Dubai is a highly attractive location for entrepreneurs, investors, and businessmen looking to start a new company. This city provides a business-friendly environment, zero tax policies, world-class infrastructure, and many other advantages. The procedure of setting up a business in Dubai, UAE is precise and accessible to anyone. This guide outlines the step-by-step process that you have to observe to launch your company in this city. Keep reading to learn about the necessary steps that will aid you to attain your business purposes.
Things to Consider for Setting up a Business in Dubai
Starting a new business in Dubai requires careful consideration of certain factors to ensure a smooth and successful setup. By taking the necessary steps and paying attention to key details, you can realize your entrepreneurial aspirations and establish your company in this bustling city.
- Budget
When starting a business in Dubai, it’s crucial to maintain your budget in mind as every dollar counts. Setting a fixed budget is crucial as it helps cover the costs of incorporation, stock inventories, hiring, licensing, advertising, and marketing. While unexpected expenses may arise, planning ahead can help you gather sufficient funds to manage them. It’s essential to think big and plan for future growth, ensuring that your defined budget encompasses any capital-intensive opportunities that may arise in the future.
- Research Your Competitors
Thorough analysis is a critical element of any successful business. Before embarking on your planned activities, it’s crucial to perform an in-depth analysis of your competitors. Determine if your chosen business is already being conducted by someone else and assess the market to identify any specific niche you can fill. Additionally, consider if you can offer a more effective method of satisfying customer demands or resolving existing issues. It’s vital to determine whether a market opportunity exists for your business or not.
- Pick the Ideal Business Structure
Selecting the appropriate business framework is a vital decision for any company. The optimal structure depends on various factors, and seeking guidance from a licensed company formation expert can ensure a professional and lasting presence in the UAE. We advise reaching out to business setup professionals in Dubai, such as Start Any Business, for expert advice. These experienced company registration agents will assess your available business activities and recommend the best approach to facilitate your trade and expansion without any restrictions. They will also help you comply with the UAE’s authorized licensing agencies and Commercial Companies Law, ensuring that your business is conducted according to regulations.
- Prepare a Detailed Business Plan
After conducting market research and finalizing your proposal, it’s essential to develop a solid business plan. This document is not only critical for initial planning but also an ongoing one that should be regularly assessed in light of your business objectives and goals. A well-crafted plan can guide your business in the right direction, and it’s worth noting that banks and licensing agencies typically require a detailed business plan. Unfortunately, many new entrepreneurs and investors skip this phase and struggle to develop an effective plan. Starting with a solid business plan is crucial for assuring the triumph of your business.
Business Economic Zones in UAE
Before a company is set up in Dubai, you must decide whether you like to work in a free zone or on the mainland. Each jurisdiction has its own requirements and advantages. It’s important to explore what each economic zone has to offer to determine which one is the best fit for your business.
- Freezone
To have complete ownership (100%) of their business, entrepreneurs should consider applying for a license and location in one of Dubai’s free zones. These zones were created by the Dubai government to attract foreign investors to establish companies in the region. Currently, there are approximately 30 functional free zones in Dubai, each centered around a specific industrial sector and granting licenses to businesses within those categories.
Dubai’s free zones offer unique economic opportunities for entrepreneurs and investors, including 0% taxation and several ownership advantages. However, a significant drawback of operating a business in a free zone is that direct interaction with the UAE market is not allowed.
- Mainland
The mainland is an equally important jurisdiction in Dubai, and running a business there can be highly advantageous. With the ability to drive business elsewhere in the nation, select your site freely, and reach an international audience, you can establish an effective existence in the UAE. However, it’s important to note that when setting up a company on the mainland, you must be in contact with an aboriginal Emirati who must be listed as a significant stakeholder. This requirement ensures compliance with UAE regulations. Additionally, operating a business on the mainland may provide opportunities to work with the government and secure government contracts.
