Dubai is a city that’s well-suited to entrepreneurs and investors seeking to tap into the UAE market and beyond, as well as to established companies seeking to gain access to customers in the UAE. But in starting a business it is not just a matter of picking a name for it and getting a trade license. The right set up will vary based on the business’s operations, ownership, location and the approvals that will apply, as well as whether it will have a physical location or not.
The same planning should be undertaken for visas and staff. A company owner can consider an investor or partner residence option, and a company where employees are to be recruited will have to adhere to the necessary work permit and immigration process. These processes are interrelated, but are not identical. A business license does not automatically entitle you to an “on residency visa” or a bank account.
Knowing the business types, the categories of license and visa routes will make you more informed and better able to ask the right questions before signing up to any business set up package. Business Setup Experts can assist entrepreneurs in comparing suitable business setup options and the things to be considered before taking a decision. It also conveys information regarding the scope of work for a provider and what has to happen when a license is issued.
What Types of Businesses Can You Start in Dubai?
The right business activity should be selected before deciding on a license or legal structure. Trading, professional services, selling online, manufacturing, retail and specialty services are common choices. The description of the activity is important as it will influence what license and approvals may be needed.
Trading and import-export businesses
Trading industries are involved in the purchase and sale of goods, distribution of goods or handling import/export. Such items as electronics, clothing, building materials, food products and wholesale supplies. Some factors such as the activity list, product type, storage requirements, and target customer may impact the licensing path. Other products or industries may require further approval.
Consultancy and professional services
Those service providers, such as consultants, designers, marketing specialists, management advisers, may be able to do so pursuant to a professional or other specific type of license. Some regulated professions have recognized qualifications or may need to be professionally registered or approved by a relevant authority. The applicant should verify these conditions prior to applying.
E-commerce and online businesses
An online business can be either a product, a digital service, or a platform. It is not an excuse to not choose a Licensed Activity when selling through a website or social channel. The business should determine if it requires a trading activity, a service activity or additional approvals based upon the goods it sells and method of business operation.
Manufacturing, retail, food and specialist activities
Industrial Licensing, Equipment, Safety and/or Products Approval may be required. Specialist organizations such as retail shops, restaurants, tourism companies, healthcare providers and other specialist businesses can have their own location, technical or sector-specific requirements. General business license is never a license for all activities.
Freelancing and independent professional work
Freelance permits or other buildings may be available for eligible professionals to work in independently. Subject to the availability of the activity, the licensing authority and the applicant’s situation. A freelance permit is different than any other Company permit and may not be suitable for a company intending to hire employees or sell products or goods or run as a larger organization.
Who Can Start a Business in Dubai?
Dubai is a place that attracts a variety of founders, such as foreign investors, UAE residents, entrepreneurs, and skilled professionals and overseas companies. Eligibility for each activity or legal form is not the same, however. The applicant must comply with the requirements of the relevant authority and submit the required documents and secure any required approvals.
Foreign ownership of many activities is allowed and in some strategic or controlled sectors special conditions may apply. People who are already employed by an employer should also ensure that they are aware of any contractual, permit or regulatory requirements that may apply to them. An international business establishing a branch establishment might require parent firm paperwork, board resolutions and paperwork that is accurately attested and translated.
Before deciding on the route of setup, discuss with your partner(s) who will be shareholders, who will be operating the company, your customers and whether your company will employ anyone. The answers would help in determining the legal form in which it is to be incorporated as well as the actual procedure of incorporation.
What Types of Business Licenses Are Available in Dubai?
Different emirates, different authorities and different setups routes have different license terminology. Some of the most common types of licenses are commercial, professional and industrial. There may be licensing requirements for specialized activities, such as tourism. Dubai also has specific licenses for some of the business models that are available and not all of the models apply to everyone who applies.
Commercial license
Trading activities include import and export, distribution and sale, and generally a commercial license. What the company can legally do is in accordance with the activities, as described on the license. Companies need to ascertain if their products or industry need additional approvals.
Professional license
A professional license can be appropriate for certain activities such as consultancy and specialist services, as these are deemed to be services. The authority might require evidence of qualifications, professional approvals or information on the proposed legal structure depending on the activity. The term should not be used as an authorization for the rendering of just any kind of professional service.
Industrial license
Industrial Licensing is applicable for Industrial or Manufacturing activities. Companies could be required to demonstrate compliance of their premises, equipment and operations with relevant requirements. Depending on the company’s products, there can be approvals from the environment, safety, or product or sector.
Tourism, e-commerce and other activity-specific options
Certain tourism activities may require approval from the relevant regulator and also tourism businesses. Ecommerce is not a single license for all business activity, but rather an activity that needs to be licensed as appropriate. Eligibility and allowed activities must be verified with the issuing entity for freelance, home-based or instant license options.
