Business setup in Dubai | Licenses | Ownership | Capital | Trade Name

Let us understand business formation in Dubai from the ground up, this post will give you an overview of ‘business setup in Dubai’ and the business requirements

Types of Licenses available in Dubai:  In Dubai’s economic department three types of licenses can be formed, depending upon the license activities, fortunately, the license type can change.

  1. Service license (professional license): Activities including under this type of license are a restaurant, IT services, education, events, facilities’ management services and consultancies.
  2. Commercial license (trading license): All types of trades and their trading come under the commercial license which includes trading of foodstuffs, general, garments, and electronics.
  3. Industrial license (manufacturing license): This license is issued to companies manufacturing new products in their plants or factories. UAE is the hub to open companies under such manufacturing licenses.

Other new license types have been introduced by different free trade zones in the past few years, such as:
1. E-Commerce license: To sell products or services using the online portal and to accept payments online.
2. Freelancer license: Enables sole practitioner to provide consultancy or professional services as a freelancer.


Understanding Ownership
If a foreign partner wishes to have 100% ownership regardless the type of business then the free zone is the right option. There are plenty of free zones in UAE. You can choose a free zone as per your convenience, for example, depending upon the location, visa requirements, budget, etcetera.
If you wish to engage in the local market of UAE, then you have to take a license from the economic department, under the economic department license, a foreign partner can hold 49% share and the remaining 51% belongs to the UAE local national.

Why do you need a Company Trade Name?
A trade name is the legal name of a business used to distinguish from other business and also registered with DED or Free Zone Authority (FZA). The Economic department has certain rules for booking the trade names. The company’s name should reflect the business activity unless it’s a branch office.

To protect your brand name and to have exclusive rights to the use of the name you are required to register a trademark separately.

What is Minimum Share Capital?
The minimum share capital must show in the MOA during the license incorporation. You don’t have to pay any capital amount in most of the cases. But, however, some free zones are required to show the capital amount in their bank account.

What is the Minimum Office Space requirement?
Office space is required to form any company under the economic department. As soon as the initial process finishes (trade name approval, MOA), you can finalise the office space. The minimum office space requirement is 200 sq. ft. in size. Free zones provide different types of offices as per the business requirements. Partners can choose from a flexible desk, executive’s offices, etcetera.

How are the Employees designated?
You can get the different designations depending on the employee’s qualification. A certificate requires being attested if the employee is seeking a managerial designation. Visa eligibility depends upon the office size. Ministry of labour gives an approval if the company needs more visas. Free zone has normally different types of packages as s per the visa requirements, the package fees may change, and the package includes license cost, office rent and registration fees etcetera.