Dubai is in latest trend list for all entrepreneurs all over the world. Having a full fledge business in Dubai is becoming a common dream of all business providers. Dubai being commonly known as business hub of the world also brings challenges along for one to setup a successful business practice covering all grounds.
You may be a Business entrepreneur who wants to expand business in Dubai referring advantages of the city which is optimal taxation laws & other business economic benefits. There are even a conflicting information available all over the internet which would lead you in having lot of confusions & delays. On safer side it is much better to go further with an expert advisory from well known & experienced Business Consultants. This will not only help you in getting the right procedures & government protocols but also will increase the work ability of whole portfolio having fast track execution on documents screening till license.
To highlight more on the whole process of setting up a MAINLAND COMMERCIAL & PROFESSIONAL license we are here by elaborating the whole information which will help you in speeding up the whole process of company incorporation in Dubai Mainland. Going ahead you can always choose to contact us for a smooth start of your process.
Steps 1 : DEFINE YOUR BUSINESS:
Define your business by taking time to choose three key factors of any business which will than determine the entire licensing process.
Currently Dubai offers plenty of opportunities for foreign investors, all you need is get acquainted with various facts associated with company incorporation or Business setup in Dubai.
Steps 2 : HIRE AN EXPERIENCED CONSULTANT COMPANY
In Dubai where the government rules & regulations are prone to changes in order to meet the international standard, Before you actually setup your desired business & start your operations in the country, you will be required to deal with systematic activity based licensing process to obtain a valid permission from Dubai economic department. Moreover these licenses also have corresponding fee structure & may have different requirements from government compliance for you to complete. Hiring a Business advisory from the start will help you in sorting out all above hurdles comfortably.
STEP 3 : CHOOSE YOUR LICENSE TYPE
There are actually 3 kinds of licenses DED issues covering all business activities. Legality of the each license is depending on the nature of business activity you choose.
• COMMERCIAL LICENSE:
This is the license you need if you are planning to conduct a trading business. For Example : Supplying goods like garments, textile, dry goods & any other consumer supplies.
• PROFESSIONAL LICENSE:
This license is for individual or group that would like to offer their expertise as services to the general public. For Example: Professionals (lawyers/Doctors/Auditors/Management Consultants/Business Consultants), artists, crafts, Fashion designers would fall under this license.
• INDUSTRIAL LICENSE:
This is the license issued to companies that will engage in manufacturing or other types of industrial activities. For example: Manufacturing of medical equipments or Textile manufacturing etc. While applying for these licenses applicants will transact with the Department of Economic Development in Dubai (A government entity taking care of the issuance of various licenses & permits of Businesses). Having plenty of Business opportunities available in Dubai, all you need is to locally registered LLC Business with a UAE national shareholder or if it is a professional business with UAE national Service agent.
STEP 4 : KNOW YOUR CORPORATE UAE NATIONAL SHAREHOLDER/SIDE AGREEMENT BEFORE DEAL
As per UAE norms UAE National Share Holder will share 51% holdings of you business on papers, though an Internal SIDE AGREEMENT can be made while dealing which than protects your rights of having full control of your business with you agreeing upon a certain amount annually to the UAE National Share Holder. A Corporate UAE National as a 51% shareholder must be taken on License to obtain freedom of operating your business from anywhere in Dubai city.
- Corporate UAE National shareholder agreement allows more transparency & clarity of deal between UAE National & foreign entrepreneur.
- At the time of any signature requirements from on the government papers, corporate UAE national allows you to omit any delays, ignorance or absence of UAE National
- In case of any unforeseen circumstances with UAE national, Business will not get adverse effects if it is under corporate structure.
In short corporate structure gives better understanding to international client/agencies along with better protection for business succession Planning. Lastly you can always ask clarity on support & security your UAE National can bring before you finally sign the Deal with Business Consultant.
STEP 5: BOOK TRADE NAME:
You can always choose to have your desired trade name subject to the availability & legality of that particular name with government department. Your trade name should signify the nature of your business activity. For example: In case of Ready made garments License, Name should be like Mohan ready made garments trading LLC. Our Business Consultant will help you in getting trade name approval.
STEP 6 : SCREENED THE DOCUMENTS REQUIREMENT FOR INITIAL APPROVAL:
In order to proceed further for initial approval from DED, consultant will give you the list of documents required based on the business activity selected by you. Majorly the basic documents are as follows:
- Registration & licensing Application form & proof of reserved trade name.
- Photocopy of the applicants identification.
- Photocopy of applicant’s naturalization identification.
- For Expats: NOC from the applicant’s current sponsor.
- For applicants aged under 21, permission from the court can be obtain for them to practice business.
- Depending on the type of company you willing to setup, you may be asked to present some additional documents as well.
STEP 7 GET INITIAL APPROVAL:
This step confirms your application fulfills the standard requirements & ready to be processed.
STEP 8 EXTERNAL APPROVALS/ SPECIAL APPROVALS IF ANY:
Some Business activities licenses are also subject to external approval from specialized related authorities like:
- Cargo Cleaning, Packaging, Fishing cages manufacturing activities – Dubai Maritime City.
