Introduction
Since 2021, there has been a 75% rise in the number of business licenses in Dubai. A good number of them being foreigners who have set up shop in the Emirate.
Recent changes in policy allowing foreigners to fully own their mainland businesses in Dubai, removing the need for local sponsors, has also contributed to more and more people opting to call Dubai their base of operations.
In this article, we will outline a step-by-step guide on how to set up a business in Dubai.
If you are looking to be a remote employee, that is, you have a job and are looking to move to Dubai to be your base (being a digital nomad), check out this article on getting a UAE/Dubai remote work visa.
Why Set up a Business in Dubai
Most people choose to set up a business or a branch of their existing business in Dubai mainly because of the savings made by not paying income and corporate tax. Below are other reasons:
- 100% ownership as mentioned earlier
- Access to a large expat market
- Stable economy and currency
- High quality of life
- Digital and e-commerce growth
- Advanced infrastructure & Digital economy
Related: A Comprehensive Guide To Getting The UAE Golden Visa
Process of Setting up a Business
- Choose a Zone – Freezone or Mainland
One of the main things you need to consider when embarking on setting up a business in the UAE is the jurisdiction of your business. There are two options to choose from: Freezone area or the UAE Mainland. But first, let’s have a look at what each means.
Freezone businesses are registered and allowed to operate within that freezone and internationally. However, mainland businesses are allowed to operate internationally and most importantly, anywhere in the UAE.
With a freezone business, one cannot operate freely across the UAE market without a local agent.
There are more than 20 Freezones in Dubai and most of them are categorized based on the industry. For businesses looking to sell their products and services to UAE citizens and residents, then setting up a Mainland business, though more expensive, would be the best choice.
Setting up a Freezone business is best for people who are looking to benefit from zero income tax as well as very low corporate tax. It is also suitable for individuals who are considered digital nomads or remote workers. - Decide on the Company Structure and License Type
Once you have chosen a zone, its now time to decide on your company structure which will affect the types of licenses you may need. If you choose a freezone, talk to the management of the freezone for them to provide all the necessary documents you require for that particular zone and the company structure chosen. An example of a company structure is an LLC, ole establishment, etc. - Register Your Company/Business Name
You’ll then be required to pick a business name that is aligned with what you are doing. The name must also have the abbreviations of the company structure chosen. For example, LLC, meaning Limited Liability Company. So, if I choose the business name Property Getter and choose LLC as the structure, the full name will be Property Getter LLC. - Gather Your Documents
Next, you need to put all the documents together.
If you are setting up as a freelance, you need the following documents:
– Passport
– Existing business license of where you business is registered
– Your profile or CV
Setting up a company will require more documents, the main ones being:
– Business plan
– Copy of existing trade license/registration certificate (if applicable)
– Passport copies of the company’s shareholders and appointed manager
– Registry Identification Code Form (RIC) for appointed manager (original and notarized)
– Specimen signatures of the company’s shareholders and appointed manager
– A brief letter clarifying the investment idea and the investor’s plan (Letter of Intent)
– 2 years audited financial reports or certificate of reference from a bank (as required) - Submit your Application for Initial Approval
You will then submit all the documents for initial approval. This initial approval is what will allow you to continue with the process of setting up your business. - Choose Your Office Location
All businesses in the UAE need to have a physical presence either through having an office or workspace. If you chose to have your business in a freezone, then this process is pretty easy as your freezone will provide you with a workspace or office depending on your needs. - Submit Documents for Final Approval & Pay the Fees
Once you receive the initial approval and have chosen your location, you can go ahead and submit your application, and if successful, pay the fees required. Fees include company license issuance fee, which depends on the type of license you are required to have for your business type.
The whole process would cost about AED 18,000 ($5,200), for a freezone company if applying through an agency. This figure changes depending on the licenses you require as well as the number of visas you want. - Apply For Your Residency Visa
If successful, you now need to apply for a residency visa so that you can be allowed to enter the country and conduct business. This process may take time so exercising patience is highly encouraged. You can start the process of the visa application while in your home country but will have to go to the UAE to get medical tests done, register biometric details, and apply for your Emirates ID. - Open Bank Account
Getting the approval and your Emirates ID will now allow you to open a bank account for your business. This process can be tedious so take note of that.
Can I set up the business on my own?
Of course you can.
However, having an entity that specializes in this will greatly reduce stress, and make the process much easy, but, it will definitely cost more to use a company to facilitate the process.
And as much as it will cost more, you are assured of the process being handled well. Doing it yourself will more often than not lead to mistakes which will cost you time and more money.
What are some of the best agencies or companies to use when setting up a business in Dubai?
You can check out the following companies:
