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How to start business in Dubai, UAE?

How to start business in Dubai, UAE?

To start business in Dubai you shall know a couple of core matters which are worth to consider:

First of all there are seven Emirates in the UAE and each of such Emirates has its own procedures to start business. Even though there are federal laws which, clearly, have the power along all UAE, different Emirates have different additional rules and regulations which apply. Thus, for example, the procedure and requirements to start business in Dubai and the procedure to start the same business in Abu Dhabi would be rather different.

Moreover in each Emirate there are different options for the company formation – as the Free Trade Zone onshore or offshore company as well as the Non-Free Trade Zone Company with the local sponsor or local agent in Dubai or other Emirate.

Another important point to consider to start business in Dubai or other Emirates is to define the exact scope of the services the company would provide. For example, if you do the company formation with the local sponsor in Dubai and decide to participate in governmental tenders in Abu Dhabi, most likely your company would be rejected from such tenders in Abu Dhabi as it must be, for such cases, be formed in Adu Dhabi .

Another sample – you do the company formation and start the business in Free Trade Zone in, for example, Emirate Ras Al Khaimah, and then realize that you need the office in Dubai: In such case you would not be able to have the office of your company in Dubai unless you would make its branch which would cost you additional time and money.

Dubai company formation

Many think about Dubai when they decide to start business in UAE. However, to start business in UAE, along Dubai there are a number of other options in the United Arab Emirates for the company formation. Generally if you are not linked to Dubai, other Emirates of UAE may be the more cost-efficient  option for the company set up as well as the office and land / storage facilities lease.

What are the most common difficulties faced when starting business in Dubai and other Emirates?

  1. Definition of the right type of the company and right type of its license and place (Emirate, Free Trade zone) of the company  formation / registration.
  2. Finding a local sponsor.
  3. Preparing and filing all the documents for the company formation with the respective authorities.
  4. For the licenses which require some professional qualifications – preparing and filing all the necessary documents to receive the respective approvals for the license.
  5. Opening bank account. Even though it does not seems to be hard to open a bank account, sometimes, without the knowledge on how the banks work, opening a bank account in Dubai can be quite complicated and time-consuming.

On the company types in Dubai and other Emirates – the business in Dubai and other Emirates of UAE can be formed in a number of different ways with different costs and requirements. In total the options are as follows:

  • 3 types of offshore companies;
  • Around 30 Free Trade Zones having different types of companies in each of such Free Trade Zones with fairly  different requirements depending on the Free Trade Zone and the company type and its business activities.
  • Non-Free Trade Zone companies which can be formed as professional or commercial companies and depending on that the local would act as the local partner or local sponsor

On top of the above there are different regulatory authorities  which shall provide respective permissions for the business activities which require such permissions, for example, for travel agency, depending on scope of its services , the approvals may be required from the aviation authority, immigration authority etc.

Finding a local sponsor – finding the right local sponsor or local agent, if such one is required, is one of the core issues to start business in Dubai or other Emirates of UAE. If you do not choose the right sponsor and make the company formation ion Dubai with the randomly chosen sponsor, you can be totally blocked for the further business. The signatures which you may require from the local sponsor / agent, for example, to register the company’s new employees or to receive some additional permissions to start business and, when such signature is missing as you cannot reach you sponsor / agent, can totally block your business.

Preparing and filing all the documents for the company formation with the respective authorities – when you start business in Dubai and shall resolve the company formation issues, quite often you face the scenario that it takes you a lot of time and efforts to find out all the procedures and requirements for the business set up. Due to the missing experience you may lose quite a lot of time at the stage of the company formation and, instead of starting the business itself, struggle with administrative matters.

Opening Offshore bank account and Onshore bank account in Dubai. Opening bank account for offshore as well as onshore companies in Dubai and other Emirates as well as foreign companies can cost you quite a lot of time and energy if you do not know the specifics of the banks in UAE.

Summary: to start business in Dubai you need to plan sufficient time to figure out all the details you may need. Before starting company formation in United Arab Emirates you shall define the exact company activities and the legal requirements for such. To start business in Dubai is not harder that in any other county which is new for you. In fact, thanks to its highly business-friendly environment and  absence of taxes on most of the type of the business, opening business in Dubai is quite  straight forward and easy if you have the experienced professional business management consultants in UAE on your side whereby such consultants can save a lot of time and money for you.