Relocating Your Business to the UAE

A dynamic economy, strategic location, and investor-friendly policies... does this sound like the ideal destination for you to relocate or expand your business to? The UAE is an attractive destination for entrepreneurs, particularly those targeting the Gulf Cooperation Council (GCC) market. Dubai, in particular, offers a wealth of resources, convenient access to international travel, and a rich talent pool, making it an increasingly popular choice for business ventures, especially among British entrepreneurs.

This guide provides an overview of the essential steps to starting a business in Dubai and outlines the process of company incorporation. By looking at some of the key considerations for starting a business in Dubai, we hope to help you make an informed decision about your new business formation or relocation.

Understanding Doing Business in Dubai

Dubai's economy is diverse, with thriving sectors such as tourism, real estate, finance, and technology. Its strategic location provides access to markets across the Middle East, Asia, Europe, and Africa, making it a global business hub. The city offers a high standard of living, advanced infrastructure, and a stable political environment, which are attractive features for businesses and their employees. So how do we get started? Before diving into the specifics of setting up a business in Dubai, it's important to understand the key aspects of doing business in Dubai and the broader UAE.

You have the option to establish your business either on the Dubai mainland or within one of the numerous Free Zones. Both locations allow for 100% foreign ownership, although on the mainland, majority ownership is restricted in strategically important sectors. In such cases, a local sponsor is required to hold at least 51% ownership. This sponsor can be an individual or a local business and is primarily responsible for facilitating government-related processes such as visa applications and obtaining necessary licenses and permits. They must also sign all official documents and legal forms.

The type of licenses available and the specific regulations can vary significantly between Free Zones and mainland Dubai. Common business activities include commercial trading, education, media, e-commerce, and consultancy, each subject to specific rules depending on the business type and location.

Choosing to operate within a Free Zone offers several advantages, such as tax exemptions and support from Dubai authorities in areas like office rental and housing. However, businesses in Free Zones may face restrictions, such as the limitation to trade only within the Free Zone area, depending on the type of entity and license.

You can register your business either online or in person, or you can utilize the services of a business establishment agent. Given that the business setup process in Dubai differs from that in countries like the UK, many entrepreneurs opt for professional assistance to navigate these differences. Nonetheless, the process is relatively straightforward for those who choose to proceed independently.

Types of Company Formation in the UAE

Free Zone Company Formation:

• Ownership: 100% foreign ownership is permitted.
• Taxes: No corporate or personal income taxes.
• Trade: Can conduct international business but are restricted from trading directly with the UAE mainland without a local distributor.
• Setup: Streamlined process with minimal bureaucracy.

Mainland Company Formation:

• Ownership: Up to 100% foreign ownership only allowed in some sectors.
• Trade: Can trade freely within the UAE market.
• Office Requirements: Must have a physical office space within the UAE.
• Regulations: Subject to local Emirate regulations and approvals.

So which should i choose? This is an important question, and it may depend on a variety of factors, however probably one of the most crucial factors to keep in mind is that certain business types can only be established on the Dubai mainland and not in the Free Zones. So if you already know what type of business you want to establish, your decision may have already been made for you, if not then it is more likely to come down to the weighing up the benefits of Free Zone entities, such as tax exemptions and simplified setup processes. You should carefully evaluate which option best suits your needs before proceeding.

We have previously published an article going into more depth about the differences between free zones and mainland company formations, if you want to know more about that you can read it here.

Another critical consideration is whether you can maintain full ownership of your company or if you will need a local stakeholder who owns at least 51% of your business. This requirement varies depending on whether your business is based in a Free Zone or on the mainland. Next, we’ll explore the key characteristics and considerations of each possible Dubai business entity type in more detail.

• Sole Proprietorship: Owned and operated by a single individual.
• Partnership Company: Owned by two or more partners.
• Limited Liability Company (LLC): Combines elements of partnership and corporate structures, typically involving two to 50 shareholders.
• Private Shareholding Company: Owned by a few individuals with shares not available to the public.
• Public Shareholding Company: Owned by shareholders with shares traded on the stock market.
• Civil Company: For professionals such as doctors, lawyers, and engineers.
• Branch of a Foreign Company: Allows a foreign company to operate in Dubai without incorporating a separate entity. This might be extra appealing if your an existing business looking to expand and keeping costs and complexities down.

Steps to Start a Business in Dubai

The process of starting a business in Dubai varies depending on whether you choose to operate within a Free Zone or on the mainland, as well as the industry you are in. You can either handle the setup independently or work with an agent or intermediary for support.