- Real Estate License approval – RERA
- Medical License – DHA
- Tents, Awnings & tarpaulin Manufacturing/Contracting & Building maintenance – DUBAI MUNICIPALITY
- Travel & Tourism – DTCM (Department of tourism & Commerce marketing)
- Printing, Publishing & Advertising Activities– NMC (National Media Council)
- Social Club Registration & Licensing – Community Development Authority
- Transport & Vehicle rental activities – RTA (Road & Transport Authority)
- Training Institutes & Educational Establishments: KHDA (Knowledge & Human Development Authority)
- Banks & Financial Institutions – Central Bank of Dubai
- Insurances – Insurance Authority
- Gym & Fitness Centers – Dubai Sports Council
- Oilfield & natural Gas Activities : Ruler’s Court
Your Business Consultant will help you in identifying whether there is any external approval required for your Business license or not.
SPECIAL FEES / DEPOSITS
For above special approvals there applies special additional fees too from respective Departments:
For Inbound Tourism AED 100,000 is to be deposited in a UAE Bank
For Outbound Tourism AED 200,000 is to be deposited in a UAE Bank
These deposits are irrevocable till the license cancelled.
For travel agency AED 100,000 is to be deposited at DTCM which is irrevocable till license cancellation.
BUILDING CONTRACTING COMPANIES:
For Building contracting company license AED 10000 additional fees is charged by the Department of Economic Development when the license is issued initially.
For General Trading incense AED 15,000 additional fee charged by the Department of Economic Development when license is issued initially.
AED 50,000 is to be deposited at Dubai Customs. The deposit is irrevocable till the license is cancelled.
Following fees to be paid for RTA initial approval:
Rent a Car – AED 5000
Bus Rental – AED 1000
Passenger Transport by rented Buses – AED 1000
Initial approval from the Department of Protective Systems
TELEPHONE & TELECOMMUNICATION EQUIPMENT TRADING:-
AED 5500 to be paid at TRA
Please also be informed that above information is subject to change at the discretion of the relevant authority. Our Business Consultant will help you in fetching all updated information from related authorities prior to start your licensing process.
STEP 9 : LEASES THE PROPERTY AS PER LICENSE REQUIREMENTS:
Now you can lease the premises and register your tenancy contract with Ejari & Dewa before submitting it to for business incorporation.
STEP 10 : FINAL SUBMISSIONS:
At the time of final submission all required legal documents (Partner’s agreement & sponsor agreement) including your tenancy contract, internal approval receipt & external approval submission if required.
BRANCH OF A COMPANY:
Branch of Foreign Company or Representative office
- A branch of a foreign company must have a manager to represent the company and to open the branch, appointed by the Board of Directors.
- The branch will become the company’s Dubai headquarters & its business shall be subject to the provisions of the law of Dubai & UAE.
- The Branch can conduct selected commercial & professional activities but cannot import goods into Dubai; this will be managed by a local trade or commercial agency.
- The Branch office must have an independent budget, its own profit/loss statement & must appoint UAE accredited auditor.The branch of foreign company also require a Local Service agent, who can be a UAE National or a Company owned by one or more UAE Nationals.
- A representative office for commercial activities is not a business structure in its own right but it is a business activity that a branch can conduct. It has its own criteria, which includes the authorization to promote & market the parent company’s business operations.
- A representative office requires a Local Service Agent, Who can be UAE National or company owned by one or more UAE Nationals.
Branch of Dubai Based Company:
A branch of a Dubai based Company must undertake one or all of the activities included in the main company license. For a company with multiple branches, each branch can undertake different activities as long as they were all included in the original license for the main company.
Branch of UAE Based Company:
A Branch of a UAE based company must undertake one or all of the activities including in the main company license. For a Company with multiple branches, each branch can undertake different activities as long as they were all included in the original license for the main company.
OVERVIEW/ LATEST FACTS
As per latest updates recorded from Department of Economic Development that more than 24,746 BRL (Business Registration & licensing) transaction were concluded & 1,666 new business licenses were issued in November 2017. On above these licenses Commercial licenses topped the list with 59.2%, Professional licenses stood at 38.5% & remaining includes industrial & tourism licenses. Dubai Economy also registered strong activity in November 2017, Completing 19,997 transactions & underlining their role in facilitating service delivery.
Lastly To ensure the smooth process of Business licensing, It is always advisable to have an experienced consultant guidance to overcome the complexities of documents screening & government compliance. Flying Colour Business Setup Services is the leading Business Setup in Dubai from past 15years. Being sustaining this industry since long, we are well experienced & got great exposure in dealing with all kinds of simple to complex Business licenses. Please take a Minute to discuss your Business plan with our Business Advisory, We will be really happy to help you.
This blog post is written by Ms. Shweta. Feel free to call our Business Adviser today for a quality consultation relating your Business queries. Please send inquiry to info[at]flyingcolour[dot]com or call +971 4 4542366.