The government of the United Arab Emirates continuously aims to make business setup on the mainland and in the free zones more straightforward and convenient for investors. The UAE region is known as one of the most business-friendly global hubs, with its excellent infrastructure and world-class services for businesses.
Economic stability, ease of doing business, variety of business premises, skilful talent and labour, investment incentives, an open economy and socio-political stability are some of the factors why the UAE is an ideal investment destination, as cited by the UAE government. Constant improvement means laws and policies can change, making it important for interested parties to keep up-to-date with the latest developments.
How do I set up a business in the UAE?
To set up a business in the country, you should think about the industry you want to enter first and foremost. From there, use the following steps as a guide for the entire process:
Step #1: Choose a legal structure.
Besides the industry, you also need to decide on a legal entity you want to put up. See available options below.
Step #2: Pick a trade name.
Once you have an initial list, check with the free zone authority or the Department of Economic Development (DED) to narrow down potential trade names you can use.
Aside from the availability, you also need to verify whether the name complies with the following requirements:
- Does not violate the public morals or order in the country
- Is followed by its legal form (e.g., FZE, LLC, DMCC, etc.)
- Is compatible with the legal status and required type of activity you selected
- Does not contain names or logos of any governing authority, religion, or any external body
Step #3: Apply for a business license.
Prepare the requirements for business licensing in the UAE based on the type of activity your business will engage in.
- Commercial License – issued for companies that will engage in trading activities
- Industrial License – reserved for firms focused on manufacturing and industrial activities
- Professional License – used by professionals, artisans, craftsmen, and other service providers
Step #4: Get an office space.
In the UAE, a physical office is mandatory for most types of businesses.
In free zones, you can choose between buying or leasing an office. The required floor area will depend on the company’s activities, number of employees, and respective free zone rules.
For example, the DMCC options include a flexi desk (20 to 30 square meters), a flexi office (200 to 265 square meters), or multiple offices with up to 2,000 square meters each (for every floor).
For the Dubai Airport Free Zone, you can choose from the following packages:
- Office Packages
- Smart Desk Office Packages
- Executive Office Packages
How much does it cost to set up a company in the UAE?
Company setup costs in the UAE fluctuate because of the fees to be paid, so a fixed rate is unlikely.
This is where business setup services are most helpful. Consultants from MBG are experienced and very familiar with levied charges during the initial stages and any updates on governmental service fees. We also provide consultancy services and advice to help you save on any unwanted disbursements.
Other factors that affect business setup costs include:
- The nature of the business
- The chosen jurisdiction
- Any certifications and approvals required
Can a foreigner own a business in UAE?
Yes.
Changes in the policies announced in 2020 removed the need for an Emirati sponsor owning 51 percent of company shares for certain industries. This replaces the 2015 Commercial Companies Law No. 2, which stated that foreign shareholders could only own up to 49 percent of total company shares.
However, some industries are exempted from this, including the telecommunications and transport and energy and hydrocarbons sectors.
What are the available business setup options in the UAE?
There are five primary business setup options available in the UAE, namely:
1. Mainland Limited Liability (LLC)
A limited liability company should have between two to 50 shareholders, each liable for only a percentage of the overall company shares. Profits or losses therein are divided amongst them based on their respective holdings.
Mainland LLCs are companies licensed by the DED of the emirate it will be registered in. These firms can operate both in the local and international markets without any restrictions.
2. Free Zone
Free zone company formation in Dubai and other emirates in the UAE is incorporated within their respective jurisdiction. A company can conduct business within the free zone they are registered in as well as outside the country.
3. Sole Proprietorship
This is the type of company owned by a single individual who also has full control of the business’s profits and operations. Anyone – both foreigners and locals – can set up such a company, but only GCC and UAE nationals are allowed to run an industrial or commercial firm.
4. Civil Company
This company is run by accountants, lawyers, doctors, and other professionals. However, professionals from other countries still need an Emirati partner for this type of legal business setup (Civil company is similar to the Sole proprietorship and comes into existence if more than one partners are involved)
5. Freelance
A freelance business in the UAE is registered in a Free Zone by submitting an application form, bank reference, a curriculum vitae, and a notarized Registry Identification Code Form.
Our dedicated team of experts are experienced in company setup and formation across a wide range of industries and are well-versed in accomplishing the task both remotely and onsite. Talk to our MBG Corporate Services experts for a hassle-free business setup in the UAE.