For those of us already living and working in the UAE, the decision to do business here can seem like something of a no brainer. For those coming from overseas however, the processes, customs and quirks of business in this part of the world can be a little daunting and potentially even off-putting.
However, the reality is, the UAE is an incredibly welcoming and supportive business environment. That’s one of the many reasons why over 20,000 new businesses launched in Dubai alone last year, with many of these registered by overseas entrepreneurs. In fact, somewhere between 80% and 90% of the UAE workforce are foreign nationals.
Are you wondering how to start a business in Dubai? If so, here we discuss everything you need to know about successfully doing business in Dubai.
Benefits of starting a business in Dubai
There are plenty of reasons why thousands of entrepreneurs the world over flock to the UAE and Dubai to do business. These include:
Low tax: The UAE still proudly boasts zero tax on both personal and corporate incomes. The only significant tax to be aware of here in the Emirates is VAT – introduced in January 2018 – which stands at a flat 5%.
The UAE still proudly boasts zero tax on both personal and corporate incomes.
Vibrant economy: The Emirates is home to the second largest economy in the Arab world, with a GDP of around AED 692bn, behind only Saudi Arabia. And it is just as diverse as it large, with numerous industries from healthcare and hospitality to technology and trade in the ascendance in this part of the world.
Great quality of life: The UAE placed 23rd in the 2017 Best Countries Index, only slightly behind Spain and Ireland and ahead of Portugal and Greece, among others.
Startup support:. The Emirates is home to many startup incubators and funding initiatives designed to accelerate business growth. The AED 2bn Mohammed Bin Rashid Innovation Fund, for instance, helps UAE companies finance projects and offers expert guidance and support to turn business ideas into reality.
Establishing a business in Dubai
The company formation process in the UAE is incredibly straightforward. You can register a business here in just six simple steps:
1. Choose an activity: The first thing to do before registering your business is decide on the activity, or activities you wish to undertake. Your chosen activities can affect where you can set up, so this needs to be decided upfront. The Dubai Department of Economic Development lists over 2,000 activities which your business can fall under.
2. Choose a location: Next you’ll need to decide whether you are going to launch in the mainland or in a free zone. If you opt to set up in a free zone, you’ll benefit from 0% corporate and personal tax, 100% company ownership, 100% repatriation of capital and profits, no currency restrictions, and 100% import and export tax exemption. However, if you wish to trade directly with the local market in the UAE, you’ll need to work with a local partner who will charge a fee.
On the other hand, if you choose to set up in the mainland, you are free to trade directly with the local market. However, unless your business activity falls under professional services, you won’t be able to retain 100% ownership of your business as an overseas entrepreneur. Once again, you’ll need to work with a local partner who will hold a 51% stake in your business, however they usually have no say in company decision making and profits are not split down these lines.
3. Choose a company name: Aside from the usual challenges of choosing a name – finding one that’s both unique and memorable, for instance – you’ll also have to adhere to the UAE’s strict naming conventions. While the rules here are comprehensive, they are very easy to stick to. In short: offensive language is forbidden, company names cannot contain religious references, or indeed references to any known organisations (anything from ‘FBI’ to ‘Mafia’). Only full personal names can be included in your company name – meaning both first name and last name are required if you are using your personal name for your company name. When it comes to your company name in different languages, all names must be written as they are sounded out, rather than translated.
4. Apply for a licence: Whether you’re setting up in a free zone or the mainland, you’ll usually only require a few standard documents: completed application form, shareholder passport copies and the like. Some free zones may also require you to provide a business plan.
5. Open a bank account: With your licence in hand, you are free to open a UAE corporate bank account. You can choose from a host of international, local and Islamic banks based here in the UAE.
6. Apply for your visa: The final step in the business set up process is immigration and visa processing. The visa application process – both for you and any relevant dependants – is incredibly straightforward. A visa application consists of four stages: entry permit, status adjustment, a medical fitness test, then Emirates ID registration and visa stamping. A company formation specialist can guide you through this process.
The visa application process – both for you and any relevant dependants – is incredibly straightforward.
Working with Virtuzone
Whatever your reasons for starting a business in Dubai – and whichever setup you choose – Virtuzone is on hand to help you with every step of the process from choosing a business activity and company name, to registering with the relevant authorities, opening corporate bank accounts and processing visa applications.
We’ll take care of all the heavy lifting for you. All that is usually required on your part is some basic documentation – passport copies and the like – and a few hours of your time. In some cases, it may even be possible to register your business without visiting the UAE.
Setting up your own business has never been easier. Virtuzone takes care of it all so you can focus on what matters – building your business. For more information about company formation in the UAE mainland or free zones, please call us on +971 4 457 8200, send an email to firstname.lastname@example.org, or click here.