose an office space. You have the option of leasing or buying one. The type of activity and number of staff will determine the office requirements. Lastly, you will require pre-approval.
For the initial approval, you will have to provide the following:
- A notarized and original Registry Identification Code form for the director or manager
- Letter of intent
- Unit title deed
- NOC from your current sponsor
- A certificate of reference from your financial bank if you are an individual shareholder or a two-years’ audited financial report if it is a corporate body
- The company’s shareholders’ signatures and that of the newly appointed director or manager
- Copies of colored passports of the company’s shareholders and that of the appointed director or manager
- Copy of an existing registration certificate or trade license
- Business plan
- Completed application form
If you are a freelancer, you are only required to submit a notarized and original Registry Identification Code form, bank reference letter, CV, and application for the registry.
Lastly, you will need to get pre-approval. Once you have gotten the initial approval, you have to pay the license fee and registration fees. The fees will vary depending on the license required, and you will then have to submit the following:
- Share capital information
- A passport-sized photo of the director or manager against a white background
- Attested and notarized signature of the director
- Notarized and attested Articles of Association and Memorandum
- Attested and notarized power of attorney given to the manager
- Notarized and attested board resolution appointing the director
- Completed application for registration
The last process is licensing and visa
- The authority will prepare the lease agreements
- Trade license is issued
- The visa process begins
- Some activities may need to be approved by the external authorities
Business Setup Companies in UAE
Setting up your business’s administrative and technical aspects in the UAE is not as complex a process as it may appear. On the contrary, business company setups are pretty straightforward. Overall, all you need is to get is a name, MoA, office space, and a license. You do not have to do this alone if you are uncertain.
There are several business setup companies in UAE whose services you can procure, making this process more efficient for you. The most significant perk of working with such a company is that they know all the laws and requirements, so your setup process will be pretty efficient.
It will help to do your due diligence before choosing a company you want to work with. Read plenty of reviews and check how long they have been operating. It also helps to check their online presence since you will likely work with them virtually.
Ideally, the agency you work with should guide you through the whole registration process. Working with an agency guarantees that document approvals and license renewals are faster and more efficient. They will also ensure that you meet the requirements that allow you to get an Emirate ID and an investor visa required for you to set up a company in UAE.
Business Consultants in UAE
There are several business consultants in the UAE, so ensure that you work with the most reputable one. Business consultants in UAE offer different services, including company formation services. They help you through all the various and complex aspects of company incorporation. You need to partner with a reliable business consultancy service that can walk you through all the available options and focus on your needs.
Different business consultants offer different services to their clients, so you will need to find one that offers what you are looking for. It helps to talk to different consultants before finally settling on one who you will work with. For instance, some may offer great package deals for business setup services and license and visa services.
It is vital to work with a business consultant agency because they are well informed, and they will help you save a lot of time. They know all the necessary laws, and they most likely know where your business will thrive. You do not have to blindly venture into setting up a business in the UAE when you can get expert and professional advice and help that will help you make informed decisions.
How to Start Trading Business in UAE?
Several UAE business sectors have experienced growth over the last couple of years. Below are some tips on how to start a trading business in UAE.
It will be best to figure out what type of trading business you want to venture into and draft a plan for it. Have yourself a well-thought-out plan, and you also need to consider the jurisdiction. Some of the things your plan should cover include:
- Marketing strategy
- Initial investment
- Office space requirement
- Total number of staff
- Activities and products
- Target market
You should carefully decide on the activities when it comes to the trading business since it will play a significant role in the general setup of the business. Think of an activity that will need a specific license.
Think about the jurisdiction and decide where you want to set up the business. In UAE, you will choose between the free zone and the mainland. It will help to do extensive research and find out which jurisdiction will best suit your business. This is why it helps to work with a business consultant.
Lastly, it would be best if you considered the legal formalities. Your business must have a license for it to be legal in UAE. Getting your business license is perhaps the most crucial thing. Once you have obtained it, you can set up your trading business in UAE.
Business Registration in UAE
It would be best if you had a trade name to register your business in UAE. Essentially, a trade name sets apart one business from the other and reflects the form and nature of the said business. You can easily register the business name on the website of the economic department of the emirate the business will be based in.
You will be charged a specific amount to register your business. Usually, you are issued a transaction number or payment voucher during the application process that you will utilize as a reference when making the payment.
If the UAE government does not object to you setting up the business, you will get initial approval. Therefore, you can proceed to the next step.
UAE Business Visa Fees
Foreigners can get a UAE business visa, which is often more long-term, for their dependents and themselves. This visa falls under the Golden visa system. Its goal is to help UAE’s economic growth by creating an appealing environment for businesses. However, there are some eligibility criteria for this visa.
You may qualify for the visa, but that is not a guarantee that you will get it. A specialized committee will review the attached documents and your application, then decide whether they should grant you approval or not. If your application is approved, you will need to follow the requirements by the Federal Authority for Identification and Citizenship to get your visa issued.
Your nomination has to be approved before you can apply for a UAE business visa. Once it is approved, you will get a link to upload the needed documents then complete your visa application. When your visa is issued, you are allowed to nominate three of the senior business staff to obtain residency. You can visit the country using the multiple entry visa for six months to facilitate setting up the business.
