No matter how approachable business setup procedures in Dubai are, for a new entity, understanding the business formation and licence application process can be difficult at times. However, knowing the whole array of steps involved in the process can be extremely helpful. Here’s a quick guide on everything important you should know about getting a business licence in Dubai:
Designate the desired business activity beforehand:
While deciding the nature or industry of your business, you must know that not all business activities are allowed in Dubai, UAE! A few are banned, some are prohibited, and some need specific consent or NOCs. The chosen business activity needs to be approved by pertinent authorities in Dubai. According to the Law No. 13 of 2011, the DED is responsible to decide, regulate, classify, permit and licence all economic activities. However, this is not applicable to freezone and offshore companies.
Select the right jurisdiction for your company formation in Dubai:
No jurisdiction is wrong for business setup in Dubai. Choose one that checks all the boxes. Your business’ scalability, budget, legal structure and commercial activity play a pivotal role in taking the right location decisions.
Figure out the most suitable shareholding structure for your company:
The decided shareholding structure must be in line with the preferred business activity and jurisdiction. The available shareholding structures for company setup in Dubai are:
- Representative Offices
- Branch Offices
- Limited Partnership
- SME Licence
- Joint Venture
- Shared Partnership
- Limited Liability Company
- Sole Proprietorship
- General Partnership
- Partnership in Commendams
- Public Shareholding
- Private Shareholding
Find a reliable local UAE national to partner with:
Try to get into an agreement with a silent partner – so that your business is secure, and its control remains in your hands. More than 2000 commercial and industrial activities qualify for full foreign ownership in Mainland Dubai, UAE. In the case of a free zone business setup in Dubai, you don’t have to share 51% ownership of your business with any Emirati national.
Register your trade name with the DED:
Propose at least three unique trade names as per the UAE standards and submit the list to DED for registration. The trade name should be associated with the licence type. You will receive the trade name registration certificate within three working days or so, which is valid for six months and useful in getting the business licence.
Attain external approvals for business setup in Dubai:
DED grants trade licence to mainland businesses and deals with investors. However, at times you may require special approvals to conduct the intended business operations. Generally, these permissions are seeked from non-governmental & semi-governmental bodies.
Rent or buy a suitable business premise:
Your business must be physically present in Dubai. For that you are required to rent an office with adequate space and get the tenancy agreement. The Real Estate Regulation Authority (RERA) documents and EJARI must be presented to the licencing authority at the time of initial approval and trade licence application
Received initial approval from DED:
You must seek DED’s accreditation on starting your business by submitting a set of required documents. With this approval, you may start your business but still require a trade licence for business setup in Dubai.
Prepare an MOA/LSA for your business setup in Dubai:
Memorandum of Association (MOA) or the Local Service Agent (LSA) are legal documents and should be drafted by your legal advisor. Both these documents must be submitted in Arabic version along with the trade licence application.
Duly prepare the required documents and submit them with the licence application:
Complete the set of documents required for a trade licence following company registration and business licence procedures and submit them with the application. Once approved, within a week, you will get a notification from DED that your licence is ready. Make the necessary payments and collect your licence duly from DED. A list of primary documents and certifications that are required for business setup in Dubai is given below:
- Duly filled-in licence application
- Name reservation certificate
- Initial approval certificate
- Attested LLC agreement
- Governmental forms
- External departments approval
- Tenancy contract
- EJARI registration certificate
- Partners’ visa and passport copies (if any)
- NOC from partners
- Dubai Chamber of Commerce and Industry Registration
- Economy and Commerce Ministry Certification (For Insurance Companies)
- Health Ministry Certification (For Medical & Pharmaceutical Firms)
- Endorsements from Governmental Agencies (For Gas and Oil Companies)
- UAE Central Bank Approval and License (For Financial Institutions)
- Finance and Industry Ministry Certification (For Manufacturing Companies)
There are a number of to-dos after receiving the trade licence to become a full-fledged business entity. These include the processing of visa applications, hiring staff, opening a corporate bank account, buying business insurance, and purchasing a payment gateway amongst others. Knowing the process gives you confidence and prepares you for the next steps ahead, however it doesn’t make business formation in Dubai less time-consuming and tedious. The best way to get it done quickly and cost-effectively is to work with an experienced business setup consultant in Dubai. With a pro business setup advisor by your side, you can avoid wasting your money on unwanted documents and energy on doing things that can be outsourced. Plus, you won’t have any difficulty taking any kind of decisions related to the Offshore Company Formation UAE formation.