12 Things You Must To Know While Starting Up A Business In Dubai Mainland

Posted by BRUCE on June 11th, 2019

Dubai is the commercial hub of the UAE. This City of Gold offers immense business opportunities and innovative commercial modules for companies from around the world.

The two main motivating factors for entrepreneurs while starting their business in Dubai are the investor friendly government and the International exposure. Startups in Dubai also get various advantages on investments and tax advantages when compared to other nations.

It can get really tough for a new company to understand the overall process of Business Setup in Dubai , irrespective of the friendly business setup procedures.

Wondering how to get started with your business?

ONE

First and foremost, you must decide your business activity beforehand. When you have decided to do your business activity in Dubai, you need to know that there are certain restrictions. To begin with, not all business activities are allowed in the United Arab Emirates!

There are various permissions needed before you can even start your business in Dubai.

Hence, the first thing to understand as far as your business is concerned is to decide whether your business fits in as per the Dubai principles.

TWO

Pick the appropriate jurisdiction. Business jurisdictions in Dubai are usually set aside zonally in order to increase the productivity and the competency of a business. Dubai has a lot to offer to entrepreneurs mainly in the areas of free zone company formations, mainland business setups, and offshore business establishments. Choosing the right jurisdiction will depend on the business activity you choose and the nature of the business you would prefer to accomplish.

THREE

You can choose among various shareholding structures and company setup in Dubai is finally determined by the shareholding structure. This also differentiates the legal form of your business. The shareholding structure should be consistent with your business operation and the preferred jurisdiction.

Here are the some of the options of shareholding structures that you may opt for:

  • Sole Proprietorship

  • Limited Liability Company

  • General Partnership

  • Public Shareholding

  • Partnership in Commendam

  • Joint Venture

  • Private Shareholding

  • SME License

  • Shared Partnership

  • Branch Offices

  • Representative Offices

  • Limited Partnership

FOUR

You might want to think about partnering with a reliable UAE national. To kick start a business in the Dubai mainland, it is compulsory to have a UAE national as a partner. The main challenge however, will be to find a trustworthy and reliable UAE business partner. For an LLC in Dubai,  the UAE local partner will hold 51% of business partnership. In case of a Professional License in Dubai, the company will need a local service agent, who will work at a nominal fee. It is most recommended to get into an agreement with a silent partner- this will assure both security and a complete control on your business.

FIVE

Your trade name must be recorded with the DED. You need to give a certain name to your company as per the standards stated by the DED or the Department of Economic Development. The trade name mainly acts as an identity of your business, and thus DED asserts on associating the name as per the type of the license. It usually takes around three days to get your trade name registered, and this is valid for over a period of six months.

SIX

Your business activity needs a formal approval. In Dubai, only few commercial activities are not permissible and some activities have certain restrictions, while others are totally prohibited! As per the Law No. 13 of 2011, the Dubai DED is the responsible body to regulate, decide, permit, license and classify various economic activities. However, this is not applicable to the free zones and the offshore business set-ups.

SEVEN

You may also need external approvals for your business in Dubai. The DED dispenses trade license to businesses and deals with all the investors. But, sometimes external approvals are needed to start your business. Generally, these permissions are obtained by both the semi-governmental & non-governmental bodies.

EIGHT

You will need to rent a business premises as well. Having a physical existence for the business is obligatory for every venture in Dubai. The RERA or the Real Estate Regulation Authority documents, the tenancy agreement, and EJARI needs to be submitted in time, post which the initial approval is then granted by the DED.

NINE

An initial approval is required from the DED. The DED grants the preliminary approvals on submission of all the important documents as stated by the officials. The initial approval is also an official recognition from the DED to help complete the remaining formalities such as signing of local sponsor/service agent agreements, availing physical office space etc.

TEN

You have to draft the MOA/LSA for your business. Drafting the MOA or the Memorandum of Association or LSA or the Local Service Agent agreement is yet another critical task. The MOA specifies the share of liberty and the limitations every partner has within the company, while the LSA describes the key role for the agent and it fulfills the agreement that will be carried out. Both the MOA and LSA are very important legal documents and they should be drafted with the help of a legal advisor only. These documents also needs to be translated in Arabic.

ELEVEN

You have to follow the entire company registration and the business license procedures. In Dubai, the company registration and business licensing are parallel processes. Once the company gets registered by the Dubai Economic Department or the DED, the business license will be then processed and could be duly collected. Business licenses are mainly provided depending on the jurisdiction of the business and the nature of the business activity.

TWELVE

You must collect your business license to start your business activity. A payment voucher or transaction number will be given by the DED upon submission of all the above listed documents. The final payment needs to be done in order to collect the business trade license. Once your trade license is collected, you then become a full-fledged business entity in Dubai.

Here are the general list of documents and certifications needed for your business setup in Dubai and they are in no certain order:

  • License Application

  • NOC and Passport copies for partners, if any

  • Governmental forms

  • Attested LLC agreement

  • Name reservation certificate

  • External departments approval

  • Initial approval certificate

  • EJARI registration certificate

  • Tenancy contract

  • Dubai Chamber of Commerce and Industry Registration

  • UAE Central Bank Approval and License (This is for Financial Institutions)

  • Endorsements from Governmental Agencies (This is for Gas and Oil Companies)

  • Health Ministry Certification (This is for Medical & Pharmaceutical Firms)

  • Finance and Industry Ministry Certification (This is for Manufacturing Companies)

  • Economy and Commerce Ministry Certification (This is for Insurance Companies)

As you can see, Dubai company registration is indeed an extensive process! Nevertheless, you can make it fast and cost-effective by appointing business set-up consultants. With a knowledgeable business consultant, you won’t waste your hard earned money on unnecessary documents. Also, as these consultants are very well-versed with the procedures, and hence the company formation can be done seamlessly.

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