Starting a business in Dubai or anywhere in the UAE is quite straightforward. While a few of the steps involved may require local knowledge and precise execution, it is important to understand them and the considerations for them before you jump into it.
In this article, we explore the details of how to start a business in Dubai. Whether you plan on doing it yourself or with Emerhub as your company formation partner, the following steps include considerations that you as the business owner should know about.
Step 1: Choosing your business activity
While this might seem like an obvious first step, its implications are slightly more complicated in the UAE.
Every business license in the UAE needs to have a specific pre-defined Activity or Activity Category, which is chosen from a list provided by your registering authority. Knowing which is relevant to your business plan is crucial for properly setting up your business.
For example, if you want to start a business that offers plumbing services, the right activity category would be “Technical services”, or “technical contracting”. These categories then have activities under them for plumbing, electrical work, masonry, AC maintenance and installation, etc.
While you can opt for multiple activities under one business, adding activities significantly increases the cost of your license (depending on your jurisdiction and the chosen activities).
Choosing the right category also plays an important role in the next step, which is choosing the right jurisdiction to start your business in.
Step 2: Choosing the right jurisdiction for company setup in Dubai and the UAE
Depending on your chosen activity, you will now have a choice between three jurisdictions to start a business in Dubai or anywhere else in the UAE.
- Free zones
As the names suggest, mainland companies are registered directly with an Emirate’s economic development authority, while free zones are under designated authorities within an emirate that offers activity-specific benefits for businesses. An offshore business can not have any economic activity inside the UAE.
Choosing the right jurisdiction can offer your business multiple benefits. Certain free zones offer special incentives for specific types of companies, such as the Jebel Ali Free Zone which offers infrastructure and tax benefits for importing goods. However, if you wish to do business freely across the UAE, a mainland company is the most appropriate choice.
Note that not all activities are available in every free zone option. While mainland companies can choose from over 2k activities, free zones offer specialized versions of those activities.
Step 3: Choosing a company name
This might be the most nuanced part of the process for company setup in Dubai. The UAE has strict guidelines on naming your business. The requirements include:
- The name must be unique, and should not have elements of any existing company name within the UAE.
- The name needs to be in line with the cultural and religious values of the country, and should not contain offensive or inappropriate words.
- The name needs to be compatible and relevant to the chosen activity.
- The name needs to have an abbreviation of the legal structure (LLC, PJSC, etc).
When submitting a name for approval, it is always best to have 3 options ready.
Need to check if your company name is available for registration? Get in touch with an Emerhub consultant.
Step 4: Creation and submission of required documents
Depending on your chosen jurisdiction, the process for this step can vary. For the mainland, Emerhub fills out the required forms from the Department of Economic Development in your chosen Emirate, along with copies of your shareholder passports.
Another important consideration at this point is your office space. When registering for most company types, you will need to show a tenancy contract or “Ejari”. The address on your Ejari will be considered your official office location, which is why you need to find the right office for your company before you begin the registration process. Alternatively, you can also get a virtual office. Emerhub assists you in acquiring either of the two, depending on your specific business needs.
Some free zones may require additional documentation, such as NOCs or your business plan. And in most cases, your documents may have to be translated into Arabic
Emerhub has assisted thousands of entrepreneur worldwide in setting up their businesses by completing accurate document submissions. Get in touch today to avoid errors and wastage of time and resources.
Step 5: Getting your business license
After successfully submitting your documents, your application will be reviewed by the relevant authorities for approval. In the rare case of any objections arising, Emerhub submits additional clarification documents on your behalf. In ideal conditions, the process for company registration takes between 4-6 working days.
Step 6: Opening a bank account
Your license is the key to unlocking every service that you may need in the UAE, the first of which is a bank account. There are multiple options to choose from, and you can’t go wrong with any of them. The options include.
- Emirates NBD
- Commercial Bank of Dubai
- Mashreq Bank
- Abu Dhabi Commercial Bank
The process for opening and managing a bank account in the UAE requires a few compliances though. Both the government and the banks monitor monetary activities very strictly, and not knowing about certain requirements can result in penalties or disapproval of your account opening application.
For example, a bank account can be closed down because of 6 months of activity.
Having a local partner like Emerhub helps foreign entrepreneurs navigate these compliances to avoid any financial or time losses in the future.
Step 7: Applying for visas
Depending on your chosen jurisdiction, your business can be eligible for Visas for you as the investor, as well as your employees. While investor visas generally come with every company type, employee visas have to be applied for by first registering with the labor department.
The general process for visa applications is similar:
- Emerhub submits the visa application and supporting documents via verified government portals on your behalf.
- Once a visa is approved, Emerhub schedules your medical examination. Generally, appointments are up to 2 days in advance.
- Once completed, Emerhub then applies for your Emirates ID. This stage could require you to visit a verified center for biometric verification.
- After submission, Emirates IDs are issued within 2-4 working days.
For an employee visa, the process has two additional steps that happen before the aforementioned steps. The company needs to procure a Labor Card from the Ministry of Human Resources and Emiratization. After that, Emerhub submits your employee’s job description, as well as your tenancy agreement to get approval for the Visa. You will need to make a bank deposit of AED 3,000 to the ministry as well against each Visa issued for employees.
To get visas for your dependents, the process is relatively simple. The sponsor must have a minimum salary of AED 4,000 or AED 3,000 plus accommodation, and all visa holders need to go through a medical examination.
Partner with Emerhub to start a business in Dubai and the UAE
Starting a business in Dubai, or anywhere in the world, can be overwhelming. And that is before you add the stress of accurately submitting documents and fulfilling government requirements, which is why you need a partner to help you navigate the complexities. Emerhub has successfully enabled thousands of foreign entrepreneurs from around the world to set up their businesses in emerging markets. And most importantly, our consultants understand the challenges a foreigner may encounter when entering a new market.
Get in touch today for a free consultation from our Company Formation Experts.