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Stages for starting a business in Dubai, UAE

Этапы для начала бизнеса в Дубае, ОАЭ

The UAE is a popular destination among investors and entrepreneurs. Favorable tax policy, favorable investment climate combined with ease of doing business have turned the country into the largest business center in the Middle East. The Government is constantly putting into effect new rules and regulations that encourage entrepreneurs of all directions.

Founding a company in Dubai is an important decision that requires research, budget planning, conceptualization, and license acquisition. From this article you will learn how to formalize your business step by step in Dubai, UAE.

Select the type of activity

In order not to make a mistake, it is necessary to conduct a thorough study to find out how profitable it will be in the conditions of the Arab Emirates market. It is important to determine the relevance of the chosen direction, expediency, find out the benefits, allowances, additional opportunities, calculate the economic benefits.

Select jurisdiction

The UAE market is divided into economic zones created for local companies, as well as functioning as free economic and offshore. These territories are also called jurisdictions. Each of them has its own set of laws and regulations concerning the organization and conduct of business. Each free zone has its own profile specialization and concentrates all the necessary conditions for the development of this particular market segment. Choose a zone that matches your organization’s profile.

Decide on the organizational and legal form of the company

Free Zone company branch

Choosing a legal form is important for starting a business in the United Arab Emirates. The organizational and legal form determines the structure of the work, the principles of the organization of resources, as well as assets. It will help you create an organization layout. Without determining the legal form of the future enterprise, it is impossible to apply for a business license. Below are the legal forms according to which you can register:

  • Limited Liability Company (LLC);
  • A local organization with 100% foreign ownership (one shareholder);
  • A local organization with 100% foreign ownership (several shareholders);
  • A branch of a local firm;
  • A branch of a firm of one of the Arab states of the Persian Gulf;
  • A branch of a foreign firm;
  • A branch of a Free zones;
  • Holding company.

Approve the name of the company and its specialization

The Department of Economic Development (DER) must approve the type of chosen activity and the name of your company before moving on. This is a preliminary approval. After receiving it, you need to collect a package of documents and apply for a trade license. This is the main document that gives the right to legal activity on the territory of the country.

Types of business licenses

There are four types of trade licenses in the UAE:

  • commercial;
  • professional;
  • industrial;
  • tourist.

The applicant has the right to apply for any of these types of permits. The licensing structure in free zones is different and depends on the type of activity of the company.

Registration

Company registration and licensing

Registration and licensing of a company is a simultaneous process consisting of several stages of registration and approval. At the first stage, it is necessary to obtain all permits from the relevant state authorities in accordance with the request of the DER. The required documents are different for each type of company.

Hire an agent

Previously, cooperation with a local partner or agent was a prerequisite for opening a foreign company. At the same time, he had to be only a citizen of the Emirates. Since the search for an agent’s candidacy was often delayed, causing problems for businessmen, especially for beginners, this requirement was canceled as mandatory. You can hire a local agent at your own request, which will speed up the registration process, as well as simplify communication with local authorities.

Get external approvals

DER has the right to request additional permits from other state or non-governmental institutions, depending on your business activity. For example, some businesses need to get permits from the municipality, specific banks, embassies, etc.

Prepare the Foundation Agreement

Drafting a Constituent Agreement (UD) to open a business in Dubai is a legally complex issue. Therefore, before you make a UD, be sure to consult with a specialist. The UD should be developed in accordance with government mandates and at the same time take into account your business interests.

Pick up an office and sign a lease agreement

Depending on the needs of the business, you can rent an entire office space or choose a common workspace in the business center. The number of visas that you can request from the DEP depends on the size of the office space.

Interaction with the tenant and Ejari

Dubai, Ejari online system

To start an entrepreneurial career in Dubai, you will need an Ejari rental agreement. This is an agreement between you and the real estate agency whose office space or shared workspace you are going to rent. Ejari is an online system operated by the Real Estate Regulatory Agency. It ensures fairness and transparency between both parties involved in the lease. You must provide your Ejari and some other documents to activate your Ejari account. An Agreement is required to obtain or extend visas for your family members and/or employees.

Initial approval

Before you get a business permit, you need to get approval from the Department of Economic Development. This document indicates that the UAE Government allows you to conduct business in the country. Without receiving approval, it is impossible to proceed to the next stage of registration of the enterprise.

Registration of a business permit

To obtain a UAE trade license, you will need to provide:

  • Constituent Agreement;
  • Application for a trade license;
  • Completed state forms;
  • Trade Name Reservation Certificate;
  • Certificate of initial approval;
  • External statements (if any);
  • Lease agreement;
  • Registration certificate Ejari;
  • Copies of partner passports;
  • NOC for partners (if any).

The entire package is provided to the Department of Economic Development together with receipts for payment of state duties.

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