Setting Up a Business in the UAE: Simplified Step-by-Step Guide

Starting a business in the UAE can seem daunting when navigating the abundant information available online. However, the process is quite straightforward if approached methodically. In this comprehensive guide, we'll explore each step in detail to help you establish your business in the UAE, using insights from personal experiences.

The first critical step in setting up your business in the UAE is to determine your business activities. Business activities define what your company will do and are crucial because different activities have different prices, compliance requirements, and jurisdictions. It is essential to narrow down your activities to one or two main areas to simplify the compliance checks and bank account opening processes.

Once you have identified your business activities, consult either a free zone directly or a business consultancy to check the pricing and available free zones. After figuring out the costs and free zone options, carefully review their contracts and terms and conditions to avoid unexpected surprises. Choose the one that suits your needs the best, and proceed with their assistance to set up your company.

Your application will be submitted to the chosen free zone and will undergo a review. This process includes a trade name reservation where you provide three potential business names in order of preference. It's best to focus on names that aren’t already in use and follow the guidelines regarding the use of words like “Dubai,” “Middle East,” or “UAE.”

Choosing between a Mainland company and a Free Zone company is determined by the scope of your intended business operations. A Mainland company allows you to work with anyone, both locally and internationally, while a Free Zone company is restricted within the Free Zone. For businesses looking to grow and operate both locally and internationally, setting up as a Mainland company is highly recommended.

Once your trade name is approved, it moves to the initial approval phase. This step involves an internal government check to ensure you don’t have any outstanding licenses or an excessive number of licenses in your name. This approval is mainly to verify that you are compliant with existing business regulations in the UAE.

Next, you must complete the legal documents required to establish your business. This includes the Memorandum of Association, which can be automatically generated and signed at the Department of Economic Development (DED) within 10 minutes or drafted by a typist or law firm to include specific powers and responsibilities. The document can be signed in Dubai courts or online if you are unable to travel to the UAE.

For a Mainland company, you must link an office address to your license. The office space could be anywhere within the Emirate where the company is registered, such as Dubai for a Dubai Mainland company. You’ll need a tenancy contract or an Ejari (a system regulating and facilitating the lease contracts of Dubai) citing the office address, size, and annual rent. Note that 5% of your annual rent will be added to your license cost as a market fee.

Once you have secured an office space and gathered all necessary documents, submit them to receive your trade license. The trade license will make your business an officially registered entity in the UAE and will include your company’s name, license number, shareholders, manager, office address, and business activities.

After acquiring your trade license, you’ll need an Establishment Card, also known as an Immigration Card. This card links your company to the immigration system and allows you to apply for investor visas for the shareholders listed on your license.

The investor visa process begins with the Entry Visa followed by the Change Status step, transitioning you from a tourist to a resident. The next step is the mandatory Medical Test, involving blood tests and x-rays to check for HIV and tuberculosis.

Once medical exams are completed, the actual visa application is processed. The visa is now digital and can be accessed as a PDF or on the ICP app. Alongside this, you will schedule a Biometrics appointment for identity verification. After the biometrics step, you await the delivery of your Emirates ID, which is crucial for performing most official transactions in the UAE.

To start operations, open a corporate bank account. While local banks like Emirates NBD may take around two months to process your application, digital banks like Wio can open an account within 5 to 7 working days. Starting with a digital bank helps in building transaction history quickly while you await the setup of your local bank account.

When adding employees, you must comply with the Wage Protection System (WPS) to ensure timely salary payments. You will also need additional approvals and permits for certain business activities. Companies often seek professional services from consultancies to handle these compliance tasks efficiently.

If you intend to bring in family members, ensure their documents (birth and marriage certificates) are fully attested and translated into English or Arabic. A minimum salary requirement must be met for sponsoring dependents, and a deposit may be required for an investor visa.

Freelance permits and visas offer flexibility, but choosing the compliant route is crucial. A freelance permit, which can be obtained from authorities like RAKEZ or DDA, does not allow you to open a corporate bank account and uses your personal account for business transactions.

A Freelancer Visa is a viable option for residing and working in the UAE. It's recommended to review the packages offered by companies thoroughly, as some may have hidden costs in the second year. A trade license with a one-visa quota is often a better option than a freelance visa or permit, offering more comprehensive benefits at a similar cost.

Setting up a business in the UAE is a structured process with specific requirements. While the procedures may seem complex initially, understanding and following the outlined steps ensures a smoother transition. Always consult with experienced professionals if uncertain about any part of the process, as their guidance can help streamline your journey to successful business operations in the UAE. For a smooth process, you can rely on us at the Good Home Team Real Estate. We not only provide real estate service but also business set up and golden visa. For more information call us at +971555932208 for a FREE 1:1 consultation.