Aspiring entrepreneurs look up to Dubai as a land of innovation and success. It’s the main business hub that is not only reaping great benefits for established businesses, but also a lot of relatively new business set ups have been eating the fruits of their labor, considering the big boom that UAE has picked up in the recent past and currently so! There is no doubt that in today’s times, it’s the best platform offering you great connectivity, worthy infrastructure and liberty to take initiative and operate business.
Business set up in Dubai Mainland can be very baffling and a time consuming task. It may also require a lot of energy and effort at your end but with the right information and guide, you will be able to achieve your goal in a jiffy!
Dubai Mainland is known for two things: its upscale facilities and amenities, as well as for its business friendly infrastructure. Organizations that are looking to establish their business in Dubai, prefer Dubai Mainland as a means to register their company and setting up their business!
What is DED and why is it important?
Before we begin to illustrate all the ways we can bring your business dream to fruition, it is mandatory that we shed light on DED – The Department of Economic Development. Yes, you will be taking this name a lot, all the way from the very beginning of your business venture to the actual concrete finalization of your startup company. To simplify the scenario for you, DED is a business center running under the authority of the government of Dubai, UAE. DED came into inception in March 1992 with the main aim to regulate and start up the trade and industry in the Emirate of Dubai. Its major aim is to enhance the economic growth and development of Dubai & the UAE. The responsibility for business setup in Dubai mainland, mainland license, business registration, commercial compliance & consumer protection in the Emirate of Dubai lies solely with DED. You can probably tell that this will be your holy grail for all legal matters!
We’ve narrowed down a step by step manual containing the description of the procedure for all aspiring entrepreneurs who are interested in a business setup in Dubai Mainland.
In this scenario, any Dubai mainland company setup has to follow six steps. It is important to note here, that there are some activities which warrant special approval from some specific Government departments. The following main 6 steps shed light on the pre-requisites of any company formation in mainland Dubai:
- Activity Selection of Business and Approval of Name
- Selection of Local Service Agent
- Initial Approval Application for Mainland Company Formation
- Preparation of MOA and Court Notarization
- Acquire Office Space and Tenancy Contact
- Final Submission of Documents for Mainland Company Set up in UAE
Business Activity Selection
DED is the authority for all the trade and business registered on Dubai mainland. It holds the rights to allow permission for more than 2000 business activities on Dubai mainland currently and these activities are further categorized into Group, class and sub class. The Selection of an activity from that particular group determines the business license you will receive, which is directly dependent upon your business activity. Firstly, selecting the right of business in which we derive whether your business is going to be commercial, professional or industrial in nature.
Companies are generally categorized into:
Public Joint Stock Company:
This type of company can conduct any industrial, commercial or professional business activities.
Private Joint Stock Company:
This type of company can practice only commercial and industrial activities.
A civil company can commence professional businesses in recognized fields of medicine, law, engineering and accountancy.
Branch of a local or GCC company:
A branch of a local company can conduct businesses included on the main company license.
Branch of a foreign company:
A branch of a foreign company is limited to selected commercial and professional activities; same as the head office.
Branch of a free zone company:
A free zone company can trade in commercial, industrial and professional businesses baring in mind the activity of the main company is authorized on the mainland.
Owner of a business can conduct any industrial, commercial or professional business activities. This type of sole proprietorship is generally permitted for UAE nationals or GCC nationals only.
The UAE Cabinet may restrict some of the business activities to be conducted only by UAE nationals.
Business Form Selection
Activity selection is just the beginning of your start up dream. What follows next is selecting a matching business form for preferred business. This is also another crucial selection as the legal structure of your business will be determined on the basis of your Business form and you will get a license accordingly.
Determine the legal form of business
Determining a legal business in the UAE’s mainland depends on the nationality of owners and type of activity they would like to conduct. You can set up one of the following company types, either a Joint Liability Company, a Simple Commandite Company, a Limited liability Company, Public Joint Stock Company or a Private Joint Stock Company.
Naming Your Business
The next step after you’ve completed the requirements of a business form, you need to decide an appropriate trade name for your business. This name will reflect the ideology behind your brand and be a symbolic identity for your business. Sometimes a word concocted over a light dinner conversation might not sit too well with the legal structure. Think of a name that is not only aligned with the vision behind your business, but also one that connects with your audience, as this name would be cited on your license and all other official documents. You should also bear in mind that the name should not comprise of any sacrilegious content, nothing indecent and avoid any locally and religiously offensive words. This means you must not use God’s name or Allah, for instance. For a complete and proper guideline, DED is your holy grail for this! So take your time and read the complete guideline of DED before giving a trade name to your business. You may even want to consult an expert on this, in case you want to be doubly sure.
