law & finance

8 basic steps to set up a business in Dubai

Starting a business in Dubai involves six procedures to be completed in eight days on average

11:00 April 2, 2017
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Starting a business in the UAE should not take you more than a week once you've sorted all your legal procedures.

But before you start your legal formalities, you need to consider some elements required in the process:


1. Type of business

Your type of business will determine the kind of license you require. Whether it's commercial, professional or industrial licenses, these will define the basis of your operations. However, while selecting, remember that certain activities such as food trading, jewellery trade, veterinary activities and legal consultancy require further approvals from other governmental departments.

The Department of Economic Development (DED) in Dubai has a list of over 2100 activities you can choose from. If you're unable to find your specific one in there, you can contact the DED. Each free zone has its own regulations and approval formalities.


2. Ownership

As a foreign national, if you'd like 100 per cent ownership of your company, you need to opt for a license and location in one of the many free zones of the UAE. There are specific kinds of activities that each free zone caters to and clarity in the first step will help you find your best option.

There are 45 free zones in the UAE; read our detailed guide here.

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If you need a local license or need to operate locally, you have to get a license from the Department of Economic Development (DED). The DED license comes with certain restrictions on share of ownership for foreigners.

Check our detailed guide on legal organisation structures under DED here.


3. Legal form

Depending on your location and type of business, there are rules regarding the make-up of your firm. For example, if you plan on a legal consultancy firm, this can be done only as a branch of company or as a stand-alone company. A sole proprietor is not allowed to take up this activity. Each free zone has its own restrictions regarding company structure and you can look these up on the official website of the zone. DED structures can be seen here.


4. Trade Name

Your trade name is a very important part of the legal procedure. The company name should ideally indicate the nature of business, unless it is a branch of another company. All the rules regarding trade names can be seen on the DED official website here.


5. Share capital

Minimum share capital is usually set out in the Memorandum of Association of your proposed company. In most cases, you do not need to pay minimum capital at the time of setting up.


6. Premises

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Once you have your legal procedures and forms ready to go, it would be best to shortlist some offices with costs and other details. This would mean a clear path forward once you get your legal formalities out of the way. In free zones, you will get assistance to find premises suitable to your requirement along with help to set up electricity, internet, water and other amenities.


7. Employees

In most legal forms of the DED, you need to hire a manager to oversee operations and have him ready to be on board before your registration is approved. But in other cases, you may not be allowed to hire at all. For example, Intelaq license holders (license for home-based Emirati business owners) are not allowed to hire staff, but can engage contractors. Details can be seen here. For free zones, each zone has its own specific regulations regarding the structure of business.


8. Local support

For DED licenses, it is mandatory to have a local agent, partner or sponsor and this is a great support for foreign nationals.  For free zones, having a local contact can help take the business forward effectively. However, this is not mandatory and Dubai as a business destination boasts easy set-up for all businessmen regardless of nationality. 

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