ULTIMATE GUIDE TO START A BUSINESS IN UAE
The UAE attracts many new businesses and investors every year. Company formation in the UAE is ideal for its favourable policies and ideal location. It has a number of free zones dedicated to specific business activities and policies such as no corporate tax and easy company formation. In recent years, the government of UAE has diversified its economy to end dependency on oil and instead promote it for its business incentives. Business set up in the UAE can be in the form of the mainland, free zone and offshore companies. Mainland companies receive their license from the government department of economic development and can operate freely anywhere in the country and internationally. Free zones are special economic zones that have their own jurisdiction and promote business activity in the region. Each free zone specializes in a particular activity. Offshore companies allow investors to conduct business activities outside of the country within which they are incorporated and provide many tax benefits and incentives. While the process of the company set up varies with the type of company and the legal structure that is being adopted, the general process includes
Choose your business activity
The first step when setting up your company is to determine the business activity that you wish to undertake. This will not only determine what license you need but also the location for company formation in the UAE. For example, if you wish to set up an advertising firm you can choose Dubai Media City free zone which specializes in media and production. There are three general licenses to choose from in the UAE. A commercial license is required for trading activities that include an exchange of goods and services. An industrial license is used for industrial and manufacturing services and lastly, a professional license required by a company operating on a marketable personal skill.
Choose a company structure
Once the business activity has been determined, the company structure can be selected. The legal structure of the company varies depending on if it is a free zone or a mainland company. For a free zone, inventors have the option of creating a free zone establishment that has more than one shareholder, a free zone company including a single owner, a branch and in some cases an offshore company. Mainland business set up in UAE offers a lot of options for legal structures. They include a limited liability company, which is the most famous type of company, a branch company, a private and public joint-stock company, sole proprietorship and civil company.
Choose a tradename
The company tradename must fulfil the legal requirements set forth by the government of UAE. These requirements include. The company formation services provided by LegalWorks includes tradename search and approval
- The trade name should not violate the public morals or the public order of the UAE
- At the end of the trade name should contain the legal form of the company such as (LLC)
- The trade name should not be in the use of a previous company or organization
- The name should be in accordance with its activity type and legal status
- The trade name should not contain names that have a religious significance, or the names of governing or external bodies
Obtain initial approval
Some free zones and all mainland companies require initial approval from the free zone jurisdiction of the Department of Economic Development. The approval conveys that the respective authority has no objection to company formation. To obtain the approval an application must be submitted along with the required documents and a fee must be paid. The documents include
- Completed business registration and licensing form
- Passport copy
- Residence permit copy
- No Objection Certificate from the sponsor for non-GCC nationals
- No Objection Certificate from the relevant free zone
- In the case of branch the parent company’s board resolution
- Copy of the parent company’s commercial registration certificate.
Get external approvals
In some cases, company formation in the UAE requires external approvals from governmental departments whose jurisdiction the business activity falls under. This is usually for mainland companies.
Submit license application
After obtaining the required approvals for your business set up in the UAE you must submit the application for the license along with a list of documents. The license fee must be paid that varies depending on if the company is a free zone or a mainland company. The documents required include
- Initial approval
- Copy of the lease contract attested by the Real Estate Regulatory Agency (RERA)
- Attested memorandum of association
- Approvals from relevant government entities
- Business plan (if needed)
Open bank account
After receiving your license and choosing your office location, you must open your company bank account. The UAE is home to some of the most famous international and local banks. The country has a stable financial structure and favorable policies for corporations.
Our experienced team at LegalWorks offers a range of company formation services and can take care of the incorporation process for you so that you can focus on expanding your business.