SETTING UP A BUSINESS IN DUBAI

Starting a business in the UAE should not take you more than a week once you've sorted all your legal procedures. But before you start your legal formalities, you need to consider some elements required.

Nature of business

Local individuals or foreign investors interested in establishing a business presence in the UAE market must determine their appropriate business ownership desired for their venture. The license requirement will depend upon the type of business you are going to set up. The business license falls into commercial, professional and industrial categories and it defines your operations.

There are different types of business structures in UAE. Establishment or Solo Proprietorship, General Partnership Company, Limited Partnership Company, Joint Participation, Public Joint Stock Company, Private Joint Stock Company, Limited Liability Company, Partnership limited with Shares.

The Department of Economic Development (DED) has list of over 2100 activities you can choose from according to the nature of business.

Ownership

If you need to operate locally, You have to get a license from the Department of Economic Development (DED). The DED license comes with certain restrictions on share of ownership of foreign nationals. The law requires that you should have a local partner who holds the majority interest. The partner will own 51% of the company. The local partner doesn’t need to contribute to the start- up investment or participate financially at all.

If you'd like 100 per cent ownership of your company, you need to opt for a license and location in one of the many free zones of the UAE. There are specific kinds of activities that each free zone has, You can choose according to the nature of your business. There are 45 freezone in UAE.

Legal formalities

Depending on your location and type of business, there are rules regarding the make-up of your firm. For example, if you plan on a legal consultancy firm, this can be done only as a branch of company or as a stand-alone company. A sole proprietor is not allowed to take up this activity. Each free zone has its own restrictions regarding company structure and you can look these up on the official website of the zone

Trade name

Your trade name is a very important part of the legal procedure. The company name should ideally indicate the nature of business, unless it is a branch of another company

Share Capital

The share capital is the amount of money each shareholder or founder of a company contributes with when setting up a company. Minimum share capital is usually set out in the Memorandum of Association of your proposed company. In most cases, you do not need to pay minimum capital at the time of setting up.

Office location

Location isn’t simply about where you would like to set up an office, shop, or factory but more about licensing jurisdiction. There are a number of options available, from onshore, licensed by the Department of Economic Development (DED) in each emirate, to a growing number of free zones, often themed around particular industries or segments. Some licensing authorities allow you to set up as a freelancer or professional services provider. Others will limit your scope of activities so if you plan to expand your services in the future, make sure you are licensed in a zone or authority that allows you to do so.

Employees      

In most legal forms of the DED, you need to hire a manager to oversee operations and have him ready to be on board before your registration is approved. But in other cases, you may not be allowed to hire at all. For example, Intelaq license holders (license for home-based Emirati business owners) are not allowed to hire staff, but can engage contractors. For free zones, each zone has its own specific regulations regarding the structure of business.

Local Support

For DED licenses, it is mandatory to have a local agent, partner or sponsor and this is a great support for foreign nationals.  For free zones, having a local contact can help take the business forward effectively. However, this is not mandatory and Dubai as a business destination boasts easy set-up for all businessmen regardless of nationality.