How to Start a Construction Business in Dubai

by Zaara 22, Mar 2018

Construction Business in Dubai

Dubai is one of the most attractive and fascinating countries in the world. We have seen the transformation of this country from time immemorial, and now the beauty of this country has reached its zenith. Dubai's most attractive destination has many eye-catching sites and beautiful beaches, not to mention the sky-scraping infrastructure. Dubai's top-notch infrastructure is attractive for tourists and business people by having a rich class culture, high standard of living, rising GDP, tax-free environment, and flexible business opportunities. These make Dubai one of the best places in the world for setting up a business.

Dubai has many mega construction projects coming towards its way in the future. There are also several ongoing projects for the World Expo 2020. The UAE recorded the highest construction project valuation in the Gulf Cooperation Council region, amounting to USD 319.1 billion. All these facts imply one thing: there is no better time for company formation in Dubai in the construction sector.

Opportunities in the Construction Business in Dubai

One of the highest-grossing businesses in the UAE is the construction business. Dubai is home to the tallest building globally, i.e., the Burj-al-Khalifa and the world's tallest residential building, i.e., Marina 101. There are also the Princess Tower and Burj-al-Arab, which are some of the most notable structures in Dubai.

Dubai's government has sanctioned USD 7.8 billion to expand the Dubai International Airport and a redevelopment project worth USD 6.8 billion of the Abu Dhabi International Airport. Not to forget that Dubai will be hosting the World Expo 2020, providing umpteen opportunities in the construction sector.

Dubai government has funded a lot in the development of the travel and tourism sector. The promotional activities of the world's first human-made island, i.e., the Palm Jumeirah, are also rising on a daily note. Other projects are in progress, like the Dubai land, Arabian Canal, and others.

Steps for Construction Business Setup in Dubai

Construction License in Dubai

Before you register your construction company in Dubai, it is mandatory to obtain a license to start the business operations. Here are the different types of construction license in Dubai –

1. Wrecking and Demolition License

Activity Code – 451001

License Type – Commercial

Activity Group – Contracting and Building works

Activity Description – with this license, you will be allowed to engage in destroying buildings and other structures, which are in rundown conditions and are at the edge of collapse, or for replacement using different techniques, such as cranes for high rise buildings, excavators, and manual for medium buildings as well as building implosion using explosives.

2. Building Contracting License

Activity Code – 452001

License Type – Commercial

Activity Group – Contracting and Building works

Activity Description – under this license, you will be involved in constructing all kinds of works like residential, hospital, airports, farms, commercial, schools, industrial, public and agricultural buildings.

3. Building Maintenance License

Activity Code – 454007

License Type – Commercial

Activity Group – Building, Maintenance, Surveillance and Cleaning work

Activity Description – This license will allow you to maintain buildings without any equipment or extensions available inside, like restoration and reparation of roofs, columns, walls, floors and others.

4. Steel Construction and Contracting License

Activity Code – 452008

License Type – Commercial

Activity Group – Contracting and Building works

Activity Description – with this license, you will be allowed to execute all operations related to steel constructions and install steel structures on sites, such as warehouse, factories, sheds, storage place, bridges, structure, and tunnels.

Procedure to Setup a Construction Company in Dubai

The steps are -

  1. Before setting up a company in Dubai, the first thing is to determine whether you want to go for a company formation in Mainland or company formation in the Free Zone.
  2. The next step would be starting company registration at the Department of Economic Development (DED). Construction business comes in the commercial sector category, for which one needs to obtain a commercial license. This license is official permission to start any business in Dubai.
  3. After acquiring a license for setting up a business in Dubai, the next step would be hiring professionals like engineers and business consultants in Dubai, who can apply for a 'building permit' on your behalf.
  4. Evaluation of the soil for construction and determining the soil properties will be the job of the professionals, which is the next important step.
  5. Other activities include obtaining a Building License from the Dubai Municipality in the case of Mainland Company. In the case of a free zone, it is called the G+1 permit. There are other licenses to be obtained, like the environmental license and civil work permit.

Approvals and Permits Required for a Construction Business in Dubai

  • A civil works permit, which includes works before any foundations
  • For a building permit, the contractor needs to submit the design drawings of the proposed building by the relevant authority
  • An environmental license from the relevant authority
  • A permit from the Roads and Transport Authority to access the road and internal road network for transportation purpose
  • To dispose of hazardous waste, approval is to be issued by the relevant authority
  • Permits from Dubai government entities regarding utilities, such as a permit from the Dubai Electricity and Water Authority (DEWA) for water, electricity and sewage, and a permit from Etisalat for telecommunications
  • NOC from Dubai Civil Defence (DCD) for Dubai Airports Company and other related government entities
  • A Building Completion Certificate, which allows the building to be occupied

Conclusion

Dubai's construction sector is booming and is planned to reach new heights in its coming 3-4 years. We have seen why Dubai serves as the best potential market for the construction business. A country with so much potential for just one sector of its market is remarkable. If you are into the construction business or planning to set up your business in Dubai, Commitbiz Management Consultants can help you in your company formation and business setup consultancy. Contact us today.