UAE’s business hub is quickly picking boom and it would be safe to say, there has been no better time than now to set up business in UAE This statement would be particularly convincing in say, the past decade, but the growth span looks rather promising in this day and age. Every week, there is an announcement of a new project being delivered and UAE’s overall growth map reveals that this is the time to get on in the act and jump right in the flourishing scene!
2017 IMF reports showed that UAE underwent a positive change by leading economic growth in the Arabian Gulf, increasing by 2.5%, leaps and bounds ahead of the region’s largest economy, Saudia Arabia, estimated to grow at 0.4%.
In 2018 and onwards, opportunities for the economy look better as there will be adoption of a new bankruptcy law and steps to ease SME’s access to finance in order to encourage private sector growth. Apart from this, UAE even plans to balance its budget by lowering its oil prices over the upcoming years!
These golden figures – combined with a notable growth in the past years – have paved way for both, budding and established businesses to come to the country.
Are you thinking of joining the route of these successful businessmen? Then luck’s in your favor because you have come to the right platform! Good news is that forming a company or setting up a business in Dubai is not only simple, but a super speed process infused with strong incentives.
If you’re looking at the number of days, then it shouldn’t take you more than a week, provided you’re done with all the other legal procedures! Just before you begin with your legal formalities, let us take you through some important aspects and elements required in the process:
The kind of business you are looking to set up will determine the type of license you require. The basis of your operations will be solely defined by a professional, commercial or industrial license issued to you. It is essential to keep in mind, however, that there are a few activities that require further approvals from other governmental departments and that includes veterinary activities, trading of food and jewelry etc.
To make life simpler, the Department of Economic Development DED in Dubai features over 2000 plus activities that you can select from and if you’re looking at something more specific which isn’t mentioned in the list, feel free to contact the DED to get a deeper insight of freely available options. You will be guided about regulations and approval formalities for a start, further adding to your list of ideas and business plans!
Selection of business activity and free zone rules
Choosing your business activity and the nature of your business brings in the topic of free zones. Transport, medical and media are some of the few types of activities that are allowed by free zones. It is also significant to look at transport links. If your business is reliant heavily upon trading of good, import and export then you should likely be choosing one of the free zones near an airport or port.
Apart from the restrictions, it would be mindful to set up or form a business near a port or airport. Having said that, in the initial stages, you wouldn’t be advised to start categorizing your business just yet, as there is the possibility of having multiple business activities listed under one trade license. You can take the final decision as you go along the preparation procedure, during which you will have a clearer picture of what it is you’re more interested in, what suits your needs and what is more beneficial in the long run, thereby carving out a much clearer route for you. It will also help you abolish some options earlier on in the process!
Ownership of business
If you are going to set up business in UAE as a foreign national, if you are looking to acquire a 100 per cent ownership of your company, it would be best that you choose for the best possible location and a legitimate license in the allotted free zones of the UAE. With over 45 free zones in the UAE, you have ample choice to see the specific kind of activity each zone caters.
Choosing your trade name
More often than not, company names that are casually concocted over hearty conversation at dinner, or simply because there is a good ring to it, may not always ring true with the mindset of your target consumer base. It is very important to understand the kind of market you are targeting to hit the right notes with your potential clients. Another major point to look at are the strict naming conventions throughout the UAE. Therefore, it is advised that you ensure the company name conforms.
To give you a brief idea, names that are sacrilegious, language or usage of words that are considered forbidden – such as those companies that are named in reference to Allah, sectarian or political groups hinting to the Mafia or FBI are strictly to be avoided.
If you wish to name the company after your own name then you may not be able to use any abbreviations or initials and have to then use your full name. Also, the person must be a partner or founder of the company.
To delve more into the subject, any business set up expert can provide a verse or chapter that holds the dos and don’ts of naming conventions! Instead of setting your heart on a name and finding out later that it doesn’t conform, you will be able to save a lot of time and energy by checking your proposed name with them to see if it passes through all the laws and if not, they can always brainstorm more names with you! As you can see, there’s clearly a solution to everything here, so you can leave all your start up stresses behind!
