Business setup guide | Things you need to know before setting up your business

Dubai is a global financial center with a thriving, business-friendly economy. Setting up a business in Dubai is a big and tough decision since you need to start your business at the right moment with the right resources. It also provides a variety of services for investors, allowing them to take advantage of Dubai’s resources.

Setting up a business in Dubai requires a lot of preparation, to understand the laws, rules, and regulations is a difficult task to perform single-handedly. In order to find the answer to your questions, an advisory firm like VBC provides you step-to-step guide and helps you in forming and expanding your business in Dubai.



Things you need to know before setting up your business


Here’s what you should know before you start the real process of registering your business to make things easier. When you’re ready to start your business, you’ll need to figure out which business zone or ownership type is ideal for you. You should be aware that there are three types of zones available in Dubai for operating a business: Freezone, Offshore, and Mainland, each of them offers distinct benefits depending on your business kind and activity.


Freezone — Dubai’s Free Zones are a mechanism for the city-state to attract and encourage international investment by making it easier to start a business and simplifying immigration and labor procedures. The fundamental benefit of owning a Freezone firm is that as an expatriate, you can own it entirely without having to sell any of its shares.


Offshore — Offshore refers to the management, registration, conduct, or operation of a business in a foreign jurisdiction, frequently with financial, legal, and tax advantages. For clients who want to engage in worldwide financial trade and investment operations, an offshore corporation has a range of purposes and benefits.


Mainland — A mainland company is also known as an onshore firm that has been licensed by the Department of Economic Development (DED) of the relevant emirate and is permitted to conduct business in the local area as well as outside the UAE.


Types of licenses


You must first determine the sort of license you need based on the sort of business activity. DED (Department of Economic Development) is in charge of issuing licenses. Commercial (for Limited Liability Companies or LLCs), Industrial, and Professional licenses are the three main categories of licenses to consider.


Commercial license — includes a wide range of trading activities.

Professional license — includes a wide range of service activities.

Industrial license — includes a wide range of manufacturing activities.


Local sponsor


You will need a local sponsor, agent, or partner to start any type of business in the UAE under a DED (Department of Economic Development) license. Although it is not required, having local support can be beneficial in a variety of ways. Local sponsors, rarely participate in decision-making, have no claim to profits, and are typically paid an annual fee for their services. A local sponsor is not necessary if you are establishing a business in a free zone or if your company activity is covered by a professional services license.


Register your business



Select the type of business — The first step is to determine the sort or category of business that you want to have. You can directly contact DED (Department of Economic Development), in case you cannot define the type of business.

Find the appropriate legal form — This is not a legal document or a form to be filled out, as the name implies. The make-up of your company is determined by the location and sort of business you run, and this is dependent on the area of operation you choose.


Select trade name — This is an important step in the process of establishing a business in Dubai. You are expected to choose a trading name that corresponds to the type of services your company intends to provide.


Initial approval — You’ll need to get a form of “no-objection” from the Department of Economic Development (DED) and use several channels to do it.


Preparation of agreements — Depending on the legal structure of your company, you may need to write and sign an MOA (Memorandum of Association) or an LSA (Local Service Agent) / Corporate Agent agreement with a local support provider (UAE national). You’ll also need to decide and select the premises for your firm.


Submission of documents — Make sure your type of business does not require any further approvals before proceeding to the last step of the registration process. After that, all you have to do is submit all of the documentation and process all of the payments. Within 30 days of getting a payment voucher, you must pay for your trade license. The transaction automatically gets canceled after six months of nonpayment.


Still, have questions about how to start a business in Dubai? Vault Bucks Corporate LLC can help you in your company formation. Our legal corporate advisors will not only assist you in determining the finest corporate structure and selecting a suitable jurisdiction, but they will also walk you through your alternatives and make the procedures as simple as possible.

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