The question that arises is not just ‘Which license will be the cheapest? That is, “What license will cover the activities I really intend to perform?” A mismatch can result in delays, amendment work and/or extra approvals.
How Do You Choose Between Mainland, Free Zone and Offshore Setup?
A mainland company is suitable for businesses wishing to conduct business throughout the UAE market subject to the licensed activities and relevant rules. There are numerous activities which are open for full foreign ownership, although there are some limitations and special conditions. Applicants are requested to verify the position with respect to their activity. A free zone could be attractive to companies looking for a more focused environment, a specific operating ecosystem or certain services provided by the free zone of their choice.
The free zone authorities, activities, packages and requirements are different in each free zone. When incorporating, it is important to consider the intended sales model as it may require the relevant permission or arrangement to operate outside the free zone or to serve mainland customers. Offshore structures are intended to serve a variety of purposes and are not intended to be assumed to be operating companies, as in the mainland or free zone, with the same operating rights.
Before selecting an offshore structure, it is important to determine if it is suitable for the business’s requirements if it is required to trade locally or have staff onsite or premises located in the UAE. Discuss the advantages and disadvantages of each option in terms of allowed activities, the locations of the customers, office requirements, ownership, visa requirements, bank preparation, approvals, renewal requirements and future expansion.
Business Setup Experts can be useful in explaining the differences of the setups, and founders can evaluate the setup that will be suitable to their planned activities. An initial quote might not always be the total cost of the structure and may not be the most appropriate quote.
What Documents Are Needed to Register a Company?
Requirements differ for the different activities, legal form and licensing authority. Passport copies and information about the owner/manager(s), proposed trade-name, information about business activity, and business activity applications are typical things applicants are asked for. Some other documents that may be requested depending on the structure are memoranda, articles of association, lease or workspace documents, or documents of a parent company.
Qualification certificates and/or professional registration or approval from other government bodies may be necessary for regulated activities. Attestation, legalization and Arabic translation might be required for overseas documents. Before submitting an application to the relevant authority, it has been prudent to verify the existing checklist so as to avoid delays in the processing due to incomplete or inconsistent documents submitted.
How Does the Business Setup Process Work?
The order may vary but generally, it starts by deciding the type of activity and the legal structure. The applicant then verifies the name, verifies ownership and authority requirements and applies for initial approval as necessary. The next steps will vary depending on the company type and could involve the preparation of company paperwork, sorting out an appropriate premises, obtaining external approvals and making an application for a license.
Upon receiving the license, the company may have to go through some extra procedures before it can hire employees or engage in all planned activities. They may range from immigration/establishment file, work permits, residence visa applications, tax registration and banking preparations. Eligibility and approval for each step is specific. The process may be coordinated by a consultant but only the relevant authority can make its official decision.
What Should You Look for in a Business Setup Consultant in Dubai?
The first steps of a good business setup consultant are to grasp the activity, its ownership, the customers involved and the growth plans. Business Setup Experts can assist on this evaluation by discussing with potential partners the business model, and assessment of the business plan and the potential licensing pathway for the business, including a confirmation of the requirements. A consultant should not simply make a blanket recommendation to all clients to use a specific jurisdiction or legal structure – they should make a recommendation based on the fact that this may be suitable for the business and highlight any restrictions or approvals that must be sought.
Seek an explanation of what’s covered in the quote. Look for it to see if it includes the following: trade-name reservation, initial approval, company documents, visa issuance, workspace and establishment procedures, visa assistance and visa renewal support. Where relevant the cost of government charges and third party costs or professional service fees are to be explained separately. Inquire about services which are not included and what future amendments and renewals may include.
A provider should also clarify what he or she can and can’t assure. No consultant can guarantee opening of an account, visa approval or acceptance of every application by an authority. Good support involves assisting you to complete accurate forms, comprehend the process and keep track of agreed activities and respond to communications from the relevant authority.
For founders comparing options, business setup in Dubai should be planned around the real needs of the company, rather than a package headline alone.
What Types of UAE Visas May Be Relevant to Business Owners and Staff?
The license of the company is different to residence of the person. Under certain conditions, the business owners and workers can consider various residence options. This will depend on your eligibility, sponsoring arrangements and immigration laws as well as the requirements of the relevant authority.
Investor or partner residence visa
In the event the company has a legal structure and only the authority allows, an eligible shareholder/partner may be able to apply under a relevant investor/partner route. Having shares does not guarantee a visa will be awarded. The applicant might require to submit company records, and complete immigration and identity procedures.
