Sign in

Step by Step Guide to Open a New Company in Dubai

Sakina Burhan
Step by Step Guide to Open a New Company in Dubai

Dubai is a city of architectural marvels as well as a fertile ground for new businesses. It is a popular destination among tourists, investors, and entrepreneurs because of its investor-friendly policies and low-tax regime as well. Besides, the government places rules and regulations that favor and encourage business owners. That makes it the best place to live and work. However, opening a company in Dubai can be a risky task, especially for new entrepreneurs. It involves planning, theorizing, research, budgeting, set-up, and decision-making. Furthermore, they also require regular guidance and assistance in selecting the right jurisdiction, business activity as well as the correct business license.

Setting up a business in Dubai enables the entrepreneurs to experience the encouraging business environment by availing enormous benefits offered by UAE. They have the facility to choose from a wide range of business registration options available in the region. Among various business licenses and business activities, investors can pick whatever suits their exact business requirements. Thus, they can establish a company in Dubai or anywhere in the UAE in the most trouble-free way. So, here’s a complete guide to help you get familiar with the process of opening a company in Dubai.

Types of company structure permitted in Dubai

  • Limited Liability Companies(LLCs) 
  • Partnership Firms 
  • Sole Proprietorship 
  • Public Joint Stock Companies
  • Private Joint Stock Companies 
  • Free Zone LLCs 
  • Branch Offices 
  • Free Zone Establishments 
  • Subsidiaries
  • Offshore Companies

Types of licenses available while setting up a business in Dubai

There are mainly three types of license that you can apply for while opening a company in Dubai

Commercial License

Businesses that involve trading activities or the buying and selling of goods need to obtain a commercial license. With this license, companies can engage in activities that involve import & export, sales, logistics, travel & tourism, general stores, and real estate.

Industrial License

An industrial license is issued to those companies that conduct manufacturing activities such as transforming raw materials and resources into final products, either manually or mechanically. It usually covers businesses such as textiles manufacturing, metal engineering, and paper production.

Professional License

Individuals in Dubai that are service providers, artisans, or craftsmen can opt for a professional license. These services include medical services, consultancy, IT services, beauty salons, repair services, etc.

Process for opening a company in Dubai

Determine the business activity

By determining the kind of business activity you want to operate in Dubai, it becomes easy to obtain the required business license for the company. The business license is based on the business activity you choose. The major thing to understand is that not all business activities are allowed in every jurisdiction, and sometimes in the UAE. Therefore, the business owner must primarily seek permission from the different departments allotted for company registration in UAE.

Choose the jurisdiction

Dubai has multiple options to offer for company formation, such as freezone, mainland, and offshore company setup. Hence, before setting up a business in Dubai, one must consider doing a thorough study on the given jurisdiction and pick the suitable one accordingly. Understanding the benefits of these jurisdictions would help in opting for the perfect location as well as a smooth business setup.

Determine the business structure

Dubai provides different types of business frameworks to business owners. The owners can do preliminary research on every type and choose whichever is preferable for their business. Besides, your business structure should match your business activity. Every jurisdiction has certain regulations regarding the setup of a venture which can be premeditated during the research.

Find a local sponsor

If you are willing to set up a business in Dubai Mainland, you need to find a local sponsor for your company. The real challenge is to find a reliable and trustworthy partner who can hold 51% of the company shares, whereas the rest of 49% stays with the business owner. In the case of the Dubai freezone company, the owner must look for a local service agent who will act for a nominal fee.

Register the trade name

This stage is a very crucial one, as the owner needs to be aware of several points while deciding on a trading name for the company. The trade name must be unique and stand different in the market. The owner must also make sure that it doesn’t resembles any existing business in the market. In addition, there are several other protocols that the owner must take care of before fixing a trading name. And once you finalize the name, register it with the Dubai Department of Economic Development(DED).

Register the business

Fill out an application form and register the business with the DED. Afterward, present the verified documents for approval from the DED. Within a week, the DED will share its approval or rejection, based on which you can proceed to further steps.

Apply for a business license

Acquiring a business license is an obligatory step as it gives legal authorization to your business. Therefore, once the business is registered, the business owner must apply for a business license from the concerned authorities. For example, from DED for Dubai mainland company, from freezone authorities for Dubai freezone companies. Business licenses are usually issued based on the business activity, nature of the business, and business jurisdiction. The whole process might take around a week to complete.

Submit the documents and pay the fees

Along with the application form for a business license, the owner needs to submit the requested documents and other significant credentials to complete the legal formalities. Post submission, the authorities issue a payment voucher to the applicant. The owner must, then, pay the required amount to complete the license application procedure.

Collect the license

The authorities will review the documents and fulfill all the remaining formalities of the license application. After receiving the license fee, they issue the license to the business owner within nominal days. Once the business owner gets the business license, they can operate the business lawfully in Dubai, UAE.

Also read the post: How to Register a Company in the Dubai Free Zone?

Documents required for opening a company in Dubai 

  • Business plan 
  • Application form
  • Passport copies of the company officials (directors, shareholders, etc.) 
  • No-Objection Certificate from the current sponsor 
  • Trade name registration certificate/approval 
  • Memorandum of Association(MoA) 
  • Local Service Agent Agreement (LSA)
  • Tenancy contract/lease agreement

Sum up

Opening a company in Dubai is an extremely lucrative option that offers tons of growth opportunities to businesses as well as business owners. Businesses mostly related to international trading, import/export, tourism, and logistics can flourish successfully in this city. However, the process of incorporation may not be as simple as it looks, because of the complex procedures and hectic paperwork. Professional business consultants in Dubai can handle all your company applications as well as save you from all the hassle.

Get in touch with the experts of Shuraa Business Setup to get the best company formation services. They will assist you in every step of the procedure - drafting documents, setting up bank accounts, seeking approval, and providing general consultancy. On the whole, they will ensure the smooth incorporation of your business in the UAE without any legal troubles or issues.   

So, book a free appointment today and kick start your business career in Dubai, UAE. Call us at +97144081900 or WhatsApp us at +971507775554. You may also send an email at [email protected].

Sakina Burhan
Zupyak is the world’s largest content marketing community, with over 400 000 members and 3 million articles. Explore and get your content discovered.
Read more