The Top 12 Things You Need to Know Before Starting Your Business in Dubai
Dubai is a city in the United Arab Emirates and the second-largest emirate in the country with an area of 4,114 sq. km. and a population of more than 2 million people. Dubai’s economy and source of rich income are driven by tourism, business, and real estate.
Dubai has long been a business hub in the Middle East. It is not only the commercial center of the UAE but also of the region. Notwithstanding its openness to foreign firms, Dubai has its own set of procedures for establishing a company.
Everyone wants to start their own business and operate independently. Starting a business is much easier and faster in this digital age. But many people in Dubai are afraid to launch a business. This is due to the requirement that a UAE national possess at least 51% of a firm before it can be registered in the UAE.
For those looking to launch a firm, Dubai continues to provide huge business opportunities despite these difficulties. With just being mentioned, let’s look at some of the crucial information one has to be aware of before opening a business in Dubai.
Choose Your Business Activity
Not all business activities are permitted in the UAE; there are some restrictions. Several permits are required before starting a business in Dubai. As a result, the first thing you must do is determine whether your organization is compliant with Dubai regulations.
Renting office space in Dubai is required when starting a business. You cannot establish a business in Dubai without first renting an office space. The tenancy agreement and Real Estate Regulation paperwork must be submitted. RERA and EJARIRERA and EJARI, following which the DED provides the initial approval.
To launch a business on the mainland of Dubai, you must partner with a UAE national. The aim is to find a trustworthy and dependable UAE enterprise partner. According to reports, the UAE local partner will hold 51% of the deal.
In the case of a free zone, a business would hire a local service officer who would work for a fee. It is recommended that you get into a contract with a silent partner; this will ensure your company’s security and the entire management.
Draft the MOA/LSA for your business
The MOA provides each partner’s portion of the company’s constraints and freedom, but the LSA describes the agent’s duty and the compliance that will be carried out. MOAs and LSAs are commercial documents that should be drafted with the assistance of a legal consultant.
Business License Process
The business license is processed after the DED has registered the company. Business licenses are generally based on the type of business activity and the jurisdiction of the company. In Dubai, the most common form of licenses is commercial licenses, industrial licenses, and professional licenses. Obtaining a trade licensing permit takes one week or more from the moment you obtain your initial DED approval.
Once you’ve completed the process of establishing a business, you’ll need to obtain a business trade license from DED. That is the document you must obtain before you can begin trading, and you must do so at that institution.
Approval of Your Business Activity
In Dubai, not all kinds of businesses get permission. There are some businesses restricted to do in UAE. According to Law No. 13 of 2011, the Dubai DED is the organization in charge of deciding, regulating, classifying, permitting, and licensing all financial activity. However, this does not apply to free zones or offshore business settings.
Select the Appropriate Authority
Dubai offers onshore business formations (Mainland / LLC), free zone business formations, and offshore business formations. The correct jurisdiction is determined by the type of firm activity and the nature of the company.
There is one more cost you must pay at that point. It covers the fees of acquiring a license, after which you will be permitted to trade in the UAE. The most expensive part of registering a corporation is the time spent waiting for the necessary legal and educational certificates, even though the fees are high.
Examine External Approvals
The DED issues company licenses and works with investors. However, to launch your business, you may require external approvals. you have to do an affidavit attestation In general, non-governmental and semi-governmental organizations obtain these permits.
Initial DED Approval
The initial approval is the DED’s accreditation to start your business. You can now establish your business and apply for your trade license permission.
National collaboration with UAE
The law requires you to collaborate with a local national because they are the only ones permitted to start enterprises in Dubai. They would need to hold 51 percent of your business partnership, and management duties might be divided however you see appropriate.
This service is provided for a fee by local agents. Because you want their position to be only a formality, it’s advisable to ask about them within your professional circles and identify agents whom others have worked with in the past.
A trade name is more than just the brand by which your company will be known in the UAE. It’s also the name you’ll be known by while dealing with government agencies. That is why it must be approved by one of them before you can begin trading.
It is carried out by a government agency known as the Department of Economic Development. The procedure must be done every six months and takes around three days to complete. If you want to establish a name for yourself, you should consider this in your marketing strategy.
At present, there are many advantages to starting a business in Dubai. Most importantly, you can set up your business there and make money. Dubai is one of the best places to start your business. The economy is growing, the government is very friendly, and many of the large corporations, such as Facebook and Google, are based here. The main advantage of setting up business in Dubai is that you can always expect a return from investment because it’s developing and it’s a place to invest in