A Comprehensive Guide: How To Start And Set Up A Business In United Arab Emirates (UAE)

Starting a business in the UAE can be a straightforward process, but it comes with potential complexities. The process, though tedious and multi-faceted, requires careful consideration. Whether you handle it independently or enlist business setup experts, seek informed advice on decision implications. Drawing from our experience, assisting hundreds of entrepreneurs, we’ve created the ultimate roadmap for starting a business in the UAE. Starting and setting up a profitable business in the UAE can be a rewarding endeavor due to the city’s strategic location, tax benefits, and pro-business environment.

How To Start And Set Up A Profitable Business In UAE

Here is a comprehensive guide to help you navigate the process of how to start and set up a business in the UAE. Keep in mind that the process of setting up a business will slightly differ depending on the nature of the business, the type of entity being established, and the Emirate where the license is applied. 

1. Strategic Business Planning: Before starting a business, it is essential to conduct thorough research and identify a viable business idea that aligns with the local market and regulations. UAE, known for its booming economy and business-friendly atmosphere, offers a wide range of opportunities. Some successful business ideas in the UAE include real estate and property management, digital marketing agencies, construction and interior design, e-commerce, tourism, healthcare, consultancy, advertising, and IT solutions. Conducting market research and understanding the local business landscape will help to make informed decisions and increase the chances of success in the dynamic market of UAE.

1. Legal Structure: Understand the various legal structures available and choose the most suitable one for your enterprise. UAE offers different legal structures, including 

• Sole Proprietorship
• Limited Liability Company (LLC)
• Free Zone Company
• Freelance Business

Each legal structure has its implications for ownership, liability, and taxation. For instance, a sole proprietorship is suitable for individual entrepreneurs, while an LLC is ideal for businesses with multiple shareholders. Additionally, the decision on the legal structure determines the personal liability, ownership arrangement, and documentation needed for the business. Therefore, thorough consideration of the legal structure is essential to ensure compliance with the regulations and the long-term success of the business in the UAE.

1. Business Activity: select a business activity that aligns with your business idea and complies with local regulations. UAE offers a wide range of industries with growth potential, such as 

• Construction
• E-Commerce
• Tourism
• Real Estate
• Healthcare
• Consultancy
• Advertising
• IT Solutions

The type of license required for your business depends on the nature of your activity, with commercial, industrial, and professional licenses being the most common types. It is essential to choose a business activity that aligns with your skills, interests, and the local market to increase your chances of success in UAE’s dynamic business environment.

• Trade Name Registration: Choose a company name that complies with the UAE’s naming conventions.  To register a trade name in the UAE, follow these steps:

• The name should be unique, not offensive, and not include references to political groups or the mafia. If you are naming the business after a person, you will need to prove that the person is a partner or owner of the company. 

• Once you have chosen a name, you need to check its availability through the public service offered by the Local Ministry of Economy. If the name is available, you can reserve it by obtaining permission from the Department of Economic Development (DED) in UAE. Choosing a suitable company name is an important step in starting a business, and it is advisable to seek guidance from legal and business professionals to ensure compliance with the regulations.

• Business License: It is essential to obtain the necessary business license based on your business activity and the company you are establishing. 

UAE offers different types of licenses, including 

• General Trading
• Industrial
• Professional License

The type of license required for your business depends on the nature of your activity.

• Local Partners and Agents: The need for a local partner or agent depends on the type of business and its location within the UAE. For instance, if you are looking to provide professional services in the UAE or establish a UAE-free zone, you do not need a local partner, as these businesses can be 100% foreign-owned. Businesses falling under industrial or commercial licenses, unless established in a free zone, need to be registered as a Limited Liability Company (LLC), which traditionally requires a local partner. However, in certain cases, such as setting up a professional services company or establishing a UAE-free zone, businesses can be 100% foreign-owned and do not require local partners. Additionally, the option of setting up a Free Zone Company or an Offshore Company allows for 100% ownership by the individual without the need for a local partner. Therefore, it is important to consider the specific business activity and the location (free zone or mainland) when determining the need for a local partner in the UAE. Therefore, it is essential to determine the specific requirements based on the nature of the business and its location to ensure compliance with the regulations in UAE.

• Funding and Investment: It is important to consider the funding and investment required. The minimum investment required to start a business in the UAE can vary depending on the company’s type of business, location, and legal structure. For instance, a Free Zone business in UAE can start with as little as AED 10,000 and go up to AED 50,000 or more, based on the free zone and type of business. On the other hand, a Mainland Company in the UAE may require a minimum investment of around AED 30,000 for an LLC Company. It is important to research and consult with business experts to determine the exact investment amount required for your business idea and location. Additionally, financing options are available for entities owned and managed by UAE nationals. UAE also offers business incubators and accelerator programs for startups and small companies to receive support and funding. With the right planning and investment, your business dreams in UAE can become a reality, and you can tap into the city’s immense potential for business success.

• Visa and Permits: It is essential to obtain the necessary visas and permits for yourself, your employees, and any family members relocating to the UAE. UAE offers various types of visas, including employment visas, investor visas, and residence visas. To obtain a visa, you will need to provide the necessary documentation, such as a 

• Business Plan
• Proof Of Financial Capability
• Relevant Qualifications Or Certification

If you are seeking visas for your spouse, child, maid, or driver, it is advisable to consult with experts to ensure that it is feasible within your chosen free zone. Additionally, it is significant to confirm that both you and the prospective visa recipients meet all the entry criteria. Once these considerations are addressed, the visa application process comprises four straightforward stages:

• Entry permit
• Status adjustment
• Medical fitness test
• Emirates ID registration and visa stamping

Mainland companies face no restrictions on the number of visa applications, while free zone companies may encounter some limitations, which vary across different free zones. It is advisable to seek professional assistance from a local business consultant or legal expert to ensure compliance with the regulations and the long-term success of your business in the UAE. 

• Taxation and Compliance: When starting and setting up a business in the UAE, it is important to consider the taxation and compliance requirements. The United Arab Emirates (UAE) has a favorable tax environment for businesses, with no corporate income taxes, withholding taxes, or capital gains taxes upon a certain threshold. However, it is essential to stay informed about the latest tax regulations and compliance requirements, as the UAE has introduced a federal Corporate Tax (CT) on the net profits of businesses, with a standard tax rate of 9% and a zero percent tax rate for certain businesses. Additionally, businesses operating in the UAE may be subject to other taxes such as value-added tax (VAT), which is currently set at a rate of 5% for the consumption of goods and services. 

In terms of compliance, businesses in the UAE must adhere to regulations related to financial reporting, auditing, and other legal requirements. For instance, all companies registered in the UAE are required to maintain proper books of accounts, including financial records, invoices, and other relevant documents, as per the UAE’s accounting standards. It is also important to keep company accounts and records up to date to comply with financial reporting and auditing regulations. 

Need Any Assistance To Start And Set Up A Business 

BRISK assists you in starting a business in the UAE by guiding various aspects of the setup process. This includes securing capital and financing, understanding the local market, and navigating the legal and compliance frameworks. BRISK can help entrepreneurs plan their business journey meticulously and leverage UAE’s resources and opportunities. Additionally, BRISK can provide support in adapting to the local market and understanding government regulations, ownership structures, and legal and compliance frameworks. Furthermore, BRISK can assist in preparing the required documentation for a business loan and in ensuring compliance with the ever-evolving laws and regulations in the UAE.