Several factors will influence how much you pay for a UAE business visa. For instance, where you are applying for the visa from and if you are working with an agent. An agent will tell you the estimated average, and if you are making the application online, you can view the associated business visa fees through the application process.
Legal Requirements to Start an Online Business in UAE
You can start a UAE online business through Bashr, an integrated eService. The government of UAE introduced this service to help start businesses. As an investor, you can start your business in the UAE via a unified online platform in about fifteen minutes. Commercial license services are offered on this platform that connects the federal and local government bodies.
Freelancers and entrepreneurs will be allowed to set up their businesses virtually in UAE without necessarily living locally through the Dubai Virtual Commercial City Program.
The legal requirements to set up an online business will depend on the area and type of economic activity. You will first need to have an ecommerce license before you begin conducting an online business in Dubai. Luckily, obtaining one is relatively easy.
Below are the legal requirements:
- Identify the activity and legal form
- Register the name
- Get approved
- Get your business licensed
- The Digital Government Regulatory Authority and Telecommunication have to approve your eTrade license
Low-Cost Business Setup in UAE
Contrary to what you may believe, it is possible to set up a low-cost business in the UAE, and you will be surprised to know that low-cost businesses are pretty standard. As discussed earlier, there are several advantages of setting up a business in the UAE and plenty of incredible opportunities.
To set up a low-cost business in UAE, you want to keep your overhead down. Therefore, it will be best to set up your business in a free zone. It will also be best to avoid taking an office lease and opting to work from an in-house co-working space.
Once you have established the best place to set up a low-cost business, you have to go through all the necessary steps of setting up a business in the UAE. Ensure that you have all the essential documents required to set up a business
That is all there is to the process of setting up a low-cost business in the UAE. The most crucial thing is equipping yourself with the proper knowledge. If you are working alone, you will need to be well informed about the whole process for it to run seamlessly.
The application process will only be easy if you have completed your license application by the submission time and it has no errors. It helps to work with a business setup company if you plan to establish a low-cost business in UAE.
US UAE Business Council
Fundamentally, this business council is a nonprofit business organization that aims to advance bilateral commercial trade relations. The US-UAE business council leverages its extensive business networks in both regions to offer unparalleled access to the senior decision-makers in the government and business to deepen investment and bilateral trade.
This council operates in different business verticals, including tourism, energy, aerospace &defense, finance, manufacturing, food security, and healthcare. It was set up back in 2007 and shows how B2B initiatives propel the expanding business relationships between UAE and the US.
It is a collaboration of the top companies based in the UAE and the US. They monitor and advocate for initiatives and policies of vital importance to bilateral businesses. They give updates on the ongoing business climate in both the US and UAE. Over 750 companies have established a presence in UAE, and it is also the largest market for US export goods in the Arab world.
Company Formation in UAE
When setting up a company in UAE, you have to choose whether you want to set it up as an offshore, mainland, or free zone company. Below are the steps of company formation in the UAE.
- Have a local sponsor who will act as your business’ service agent in the UAE (this is not a prerequisite if you are setting up the company in a free zone)
- Choose the type of economic activity you are interested in, then select the legal form of your business based on that.
- Submit your company registration application to the Department of Economic Development and ensure you also submit your proposed company name
- You can get your trade license when you submit the company’s documents to the Chamber of Commerce and Industry or the Department of Economic Development.
- Notarize the Memorandum of Understanding of the company
- Register the trade name
- Fill an application for an establishment card
- Get the initial approval and any other special approval
- Sign the lease agreement and Memorandum of Understanding before a public notary
- Get the inspection and location approval from the Municipality
- Have the documents processed so you can have your payment voucher issued
- Pay for the license to get your trade license
- If you are hiring staff, you will need to get approval from the Ministry of Labor and the Name Board.
- The documents you will need for company formation in the UAE include
- A stamped visa from immigration
- Trade name certificate
- Photocopies of Technical Evaluation Report
- Partnership contract certificate from a public notary
- License form
- Approval documents from the Ministry of Economy
- Approval document from the Legal Affairs Department
- Photocopies of family book, national ID, ownership certificate or land map, residency certificates, No-Objection Certificate, passport, and visa.
- Certified copy of tenancy contract
Business Consulting Companies in UAE
There are several business consulting companies in UAE. The best part is that you can procure most of their services online, making it convenient for anyone not based in the UAE. It is essential to work with a business consulting company since they can answer all your questions.
They will also equip you with all the knowledge and information you need to make an informed decision. Some business consulting companies specialize in specific industries, so it helps to know what they deal with before you start working together.
Ensure that you only work with the top and reputable companies. All you need to do is search for the top companies. Alternatively, you could ask for recommendations for anyone you know who set up their business in the UAE and worked with a consulting company.
Working with a business consultant company in UAE will make your process much more straightforward. They can recommend the ideal jurisdiction for your business and walk you through the whole process.
Wrapping It Up
Setting up a business in UAE is a pretty straightforward process when you are equipped with the right information. If you plan to set up a business, ensure you do extensive research to be well informed and determine if you qualify to set up a business in the UAE.