- Offshore
Offshore businesses aren’t a jurisdiction, but rather a kind of company that differs slightly from a free zone enterprise. While it can stand documented in a free zone, it allows the key to numerous benefits of that economic zone. The primary difference between an offshore firm and a free zone company is the business’s operations. Offshore companies can only operate outside of the UAE, and there is no minimum capital deposit required before incorporation. However, there is a drawback to setting up an offshore company. It requires a sponsor, which limits foreign ownership to 49 percent and prevents the business from operating as a free zone enterprise.
Process for Setting Up a Business in Dubai
- Choose a Business Activity
Before setting up a business in Dubai, the first step is to choose a business activity. It’s important to conduct research and carefully consider the options before making a decision. If you have already prepared a business plan, it will be easier to select the most suitable activity. The Dubai Department of Economic Development (DED) website offers over 2100 business activities, categorized and approved as legal for operation in Dubai, providing a helpful resource to choose from.
- Select a Business Name
After choosing your business activity, the next important step is to select an appropriate business name that complies with the rules and regulations. The Department of Economic Development (DED) has specific guidelines that need to be followed while selecting a name. Once you have finalized a name, you can proceed to register it with the DED.
- Obtain Funding
To establish your business, you may need to secure funding. However, for many businesses, a minimum share capital deposit is not required.
- Obtain Initial Approvals
After securing funding, you must apply for the necessary initial permits. To initiate the setup of your Dubai-based company, submit your application and accompanying documents to obtain the initial permits.
- Secure an Office Space
To operate your business in Dubai, you will need to secure an appropriate office space in your chosen jurisdiction. Without an office, it will be difficult to conduct business activities.
- Submit Required Documents
After finding an office space, the next step is to present all the necessary documents and paperwork, comprising your company registration application, to the appropriate government bodies for final permission to begin your business operations.
- Open a Bank Account
Once you have obtained all the vital permissions and documents, the next step is to open a bank account. You have the option to select from a combination of local and international banks available in the UAE.
Required Documents for Setting up a Business in Dubai
The documents you need to provide for your company setup in Dubai will vary depending on the type of business you choose, but some common documents include –
• Filled out business licensing and registration form
• Feasibility study of the project
• Copy of your ID and passport
• The company’s article of association
• Copy of your visa and residence permit
Cost of Setting up a Business in Dubai
Setting up a business in Dubai involves certain costs that vary depending on the business type and location. The cost will be higher if you choose to set up your business in a prime location such as Dubai mainland. Here are some of the expenses that you might incur while setting up a business in Dubai –
- License Fees – To start a business in Dubai, you must obtain a license from the Department of Economic Development (DED) or relevant authorities. The cost of a license varies depending on the type of business and the location.
- Visa Fees – If you are planning to employ foreign workers, you must obtain visas for them. The cost of a visa relies on the kind of visa and the period of stay.
- Office Rent – You must also factor in the cost of office space. The cost of rent differs relying on the location and size of the office.
- Government Fees – You will be required to pay various government fees for processing your application, obtaining approvals, and registering your business.
- Legal Fees – You may need to hire a lawyer to assist you with the legal aspects of setting up your business, such as drafting contracts and agreements.
- Miscellaneous Expenses – Other expenses include registration fees, bank charges, and insurance costs.
Go with Start Any Business for Setting Up a Business in Dubai 2023
Start Any Business is a company that provides services to assist entrepreneurs and investors in setting up businesses in Dubai. With vast experience and knowledge in the field, the company offers comprehensive solutions to clients that enable them to establish their companies with ease.
One of the ways Start Any Business helps in setting up a business in Dubai is by providing guidance on selecting the most suitable jurisdiction for a particular business activity. The company’s team of experts can assist in identifying the best free zone or mainland option based on the type of business, ownership structure, and other relevant factors. This advice can be invaluable to ensure that the company is set up in a jurisdiction that maximizes its potential for growth and success.
