HOW TO START A BUSINESS IN DUBAI
There are several attractions for business people in Dubai, such as 0 % income tax and its geographic position within the significant European-American time zone. Do you have a business idea and want to set up a Business in Dubai? At GCS Group, we use our well-tested approach, which will get your product out fast. Our proven approach makes business setup hassle-free, and you can easily take advantage of all Dubai offers.
Everything you need to know about how to start a business in Dubai
Setting up a business in Dubai is fairly straightforward, but there are complexities and considerations. Whether you decide to handle the process on your own or call upon business setup experts specialists for a hassle-free setup, remember to ask experts: What would be some good ideas?
We’ve also got a great deal of experience helping over 60,00 entrepreneurial clients start their businesses in Dubai and have put together the definitive guide to starting a business here. Our comprehensive guide enables you to sail through the journey clearly and make prudent choices every step of the way.
Why start a business in Dubai?
Dubai and the UAE provide very friendly, conducive business environments, with more than 20,00 new businesses launched Downtown alone last year, many by immigrants. Between 80 % and 90 % of the UAE workforce are foreign nationals.
Entrepreneurs worldwide are drawn to the UAE and Dubai for numerous compelling reasons:
- Low Tax: The UAE has a 0 % tax rate on personal and corporate incomes, with VAT the only introduced tax at a flat rate of 5 % from January.
- Vibrant Economy: The UAE is the second-largest economy in the Arab world. It’s a wealth of economic diversity. Business people can participate in diverse industries such as healthcare, hospitality and catering, technology, and trade.
- Quality of Life: Ranking 23rd in the Best Countries Index, people have a high quality of life, closely behind countries like Spain and Ireland.
- Startup Support: The Emirates houses many incubators for startups and funding schemes, creating an atmosphere conducive to faster business development.
As for the future, business in Dubai looks bright. According to the International Monetary Fund (IMF), the UAE is expected to lead the pack for a reasonable increase of 2.5 % this year in terms of economic growth. It surpasses forecast growth of 0.4 % for the region’s largest economy, Saudi Arabia.
For those interested in starting a business in Dubai, don’t worry. Company formation within the city can be easy if you follow the steps outlined herein.
How to start a business in Dubai – The Company Formation Process
1. Choose an Industry
The right industry is the first step toward business setup in the UAE. Although everyone is eager to get straight into the setting up procedures, you need your base covered right from Day 1: What do you want to be?
Dubai and the UAE have specialized areas for various business activities. Some free zones also specialize in media, finance, or tech sectors. For example, Dubai Media City is a free zone covering media work, where global heavyweights like the BBC and CNN rub shoulders with Thomson Reuters. Similarly, DIFC is home to many of the world’s largest financial services companies, including Credit Suisse AG, Goldman Sachs International (GS International), and Morgan Stanley.
Some free zones were designed to serve specific industries, but several have evolved into more general business hubs. Besides restrictions, see also the advantages of being close to other businesses in your same business and examine transportation links. If your business involves a lot of imports and exports, choosing a free zone near an airport or port is strategic.
In the UAE, many sectors do very well in business. Thus, businesses established in 2022 and beyond that contribute to this vision stand well positioned by their commitment to diversify from the oil economy.
2. Choose a Location
The next big decision is whether to set up your business on the mainland or in a free zone. Here’s a breakdown of the key considerations:
Free Zone:
If you choose to set up in a free zone, you can enjoy various benefits, including:
0% corporate and personal tax
100% company ownership
Repatriation of 100 % capital and profits.
No currency restrictions
100 % import and export tax exemption.
But if you want to deal directly with the UAE market, then that will involve interaction between mainland companies and perhaps a fee.
Mainland:
Choosing the mainland means you can trade directly with local and international markets. But if your business doesn’t fall under professional services, you must join forces with a local partner who will be positioned to hold 51 % of your company shares.
For mainland businesses, GCS Group offers a Local Corporate Nominee Shareholder as the local partner. With this arrangement, foreign business owners are able to maintain 100 % control over the operations and finances of their mainland companies.
3. Choose Your Company Name
Choosing the right name for your company in the UAE begins with following naming conventions. But make sure that when you’ve decided on a company name, it conforms to legal requirements. Here are some essential guidelines:
- Avoid Offensive Language: No offensive names are allowed.
- Religious and Political Sensitivity: Company names using Allah, religious figures, or political groups are banned.
- Personal Names: If using a person’s name to identify your business, that individual must be either a partner or owner; you may not use initials or shorten the first and last names.
See our detailed guide here for a complete tutorial on choosing company names.
4. Complete the Incorporation Paperwork
As you progress in your journey to start a business in Dubai, the next crucial step is dealing with the necessary paperwork. Here’s what you need to consider:
- Application Process: Complete an application for your chosen company name and activity. This will be submitted to the relevant government authorities with copies of shareholders’ passports.
- Additional Requirements: Some free zones may require extra documentation, such as a business plan or a Non-Objection Certificate (NOC) from your current sponsor, confirming your permission to establish another business in the UAE.
- Mainland Companies: Mainland companies must meet specific capital requirements detailed in a Memorandum of Association.
- Registration Process: Contact the Department of Economic Development in your chosen emirate to register your business activity and trade name. Submit the necessary documentation, and once processed, you’ll be issued your company license.
Navigating this paperwork can be complex and time-consuming. Many find assistance from GCS Group invaluable at this stage. Our expertise can save you time and money, making the process smoother and more efficient. If you’re averse to intricate paperwork, consider leveraging our services for a hassle-free experience.
