How might setting up a business in UAE benefit you? Going offshore is a strategy to regain financial independence, and launching a business in the thriving city of Dubai is a wise decision. Our extensive guide provides all the information you need for setting up a business in UAE.
The United Arab Emirates welcomes business opportunities with open arms. While your local jurisdiction may present various challenges, the process of setting up a business in UAE is notably straightforward. The United Arab Emirates offers new avenues for investment, especially for individuals with significant wealth.
Considering the numerous advantages of setting up a business in UAE, you can unlock unparalleled opportunities for growth and prosperity. With a strategic location, a robust economy, and a business-friendly environment, the UAE becomes an ideal destination for entrepreneurs seeking to expand their ventures. Setting up a business in UAE also provides access to a diverse market, fostering innovation and sustainability.
Our comprehensive guide not only simplifies the complexities of the business setup process but also highlights the unique advantages that come with establishing your business in the UAE. Whether you’re a seasoned entrepreneur or exploring the entrepreneurial landscape for the first time, our guide ensures that you are well-equipped with the knowledge and insights needed for a successful business setup.
Setting up a business in UAE is more than a strategic move; it’s a gateway to a world of possibilities and unparalleled success in one of the most dynamic business hubs globally.
Setting Up a Company in UAE
Benefits of Setting Up a Business in UAE
The United Arab Emirates was clear in its desire for foreign investment and lured investors with attractive incentives. As a result, it has enticed some of the world’s most prominent investment firms to establish offices in the country.
The UAE government is dedicated to advancing business activities within the UAE and has introduced innovative measures to facilitate this process. Notably, they’ve introduced the Bashr service, which enables entrepreneurs to set up a company online.
This integrated eService simplifies the process of setting up a business in UAE, allowing investors to complete the process within just 15 minutes through a unified online platform. This platform seamlessly connects with federal and local government bodies to expedite the issuance of business licenses. The Abu Dhabi Business Centre even offers an instant license, eliminating the need for physical presence in the UAE to collect it.
Dubai Economy and other relevant Dubai government entities have launched the Dubai Virtual Commercial City Program, designed to cater to global entrepreneurs and investors. This initiative allows investors to create a virtual company in the UAE, regardless of their place of residence.
Previously, the UAE stipulated that a minimum of 51% of a company’s shareholders had to be UAE residents. However, recent amendments to the Commercial Companies Law have eliminated this requirement. As a result, it is now possible to establish an LLC in the United Arab Emirates with 100% of the shareholders residing abroad.
Establishing a business in the UAE also opens up the possibility of obtaining a UAE residence visa. The UAE is renowned for its zero-tax environment, although it’s important to note that a new corporate income tax of 9% was introduced in June 2023.
Nevertheless, free zone companies can maintain a 0% tax rate by meeting specific criteria. Additionally, various tax exemptions are available for businesses operating in strategic sectors.
Setting up a Business in UAE with Six Easy Steps
Numerous factors make the UAE an attractive choice for entrepreneurs worldwide.
First and foremost, the country’s favorable tax system is a significant enticement, with zero taxation on both personal and corporate incomes. Additionally, the UAE’s central location in the heart of the Middle East positions it as an ideal global trade hub.
Opting to establish a presence in one of the UAE’s free zones brings even more benefits, including a 100% exemption from customs tax, freedom from currency restrictions, and the ability to repatriate all capital and profits, among other advantages.
Furthermore, the UAE offers a remarkably straightforward company formation process, which, if you have a good understanding of local business practices, can be accomplished in just a few uncomplicated steps.
To launch a business in Dubai or the UAE, you only need to follow six simple steps:
Determine Your Business Activities
The initial stage in establishing your UAE business involves selecting your business activities. With a multitude of potential options available, it is crucial to list all activities you plan to engage in on your license application.
Failing to specify all your intended activities can potentially result in complications later on. Therefore, it’s advisable to collaborate with a company formation specialist when making this decision. These experts possess knowledge of permitted activities and can recommend those that best align with your business objectives.
