Dubai is one of the most dynamic and vibrant cities in the world right now, making it a great place to start a business or expand an existing one. However, if you're just starting out, you might be confused about what the process is like and how to begin it.
In this article, we will discuss how to start your own business in Dubai. It is a good idea if you want to be self-employed in the UAE, but first of all, you need to know why. You see, many expats choose to be their own boss and start a business because it offers benefits that other professions do not have.
Why Start a Business in Dubai ?
Dubai is a dream destination for foreign entrepreneurs, as it's one of the most supportive and welcoming cities in the world. Dubai's proximity to so many important markets makes it perfectly suited for companies needing global reach that are looking to expand their horizons beyond their home markets.
There are many benefits to starting a business in Dubai, the main being that:
Low tax:
The UAE's tax environment is extremely friendly for both individuals and businesses. There are no personal income taxes, nor corporate taxes—the only significant tax here in the Emirates is VAT (value added sales tax), which stands at a flat 5%.
Vibrant Economy:
Dubai has one of the largest economies in the Arab world and is also one of the most diverse. If you want to start a business, it's not hard to do so. You have a range of opportunities available to you, including tourism, real estate, and banking.
Great Life:
The United Arab Emirates (UAE), one of the most developed countries in the Persian Gulf region, placed 23rd in the Best Countries Index, only slightly behind Spain and Ireland and ahead of Portugal and Greece.
Startup Support:
The Emirates boasts many startup incubators and funding initiatives designed to help businesses start up, grow, and flourish.
How to Start Your Business in Dubai: Business Setup Process
Choose a Business
Deciding on a business type is step one in the success of your company. It is important to identify what type of company you want to be, or want your company to become, before even starting up. This will help you spend less time and resources on the initial setup and get more done during the first few months of your business.
In Dubai and the UAE, many locations only permit specific business activities. Before starting a business in Dubai or the UAE—or any location for that matter! —be sure to research what kinds of businesses can operate there.
For example, Dubai Media City is a free zone dedicated to media companies, while DIFC is in Dubai International Financial Centre and offers service providers in the financial services industry.
However, over the years, some of these Free Zone areas have started to welcome general business activities instead of just those related to their sector.
Select Your Location
Once you've decided on an industry, the next big decision is whether to launch in a free zone or on the mainland.
Benefits of Freezone Company Formation in Dubai
0% corporate and personal tax
100% company ownership
100% repatriation of capital and profits
There are no currency restrictions, and
100% import and export tax exemption
However, if you wish to trade directly with the local market in UAE, your best bet is to work with an established mainland company who can help facilitate these trades for a fee.
If you choose to establish your business on the mainland of Dubai, you will be able to sell directly into the local and international markets.However, unless your industry falls under professional services (such as legal or accounting), you will need a local partner who controls 51% of your company's shares.
Choose a Name for Your Business
In Dubai and the UAE, there are strict naming conventions that must be followed, to ensure any company name meets legal and regulatory requirements. In addition to these rules, it is important that you don't select a name that may cause offence to other people or religious groups.
The following things are prohibited by law:
-A name that is likely to cause confusion with an existing trademark or company name.
-A name that contains the words "Dubai" or "United Arab Emirates."
-A name that is offensive or obscene in nature.
The best way to find out what names are available for your company is by visiting the Dubai Companies Registry website. You can search for a name that is not already registered, and if it's available, you'll be able to purchase it. Once your company name has been approved by the authorities, you will have to pay a fee of around AED 1,000 in order to register the new name.
Submit the required documents.
In order for the company to be officially registered, the required documents must be submitted. This will include an application for your chosen company name and activity and a shareholder's passport that is issued by the Ministry of Economy in the UAE. Some free zone companies also require additional documentation, such as a business plan or Non-Objection Certificate (NOC) from your current sponsor.
Apply for License
Once your application has been processed, the government will issue you your company license. Whether you set up on the ground in a free zone in UAE or elsewhere, you’ll usually only require a few standard documents: a completed application form, shareholder passport copies, and the like. Some free zones may also require you to provide a business plan. Essentially, filling out an application with all the necessary information, signing it, and sending it over are all that’s left.
Open a bank Account
Before you can open a corporate bank account in the UAE, you need to get your paperwork approved. You will also need to provide proof of ID, as well as all of your business incorporation documents and correspondence with your banker.
Apply for Visa
After all the work you've put into applying for your visa, you're nearly ready to start running your business in Dubai. Not only will many free zones allow you to apply for visas on behalf of staff and dependents—they may also be able to approve applications online or over a smartphone app!
If you are hoping to obtain visas for a spouse, child, or driver in one of the free zones, it is best to seek expert advice first.
Choose an expert
Al Hadif is a leading business setup consultancy that offers comprehensive services to help investors and entrepreneurs establish business operations anywhere in the UAE. We ensure that our clients receive the best legal, accounting, and tax planning advice available so they can set up their business with confidence.