The process of a business setup in Dubai is quite hassle-free for investors. It is impossible to overstate the significance of employing business setup consultants in Dubai.
The Government of Dubai provides the lowest possible tax rates, state-of-the-art infrastructure, flexible business laws, and many other benefits for investors. That’s why Dubai has become a hub of trade, travel, tourism, education, and job opportunities.
Even though establishing a company in Dubai is quite simple, this does not always mean it will be the same for investors. This is because market research, preparing documents, acquiring a license, and registration is challenging to tackle. It is not necessary for you to do everything by yourself since the procedure of selecting from among more than 2,000 licenses and more than 28 jurisdictions might be overwhelming.
This blog will walk you through the fundamentals of understanding the business climate in Dubai and the fundamental steps to getting your business off the ground in Dubai. We have provided a descriptive account of them broken down into six parts.
What do you need to know before starting a business in Dubai?
Before starting a business in Dubai, there are a few things you should be aware of.
1. Visas are essential
A visa allowing you and your staff to live in the UAE is necessary for the start of a business there. If your Dubai startup company is local, you will have to work with your sponsor at least at first to get your visas.
Since the bureaucracy is relatively open to international businessmen wanting to set up shop in the city, the application process for business visas in Dubai is not as stringent as most people would assume. Here, the attitude is that all business is good business. In the future, if your sponsor decides to grant you permission, you might be able to petition for the visas of your employees. You are the investor in your new business, so you must have your sponsor file for a visa on your behalf.
2. Understand the Types of Permits
In selecting a zone, you must also pick the kind of license necessary. The Department of Economic Development (DED) is responsible for awarding grants, and there are three primary types:
2.1 Commercial License Types
A commercial license is a must for starting a business in Dubai that engages in trade or purchases and sells products. This license may encompass import & export, sales, logistics, travel & tourism, general merchandise shops, and real estate firms.
2.2 Industrial license
This license is provided to enterprises that manually or mechanically convert raw materials and resources into finished goods. This license includes textile, metal, and paper manufacturing, among others.
2.3 Professional registration
The professional license is provided to service-providing enterprises, artists, and artisans. This license is often sought by medical services, beauty salons, and repair services, among others.
3. Getting the Sponsorship
There is no need for a local sponsor in a free zone. One of the primary advantages of forming a free site is establishing a company with 100 percent foreign ownership without requiring a UAE local as a partner or sponsor.
Hiring Professionals can be the best thing to do
Your best choice might be to hire a business advisory agency to register your startup. Not only will these experts guide you through the setup procedure, but they will also register the company on your behalf. Additionally, they’ll assist you with creating a bank account, deciding on an auditor, handling renewals, and providing nominee services.
Their experience working with the Free Zone Authorities and the local government bureaucracy may help you plan and list the costs of starting your business.
In most cases, these companies offer a team of experts to plan out your company registration from scratch. This includes the strategies you must follow to successfully set up your business, itemizing potential costs, offering licensing and location options, coming up with solutions for potential business obstacles, etc.
6 Steps to Starting a Business Setup in Dubai
Step 1: Undergo Extensive Research
To successfully launch a business in Dubai, you will need to conduct exhaustive research. Study the local market and have a fundamental comprehension of the surrounding area. This will allow you to understand the business opportunities available in Dubai and identify the market segment. You must not enter the process of starting a business without doing a considerable study. The research will assist you in determining the kind of business with a more significant potential for success and profit. Therefore, don’t be in a hurry to take the plunge.
Develop a solid strategy for your company’s future, which should contain research on the market. This includes goods and services, a target audience, their behavior, and your predictions about the business outcomes. If you can demonstrate that your business plan is sound, you may be eligible for financial assistance from the government for your endeavor.
Step 2: Determine the Nature of Your business and Its Activities
The second thing you need to do is decide what kind of business you will run. It will determine whether you need your business’s industrial, professional, or manufacturing license. There are many chances for financial investment in Dubai. The Department of Economic Development (DED) has compiled a list of more than 2100 activities. You have the option of going into the trading business, the real estate business, consulting, online retail, food chain stores, apparel stores, and many more. Please choose the one that interests you the most and get the Department of Education’s approval.
Step 3: Decide the jurisdiction
An investor has their business in one of three primary ways inside the city of Dubai. The Mainland Company, the Free Zone Company, and the Offshore Company. Each of these forms is unique and has its setup steps.
1. Mainland Company:
According to the laws of the United Arab Emirates, for a foreign investor to establish a business in mainland UAE, they must have a local sponsor who owns at least 51% of the company. An investor outside the country will control the remaining 49 %of the shares. The foreign investor must employ a local service agent who will represent the firm in the appropriate government agency if professional services are required.
When it comes to the fees, there are often three different sorts of local sponsors:
- Sponsors charging a low yearly charge will do nothing more than sign your company’s incorporation paperwork. Hence, the rest of the processes for establishing and running a business are your responsibility.
- Sponsors with a medium charge may assist you in incorporating your business and accompany you to meetings with government agencies necessary to establish your firm.
- Expensive names: People who hold important positions in the government or society of Dubai and have prestigious last names. You can’t do without them because of the prestige they bring to the table, and they can get your task done because of their reputation and network.
2. Free Zone Company:
A Free Zone Company is a company in one of Dubai’s special economic zones and enjoys a variety of unique advantages. The most significant distinction between this one and Mainland Company is that a foreign investor can hold 100% of the company and that a local sponsor is unnecessary.
3. Offshore Company
An offshore company is a business in one nation but operates in another to increase its profits. Also, the establishment of an offshore corporation comes with a plethora of advantageous outcomes. Business setup consultants are industry leaders in offering comprehensive services for establishing companies.
The legal process for forming a business has a unique and vital role in the trade name. In an ideal world, it should define the nature of the company. The Department of Economic Development website lists the requirements for choosing a trading name.
Also, you must set up a minimum share capital (MOA) on the Memorandum of Association for your firm. Most of the time, you are exempt from having to pay it.
Similarly, consider your financial constraints while choosing a commercial location for your business. We can also assist you in locating the most suitable site for your place of business.
Step 5: Itemize Business Cost
It is crucial to itemize your costs to stay within your financial setup and ensure you do not lack funds. Hence, allow business setup consultants in Dubai to assist you with itemizing your costs.
Step 6: Business License and Registration
Documentation processes and visits to relevant government officials are necessary for business setup in Dubai. Therefore, professionals are familiar with the requirements and have experience writing hundreds of businesses in Dubai.
Even though it may seem like a lengthy procedure, the time for business setup in Dubai will be no more than a few weeks. Hence, business setup consultants can help you with every process of starting a business in Dubai. From creating documentation and monitoring submissions to assisting with translations and establishing bank accounts.