The United Arab Emirates (UAE) is becoming a top destination for companies and entrepreneurs. The attraction stems from enticing incentives that support entrepreneurship and encourage greater foreign investments. Some of the incentives include 100% ownership of the business for foreigners, 40 free zones that come with tax benefits, no minimum capital requirement, and no income tax.
But is it easy to do a business setup in the UAE?
Business Setup in the UAE: A Step-by-Step Guide
Establishing a business in the UAE is easy enough. It only takes four days to do it through the Department of Economic Development and a mere 15 minutes on Basher, an integrated online platform. You can start a business by applying in person or by going online.
Here are the steps to follow.
Determine your location.
You can choose the UAE mainland or any of the free zones.
When you’ve picked the mainland, you can apply in-person by going to the following offices:
- Government service centers
- Tasheel offices
- OnTime offices for government services
- Legal services offices
- Customer happiness centers affiliated to the departments of economic development in all emirates of the country
You can apply online through:
- Basher, which brings together local and federal government agencies that handle the licensing of economic activities in the UAE
- The departments of economic development in the Emirates (e.g., Department of Economic Development in Abu Dhabi, Department of Economic Development in Dubai, or Department of Economic Development in Ras Al Khaimah)
Pinpoint the nature of your business.
The mainland offers six types of economic licenses, namely:
- Commercial
- Tourism
- Agriculture
- Industrial
- Occupational
- Professional
If you’ve chosen a business setup in the Dubai free zone, you’ll have more options with the economic activities.
- Industrial
- Educational
- Media
- Freelancer
- eCommerce
- Offshore
- Commercial Trade
- Consultancy Services
- Warehousing
- Manufacturing
- Innovation
- Others
Choose your business’s legal structure.
You have several structures to consider, each one offers up a different set of benefits and drawbacks.
Are you growing the business and looking for other investors? Then a limited liability company (LLC) might be a good fit. An LLC also protects your personal assets in the event of a business obligation or debt resulting in a lawsuit.
Do you want to be the sole owner of the business? Sole proprietorship is the simplest structure to organize, but it does expose you to certain risks. This structure sees no legal separation between your personal assets and business assets.
Mainland UAE offers several structures:
- Sole establishment
- Limited liability company
- Branch of a GCC company
- Branch of a local company
- Civil company
- Holding company
- Public joint stock company
- Private joint stock company
- Representative office of a foreign company
The business structures in free zones differ because you have only three options: limited liability (abbreviated in your trade name as FZ LLC), company (FZ Co.), and establishment (FZE).
Register your company’s name.
A few things to consider when choosing your business name in the USE:
- It must contain the abbreviation of your business structure, e.g., LLC, PJSC (public), PrJSC (private), or FZ LLC.
- It must not be offensive to the public or contain inappropriate language.
- It must be compatible with your economic activity.
Wait for the initial approval to come through.
The initial approval ensures the UAE government has no objections to your business setup. You’ll have to wait for that approval before operating your company.
UAE free zones require the following documents for initial approval:
- Completed application form
- Business plan
- Passport copies of the company’s shareholders and appointed manager
- Copy of existing trade license/registration certificate (if applicable)
- Registry Identification Code Form (RIC) for appointed manager (original and notarized)
- Specimen signatures of the company’s shareholders and appointed manager
- A brief letter clarifying the investment idea and the investor’s plan (Letter of Intent)
- 2 years audited financial reports or certificate of reference from a bank (as required)
- Title deeds (if applicable)
Apply for additional government approvals.
Depending on your chosen business, further approvals may be necessary.
For example, businesses in travel and tourism, car clubs, charter trading, charter air transport, ship and maritime agencies, and general services will need to secure approval from the Executive Council.
Submit the required documents.
Mainland UAE requires the following documents for submission once you’ve secured the necessary approvals.
- Receipt of initial approval and copies of all previously submitted documents
- Copy of lease contract, duly attested
- Memorandum/s of Association, as required
- Approvals from other government entities, as required
Pay the fees and collect your license.
You can collect your business license from the service centers of the Department of Economic Development.
Register your company.
You will need to register your company with the Chamber of Commerce and Industry in the emirate where you’ve incorporated.
For example, if you’re set up in Dubai, register with the Dubai Chamber of Commerce and Industry.
Establish your business location.
All businesses setting up in the UAE need an office address.
Businesses in the mainland need to lease an office space. In Dubai, you must register rental documents with the Dubai Land Department.
If you’re establishing a company in the free zone, you can manage rental costs by using a business center for a minimum of five hours per week. Instead of renting a space of your own, sharing a temporary office lets you establish the company first and lease an office later on.
What Is the Best Business to Start in the UAE?
The UAE has some of the best infrastructure in the world, enabling the region to support any kind of business. The modern transportation network, state-of-the-art facilities, and advanced telecommunications help businesses thrive.
With the latest change to its business-friendly policies (specifically, the removal of a local partner or national agent for foreigners to open up a branch), the range of opportunities grows even wider.
Among the more appealing business ideas in the UAE are:
- E-commerce and online retail
- Tourism and hospitality (e.g., travel agency, tour operators, hotels, etc.)
- Health and wellness (e.g., fitness studios, organic products, wellness clinics, etc.)
- Real estate (e.g., property management, property consulting, vacation rental services, etc.)
- Event planning (e.g. corporate events, wedding planning, exhibition organizing, etc.)
The UAE takes seventh place on the Institute for Management Development World Competitiveness Ranking 2024. The move indicates how the region has become attractive to entrepreneurs and investors – a testament to the ease of doing business.
When you’re ready to take that step, review this guide to setting up a business in the UAE.
