How to start a business in Dubai

Setting up a business in Dubai is not complicated and takes around a week once all the legal procedures have been taken care of. 

Luxhabitat takes you through the prime steps that are needed to be taken while setting up a business in Dubai.

1. Decide The Activity Of The Business

The type of your business and the activities that you want to carry out will determine the type of license that you would require. You will also need to determine whether the company is an establishment, a branch of a foreign company or a limited liability company. The license can be a commercial, a professional or an industrial one but activities such as food trading, jewellery trade, veterinary activities and legal consultancy require further approvals from other governmental departments.

The Department of Economic Development (DED) in Dubai features over 2100 activities for you to choose from. The free zones, however, have their own regulations and approval formalities,

What you should also keep mind is that there are certain kinds of business activities that are not allowed in Dubai. Therefore we highly recommend you to check with the relevant authorities beforehand.

2. Ownership Of Your Company

Foreign ownership is one of the most common challenges that expats face when they decide to set up a business in Dubai. Any business that falls under commercial or industrial licenses in the mainland of the city can only be 49% owned by an expat. The rest of the 51% of the stake must be owned by a local sponsor. 

As an expat, if you want 100% ownership of your company, then you will have to obtain a license from one of the many free zones in Dubai. You should also check whether the activity that you want to carry out is catered by the respective free zone.

3. Legal Structure Of Your Company

The location of your company and the type of your business determine the majority of rules and regulations that your company is subjected to. 

If the company that you plan to set-up is a legal consultancy firm, it can either be a branch of a company or a stand-alone company. If you are a sole proprietor, you will not be allowed to take up the activity. Free zones, however, have their own rules and regulations.

4. Registering A Trade Name For The Company

Choosing a unique trade name for your business, that differentiates it from other entities is one of the main parts of the legal procedures that you will need to take care of while starting a company. Ideally, the trade name of the company should indicate the nature of the business activity that it will carry out.

The trade name should not be a one that has been previously used or currently registered in the same business industry, it must not violate any public law and order, it must not be the same as any local or international trade name registered with the Ministry of Economy, and it must not be misleading to the consumer/clients.

5. Getting An Approval

Once you have registered a trade name and obtained a certificate, you will require a preliminary approval from the DED that will allow you to procure other necessary approvals. You should keep in mind that the preliminary approval is valid for 3 months from its date of issuance. However, a new certificate must be obtained before continuing to the next step if the existing one expires.

6. Licensing

Once the necessary approvals have been acquired, the business license should be collected. The documents must be translated into Arabic by a legal translator and attested by the ministry of justice.