Things To Consider Before Setting Up Business In UAE
Starting a business in UAE involves planning, conceptualizing, research, budgeting, set-up, and decision-making among other things. As a business owner, one would want to make sure to have covered all your legal bases to avoid any fines, lawsuits, and other formalities. Below are some important steps to start a business in the United Arab Emirates.
Select a Business Activity
When selecting a business activity for your venture, practicality of the chosen activity in relation to the UAE market is must. A thorough research on the feasibility and profitability of the activity should be done before deciding to start a business in UAE. There are four main types of business structures as below:
- Sole trader – A business started by a single person
- Partnership – Two or more individuals running the business
- Company – A distinct legal entity from its shareholders
- Trust- An entity holding the assets of the business for the benefit of others
A business setup consultant can run you through the pros and cons of these structures to help make a wise decision.
Get approval for Company Name and Activity
The Department of Economic Development (DED) must approve the trade name for company before one can move ahead and start the process of company set-up in the UAE. Selected business activity also goes through approval during this stage along with company name. Once approvals are received, one will have to submit documents to apply for UAE trade license.
Apply for your Trade License
One can apply for any of these trade licenses if you plan to start a business in UAE mainland. The licensing structure in UAE free zones is different and is dependent on the business activity company decides to proceed ahead. There are four types of trade licenses in the UAE, also called business licenses:
- Commercial License
- Professional License
- Industrial License
- Tourism License
Select the Jurisdiction
Economic zones are also called jurisdictions. Each jurisdiction has its own set of laws and regulations pertaining to business setup. The UAE market is divided into different economic zones – Mainland, Free Zone, and Offshore. Selecting a jurisdiction for business depends on business requirements and business activity.
Register Company
Company registration and licensing are simultaneous process. In this step, one will have to get all the approvals from relevant government authorities as requested by the Department of Economic Development. One thing need to understand is that entire process of documentation and approvals goes through various stages. The documents required are different for each company type and activity.
Rent an Office
Depending on business needs, one can choose to rent an office unit or go for a shared workspace in a business center. An office space can also determine the number of visas one can request for from the Department of Economic Development.
This blog is written by Ms. Heena Arora, Partner Relation Executive at Flyingcolour Business Setup, VAT and Accounting Services, Dubai. We at Flyingcolour help businesspersons to setup a business in the UAE effortlessly. Our expertise can help you right from company formation to providing office space. Contact us today at +971 4 4542366 or email us at info[at]flyingcolour[dot]com for more information.
*Please Note: This article was published on 17th December, 2020. The information provided in the article is based on the policies and rules applicable at the time of writing it. Talk to one of our consultants for any recent update or change.
