The Top 12 Factors to Consider Before Opening a Business in Dubai

Updated on: 15 Sep 2022

With a population of over 2 million and a land area of 4,114 sq. km., Dubai is the second-largest emirate in the United Arab Emirates. The three main economic pillars of Dubai are business, real estate, and tourism.

Middle Eastern business has always been centred in Dubai. It serves as the regional and not just the UAE's business hub. Despite being welcoming to foreign businesses, Dubai has its own set of requirements for forming a corporation.

Everyone aspires to launch their own company and work for themselves. In current digital age, launching a business is more simpler and faster. However, starting a business in Dubai is feared by many people. Here is because a UAE citizen must own at least 51% of a company before it may be registered in the UAE.

Despite these challenges, Dubai still offers a tonne of business prospects for individuals wishing to start a company. Let's look at some of the important information one needs to be aware of before starting a business in Dubai in light of what was just discussed.

Select a Commercial Activity

There are various limitations on the kind of businesses that are allowed in the UAE. In Dubai, a number of permits are necessary before opening a business. Therefore, the first thing you need to do is check to see if your company complies with Dubai legislation.

The workplace

Starting a business in Dubai necessitates renting office space. In order to start a business in Dubai, you must first hire an office. Both the Real Estate Regulation documentation and the tenancy agreement must be sent in. After RERA and EJARI, the DED grants the initial approval.

Community Sponsorship

You must collaborate with an individual from the UAE in order to open a business in mainland Dubai. The objective is to identify a reliable and trustworthy UAE business partner. The local partner from the UAE will own 51% of the contract, reports claim.

In a free zone, a company would employ a local service officer who would be paid. It is advised that you enter into a contract with a silent partner to safeguard the management and security of your firm.

Prepare the MOA/LSA for your company.

The MOA outlines the restrictions and freedoms that apply to each partner's interest in the business, but the LSA outlines the agent's obligations and the compliance that will be upheld. Commercial papers like MOAs and LSAs ought to be created with the aid of a legal advisor.

Process for Business Licenses

The DED processes the business licence after the firm has been registered. Business licences are often granted based on the company's jurisdiction and the type of business activity. Commercial, industrial, and professional licences are the most prevalent types of licences in Dubai. After receiving your initial DED approval, it usually takes one week or longer to receive a trade licencing authorization.

commercial permit

After the business-establishing process is complete, you must apply for a business trade licence with DED. Before you start trading, you need to get that document, and you have to do it at that institution.

Acceptance of Your Commercial Activity

Not all enterprises in Dubai are granted permission. In the UAE, there are some enterprises that are prohibited. The Dubai DED is the entity in charge of deciding, regulating, classifying, authorising, and licencing any financial activity, as per Law No. 13 of 2011. Free zones and other offshore business environments are not covered by this, though.

Choose the Correct Authority

Dubai provides offshore business formations, free zone business formations, and onshore business forms (Mainland / LLC). The type of firm activity and the company's characteristics define the appropriate jurisdiction.

At that moment, there is still a fee that you must incur. It pays for the costs associated with obtaining a licence, which entitles you to engage in business in the UAE. Even if the expenses are substantial, the most expensive component of creating a corporation is the time spent anticipating the required legal and academic certificates.

Analyze outside approvals

The DED collaborates with investors and grants business licences. However, you could need outside approvals before starting your firm. An affidavit attestation is required. These permissions are typically obtained by non-governmental and semi-governmental organisations.

DED Initial Approval

The DED's approval to launch your firm is the initial approval. Now that your company is established, you can request a trade licence.

Cooperation between countries and the UAE

The only people who are allowed to start businesses in Dubai are local nationals, thus the law mandates that you work with one of them. They would have to own at least half of your business partnership, and you may allocate managerial responsibilities however you saw fit.

Local agents offer this service for a fee. It is good to inquire about them in your professional networks and choose agents that others have worked with in the past because you want their job to be merely a formality.

A trademark

A trade name is more than just the name by which the UAE will refer to your company. Additionally, it is the name you will use while communicating with government organisations. That's why before you can start trading, it needs to be approved by one of them.

The Department of Economic Development, a department of the government, is in charge of carrying it out. It requires about three days to complete and must be done every six months. This is something to keep in mind while developing your marketing plan if you want to build a name for yourself.

Currently, there are numerous benefits to establishing a business in Dubai. And maybe most crucially, you can launch a profitable business there. One of the best areas to launch a business is Dubai. The government is very cordial, the economy is expanding, and several major businesses, including Facebook and Google, have headquarters here. The fundamental benefit of opening a business in Dubai is that, as it is developing, you can always expect a return on your investment.

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