Reasons to Start a Construction Business in the UAE

by Priyadarshini Balamurugan 15, Dec 2023

The Middle East is one of the most sought-after locations in the world by everyone. Be it investors or entrepreneurs, tourists, or people in business, everyone wants a piece of the UAE. The Middle East, especially Dubai, has a breathtaking skyline with skyscrapers reaching the clouds. There are various buildings that would take your breath away, and there are plans of the government and the private sector to make more of such astonishing marvels.

Such constructions include buildings that touch the sky (Burj Khalifa) or an utterly human-made island (the island of Palm Jumeirah). These constructions are not only a spectacle to watch but are also dedicated to business and office space or residential places. In both cases, there are no compromises in the amenities provided to the people utilising such constructions for their daily work.

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How to Start a Construction Company in Dubai, UAE?

Here are the steps to start a construction business in Dubai, UAE

  1. Decide the suitable legal structure for your business
  2. Select and decide on an appropriate name.
  3. Get all the required approvals from the relevant authorities.
  4. Open a corporate bank account
  5. Build a professional team
  6. Avail Visa and labour requirements.
     
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Reasons to Start a Construction Business in Dubai, UAE

The construction business in Dubai is one of the businesses that the government is looking towards to help in the diversification of the economy. There are various benefits to starting a construction business in Dubai, UAE, such as easy availability of construction license, government support, rise in the footfalls of tourists, etc., which are described below:

  • Increasing Opportunities

The government of the UAE has taken initiatives in various sectors and is trying hard to diversify the economy of the country. These initiatives are expected to increase foreign investments in the country gradually. Various efforts by the government, such as the National Strategy for Higher Education 2030, the Energy Strategy 2050, the Sheikh Zayed Housing Programme and the Dubai Tourism Strategy, ensure that the construction industry in the country has a very positive outlook.

  • Diversifying Economy

The diversification of the economy plays a significant role in opening up new avenues for people to invest in the country's construction sector. Mega Projects like the Dubai Hills Estate, Dubai South and one of the preparations of the significant worldwide event, the Dubai Expo 2020, will bring in visitors and investors from all portions of the world and will ensure that there is no lack of any construction activity.

  • Low Construction Costs

The diversification of the economy has resulted in the lowering of construction costs. In comparison, the UAE has one of the most economical construction costs of any developed city in the world, such as New York, Doha, Paris, San Francisco, etc. This lowering of fees is due to the increasing competition in the construction sector and also the competition among the various GCC countries. Low wages also play an essential role in the lowering of construction costs.

  • Available Labour

The availability of labour poses a huge question in any of the construction activities. There is a global shortage of productive and skilled labour in the world, but the Middle East region seems to defy this global shortage. The low wages of the labourers in the UAE also make it a very profitable place to set up a construction business.

  • Easy Availability of Licences and Permits

Getting the necessary permits and licenses for the construction business in Dubai, UAE, has been simplified. A new strategy for Building Permit Procedures Development in Dubai has been approved by His Highness Sheikh Mohammed bin Rashid Al Maktoum. This strategy will make sure that there is no hindrance to the process of getting the licenses from the government.

For details on how to obtain a construction licence in Dubai, read about the steps for getting a construction license in Dubai.

  • Government Promotion

The government of the UAE is taking steps to ensure that visitors and investors from all over the world visit the country. The country provides various benefits and features to entrepreneurs trying to setup their business in UAE.     

  • Rising Investments

The newly passed FDI law in 2018 will increase the flow of Foreign Direct Investments by almost 20%. This report was given by the UAE Ministry of Economy. The attraction of the FDI is critical to the sustainable development of any country and, in the case of UAE, to economic diversification. According to the International Monetary Fund (IMF), the GDP of the country will experience a rise of almost 3.7% in the year 2019.

  • Good Return on Investments

The increasing competition, the upcoming major global events and the tax-free environment allow the various construction companies to give a good return on investment. Moreover, increasing visitors and tourists from all parts of the world is a significant factor that ensures a constant flow of FDI.

  • Easy Transportation

There is a vast network of roadways that connects one emirate to another, making transportation very easy. Easy transit will increase the availability of both resources and labour for a company.

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Different Types of Construction License in Dubai

Below listed are the most common construction licence types include: 

  •  Building Contracting License

This license allows the license holder or the company to construct industrial, residential, commercial and office buildings

  • Wrecking & Demolition License 

The licence allows the company to be involved in demolishing works.

  • Steel Constructions Contracting License

This licence allows the company to get involved in constructing structures using steel, such as bridges and factories.

  • Building Maintenance License 

The license allows the company to do maintenance activities such as building maintenance, electrical, plumbing and painting.

Setting up a company in Dubai and, moreover, a construction company can be very profitable options in the UAE if done right. With Expo 2020 around the corner, there are a lot of opportunities to tap into this sector. Having construction experience will help in starting a construction company in Dubai, but some research needs to be done to understand the standards and benchmarks of the industry properly.

Are you looking to set up a construction company in Dubai? If so, then you must avail our services. Commitbiz will provide you with all the necessary information required to set up a Construction company or a consultancy. For further details on Commitbiz's services, contact us. We would be happy to help.

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FAQs

What are the regulatory requirements for starting a construction business in Dubai, UAE?

This question seeks information on the legal and regulatory framework governing the establishment of construction businesses in Dubai. The response should cover licensing procedures, documentation requirements, and compliance with local construction laws.

What construction projects can a business undertake in Dubai, and are there any specialization requirements?

Prospective business owners may want clarification on the scope of construction projects they can undertake and whether there are specific requirements for specialization. The response should outline the permissible types of projects and any specialization criteria.

What is the process for obtaining necessary permits and approvals for construction projects in Dubai?

This question addresses the practical steps in obtaining construction project permits and approvals. The response should cover the application process, documentation needed, and the relevant authorities responsible for issuing permits.

Are there specific safety and quality standards that construction businesses in Dubai must adhere to?

Safety and quality standards are critical in the construction industry. This question aims to understand the requirements for maintaining a safe working environment and delivering construction projects that meet or exceed specified quality standards in Dubai.

What is the role of the Dubai Municipality in overseeing construction projects, and how can businesses ensure compliance with its regulations?

It is essential to understand the Dubai Municipality's role and how businesses can align with its regulations. The response should cover the municipality's oversight, its requirements for construction projects, and measures businesses can take to ensure compliance.