Dubai and the United Arab Emirates have rapidly emerged as welcoming and supportive hubs for entrepreneurs looking to establish their businesses. In fact, Dubai alone witnessed the formation of more than 45,000 new businesses in the first quarter of 2022, with many of these registrations stemming from international businesses seeking growth opportunities.
To ensure a smooth and successful business setup, it’s crucial to gather trustworthy advice on the implications of your decisions, whether you opt to navigate the process independently or enlist the expertise of business setup professionals to expedite your journey.
In this blog, we present the ultimate roadmap to setting up a business in Dubai and the UAE, empowering you to embark on your entrepreneurial adventure with confidence and clarity.
Basics of Company Formation In UAE
· Choose an industry
The UAE has a broad variety of business sectors and multiple opportunities for creativity and innovation. Although one might be tempted to start the actual setup procedure right away, we advise that they should first identify what kind of business they want to run.
For instance, certain free zone areas specialize in particular activities or sectors, like journalism, finance, or technology. However, over time, a number of industry-specific free zones have begun to accept all types of commercial operations, not just the ones they are designed for.
· Find a Local Sponsor
A local sponsor is needed to create an LLC if one is to open a business anywhere in the UAE. The UAE government’s regulations state that in order to run a business in the country, one must have a local sponsor who owns the majority of the shares and exercises managerial control. They should also negotiate over the fee their sponsor will receive each year. It is important to establish a good relationship with the sponsor so that he can deal with any obstacles that arise when establishing the business with the authorities.
· Choose the company name
Make sure the company name is appropriate legally before committing to it because the UAE has certain rigorous naming conventions. The person must be a partner or owner of the business if it’s decided to name the company after them and their complete name must be used—no initials or abbreviations are permitted.
· Apply for a licence
The government will grant a business licence after processing the application. Irrespective of setup location, one will typically only need a few common documents, such as a filled-out application form and copies of shareholder passports. They might also be asked to submit a business plan in some free zones.
· Open a bank account
Once the paperwork has been returned, all the paperwork one needs to open a business bank account will be available. There are several banking institutions in the United Arab Emirates, including national and international.
Even international banks like Barclays, HSBC, and Citibank provide services in the UAE. Depending on the unique needs, one can select the one that is best for them. Before starting trading in the UAE, everyone must have a bank account.
Paperwork To Be Completed Before The Formation Of A Company
One will need to fill out an application for the selected company name and activities, which they will submit to the appropriate government officials along with copies of shareholders’ passports. A business plan or Non-Objection Certificate (NOC), which is a letter from the present sponsor certifying that one is permitted to open a new company in the UAE, may be needed in some free zones.
An application must be filled out to register the selected company name and business, as well as provide copies of shareholders’ passports when one arrives to register the company in the UAE. A Memorandum of Association must specify the capital requirements that mainland businesses must meet.
To register the company activity and trade name, get in touch with the Department of Economic Development of your preferred emirate. After that, provide the necessary paperwork. On the website of the UAE government, under Information and Services, references to the relevant offices can be located.
The company licence will be sent once the registration has been finalized. At this point, managing the paperwork is arguably the most difficult task one might face. It is strongly advised to get expert guidance if one is not a fan of tedious, challenging paperwork with lots of small details. The capital and time which is saved up during this period alone more than pays for itself.
Cost Of Assembling A Business In UAE
Numerous fees will arise depending on where in the UAE you choose to locate it. Four costs can be overlooked and will surely be included in the cost of setting up a business in the UAE.
Those have been mentioned below:
- Registration Fee
The business registration fee is a one-time sum that one must pay to the free zone authority when they first register the business. The exact cost will depend on the legal structure of the organization. In a Dubai-free zone, the cost of writing a business is not wildly variable; it normally falls between AED 9,000 and AED 10,000.
- Licence Fee
Choosing a business licence is the most important step in functioning in one of Dubai’s free zones. The three most popular types of company licences are those for manufacturing, services, and trading. License fees, as compared to company registration fees, are recurring expenses that can cost anywhere between AED 10,000 and AED 50,000 annually.
- Capital requirements
Although, in practice, the minimum capital permitted by the Dubai licensing authorities was AED 300,000 (about US$82,000), LLCs were previously needed to have a share capital of at least AED 150,000 (around US$41,000). However, since share capital is no longer required to be paid up before a company can register, it is no longer essential to deposit it. Instead, companies are expected to have enough share capital to accomplish their objectives.
In reality, however, each emirate’s appropriate licensing agency has the discretion to establish minimum share capital needs, and they still do so for some types of commercial activity.
Benefits of Operating A Business In The UAE
· Easy Business Setup Process
One of the most entrepreneur-friendly legislative frameworks may be found in the United Arab Emirates. The UAE’s government is particularly concerned with strengthening and guaranteeing the business’s overall viability. As a result, it provides constant cooperation, simple paperwork, and cutting-edge facilities to finish the entire procedure in a few days.
· Government Support
Investors from all over the world are continuously supported and collaborated with by the government of the United Arab Emirates. It offers a range of first-rate amenities as well as other successful business plans all year long. The UAE government offers long-term residency to business owners, investors, and those with exceptional potential.
· Ample Expansion Opportunities
Due to the UAE’s advantageous location, the doors to local markets in the Middle East, Africa, and Europe are constantly open for business. Additionally, the UAE provides Indian business owners with a variety of other commercial prospects, including B2B, B2C, and C2B trading.
Seamless Business Setup With TASC Corporate Services
Setting up a business in the UAE can be a rewarding experience, but navigating the complexities of the process requires expert guidance. This is where TASC Corporate Services comes in, offering comprehensive support to build your business in the Middle East. Our business setup services, and a team of professionals ensure a seamless and profitable setup process, making the UAE and Saudi Arabia your top destinations for establishing a thriving business.
With TASC Corporate Services, you can tap into a plethora of options, maximizing the potential of your investment and reaping immense benefits. Don’t leave your business setup to chance; trust the experts at TASC to provide the assistance you need in reducing costs and overcoming obstacles throughout the journey.
Ready to embark on your business venture in the UAE? Contact us today and let us help you turn your vision into a reality.