3 Crucial Factors That Needs to be Consider While Setting up a Business in Dubai

Posted by Linda Hudson on October 22nd, 2019

Due to its progressive business landscape which is backed by government incentives & ease of setting up a new business, Dubai has become an ideal destination for investing in a new enterprise. Dubai has got talented people who have creative and business mindset who are benefitting from this tax-free heaven. Dubai has a safe & sound working environment as well as a rich social & cultural lifestyle.

Company formation in Dubai is no rocket science, neither the Dubai Company registration cost is huge, as the government provides the most liberal and attractive operating conditions. However, there are a few factors that need to be taken into consideration beforehand so as to avoid any obstacles. The crucial points to consider while setting up a business in Dubai are:

Form of Business

The first crucial thing to decide is the type of business you want to step in. This will also determine the form of license and the Dubai Company registration cost as per the government norms. You should keep in mind that for certain businesses such as the trade of food or jewellery or legal consultancy requires more approvals from specific authorities. The Department of Economic Development (DED) has provided a list of 2100 activities out of which you can opt for any area. 

Ownership

If you’re a foreign investor, then you mainly have two options for ownership. If you want to have complete ownership of your business, then you’ll have to choose the free zone in Dubai for your business operations. These free zones are the special economic zone that provides 100% ownership to the foreign investor along with 100% retention of capital & profits. However, your business operations will be restricted to that specific free zone and outside of UAE. For entering the local market, you’ll require a local distributor. The other option is- if you want to operate locally, then you’ll have to go for Mainland Company, but this will restrict your ownership maximum up to 49% as you’ll have to find a local sponsor, who will be having 51% of ownership. And the license for your Mainland setup will be issued by DED.

Legal Structure of Business

There are various legal types for businesses such as sole proprietorship, one-person company, Partnership Company, civil company, a branch of a foreign or UAE company, Limited Liability Company and many others. Each legal structure has its own rules & regulations that have been specified by the Department of Economic Development (DED). Therefore, the legal structure will depend upon the nature of your business. Also, there are company formation consultants in Dubai who can help you with all these things.