Dubai has gained the reputation of a leading trading hub in UAE, owing to premier business establishments and an environment that is not unduly restrictive. It offers international businessmen the most liberal operating conditions, tax exemptions, asset protection, complete privacy, and limited liability, in setting up a business in Dubai.
Benefits of Setting Up a Business in Dubai
- Excellent growth trajectory (imports have doubled since 1990), and unique policies of liberalization
- Prosperous market located in one of the world’s richest regions that is diversified and offers wide opportunities to traders
- No trade barriers, quotas, exchange controls (open market)
- High accessibility through air or water (around 90 airlines and 170 shipping lines)
- Presence of over 30 free zones, that offer 100% foreign ownership, corporate and personal income tax exemption, and full repatriation of capital and profits
Process of Setting Up a Business in Dubai
- Arrange for a local sponsor is needed. A local sponsor refers to a UAE national (or a company wholly owned by UAE nationals) who acts as a service agent for your business in the UAE, generally also acting as a sleeping partner of your company. A detailed agreement, stating the responsibilities of the said sponsor towards the business as well as his/her annual fee, is to be prepared. A no-objection certificate from the local sponsor is required for running your business activities.
- Prepare a Memorandum of Association (MOA) for your company. It is a document listing the fundamental conditions upon which a company must operate.
- Obtain a preliminary approval for the company by notarizing the MOA at the Department of Economic Development (DED), Dubai. It’s best to get this done through a lawyer or business setup consultant.
- Finalize a trade name for the company and register it with the DED. The name should be unique and relevant. The DED has the authority to reject or change the name in case a company with a similar name already exists.
- Arrange for an office space for the company – this is a prerequisite to obtain a licence for the business. The office tenancy or ownership contract serves as the proof for a registered office address. In case of an offshore company, the address of the registered agent (appointed by the company from the approved list of registered agents in UAE) can be provided as the official address of the company.
- Apply for a trade licence, which is again issued by the DED. A trade licence can be one of the following types, depending on the kind of business activity your company carries out:
- Industrial licence, for manufacturing activities
- Professional licence, for service-based companies like law firms, educational institutes or artisans
- Commercial licence, for any kind of trading activity
- Based on the type and location of your company, submit the required documents to the DED and the Commercial Registration Department, and pay the licence fee.