Things to Know Before You Plan to Setup Your Business in UAE

by Zaara 09, May 2015

Setup Your Business in UAE

The United Arab Emirates is not only one of the fastest growing tourist destinations which boast of exotic locales, safe environment, and rich traditional culture, but it’s also a promising commercial and trading hub. There are a few important things that you need to keep in mind in case you are planning to set up your company in UAE.

UAE Laws

Government is UAE is very welcoming, but equally particular that foreign nationals follow the prescribed moral conduct, and abide by all the rules and regulations; failing to which may result in fine / court cases / social embarrassment. If you need to stay out of trouble, take care of the following laws:

  • Taking pictures of other individuals without their permission
  • Disrespecting any religion is an absolute no
  • Making indecent gestures or swearing can lead to fine / court cases/imprisonment
  • No touching or kissing in public
  • Sharing private space with a member of the opposite sex not related by marriage or family ties

Types of Permissible Business Establishments

There are five types of business establishments in which a foreign entity can invest, in case it plans to establish a professional presence in UAE.

  • Apply for a ‘Permanent Establishment”
  • Create a UAE ‘Free Zone Entity’
  • Enter into a ‘Commercial Agency Agreement’
  • Establish a ‘Branch Office’
  • Register a ‘Civil Company’ in Sharjah and Dubai (currently limited to these 2 locations)

For each company established in UAE under Commercial Companies Law, the foreign national can at max hold 49% of the company’ capital, while the remaining 51% (at least) should be held by one or more UAE national partner(s). However, if your company is engaged in any of the following activities, you can get an exemption from this 51% requirement –

  • Companies belonging to the Oil and Gas industry
  • Companies engaged in Transmission and Distribution
  • Companies established in Free Zones (in case the free zone regulates the activity performed by the company)
  • Companies involved in Treatment of Water
  • Companies that produce Electricity and Gas
  • Foreign Banks are also exempted from appointing a sponsor

Miscellaneous

Business Hours – Offices are usually open Sunday to Thursday, with Friday and Saturday being holidays. The normal office time is 8.30am to 5.30 pm, including lunch. Banks are also open on the same days between 8 am to 1 pm

Local UAE Time and Code – UAE Time Zone is GMT+04.00, and the International country code is + 971 (UAE)

Language – Arabic is the official UAE language, though most of the people (taxi drivers, staff in restaurants, airlines, malls, hotels, etc.) are well-conversant in Arabic, English, Hindi, and Urdu

Currency – Dirhams (Dhs) is the currency of UAE, and is also known as AED (Arab Emirate Dirham). It is divided into 100 fils

Religion – UAE respects and is tolerant of all religions, however, Islam is the official religion

Transportation – The most common and preferred method of commute in the Emirates is Taxi. Also, the buses operate round the clock and are very cheap, with fares as little as 1Dhs

Follow the information given above to ensure hassle-free business setup in UAE. If you are looking for a specialized service provider to ease the task for you, a team at Commitbiz can help. Contact us today!

FAQs

Which are the Labor Laws to keep in mind before setting up a business in UAE?

These are the labour laws for every UAE business to know -

  • According to the Labor Laws, the employees are entitled to 10 public holidays yearly. The government can also add extra day-offs depending on circumstances.

  • Employees working overtime or on holidays are entitled to additional pay, barring those in some advisory roles.

  • Female staff (who’ve worked for at least 1 year) at your organization is entitled to a paid maternity leave for up to 45 days, including the time before & after the delivery.

What are the documents required for setting up a UAE company bank account?

These are the documents required for opening bank accounts in UAE -

  • Copy Of your Trade License

  • Copy Of Passport

  • Copy of your power of attorney

  • Copy of Chamber Of Commerce registration certificate

Why UAE is a great place to setup a company?

UAE has plenty of advantages that make it ideal for doing business. The most prominent ones are -

  • UAE is the 29th largest economy at the present

  • There’s 100% ownership of a business as a foreigner (in free zones)

  • UAE government is offering great infrastructure in office places, showrooms, tax exemptions, labour, etc.

Btw, 80% of the Fortune 500 companies (including the top 10) have set up their offices in UAE.

What are the challenges faced by foreign investors while setting up a business in UAE?

  • English is not the most common language in UAE

  • If you’re doing business outside a free zone, you’ll need to appoint a local agent for setting up your business. That local agent is entitled to a fixed pay every year

  • The Freezone, Mainland & Offshore laws, on top of that, the laws for individual emirates are quite complicated to understand

Start your Entrepreneurship Journey Today in UAE from AED 5,500

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