Steps to Start a Business in the UAE

Steps to Start a Business in the UAE

Starting a business in UAE or anywhere around the world is an important decision. It involves planning, conceptualising, research, budgeting, set-up, and decision-making among other things. It also requires guidance and assistance on selecting the right trade license for your business, especially if you are a new entrepreneur. Here, you will learn about the important steps to start a business in the United Arab Emirates.

 

The UAE is a popular destination among investors and entrepreneurs. Not only is it an investor-friendly country but its low tax policies and ease of doing business have helped strengthen its position as a business hub in the Middle East. The government also has in place rules and regulations that favour and encourage business owners.

 

To start a business in UAE, follow the steps below:

Select a Business Activity

When selecting a business activity for your entrepreneurial venture, keep in mind the practicality of the chosen activity in relation to the UAE market. Do a thorough research on the feasibility and profitability of the activity before you decide to start a business in UAE.

Select the Jurisdiction

The UAE market is divided into different economic zones – Mainland, Free Zone, and Offshore. These economic zones are also called jurisdictions. Each jurisdiction has its own set of laws and regulations pertaining to business setup. They also cater to different business needs. Selecting a jurisdiction for your business depends on your business requirements and your business activity.

Decide the Company Structure/Legal Form

Choosing the legal form for your company is an important decision when starting a business in UAE. It sets the tone and structure for dealing with profits and losses and how you should organise your resources and assets. Decide the legal form or your company structure during the initial stages of planning. This will help provide a layout for your company. You cannot apply for your business license unless you decide your company’s legal form. Following are some of the legal forms or company structures under which you can register your business in the UAE:

  • Limited Liability Company (LLC)
  • Sole Establishment
  • Civil Company
  • Local Company Branch
  • GCC Company Branch
  • Foreign Company Branch
  • Free Zone Company Branch
  • Holding Companies

Get approval for your Company Name and Activity

The Department of Economic Development (DED) must approve the trade name for your company before you can move ahead and start the process of your company set-up in the UAE. Along with your company name, your selected business activity also goes through approval during this stage. Once you receive the approvals, you will have to submit documents to apply for your UAE trade license.

Apply for your Trade License

There are four types of trade licenses in the UAE, also called business licenses, that you can choose from:

  • Commercial License
  • Professional License
  • Industrial License
  • Tourism License

You can apply for any of these trade licenses if you plan to start a business in UAE mainland. The licensing structure in UAE free zones is different and is dependent on the business activity your company decides to undertake.

Register your Company

Company registration and licensing is a simultaneous process. However, the entire process of documentation and approvals goes through various stages. In this step, you will have to get all the approvals from relevant government authorities as requested by the Department of Economic Development. The documents required are different for each company type and activity.

Find a Local Partner/Sponsor

To start a business in UAE mainland, it is mandatory to find a local partner for your business. A local partner or local sponsor must be a UAE national only. As per the UAE commercial law, the local sponsor will hold 51% shares in your company. There are two types of sponsorships – local sponsorship and corporate sponsorship. Finding a trustworthy partner or sponsor can seem tiring, especially for a first-time entrepreneur. A business setup consultant can connect you with companies that offer corporate sponsorship where you will be given documented authority and 100% ownership of your business.

Get your External Approvals

The Department of Economic Development may request additional approvals from other government or non-government agencies, depending on your business activity. For instance, some businesses may be asked to get approvals from the municipality, specific banks, embassies, etc.

Draft your Memorandum of Association

It is important to understand the complexities of a Memorandum of Association (MOA). Before drafting the MOA for your business, make sure to get expert advice. The MOA should be drafted in accordance with the UAE government’s mandates and must also take into consideration your business interests.

Rent an Office

Depending on your business needs, you can choose to rent an office unit or opt for a shared workspace in a business centre. An office space can also determine the number of visas you can request for from the Department of Economic Development.

Get the Tenancy Contact and Ejari

A tenancy contract is the agreement between you and the real estate agency whose office unit or shared workspace you intend to rent. Ejari is an online system governed by the Real Estate Regulatory Agency (RERA). It ensures fairness and transparency between both parties involved in the tenancy. You must submit your tenancy contract and a few more documents to activate your Ejari account. Ejari is very important because you need it to get or renew visas for your family members and/or employees.

Get the Initial Approval

Before getting your business license, you must get the Initial Approval from DED. This approval indicates that the UAE government does not object to you starting a business in UAE. If you do not receive this approval, you cannot proceed to the next steps in the application process.

Collect your Trade License

To get your UAE trade license, you will have to submit the following:

  • Memorandum of Association (MOA)
  • Trade license application
  • Relevant government forms
  • Trade name reservation certificate
  • Initial approval certificate
  • External approvals (if any)
  • Tenancy contract
  • EJARI registration certificate
  • Passport copies of partners
  • NOC for partners (if any)
  • Other requirements by the DED (if any)

All these should be submitted to the Department of Economic Development along with the necessary government fees.

Contact Shuraa Business Setup

If you need advice on how to start a business in UAE, you can contact Shuraa Business Setup. We have been helping entrepreneurs form their companies in the UAE for nearly 20 years now. Book your FREE consultation with our company formation experts today! Call us on +97144081900 or WhatsApp us on +971507775554. You may also email us at info@shuraa.com or visit https://www.shuraa.com/ to learn about the wide range of business setup services that we provide.