Select a Company Name
Having defined your business activities, the next step is to select a suitable company name. Naming your business in the UAE involves adhering to specific naming conventions that are both strict and straightforward. It’s advisable to seek guidance from a company setup specialist for this phase.
In essence, you should avoid any offensive or blasphemous language in your company name. Furthermore, steer clear of names associated with well-known organizations, and if you’re naming your company after yourself, opt for the full name, such as “Joe Tann Consulting,” instead of using abbreviations like “J Tann Consulting.” It’s also crucial to ensure that your chosen name is available for registration.
Choose Your Setup - Free Zone or Mainland?
The final decision before submitting your license application is to determine whether you want to establish your business in a free zone or on the mainland.
Both options come with their unique advantages. Free zones offer benefits like a streamlined incorporation process, ongoing business support, and financial incentives such as tax exemptions and the absence of currency restrictions.
Conversely, operating on the mainland allows you to engage directly with the UAE market and pursue potentially lucrative government contracts.
The choice that suits your business best depends on its nature. Once again, a company formation expert can provide guidance on the most suitable approach.
If the cost of launching a business in Dubai is a significant factor in your decision-making process, rest assured that the expenses are comparable, whether you opt for a free zone or mainland setup.
Applying for Your Business License
Securing a business license is a fundamental requirement when embarking on a business venture.
Obtaining a business license is a straightforward process for both free zone and mainland companies. Here’s a breakdown of the requirements for commencing a business in the mainland: you must apply for your license directly with the Department of Economic Development or the Municipality in the Emirate where you intend to setting up your business. In most instances, the processing time for mainland license applications is approximately three weeks.
If you plan to operate from a free zone, you’ll need to apply directly to the relevant governing authority. Free zone licenses can often be issued within a matter of days, contingent on the nature of your business and the specific type of license you require. To ensure a seamless process, it’s once again advisable to enlist the services of a company formation specialist at this stage.
Whether you’re submitting your application independently or with the assistance of a company formation agent, the typical requirements are quite straightforward and involve providing a few essential details along with basic documentation, including:
- A completed application form
- A copy of the passport of the proposed owner or owners
- Two color passport-size photos
If you’re exploring how to initiate a business in Dubai on a limited budget, free zones often present an attractive option. Free zones offer cost-effective license packages that do not mandate paid-up share capital, eliminate the need for annual audits, and feature a simplified incorporation process. Additionally, there’s no requirement for your physical presence in the UAE to establish your new company.
Applying for Visas
Obtaining a UAE visa is another crucial requirement when launching a small business. The visa application process, whether it’s for yourself or your employees, is unique but straightforward. Once again, seeking guidance from a UAE company formation expert can simplify this process.
With a UAE business license in your name, you also have the ability to sponsor visas for others. This may include family members such as a spouse, parent, child, or even a domestic worker like a housekeeper.
The maximum number of visas you can apply for will be contingent on the size of your company, the type of business setup you’ve chosen, and, in the case of dependent visas, your personal income.
Like Setting Up a Business in UAE, you may also like to know about Searching for a Job in UAE.
Opening a Corporate Bank Account
The UAE’s stringent anti-money laundering regulations can pose challenges for foreign entrepreneurs seeking access to corporate banking services. Collaborating with a seasoned expert in this domain can greatly streamline the process.
Company formation specialists possess extensive connections with both local and international banks and can readily connect you with the one that aligns best with your requirements, even facilitating in-person meetings when required.
Whether you are seeking to obtain your company license in the UAE, be it in a free zone or on the mainland, or exploring opportunities in Qatar and Saudi Arabia, our team is well-equipped to provide the assistance you need.
The attractive feature of setting up a business in the UAE is its low corporate tax rate, ranging from 0 to 9%. The process of company formation and application is notably simplified compared to many other countries.
What sets the UAE apart is the flexibility to establish your company either digitally or physically. In contrast, many countries impose residential or other limitations when it comes to establishing a company abroad.
