Registering a business in Dubai requires following the steps and formalities set by the Dubai government and economic department which are the main authorities that set the rules and regulations for any company registration in Dubai and the Business setup process.
We want to clarify the formalities and the types of business you can setup in Dubai with requirements that all business investors need to meet to register a company and get the business license.
Depending on the type of business, the criteria for a trade license and authorization from various organizations and government departments may vary.
As a result, certain sorts of enterprises, such as financial services, health services, printing and publishing, and food trade, require specific permissions than a typical trading firm.
There are 3 types of business licenses in Dubai
A license will be awarded in one of these categories depending on the nature of the activity a business entity intends to engage in:
1. Commercial License: granted to a business that will engage in any type of trading activity.
2. Industrial License: granted to a business that will engage in manufacturing or any other industrial activity.
3. Professional License: to be given to service providers, professionals, artisans, and craftsmen.
The Dubai Department of Economic Development is the government agency in charge of issuing local Dubai company licenses. This department provides licensing services from multiple locations of Dubai.
Requirements for specific company registration in Dubai
Understanding these requirements will ease the process of opening a company in Dubai and the other UAE Emirates
• The UAE Central Bank has to approve the issuance of licenses to banks and other financial institutions.
• The Finance and Industry Ministry must approve the issuance of licenses for manufacturing and industrial companies.
• The Economy and Commerce Ministry must approve the issuance of licenses for insurance companies and other relevant firms.
• The Health Ministry must approve the issuance of licenses for medical and pharmaceutical products.
• Additional endorsements and approvals from other government agencies may be required for companies engaged in gas or oil production.
• Additionally, the Dubai Chamber of Commerce and Industry has to get involved in the company registration.
Requirements for company ownership in Dubai
UAE government has relaxed foreign ownership law since June 2021 the new law amendment allows a foreign national to setup a business with 100% foreign ownership. Companies that provide consultancy and services which require professional licenses, must appoint a UAE national as a local agent, but the appointed UAE national will not involve in any business activities.
Companies that do not require any local Agent
- A company that is based in one of Dubai’s Free Zones.
- In cases where the law requires that the company has to be owned entirely by locals.
- When a company is owned entirely by A Gulf Cooperation Council (GCC) and he wants to partner with another company owned entirely by UAE nationals.
- In certain activities also, GCC nationals are allowed to open and own 100 percent of the company.
- In artisan or professional firms where total foreign ownership is permitted.
- When a foreign entity establishes a representative or branch office in the UAE.
- Foreign ownership can be 100 percent in the case of a professional license for some professional activities such as architect, doctor, artist, and so on. A local national is required as a local agent.
- Trading and commercial activities after the new law amendment are now 100% foreign ownership and no local agent is required as per new law.
The legal structure of companies in UAE
The choice of business structure is an important consideration in Dubai and the other UAE Emirates when registering a company.
There are 11 business legal structures in UAE as per the federal law
The UAE Federal Law defines the 11 legal structures of business organizations, as follows:
• Sole proprietorship
• Civil Company
• Limited Liability Company (LLC)
• Partnership
• Private Share Holding Company
• Public Share Holding Company
• Branch of Foreign Companies/Representative Office
• Branch of GCC companies
• Branch of Free zone company
• Branch of Dubai based companies
• Branch of UAE based companies
Setting up a representative or branch office of a company
A branch or representative office of a foreign entity in Dubai can be 100 percent foreign-owned. This benefit is granted on the condition that a local agent is appointed. The local agent in question must be a UAE national (or a company 100 percent owned by UAE nationals).
registering a company’s representative or branch office in Dubai is another option you can think about especially for some foreign entities. The Commercial Companies Law governs business registration in Dubai for this option.
After all the facts and details, it is obvious that Dubai company registration and UAE emirates are easy procedures any entrepreneurs.
The steps of registering a company in Dubai
Step 1: Determine your local partner also called Local Sponsor or agent.
This step involves a careful consideration of the services you anticipate from the sponsor.
• Do you want him to help you resolve the process with government procedures, or do you just want his name on the license and nothing else?
• How much annual fees are you willing to pay?
• Having a good relationship with your sponsor eliminates a lot of potential problems.
Step 2: Obtain approval from the Department of Economic Development (DED) for a name and activity. This can be done on a standard application form and submitted to DED.
Step 3: Find a business location and sign a tenancy agreement.
To register a company, all businesses in Dubai are required to have business premises as evidenced by a tenancy contract called Ejari.
Step 4: Create a Memorandum of Agreement (MOA) with the sponsor and submit it to DED.
Step 5: Submit the Memorandum of Association (MOA) and License application of your business to DED, together with all required legal papers and the tenancy contract known as Ejari.
At this point, all fees must be paid. After completing all the process, you should get a license in approximately a week.
Contents