Business setup in Dubai
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:
- Service license (professional license): Activities including under this type of license are a restaurant, IT services, education, events, facilities’ management services and consultancies.
- 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.
- 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
1. E-Commerce license: To sell products or services using the online portal and also to accept payments online.
2. Freelancer license: Enables sole practitioner to provide consultancy or professional services as a freelancer.
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 also 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 Memorandum of Association (MOA) during the license incorporation. Investors don’t have to pay any capital amount in most of the cases. 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 and also an 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. If the company needs more visas then the Ministry of Labour gives an approval. The Free zone has basically different types of packages as per the visa requirements, the package fees may change, and also the package includes license cost, office rent and registration fees etcetera.