5. Apply for a License
Once the government handles your application, it will issue you a company license. Regardless of where you set up your business, you will generally require a few basic documents, including the completed application form and copies of shareholder passports. Some free zones need a business plan as well.
6. Open a Bank Account
Once your processed paperwork returns, you’ll have everything needed to open a corporate bank account. The UAE hosts a variety of banks, both local and international, such as:
- Emirates NBD
- Abu Dhabi Commercial Bank
- Commercial Bank of Dubai
- Noor Bank
- Emirates Islamic
- Mashreq
- RAKBANK
- Ajman Bank
- Global names such as HSBC, Citibank and Barclays
Selecting an appropriate bank depends on what you want. Firstly, you must have a bank account before trading in the UAE.
Opening a UAE Business Bank Account
Establishing a business bank account in the UAE usually takes two to four weeks. The bank will inquire about:
- Your primary business areas
- Anticipated currency volume
- Total deposits
- Revenue levels
- Main customers and suppliers
After you get the documentation from the government, you’ll have all that is needed to go and see a bank of your choosing.
7. Apply for a Visa
Congratulations on reaching this stage! Getting a visa is the last in learning how to start a business in Dubai. When applying for your visa, many free zones also accept applications from staff and dependents, but this number is determined by which free zone you choose.
As for spouses, children, maids, or drivers’ visas, you should seek advice from an expert. It determines the practicability of your desired free zone and whether you satisfy all criteria to live there.
Assuming all requirements are met, the process comprises four simple stages:
- Entry Permit
- Status Adjustment
- Medical Fitness Test
- Emirates ID Registration and Visa Stamping
A mainland company is not limited to the number of visas it can apply for. However, free zone companies face restrictions that differ by different zones.
After completing these eight steps, you’re ready to launch your business in Dubai!
Let’s do Business!
Once these steps have been taken, your business is ready to begin. This has indeed been a successful step; according to the World Bank Ease of Doing Business 2018 rankings by region, setting up a company in the UAE was ranked number 16 out of all countries globally. By comparison with many other regions around our earth today, this is definitely testimony that there exists true efficiency when it comes to forming companies here. Now, on to the entrepreneurial adventure in the UAE!
How to Start a Business in Dubai: Business Etiquette in the UAE
To establish a business in Dubai, you must learn the ropes in this multi-faceted, bustling center. Here are some valuable tips to avoid pitfalls:
DO: Dress Up Properly, Be Polite, and Smile
Finding a balance between brand consciousness and cultural sensitivity is important in Dubai. It is necessary to dress with intelligence, decency, and elegance. If crystal clear in meetings or finding a local sponsor, men especially are encouraged to wear suits and ties. One must always maintain a cheerful and friendly manner, as Dubai needs an air of happiness.
Knowing how to relate with the local Emiratis is essential. Make introductions respectfully, observe social hierarchies, and carefully direct your speech toward people. Do not begin to stick out your hand unless you firmly believe that the opposite gender is about to do so first. Be sure always to use your right hand.
In business, avoid plunging right into things. Before jumping into business, take a few minutes to ask about the other person’s health, family, and goings-on for the day. Patience and small talk are valuable in helping forge relationships and the possibility of future business alliances. For example, remember not to start talking business immediately and try not to be as blunt. Business etiquette in Dubai is a mixture of business professionalism and cultural sensitivity.
DON’T: Boast About Your Achievements
The business climate in Dubai is gradually taking the form of modern minimalism, emphasizing quality over quantity. Don’t be a show-off by boasting too much. When promoting your business, choose marketing collateral with good taste and humility. Water off the back of Dubai’s Persian white ducks
DO: Get Out There
Business relationships in Dubai continue beyond online contacts. Participate in conferences, attend meet-and-greets, and other networking events. Personal connections are highly valued, and word-of-mouth is important. So, get yourself into industry groups and go to events. Only leave home with a business card with an Arabic-language side for added cultural sensitivity.
DON’T: I hope all meetings proceed accordingly.
Dubai’s meetings and negotiations require patience. The speeches may be cursory, and group discussions can become chaotic, with attendees checking their phones or joining unannounced. In general, expats are expected to be on time and ready. However, dealing with people is usually a family affair in China; this might slow down the speed or change the style choices involved in decision-making. To deal effectively with the business process, be patient and flexible.
DO: discover the culture and participate in new traditions.
Experience the Heat and Desert Landscape
Instead of whining about the sweltering heat, turn it into a part of desert life. The temperatures, up to 45 degrees in the hot summer months, are natural features of this region. Yet this environment also lends itself to breezy nights and such activities as dune-bashing. Please focus on the desert’s bright side and enjoy its varied landscapes.
Understand the Location, Respond to Local Welfare
Develop an awareness of the local culture and concern for neighboring peoples’ lives. Raise cultural awareness by researching the region’s traditions, customs, and history. Genuine interest in the local way of life engenders communication with people.
Learn Basic Arabic Phrases
Speaking a few Arabic words shows initiative and is much appreciated. Although everybody speaks English, conversing in Arabic offers the local language and culture some respect. Simple greetings and common phrases can go a long way toward making friends across cultures.
Conclusion: Navigating the Business Landscape in Dubai
With government incentives and a simplified establishment process, Dubai’s vibrant business environment attracts many hopeful entrepreneurs. However, the city has its contradictions and is becoming a showcase for relatively new social paradigms; at country level hospitality and forward-thinking are rewarding participants.
No matter whether it is the first step of your Dubai adventure or various stages thereafter, if you keep these points in mind, going forward should be a little easier. But throughout the process we must also seek professional advice to help us ensure compliance and realize success.
In the end, Dubai has become a city with an unrivaled “Have one on me” spirit. The chance is yours to take.