Dubai is the commercial capital and golden city of UAE. Dubai provides vast business opportunities and unique business structure to the companies from all around the globe. It also has the most diverse and largest economy in the world. UAE is a WTO(world trade organization); therefore, it plays a vital role in trade and commerce globally.
Dubai has international exposure and an investor-friendly government, which are the most important factors motivating the entrepreneurs to start a business in Dubai. Startups in Dubai also received investment allowances and tax advantages when compared with other countries. Henceforth, many entrepreneurs look forward to staring at a new business in Dubai.
Although Dubai has an approachable business setup process, understanding the business setup process can be tricky and complicated for the new businessmen.
What are the Important Factors To Know Before starting a company in Dubai?
So, If you are thinking of forming a new company in Dubai, UAE, here are seven factors you need to understand before setting up a company.
Choose and Select the Right Business Activity
Whenever you plan to start a company in Dubai, you should be aware that there are certain limitations. All types of business activity is not allowed in Dubai, UAE. You require permission and permits before you start doing business. Therefore, work on the first important point about whether your business activity meets the Dubai standards. Please do thorough research on it and decide the business activities accordingly.
Select the right Key Structure
The success and setback of your business will depend on the type of crucial structure you will follow. The most common jurisdiction followed in Dubai is the LLC (limited liability company) structure for business registration. It allows us to maintain 100 percent foreign ownership in Freezone areas like DIC, DMCC, etc.
Dubai offers mainland business setup, free zone company formation, and offshore business enterprise. Selecting the proper jurisdiction will depend on the business operations and the nature of the business you want to do. If you have a small business, it will be useful to register it in DMCC because registering it in an offshore company will put you into many restrictions, although its cost is low.
Partner with the Right UAE Local
To start a business in mainland Dubai, it is a mandate to partner with UAE nationals. The UAE local partners will hold 51% of the partnership. In terms of Freezone, a company will need a local service agent, who will work for a nominal fee. The best way is to get an agreement with the silent partner- will ensure the safety and full control of your business.
Register your Trade Name With DED
It is a mandate to register your trade name. Suppose you are planning to do business in Dubai, UAE. You must provide a name for your company by the standards set by the Department of Economic Development (DED). Trade name acts as your business identity, and emphasis on DED associate the name as per the type of license. It takes about three days to register the trade name, and valid for six months. Dubai follows stringent rules for naming conventions, so read those rules properly and select a business name.
Business operations Need Approval
In Dubai, only a few commercial activities are not allowed; some activities have limitations, while others are forbidden! According to Law No. 13 of 2011, Dubai DED is responsible for deciding, organizing, classify, permits, and licenses from all economic activities. However, this does not apply to Freezones and offshore business setups.
DED distributes the trade license for business and deals with investors. But, sometimes, you may need external Approval to start your business. Generally, this permission is given by non-governmental and semi-governmental organizations.
DED gave preliminary Approval to the submission of all necessary documents. Prior Approval from DED is critical to set up a company in Dubai. at this, stage you can start your business continuing with the process of obtaining permission for your trading.
Get Business License To start The Business and draft the MOA/LSA for your business
Company registration and business licensing is a parallel process. After the DED registers the company, business licenses will be processed and can be collected duly. Business licenses mainly depend on the nature of the operations and business jurisdiction. The most prominent permit to set up Dubai’s businesses is commercial licenses, industrial licenses, and professional licenses. It will take two weeks approx. To get a trading license from the time you receive your initial Approval. It mainly depends on the business activities and external documentation.
The DED will provide a voucher payment or transaction number on the submission of all the documents listed. The final amount is to collect business license trading. After you gather your trade license, you become a full business entity.
Company setup in Dubai, UAE, is not that harder. You can even form the company and complete all legal procedures in one week. When you plan to start a company in Dubai, you should consider these basic things to begin the process.
It is advised to take help from an expert business setup consultant because they will guide you through the business setup process. It becomes fast and cost-effective by appointing consultants’ business setup. With a knowledgeable business consultant, you will not waste your money on unwanted documents. Also, because of their experience with the procedure, the establishment of the company can be instant. So, all the best with your business!