It can be daunting to even think of starting a new venture in a foreign land. But, they say behind every successful business their lies a risk-taker. If you think that you would risk it all to set up a business and make it successful, Dubai is the go-to location for you. The country is filled with hundreds of success stories. Do you want to be in the list? If yes, then let us not beat around the bush and get directly into the crux of the matter.
Procedure to Setup a Company in Dubai
The Dubai Department of Economic Development (DED) looks after business setup procedure in the country.
1.Decide the Business Activity
Once you decide the type of business activity, it gets easier to get the license needed, as ultimately a license is determined by the type of business activity you choose. Also, one must know that, not all the activities are allowed in the UAE. Various departments need to give you permission before you start the business in Dubai. Thus, the first thing to do business is to decide whether your business fits in as per the Dubai standards.
2.Pick the Jurisdiction
Dubai offers mainland business setups, freezone company formations, and offshore business establishments. One must be aware of these jurisdictions available in Dubai before starting a business. Once you know there advantages and disadvantages, it will be easier for you to select one according to whichever seems feasible for the type of business you will be into.
3.Choose a Business Structure
Dubai offers various types of business structures to its business owners. That way, you have a lot of option to choose from after doing primary research on each type of business entity. Depending on your location and type of business, there are rules regarding the make-up of your firm. For example, if you plan on a legal consultancy firm, this can be done only as a branch of company or as a stand-alone company. Types of business structures offered in Dubai are;
- Sole Proprietorship
- Joint Venture
- Public Shareholding Company
- Private Shareholding Company
- Limited Liability Company
- General Partnership
- Partnership en Commendam
- Professional Company
4.Look for a Local Sponsor
This step is useful when you decide to start a company in the UAE mainland. The challenge is to find a trustworthy and reliable UAE business partner. It is stated that the UAE local partner will hold 51% of partnership and the remaining 49% can be owned by the entrepreneur. In terms of freezone, a company would require a local service agent, who would work for a nominal fee.
5.Register your Trade Name with the DED
In this step, you need to decide on a business name. The name must not be similar to any existing businesses in the UAE. Once you finalize the name you need to register it with the DED. It takes around three days to register a trade name, and it is valid for a period of six months.
6.Approval on the Business Activity
There are a few commercial activities that are not permissible according to the DED law. According to the Law No. 13 of 2011, the Dubai DED is the accountable body to decide, regulate, classify, permit and license all the economic activities. However, this is not applied to freezones and offshore business setups.
7.External Approvals for the Business
There are a few external approvals that you might need to take if your business is restrictable according to the law. These permissions must be acquired by the non-governmental and semi-governmental bodies.
8.Rent an Office
If you are setting up a business in Dubai, renting a business premises is a must. The tenancy agreement, Real Estate Regulation Authority (RERA) documents, and EJARI need to be submitted, following which the initial approval is granted by the DED.
9.Get an Initial Approval from the DED
Initial approval is basically consent by DED for registering your business in Dubai. Hence, before registering the company you must take an initial approval by filling an application form and attaching the supporting documents and submitting it to the authority. You can start your business at this stage and continue with the process of acquiring your trade license.
10.Draft a Memorandum and Articles of Association or LSA
This step is yet another important task. The MOA specifies the share of limitations and liberty every partner has within the company, while the LSA describes the role of the agent and fulfils the compliance that will be performed. MOA/LSA are the legal documents and should be drafted with the help of a legal advisor. They also need to be translated in Arabic.
11.Register your Business
To complete this step, you need to fill an application form of registration. Once it is duly filled, attach required documents with it. Submit it to the DED for approval. You will get the notice of approval/disapproval within a week or so.
12.Submit an Application for Your Business License
Once the company is registered by DED, the business license will be processed and could be collected duly. Business licenses are provided mainly depending on the nature of the business activity and the jurisdiction of the business. The most prominent licenses for business setup in Dubai are: commercial license, industrial license, and professional license. It takes around one week or more to get the trade license from the time you receive your initial approval.
13.Pay fees and Collect the License
A payment voucher will be provided by the DED once you fill the license form and send the documents. The final payment needs to be made to collect the business trade license. Once you collect your trade license, you become a full-fledged business entity.
Documents Required to Start a Business in Dubai
Here is the general list of documents and certifications that are required for business setup in Dubai.
- License Application
- Attested LLC agreement
- Governmental forms
- Name reservation certificate
- Initial approval certificate
- External departments approval
- Tenancy contract
- EJARI registration certificate
- Passport copies partners and NOC for partners (if any)
- Dubai Chamber of Commerce and Industry Registration
Based on the aforementioned details, it is evident that that Dubai company registration is an extensive process! Nevertheless, you can make it quick and cost-effective by appointing a business setup consultant. With a knowledgeable business consultant, you won’t waste your money on unwanted documents. We at Business Setup Worldwide can do that for you. Our team of professionals has years of experience in this field. Also, as they are well-versed with the procedure, company formation can be instant. Contact us today- we’d be glad to assist you. All the best with your business!