Dubai has long been a global trade hub. And in an effort to attract more investments and businesses, the emirate provides a very conducive environment for entrepreneurs. Hassle free company formation, highly advanced infrastructure, no taxes and easy availability of labour all contribute to the reputation of Dubai as a true business haven.
With its ranking as the first in the MENA region in ease of doing business, Dubai provides many opportunities to both business conglomerates as well as small and medium enterprises. For international companies, a Middle East presence is always an advantage.
Business Formation in Dubai
There are three main options for business formation in Dubai- mainland business setup, offshore business setup and free zone business setup.
In mainland business setup, an expatriate needs an Emirati sponsor who has 51% stake in the enterprise. In free zones, an entrepreneur can have 100% ownership of their company. But a free zone company will not be allowed to do direct trade in the local market. If a person does not want any local trade and only want to protect their assets in UAE, then there is a third option of offshore business.
On Shore Company (Mainland Company)
To register a mainland company, as mentioned earlier, you need an Emirati sponsor with a 51% stake in the company. The company registration process comes under the Dubai Economic Department.
The business type and business activity are broadly categorised into three.
- Professional – Professional and personally offered services come under this category. For example, a management
- Commercial – All retail activities and trade come under this category
- Industrial– This category includes the sale of manufacturing or processing goods or packaging products.
Multiple business activities can be selected under one license.
Licensing for Mainland Company:
Dubai Department of Economic Development will issue the licenses for all three categories. However, certain ministries and other authorities’ approval is required for some categories of business, few are given below:
- Central Bank of the UAE approval for Banks and financial institutions.
- Insurance Authority approval for Insurance companies and related agencies.
- Ministry of Health approval for Pharmaceutical and medical products.
- Municipality approval for Contracting and Building Maintenance and some other activities.
- Road and Transport Authority approval for Transportation and vehicle rental activities
- National Media Council approval for Printing, publishing and advertising activities.
- Dubai Maritime City approval for Cargo Clearing, Cargo packaging, Canal dredging contracting and Fishing cages manufacturing activities.
- Department of Tourism and Commerce Marketing (DTCM) approval for Travel and tourism activities.
- Dubai Sports Council for Gymnasium Club activity.
- Community Development Authority approval for Social Club
Businesses engaged in oil or gas production and related industries will have more detailed procedures for getting approval.
- Financial guarantee (issued by a bank operating in Dubai) is required for practising some trade activities like jewellery and insurance.All commercial and industrial businesses in Dubai should be registered with the Dubai Chamber of Commerce and Industry.
Tourism Companies: A deposit to be made in Bank for Inbound Tourism Dh 100,000
Deposit to be made in Bank for Outbound Tourism Dh 200,000
Refund will be done from the bank only on license cancellation.
Travels: Deposit of Dh100,000 to be made at Department of Tourism & Commerce Marketing. This deposit will be refunded only after the license is cancelled.
Building Contracting Companies: During initial license issuance for Building Contracting Company, Dh10,000 has to be paid extra at the Department of Economic Development.
General Trading: During initial license issuance for General Trading License, Dh15,000 has to be paid extra at the Department of Economic Development.
Customs Broker: Deposit of Dh50,000 has to be deposited at Dubai Customs which will be returned only upon license cancellation.
RTA Activities (following fees to be paid for RTA initial approval): For activities that need RTA approval, these are the charges:
Rent a Car: Dh5000
Bus Rental: Dh1000
Passenger Transport by rented Buses: Dh1000
Telephones & Telecommunications Equipment Trading: A One-time fee of Dh5500 has to be paid at Telecommunications Regulator Authority (TRA).
Security Service: Property guard & Surveillance Services, Party security & private guarding services: Initial approval from Department of Protective Systems, Dubai. Tel. 04-2048312
Oilfield & Natural Gas related activities: Initial approval from Ruler’s Court
Business Setup in Free zone
Any expat entrepreneur can retain 100% ownership in any company set up in the free zones.
Dubai offers great business opportunities. But it is essential to make the right decisions and pick the right business setup suitable for your business activity.
You can always contact us at Prime Global Business Services with your queries and we can help you set up your business without any hassles.