The UAE is famous for many things; unique tourist attraction sites, skyscrapers, cuisine, and luxurious lifestyle. However, entrepreneurs are attracted by the stable business environment in the region. There are many business opportunities to tap into in the Emirates for foreigners and locals.
The United Arab Emirates is the 2nd largest in the Arabs nations after Saudi Arabia. It is a significant business hub in the region. Many international businesses have taken root in the region because of the favorable business environment and economic and political stability. Both big and small businesses are rushing to start their businesses in the UAE because of the lucrative advantages they will enjoy.
Why Entrepreneurs Start Businesses in the UAE
Many businesspersons rush to the UAE to start their companies because of the fast-growing economy. The country has had a high annual trade surplus and high per capita income for at least 40 years. This is why many international companies have set camp in the region.
The government also promotes a comfortable environment by building modern amenities and infrastructure. The country has state-of-the-art transport systems, business parks, utilities, connectivity, warehousing, office spaces, etc.
The government is also at the forefront of promoting foreign investment by reviewing the legal framework to support foreign investors. Although the criminal law has not changed, there is a new set of regulations and laws for foreign nationalities.
A Step-by-Step Guide to Starting a Business in the UAE
Starting a business in a foreign land can be overwhelming because there’s so much to learn. Below is the procedure for starting a business in the UAE.
Choose a Business Activity
The first step is to choose a business activity; however, you need to know that not all businesses are allowed in the UAE. You can consult an expert from a law firm in Dubai to help you choose a business activity. Some prohibited businesses include food and foodstuff (Producing and selling alcoholic products and goods made of pork), magazines with pornographic content, and other related material, gambling, and illegal activities.
Choose a Location
You need to choose a jurisdiction where your business will thrive. You can pick the Free Zones, Mainland, and Offshore setup. You need to understand the pros and cons of establishing your business in any of these jurisdictions; this helps you to make the right decision. The location you choose depends on the type of economic activity you want to establish. The UAE is home to a great selection of office spaces, from startup-friendly coworking spaces in Abu Dhabi to luxury office suites in Dubai for established multinationals.
Choose a Type
You need to choose a business type; each has a unique legal structure. You can hire legal consultants in Dubai to guide you on the requirements for each business. There are many types of companies to choose from, for instance;
- Sole proprietorship
- Limited partnership
- Private Shareholding Company
- Public Shareholding Company
- General partnership
- Limited Liability Company
- Professional Company.
Get a Local Sponsor
Foreigners need to collaborate with a local sponsor when establishing businesses in the UAE Mainland; the sponsor owns 51% of the shares. Free Zones, on the other hand, allow you to complete ownership of the company. Although Free Zones have many advantages, you cannot conduct your business activities directly without an agent who requires a certain amount. If you choose a mainland business, find a reliable and trustworthy partner.
Business Registration
The next step is to register your business name with the Department of Economic Development (DED). Brainstorm different names but remember there are rules and regulations. For instance, don’t choose a name under copyright by a similar company in the UAE, choose a name that aligns with your business activities, don’t use God’s name or his attributes, no indecent or obscene words, etc. Legal consultants in Dubai can help you stay on the right track.
Get Approval
After choosing a business name, you need to wait for approval by the DED. It is mandatory to apply for initial approval from the Department of Economic Development; this shows that your company is legal. You can submit your approval application and name approval at the same time. Required documents vary with different businesses. However, you need a copy of your Visa and passport and approval from ministries that align with your business. You also need external approval from semi-governmental and non-governmental bodies.
Get a License
After registering the business with the DED, your license is processed and ready for collection. The license is issued based on the nature of the business and jurisdiction. This process takes at least a week from the business approval date. The DED provides a payment voucher for paying for your license. After making the payment, collect your license, and set up your business.
There are so many advantages of establishing your business in the UAE; the environment is favorable for local and foreign enterprises. Although it can be overwhelming to start a business in a foreign land, the UAE has a simple procedure to set up your economic activities.
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