How can I start my own business in Dubai?
- Post by: Public
- on: 08-03-22
Dubai is the best place you can start a business right now. Whether it is an offshore company setup, mainland company setup, or free zone company setup will depend on the type of business you want to start. Whatever the choice is, business setup in Dubai is comparatively easier than in other countries in the world. The availability of Company Setup consultants makes the process a walk in the park.
It is also possible to start a business on your own without the help of any business consultants. However, it is recommended that you only attempt it yourself if you have previous experience with startups. If you are a foreigner then the new processes may be a little intimidating at first, but you will get a hang of it in no time.
While business consultants do charge you for their services when opening a business through them. You will end up losing more money if you do not know what you are doing. Any incorrect steps in the company formation process will cause some expensive setbacks for you. That is why it is suggested that you take help from the experts who have incorporated hundreds of companies in Dubai. However, if you are a seasoned entrepreneur and want to take on the challenge by yourself, then here is how you can start your own business in Dubai.
Economic Zones or Jurisdictions in the UAE
Dubai and the rest of the emirates in the UAE have three types of Economic Zones. When starting out you need to select which of these jurisdictions will be the best for your business and you have to go with that. The company formation process will also depend on the economic zone you choose.
Here are brief overviews of the economic zones so that you can decide which one will be the best for your business:
· Mainland Businesses
Mainland Dubai is the general area of Dubai that is not covered by any of the free zones. The biggest difference between the free zones and the mainland is that when you open a business in the mainland, you can sell your goods and services anywhere you want. That means you are free to take lucrative government and private contracts. You are free to sell your products and conduct your business activities legally in a broader geographical area. The mainland is also flexible in terms of the business activities you can perform here.
You can get benefits like 100% exemption from taxes, 100% repatriation of capital and profits, 100% ownership of businesses, etc. Previously, the mainland did not allow foreigners to have 100% ownership of businesses. They could only own 49% of any business on the mainland. The rest 51% had to be owed by a citizen of the UAE. However, now anyone can own 100% of a business in the majority of the sectors on the mainland. Sectors that are strategically important to the government of the UAE still do not allow 100% ownership to foreigners. These sectors include the oil and gas industry, transportation, weapons manufacture, etc.
· Free Zone Businesses
Free zones are specific areas that facilitate businesses in a certain sector or sectors that are closely related to one another. For example, Dubai Healthcare City is a free zone that caters to businesses in the healthcare sector. Healthcare professionals will find more benefits when setting up their company in these healthcare-related free zones than in the mainland.
However, when you select a free zone as the location of your business, you can only perform your business activities within that free zone. If you have manufacturing business in a free zone, then you can export your products or sell them within the free zone. The rest of the UAE will be off-limits to you unless you agree to sell through a licensed agent. So, when setting up your startup, take these factors about the mainland and the free zones into consideration.
· Offshore Companies
The offshore company jurisdiction is mainly for high-net-worth individuals. This is because Dubai offshores protect the assets and information of businessmen better than any other city in the world. It is also a tax haven for businesses from all around the world. The privacy they provide is unparalleled because they do not disclose any information about individuals to any countries or governments.
Company Formation Process
As we have mentioned before, the company formation process will depend on the economic zone you choose for your business. Here are the common steps you can expect in the company formation process of the free zones and the mainland:
· Business Activities
The first step is to determine the business activities that you are going to perform through your company. The business activities need to be legal in the UAE. The business activities you choose will determine the business trade license you need to apply for. The types of trade licenses available for you will depend on the economic zone as well. The most common types of trade licenses are the commercial trade license, industrial trade license, and professional trade license.
· Business Structure
Again, the types of legal structure that will be available for you will depend on the economic zone you select for your business. Different free zones provide different options so take your time to research if the structure you have in mind is allowed in the economic zone of your choice or not. Some of the most popular business structures are Sole Proprietorship, Public Shareholding Company, Private Shareholding Company, Limited Liability Company, etc.
· Business Name
You need to register a trading name for your business. The trade name you have in mind needs to be unique in the UAE. It can be in use in other countries in the world, as long as it is available in the UAE, you can go for it.
If you are planning to get started in Dubai, then the Company Setup experts are always ready to guide you and help you through all the steps in the process regardless of the economic zone you choose.