Starting a business in Dubai as a foreigner? Here’s all you need to know
Starting a business in Dubai as a foreigner, without a doubt, requires extensive groundwork. Any investor contemplating how to start a business in Dubai as a foreigner, would have to navigate the available options and process. Expat entrepreneurs trying to understand the rules and regulations of an unfamiliar land and unknown language, might find the task gruelling. However, consulting company formation experts in Dubai will give you a fair idea.
Things to know before starting a business in Dubai as a foreigner
Before we get into explaining how to start a business in Dubai as a foreigner, it is important to understand how things work in the emirate.
Dubai has gained international prominence as the economic hub of the Middle East. Its strategic geographical location providing easy connectivity to suppliers in the Gulf, Asia as well as the African subcontinent. Also, 90% of the city’s population comprises expats from all over the world. Moreover, Dubai’s excellent infrastructure, safe living environment, tax-friendly policies, and the visionary leadership which supports technology and innovation, create highly conducive for entrepreneurs to thrive. Therefore, starting a business in Dubai as a foreigner provides you with the option to live in such a lucrative city.
One of the first decisions you need to make before starting a business in Dubai as a foreigner, is the type of company you want. This will be determined by various factors, including the nature of your business, the purpose of your company and its operational aspects, among others. There are two major types of corporate structures that you can choose from:
Limited Liability Company — Also known as an LLC, this corporate structure allows multiple shareholders, minimum two and maximum 50, to come together for company formation. This is the most preferred structure in Dubai as it allows import/export and trading activities locally as well as internationally without much hassle. Furthermore, it also helps in easy processing of visa and immigration documents for partners, their families, and employees. However, it is important to note that to form an LLC company you have to partner with a UAE national, an Emirati. This local sponsor acts as a silent partner and provides services an agreed annual fee. It is also possible for an expat to fully-own his or her commercial company. But, for that, there are quite a few conditions that need to be met and a steep deposit is required based on your business type.
Sole Establishment — This structure is suitable for a company that is completely owned and operated by a single person. It covers professional sectors such as consultancies, IT, salons, medical representation, etc.
In Dubai, you can set up shop either on mainland or in one of the many free zones. Starting a business in Dubai as a foreigner, one may wonder what is the difference between mainland and free zones?
Mainland — Operating a company on Dubai Mainland allows you to trade within the local markets as well as trade internationally. The process of company formation is quite systematic. Moreover, you can get a business license within a day.
Free zones — Setting up a business in free zones is quite reasonable and favourable for new businesses. Some of the most prominent free zones in Dubai include Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), Dubai Media City, Dubai Silicon Oasis, Dubai International Financial Centre (DIFC), Dubai Healthcare City (DHC), and Dubai Multi Commodities Centre (DMCC). The rules and regulations for businesses and timeline for business setup formalities, however, may vary from one free zone to another as they are governed by their own authorities.
The Department of Economic Development (DED) in Dubai issues all the business licenses in the emirate. There are four types of business licenses which you can choose from according to your business:
Commercial — As the name suggests, you require this license to conduct any trading business in Dubai.
Professional — This license is issued for any service-oriented company.
Industrial — For all manufacturing or packaging-related activities, you need to acquire this license.
Tourism — In this case, the company formation is reviewed not only by DED, but also, the Department of Tourism and Commerce Marketing (DTCM). The latter issues this business license.
Steps to start a business in Dubai as a foreigner
- Choose your business activity
- Select the jurisdiction best suited for your company
- Finalise your business’ legal structure. You an choose to establish a sole company or an LLC or a branch of a foreign company.
- Get your trade name approved
- Apply for the relevant trade license. Depending on the nature of your business, you many avail a professional, commercial, industrial or tourism license in Dubai.
- Register your company
- Draft the Memorandum of Association
- Rent an office space (if required)
- Get your tenancy contract, also known as ejari ready
- Get the initial approval for your business
- Collect your trade license and get your business up and running
Approvals required for starting a business in Dubai as a foreigner
In Dubai, specific businesses need to acquire permissions from various government agencies. For instance, to open a restaurant in Dubai, you will need to get a permit from the municipality for food and safety. Similarly, you need to lease or rent factory space of specific minimum area to carry out any industrial activities.
Still wondering how to start a business in Dubai as a foreigner? Consult UAE company formation experts at Shuraa. Our experienced legal corporate advisors will not only help you figure out the best possible corporate structure and choose a suitable jurisdiction, but they will also walk you through your options and simplify the procedures.
To get a free consultation, call +97744081900 or chat with us on WhatsApp: +971507775554. You can also drop us an email at [email protected]