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The Dubai Chamber of Commerce predicts a significant increase to $140bn by 2031, indicating a remarkable growth trajectory for the UAE’s digital economy in the coming decade.
This equals a massive 20% contribution to the country’s GDP, demonstrating the sector’s significant potential.
Unsurprisingly, so many entrepreneurs are coming to the UAE, drawn in by the country’s pro-business environment and a corporate tax rate ranging from zero to just 9%.
In particular, the Dubai Multi Commodities Centre (DMCC) has seen an impressive influx of new members, welcoming 1,456 new companies to its business district in the first half of 2023 alone.
The number of registrations this year is the same as it was in 2022. This shows that the sector is still growing.
In fact, the country’s potential for economic growth shows no signs of slowing down any time soon.
With plenty of opportunities for innovation, technological advancement, and sustainable growth, the UAE is a prime destination for anyone looking to build a strong, prosperous business in an environment that’s both supportive and highly conducive to success.
If you are thinking of starting your own business in Dubai, there are a few things you need to know before you get started.
Mainland:
Setting up a mainland company in the UAE is a straightforward process.
These companies are incorporated onshore and licensed by the Department of Economic Development (DED) or the equivalent municipality in the chosen emirate.
With this setup, you can operate your business anywhere in the UAE and engage directly with the local market.
Free Zones:
The Dubai government implemented the free zone concept to attract foreign businesses to establish themselves in the city.
It’s important to note that companies operating in a free zone are prohibited from directly trading with the UAE local market.
Offshore:
You can register offshore companies in one of these free zones, Jebel Ali Free Zone Authority or Ras Al-Khaimah Free Trade Zone, and they get many of the same benefits.
But remember, it’s not a total replacement for a free zone company. The big difference is that Offshore companies can operate only outside the UAE, not within it.
Type of Licenses:
Commercial License:
If you’re involved in trading or buying and selling goods, a commercial license is what you’re looking for.
This license covers a range of businesses, including import and export, sales, logistics, travel and tourism, general stores, and real estate.
Industrial License:
If your business is in manufacturing, you’ll need an industrial license. This license type is for companies that transform natural materials or resources into final products, either manually or mechanically. Think textiles manufacturing, metal manufacturing, and paper manufacturing.
Professional License:
You’ll need a professional license if you’re a service provider, artisan, or craftsman. This license is for businesses like medical, beauty salons, and repair services.
Company Setup Process in Dubai
The paperwork and time required are minimal. Here’s what you need to do:
1- Legal entity:
Decide what kind of legal entity you want for your business.
You have two options in a free zone: Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.), or Free Zone Establishment (FZE).
2- Choose a business name:
Choose a catchy trade name for your business. Check with the free zone authority or the Department of Economic Development (DED) to see if the name you want is available and meets all the requirements.
It should be morally acceptable, include the company’s legal form, not already registered, and be in line with your business type and legal status.
Avoid using religious or governmental names, logos, and any external organization names.
3- Get Initial Approval:
You need to get initial approval before you set up your business in a free zone.
You must fill out an application and provide a business plan. You will also need passport copies of the shareholders, their signatures, and documents about the title of the unit. Finally, write a letter telling why you want to do this.
4- Register your business
After getting approval, you must pay the registration and license fees.
The amount of money you have to pay depends on the type of license that you are getting and the Free Zone you choose.
5- Find an office space:
Whether you want to buy or lease, it all depends on the size of your team and the type of business you’re in.
6- Licensing and Visa process:
In this step, the leasing authority will prepare the necessary lease agreements.
Once the lease agreement is ready, you can apply for a trade license. This license is required for businesses to operate in the designated location legally.
After that, the authority will start to process the visa.
How we can help:
At D’Andrea & Partners Legal Counsel, we’ll help you understand all the potential benefits for your business in the Middle East.
Don’t worry about getting lost in the details. Our team is here to help you navigate the process and make smart choices for your business.
Disclaimer
The above content is provided for informational purposes only. The provision of this article does not create an attorney-client relationship between D’Andrea & Partners and the reader, and does not constitute legal advice. Legal advice must be tailored to the specific circumstances of each case, and the contents of this article are not a substitute for legal counsel.
