Starting A Business in Dubai as a Foreigner

Business in Dubai

Are you having second thoughts about starting a business in a foreign country? Do you think that you will need to do extensive groundwork? Any investor in a foreign land will have to do a ton of research before starting a business. Expat entrepreneurs can have a hard time understanding the rules and regulations of how to start a business in Dubai, much more to make it succeed. Before you start your business in Dubai, here are 5 essential things you need to know:

  1. Dubai is an International Prominent Economic Hub

Before we get into the nitty-gritty of starting a business in Dubai as a foreigner, you probably know the reason why you want to start a business here in Dubai. You should understand how things work here in the emirates.

Why Dubai?

Dubai is a prominent economic hub in the Middle East, if not “THE” most prominent business hub in the area. It is strategically located giving the hub easy connectivity to the Gulf, Asia, and as well as Africa. 90% of its population consists of ex-pats from all around the world. The infrastructure of Dubai has created a safe living environment with tax-friendly policies because of the visionary leadership of the country which supports technology advancements and innovation. Dubai creates a venue for small and big businesses to thrive. Therefore, starting a business in Dubai as a foreigner gives you an opportunity to both thrive in business and live in a lucrative city.

  1. Choose your Corporate Structure Wisely

One of the major decisions you have to make BEFORE starting your business is the corporate structure. Many foreign businesses skip this step altogether which makes them fail in business. Corporate structure is the type of company you wish to establish, in short, how your business is going to operate.

There are two major types of corporate structures:

Limited Liability Company – a.k.a. LLC, this allows shareholders to be part of the company. LLC requires a minimum of 2 shareholders but not more than 50. This is the preferred corporate structure in Dubai. LLC-type businesses allow import and export activities without much hassle. As an LCC company, you have to partner with an Emirati, (or a UAE National). This local partner will be your sponsor which provides services on an agreed annual fee. If you do not wish to partner with a local Emirati, you can fully own your business with additional conditions which require a steep deposit based on the type of business. As an added perk to LCC, the processing of visa and immigration documents of partners, their families, and employees is easier.

Sole Establishment – this corporate structure is suitable for small business types which are owned and operated by one individual. Some examples include consultancies, salons, medical representations, Information Technology, and the like.

  1. Choose Jurisdiction to Your Advantage

Choose either to have your business established in the mainland or one of the free zones. You might wonder, as a foreigner in Dubai, where it is best to establish your business. Of course, you have to consider your lifestyle and the type of business you are to establish. They used to say, it’s all about location! Location! Location! In Dubai, this adage still applies.

Mainland – Operating a business in the mainland allows you to trade with local markets easily. The process of forming the company is simple and quite systematic. Moreover, getting a business license can be done within the day. Having your business in the mainland gives you opportunities both international and local.

Free Zones – This is the preferred jurisdiction for small and new businesses. This allows the business to grow. Some of the well-known free zones districts in Dubai include Jebel Ali (JAFZA), Dubai Airport Free Zone (DAFZA), Dubai Media City, Dubai Silicon Oasis, and Dubai Multi Commodities (DMCC). Each free zone might have a slight alteration as regards their business setup but formalities and business timelines but more or less, are practically aimed at making your business thrive.

  1. What Trade License to Get

The DED or Department of Economic Development issues all business licenses in the emirate. You can choose from these four types:

  • Commercial – for trading businesses
  • Professional – for service-oriented businesses
  • Industrial – for manufacturing, packaging, and other related businesses
  • Tourism – for tourism. (In this case, the Department of Tourism and Commerce Marketing together with the DED review the application)
  1. Requirements for Foreigners Establishing a Business in Dubai

Certain businesses need other permits to operate other than the license issued by the DED. In Dubai, specific businesses still have to get permission from different government agencies. For example, opening a restaurant in Dubai requires you to get a permit from the municipality to operate for food and safety. Another example is that manufacturing companies need to get safety permits from the local jurisdiction.

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