Understanding Legal Structure
You have to keep location and type of business in view, as there are rules for every kind of set up. For starters, if you decide set up a legal consultancy firm, then it can only be done as a stand-alone company or as a branch of a company which means it rules out the possibility of a sole proprietor to take up this activity. Company structure layout is defined by each free zone along with its own set of restrictions, and to get an understanding of that, you can always look it up through the official website of the zone.
Finalization of Paperwork
For your chosen company name and activity, you will be required to complete an application. Copies of shareholders passports are mandatory and need to be provided to the pertinent government authorities. You may need to show additional documents like NOC or a business plan in certain free zones in which case you will need a letter from a sponsor to confirm that you are allowed to start up another business in the UAE. Paperwork in general is most taxing but with the help of an expert this should be a breeze before you start seeing your dream venture turn to reality. He can not only give you advice but also all the assistance you require to fill it.
The Memorandum of Association has a minimum share capital usually set out for your planned company. Mostly at the time of setting, you do not need to pay minimum capital.
After completing your legal procedures and forms, your next step should be to narrow down your costs and office space along with other details. As soon as you get your legal formalities out of the way, it would give you a much more concrete and clear picture of what is to come ahead. You will be able to get assistance to set up internet, electricity and water and find land suitable to your needs.
You will have to hire a manager to manage operations and be prepared to have him on board, before your registration is approved in most legal forms of the DED. In some cases, such as in the case of Intelaq license holders, you might not be allowed to hire at all. This is a license for home-based Emirati business owners who can appoint contractors but are not allowed to hire staff. Check each free zones for every zone has its own specific regulations regarding the structure of business.
Support of local sponsor and agents
To speed up the process, it is beneficial to have a local sponsor, partner or agent which could serve as a great support for foreign nationals. Business can be effectively taken forward through a local contact. Having said that, Dubai is a business destination thriving on easy set-up for all businessmen without the question of nationality, therefore having a local agent won’t be mandatory.
As someone starting their business in Dubai for the first time, administrative, financial and technical aspects of company formation can be overwhelming, but following the right process and through support, it couldn’t be more affordable simple and straightforward.
Benefits to foreign national entrepreneurs
As a foreign national, free zones are popular with such entrepreneurs as they offer 0% personal tax and corporation, no restrictions on currency, 100% company ownership, 100% import and export tax exemption, 100% repatriation of capital and profits to name a few. Doesn’t this all sound too tempting?
Well, it surely is the reason why the influx of entrepreneurs in the UAE has increased over the span of time.
Set up a bank account
UAE and Dubai especially is the most developed and well connected business hub in the world. Opening a bank account in UAE is pretty simple and the requirements vary from bank to bank. To open up a current account you have to be resident but some banks also allow non-resident to open up an account if they can meet the minimum set balance limit by the bank. The time period is mostly around two to three weeks to open up your account depending on what kind of account you want to open up. In order to set up a bank account in UAE we have to first establish all the necessary paperwork. Being the hub of multiple bank accounts both local and international such as Commercial Bank of Dubai, Abu Dhabi commercial bank and Emirates NBD are amongst the local banks and also global banking giants such as Citi bank, HSBC and Barclays. Once you have decided on the bank of your choice, simply visit them personally or you can ask your start-up partner to set up a meeting with the mentioned banks for the most appropriate option.
The endmost or the eventual step of establishing a business in UAE is visa processing. You can apply for yourself as well as your staff and dependents in many free zones in UAE, varying on the exact numbers of dependants depends on the free zone you choose for the start up. You can also seek expert opinion if you are seeking a visa for spouse, child or any other relative. The expert can guide you to seek the best free zone and also can tell you if both of you and anyone seeking sponsor have met all the visa criteria. If all goes according to plan then you are left with four easy check outs. Firstly, entrance permit in the UAE, your status in UAE, medical fitness, UAE ID registration and finally you will get a visa stamp which will allow you to start up your business in UAE.
So this is the guide line necessary to set up business in UAE free zone. As you know, forming a company in Dubai and UAE is pretty simple since UAE is open to accommodating new venture in the free zones and with the right guidance you could be able to start your business in about a week or so.