Example, Steps to Set Up a Business in a Dubai Free Zone:

1. Identify the Business Type and License: Determine the type of business you want to start and the corresponding license required according to the UAE licensing system. The license type will depend on your business activities.
2. Choose the Business Entity Type: Select the appropriate business entity for your needs. In a Free Zone, your options include a Free Zone Limited Liability Company (LLC), a Free Zone company, or a Free Zone establishment. Each entity type has its own features, advantages, and disadvantages.
3. Register Your Company Trade Name: Choose and register a unique trade name for your company that complies with UAE naming regulations.
4. Select Your Business Space and Location: Decide on your business premises. Free Zones offer various options, including building, owning, or renting office spaces, warehouses, or other required facilities.
5. Submit Your Documents and Obtain Approval: Prepare and submit the necessary documents to obtain initial approval for your business. The documents required will vary depending on the Free Zone and the business activity.
6. Register Your Business and Obtain Your License: Once you have received initial approval, proceed with registering your business and obtaining your trade license to operate in Dubai.

You can apply for approval and register your business online or attend an appointment in person. If you're unfamiliar with the process, hiring a company registration agent can ensure a smooth and hassle-free experience, although this may involve additional fees.

Documents Required for a Free Zone Company License:

• Completed business license application form
• Business plan
• Copy of existing trade license/registration certificate (if applicable)
• Passport copies of the company's shareholders and appointed manager
• Registry Identification Code Form (RIC) for the appointed manager (original and notarized)
• Specimen signatures of the company's shareholders and appointed manager
• Title deeds (if applicable)
• Letter of Intent clarifying the investment idea and the investor's plan
• Two years of audited financial reports or a certificate of reference from a bank (as required)

Documents Required for Business Registration:

• Completed registration application form
• Board Resolution appointing Manager/Director (notarized and attested (i))
• Power of Attorney given to Manager/Director (notarized and attested)
• Memorandum and Articles of Association (notarized and attested)
• Specimen signature of Manager/Director (notarized and attested)
• Passport-size photos of Manager/Director
• Share capital information

This comprehensive process ensures that all legal and regulatory requirements are met, allowing you to establish your business efficiently and effectively in Dubai.

(i) Notarized and attested - This is common requirement in the UAE, often referred to as document legalization services, you can find more information about this on our document legalization page.

Setting up a Business in Dubai - FAQs

Here are some questions we regularly get asked in consultations with entrepreneurs new to the UAE market -

How much does it cost to start a business in Dubai?

The cost of setting up a business in Dubai can vary significantly based on the type of company, numbers of staff, and the chosen location. For instance, establishing a single-person company in a Free Zone is very affordable, with the average cost being in the region of £3000 (AED14,000). On the other hand, a larger business employing around four people, requiring visas and office space, could reach fees over £12,850 (AED60,000). In Free Zones, costs and the number of visas available typically depend on the size of the office or warehouse you choose to rent or purchase.

Is Dubai startup friendly?

Dubai is quite accommodating for startups, but specifics can vary depending on the business type and location. The business approval and registration process is efficient and can be completed online. As long as your business activity is permitted in Dubai, establishing a startup should be relatively smooth.

Is it easy to start a business in Dubai?

Setting up a business in Dubai is generally straightforward, though the process might be unfamiliar to some. The UAE government indicates that you can set up your company online in as little as 15 minutes, or in about four days if done in person. According to the World Bank, the average time to establish a company in a developed country is approximately ten days, so in comparison to the average it is a very swift process.

How to start a business in Dubai as a foreigner?

Foreign nationals can fully own businesses in Dubai, particularly within Free Zones. Some mainland businesses in Dubai can also be 100% foreign-owned, although some strategically important industries might require a local majority stakeholder. The setup and application process in Dubai is straightforward and can be done online. Alternatively, you can hire a company formation agent for a fee to assist with the process.

Is Company Formation in the UAE Right for Me?

Starting a business in Dubai involves navigating a well-defined yet comprehensive process. With the right preparation and support, such as the services offered by Prism 7 Corporate Services, you can establish and grow your business successfully in one of the world's most vibrant business hubs.

In comparison to many other countries, it can be one of the more straight forward and efficient processes you'll find, and with the multiple benefits we've mentioned here amongst many others that the UAE offers, we believe its a fantastic location to do business. If you're still not sure if it's the right choice for you, speak to our team. With a free consultation although we still can't make the decision for you, you'll have the opportunity to ask more in depth questions and get answers specific to your industry from our team of UAE company formations experts.