Need for local service agent
Word of advice: before you begin to setup your company in the Dubai mainland, it is advised that you appoint a UAE national as a local sponsor or a corporate sponsor for your business. There is a good reason behind it and will be beneficial in aiding a hassle-free set up as well. But wait, there is a slight catch to this – while you can easily get a local sponsor, this sleeping partner will be required to make an agreement that there will be no involvement from his end in the company operations, neither have anything to do with profit sharing of the company setup in Dubai mainland this is where we can help you to secure your business from any future legal issues.
If the investor wants 100% ownership for a professional License, the need for a local service agent is still pretty much required. Therefore, in the setup of any professional company, the local sponsor plays no active role in the business management of the company, neither in profit sharing nor operations. To put it in a nutshell, they will simply act as the basic representative, while conscripting legal agreements and forming other business documentation required in Dubai
Approval Application Certificate from DED
Now that your trade naming procedure is out of the way, let’s go through the steps for an approval certificate from DED that you will require initially. The startup of any business in mainland Dubai is highly determined by this certificate as it qualifies you to embark on the next step for any business agreement that you make. In this case, the one person you should look out for is an authorized document clearing agent. He is going to be your go-to person for all document authorization and other details that you need to consider before getting your hands on this very essential certificate! This certificate is your route to obtaining a license. This is going to have a validity of 6 months and you cannot renew it.
Activities requiring special approval
There are 6 main steps involved in Dubai mainland company setup. However, there are some activities which Mainland setup require special approval from some specific Government departments. These include: Transport Activities, where the approving authority is Road and Transport Authority and the department handling this is Commercial Activities Department.
For oil related services, the approving authority is H.H. The Ruler’s Court and the department handling this is the Department of Petroleum Affairs. For all Legal activities, the approving authority is again H.H. The Ruler’s Court and the legal department is handling it. Approving authority for Telecommunications is Telecommunications Regulatory Authority and is being managed by the Licensing Department. Architectural and engineering activities is being approved by Dubai Municipality and The Building Department is heading it. Veterinary activities are also being approved by Dubai Municipality.
In case you are interested in either of the aforementioned activities, you now know who to contact!
Now let’s elucidate on the 6 main steps involved for company formation in mainland Dubai:
Application for the initial approval can be done in the following ways:
- eServices: In order to access eservices, you are required to make a user account
- Download the Business in Dubai App, available for iOs and Android
- Any Service Centre can guide you.
- Happiness Lounge: The Happiness Lounge can be found on the 1st floor of Business Village. It is designed to provide eminent high quality services and aims to promote Dubai as your one-stop destination for growing investments and for business prosperity.
- Law firms
In this application process, you will be allotted a transaction number or a payment voucher, which will be used as a reference when you pay. This payment can be made through various approved payment channels.
In order to establish your relationship with your local partners you have to draft the bylaws of company. For that drafting a Memorandum of association is a necessary step.
Verified Office Address
In order to set up business in Dubai, you need to look at this one major factor that is crucial to starting up any venture. First and foremost, you will have to look at verified office address protocol as it’s the requirement of Dubai Municipality. Office space for any mainland business means the need for a suitable office space or we can also start your business in dubai with co-working space which can save a lot of cost and its affordable for startup companies. This decision is highly dependent upon the type of license the investor is interested in and that varies. It is solely the investor’s responsibility to guarantee a tenancy contract that’s valid and available at the time of Dubai Mainland license application.
In order to operate or start a business in Dubai mainland it is necessary to have a physical address in commercial area in Dubai mainland or a co working office space to start your business in dubai. The number of employment visa that a company can apply for depends on the activity and size of the office of the company.
Upon selection of the work place the next process is taking approval from planning section of Dubai municipality department. The department confirms availability, suitability and compliance to public health and safety of the work place. Once you get approval you can sign your tenancy agreement with your land owner and hence open an account with Dubai electricity and water authority. The ultimate step is registering your contract with Ejari for attestation. Ejari is an initiative which regulates tenant-land owner relationship in Dubai.
Final Submission of Documents for Mainland Company Set up in UAE
The final step in order to get approved license from the Department of Economic Development is to submit the following documents. For that you need a trade name certificate, an initial approval certificate, initial approval form with all the necessary stamps. Ejari registered tenancy contract, a set of memorandum of association. Normally, this process can take a week or more depending on the nature of the business activity. After getting your approval of license you can commence your trade.
So, this is your guide to conduct Business set up in Dubai Mainland.