Entrepreneurs from all over the world call Dubai home. Every year, more and more foreign investors and businesspeople come to the emirate to benefit from its excellent business climate. The long-term visa, which enables foreigners to stay in the UAE for protracted periods and possibly retire here at the end of their careers, is one of the most recent changes. Even non-residents can set up their company in the UAE and manage their company from any location in the world with the right assistance. Read on to learn how to starting a business in Dubai as a foreigner.
Is it possible for a foreigner to start a business in Dubai?
Let’s begin with the fundamentals. Yes, and many foreigners do, set up shops in Dubai. Over 80% of the residents are foreigners, and many of them run their own businesses.
Dubai actively welcomes foreign investors and entrepreneurs. The emirate is home to a large number of setup agents and company formation specialists who were established to assist foreign business owners with the license, visa, and business incorporation procedures.
Tax exemptions, simplicity in starting a business, speedy procedures, a booming economy & political stability are just a few benefits for foreigners starting new businesses in Dubai and other UAE emirates.
The short answer is that it is possible for expatriates to register a new business in the UAE. If you are interested in these benefits but are wondering if it is even possible to start a business in the UAE as a foreigner.
Things to know before starting a business in Dubai as non-resident or 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.
The city has gained international prominence as the economic hub of the Middle East. Its strategic geographical location provides 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 and Sole Establishment.
In Dubai, you can set up shop either on the 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 favorable 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 Center (DIFC), Dubai Healthcare City (DHC), and Dubai Multi Commodities Center (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.
Types of Trade License
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 — You need to acquire this license 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 non-resident
Setting up a company in Dubai is straightforward if you know the rules and regulations maintained by the government. To start a business in Dubai as a foreigner or non-resident, follow these steps:
1. Decide your business type
The type of business you want to build is one of the most important decisions you need to make before starting a business in Dubai as a foreigner. The activity you choose will define the structure of your company. You can launch a sole proprietorship that allows you to be the sole owner of your business. Furthermore, you can form a limited liability company (LLC), the most common type of business structure in Dubai that allows you to have a separate legal structure.
2. Choose a trading name
Trade name reservation is a precondition for a company’s registration. Your company name must reflect the type of business you do. The legal advisors at Shuraa can help you choose a name that is not previously registered, does not violate public sentiments, and complies with your business activities.
3. Obtain a license
Acquiring a license is mandatory to start a business in Dubai as a foreigner. The trade license can be obtained directly from the respective free zone authorities, or from the DED.
4. Business registration and incorporation
Once you’re done with all the steps mentioned above, you can register your business with the concerned jurisdiction and get started with your operational activities in the UAE. Registering would mean gathering all documents, identity proofs, trade license, permissions, bank account, etc. Your business becomes a legal entity in Dubai post-registration only.
5. Get a business visa
A business visa facilitates the movement in and out of the country for the business. Besides, it allows three of the senior business staff to apply for residency. The people who want to start a business in Dubai as an expat can get a long-term visa for themselves and their dependents. You can get the visa by contacting the local embassy. Furthermore, anyone willing to relocate to the UAE to establish a business is eligible to apply for a business visa.
Cost of starting a business in Dubai as an expat
The cost of starting a business in Dubai as a expat or a foreigner is dependent on various factors like type of business, license cost, location, and other documentation. For example: the trade license would cost you between AED 15,000 to AED 25000, approximately depending on the region.
Also, if you pick a foreign name (non-Arabic) for your company you have to pay additional fee of AED 2000.
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 as a foreigner. Consult UAE company formation experts at Shuraa Business Setup. 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].