Employment residence visa
An employee must have the correct work authorization and residence process organized by a sponsoring employer that is eligible for sponsorship. Employer’s staff follows relevant labor and immigration procedures. Just because a person has a trade license, doesn’t mean that they can work and the business should ensure that they are working in the right way before they take them on.
Green Visa and Golden Visa
There are certain types of people who are eligible to apply for the Green Visa such as skilled workers, freelancers or self-employed, investors, and business partners. There are also certain types and requirements for the Golden Visa. Both paths should not be suggested as a no-brainer process when forming a company. Applicants should note that the evidence and criteria required in their category is subject to change.
Freelance and family residence routes
Depending on authorization and activity, eligible freelances can receive the necessary permits and residence. A resident also may be able to sponsor a qualified relative of his/her family. For each case, the kind of permit, income requirement and documentation and sponsorship requirement should be checked.
When Do You Need PRO Services and MOHRE Assistance?
Businesses can get support from PRO to coordinate government paperwork and follow up with the government. Support can range from document preparation to applying for licenses, such as application, modification, renewal, establishing procedures and visa administration. The specific service may vary according to the authority and company’s needs.
MOHRE processes relate to many employer and labor processes in the private sector, such as work-permit services, updating of the establishment file and other employer processes. A MOHRE enquiry could be beneficial when the employer requires to know about an application, understand a requirement and/or determine the most appropriate service channel. When you make an enquiry the business should have relevant information about the company and applications.
All UAE companies do not have the same working process. There are some employment matters that will be handled by the free zone business under the free zone’s jurisdiction and other matters that will be handled by federal or local authorities. This will depend on the jurisdiction, the status of the employee and the issue under discussion. A PRO team can assist in determining the process and in structuring the documents but is not meant to make the authority’s decision.
For administrative support with government procedures, PRO services in Dubai may help businesses coordinate the steps that apply to their circumstances.
What Happens After Your Trade License Is Issued?
Obtaining a license is a significant step, however it may not be enough to complete all setup requirements. The following steps vary between businesses, but may involve opening appropriate business files, arranging eligible employee permits, finalizing residence visa applications, corporate bank account setup, and tax registration if applicable.
It’s also a good idea for businesses to have a calendar to keep track of document changes and updates, lease requirements, and any activity-specific approvals, as well as license renewals. Employers are required to comply with any labour rules that apply to them, including those that relate to wages and paying of wages, and if applicable, those that relate to employees. The tax obligations will depend on the situation of the company and the UAE tax laws in effect and it is best to check registration, filing and record keeping requirements with a professional adviser or the relevant tax authority.
By planning these tasks in advance, delays can be avoided. It provides a clearer picture for owners of their annual requirements as well as just the initial license application.
Make the Right Decisions Before You Register
The key decisions are made in the right order to start a business in Dubai. Describe the activity first and compare structures and licensing options for the activity. Review the provision of services to customers (including establishing a physical site), approvals that may apply, and the number of owners/employees who require visas. This information will influence the registration procedure and what is expected of a registered individual.
It is also good to take a look at the original license. Whether it’s establishment procedures, work permits, applications for residence, preparation of banking and tax matters, all of these can have an impact on how smoothly a company gets up and running. Requirements are subject to change, so please check for up to date information with the relevant authority before committing.
The quickest and cheapest choice isn’t always the best one – in fact, it often isn’t. It’s the one that suits the business activity and meets the rules of the game and that allows the owner to have a good picture of what’s coming down the road. Business Setup Experts can facilitate the understanding of all the steps involved, and make their decision making around business setup based on their actual business need. Planning and support can ensure that an entrepreneur can make informed decisions and develop a business that will be sustainable.
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Frequently Asked Questions
Can a foreigner own a business in Dubai?
Many businesses and activities in Dubai can be owned by foreign investors, and many even on the mainland have a specific condition. Ensure you have verified the ownership terms and permissions for the specific activity and legal framework prior to application.
Which business license is best for a new company?
It is dependent on the activity, legal form, authority and operating plan to determine the right license. Typical commercial licenses are for trading, professional licenses are applicable to eligible services, and industrial licenses are for manufacturing. Extra permissions will likely be necessary for specialist activities.
Does a business license include a UAE residence visa?
No. Business license and residence visa are separate applications. Applications may be made via an appropriate process by eligible owners; employees are generally subject to the relevant work and residence requirements of the owner.
What is a MOHRE enquiry used for?
Employers or employees can use a MOHRE enquiry to get clarification on relevant labor services, work-permit issues or establishment procedure. This will vary depending on the issue and where the company is based.
Why use a business setup consultant in Dubai?
A consultant can assist with comparing structures, organize the documentation and coordinate applications, as well as provide explanations of the follow-up requirements. Select a provider who outlines the services they will provide, and does not guarantee bank accounts, visas or government approvals.
