Dubai, a bustling metropolis, has become the sought-after destination for entrepreneurs worldwide. Each year, an increasing number of foreign investors and businesspersons flock to this vibrant emirate to capitalize on its favorable business environment. Notably, recent developments such as the long-term visa scheme have further incentivized foreigners to establish roots in the UAE, offering extended stays and even retirement options.
Moreover, the allure of setting up a company in Dubai extends beyond residency, as non-residents can also initiate businesses with ease, managing operations remotely from anywhere across the globe with the right guidance. Delve into this guide to discover the essential steps for starting a business in Dubai as a foreigner.
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Is it possible for a foreigner to start a business in Dubai?
Certainly! Foreigners are welcomed to start businesses in Dubai, with many already taking advantage of this opportunity. A large portion of Dubai’s population comprises expatriates who have established their own ventures. The emirate actively encourages foreign investors and entrepreneurs, offering various benefits such as tax exemptions, streamlined procedures, and a stable political environment. Setting up a business in Dubai is facilitated by setup agents and company formation specialists who assist with licensing, visas, and incorporation processes. In summary, expatriates can indeed register new businesses in the UAE, benefiting from its thriving economy and business-friendly environment.
Things to Consider before starting a business in Dubai as non-resident or a foreigner
Before delving into the process of starting a business in Dubai as a foreigner, it’s essential to grasp the operational landscape of the emirate.
Why Choose Dubai?
Dubai stands out as the Middle East’s economic nucleus, drawing global attention. Its strategic location facilitates seamless connectivity with suppliers across the Gulf, Asia, and Africa. Additionally, its expatriate population, comprising 90% of residents, fosters a diverse and cosmopolitan atmosphere.
Furthermore, Dubai’s robust infrastructure, secure living conditions, tax-friendly policies, and forward-thinking leadership, which champions technology and innovation, create an ideal environment for entrepreneurial success. Thus, establishing a business in Dubai as a foreigner offers the prospect of thriving in a lucrative metropolis.
Corporate Structure
As a foreigner starting a business in Dubai, one of your initial decisions involves selecting the appropriate corporate structure. This choice hinges on factors such as your business’s nature, purpose, and operational requirements. The two primary corporate structures available are Limited Liability Company and Sole Establishment.
Jurisdiction
In Dubai, entrepreneurs can opt to establish their businesses either on the mainland or within various free zones. Understanding the distinction between mainland and free zones is crucial for foreign business owners.
a). Mainland:
Opening a company in Dubai Mainland grants access to both local and international markets. The process of company formation is systematic, with the possibility of obtaining a business license within a day.
b). Free zones:
Setting up a business in Dubai free zones offers favorable conditions, particularly for new ventures. Notable free zones in Dubai include Jebel Ali Free Zone (JAFZA), Dubai Airport Free Zone (DAFZA), Dubai Media City, Dubai Silicon Oasis, Dubai International Financial Center (DIFC), Dubai Healthcare City (DHC), and Dubai Multi Commodities Center (DMCC). However, rules, regulations, and setup formalities may vary across different free zones, as each operates under its own authority.
Steps to Start a Business in Dubai as a Non-Resident
Starting a business in Dubai as a non-resident can be a straightforward process if you understand the regulations and requirements set by the government. Here are the steps to help you get started:
1. Determine your business type:
Decide on the type of business you want to establish, whether it’s a sole proprietorship or a limited liability company (LLC), which is the most common structure for businesses in Dubai.
2. Choose a trading name:
Select a unique and appropriate name for your business that reflects its activities and complies with the guidelines set by the authorities. Consult with legal advisors to ensure the name is available and suitable.
3. Obtain a license:
Acquire the necessary business license from the relevant free zone authorities or the Department of Economic Development (DED) depending on your chosen business location.
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4. Register and incorporate your business:
Complete the registration process by submitting the required documents, such as identity proofs, trade license, permissions, and opening a bank account. This step establishes your business as a legal entity in Dubai.
5. Obtain a business visa:
Apply for a business visa to facilitate your entry and exit from the country. A business visa also allows senior business staff to apply for residency. Non-residents can also apply for long-term visas for themselves and their dependents. Contact the local embassy or relevant authorities to obtain the necessary visas.
Types of Business Licenses in Dubai
The Department of Economic Development (DED) in Dubai oversees the issuance of all business licenses in the emirate. Depending on the nature of your business, there are four main types of licenses to consider:
a). Commercial License: Commercial license is essential for businesses engaged in trading activities within Dubai.
b). Professional License: If your business provides services rather than trading goods, you’ll need to obtain a professional license.
c). Industrial License: For businesses involved in manufacturing or packaging activities, an industrial license is required.
d). Tourism License: Companies operating in the tourism sector undergo scrutiny not only by the DED but also by the Department of Tourism and Commerce Marketing (DTCM), which issues the tourism license.
Cost of Starting a Business in Dubai as an Expat
The cost of starting a business in Dubai as an expat or foreigner can vary depending on several factors, including the type of business, license fees, location, and other required documentation. For instance, the trade license fee typically ranges from AED 15,000 to AED 25,000, approximately, depending on the specific region.
Additionally, if you choose a foreign name (non-Arabic) for your company, there may be an additional fee of AED 2,000. It’s important to consider these costs and factor them into your budget when planning to start a business in Dubai as an expat.
Government Approvals for Business Startups in Dubai as a Foreigner
When starting a business in Dubai as a foreigner, certain government approvals are required for specific types of businesses. For example, if you plan to open a restaurant in Dubai, you will need to obtain a permit from the municipality that ensures compliance with food safety regulations. This permit ensures that your restaurant meets the necessary health and safety standards.
Similarly, if your business involves industrial activities, such as manufacturing or production, you will need to lease or rent a factory space that meets the minimum area requirements specified by the relevant government authorities. This ensures that your operations align with the regulations and guidelines set for industrial activities in Dubai.
Consulting with local authorities and engaging with business setup specialists can help ensure that you have a clear understanding of the necessary government approvals and the process to obtain them as a foreigner starting a business in Dubai.
Can a non resident start a business in Dubai?
Yes, non-residents can start businesses in Dubai. Foreign entrepreneurs are permitted to retain full ownership of their businesses in Dubai and the UAE, enjoying advantages such as low corporate taxes and the absence of personal income tax. Additionally, non-residents can establish businesses on Dubai mainland by partnering with a local sponsor.
What are the benefits of starting a business in Dubai as a foreigner?
#1. Business-Friendly Policies:
Dubai offers a supportive regulatory environment conducive to business growth and innovation.
#2. Access to International Markets:
Situated at a strategic crossroads, Dubai provides easy access to global markets across the Middle East, Asia, and Africa.
#3. High-Quality Lifestyle:
Entrepreneurs in Dubai benefit from a high standard of living, world-class infrastructure, and modern amenities.
#4. Low Tax Rate:
Dubai imposes low corporate taxes and does not levy personal income tax, reducing financial burdens on businesses and individuals.
#5. 100% Foreign Ownership:
Foreign entrepreneurs can retain full ownership of their businesses, fostering autonomy and control over operations.
#6. Versatile Economic Sector:
Dubai’s diverse economy accommodates businesses across various industries, offering opportunities for growth and expansion in multiple sectors.
Start your business in Dubai with Company Setup
Looking to start a business in Dubai as a foreigner? Consult with Company Setup Consultants for expert guidance. Our experienced advisors will assist with corporate structure, jurisdiction, and simplify procedures. Get a free consultation via phone: +971582595164, WhatsApp: +971582595164, or email: info@companysetup.ae .
