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What are the Procedures to Start a Business in UAE?

News & Blog

What are the Procedures to Start a Business in UAE?

The UAE is one of the best places in the Middle East to start and grow a business. Its strategic location, developed infrastructure, and business-friendly environment make it an attractive option for entrepreneurs worldwide. If you’re looking to launch a company in the UAE, this guide will walk you through the key steps and procedures involved.

What are the procedures to start a business in UAE?

One of the first decisions you’ll need to make is choosing a business structure that aligns with your objectives and needs. Some common structures for companies in the UAE include:

  • Sole Proprietorship: Simplest structure owned by one person. No requirement for an Emirati partner.
  • Limited Liability Company (LLC): Separate legal entity owned by one or more partners. Requires at least one local Emirati partner with 51% ownership.
  • Branch of Foreign Company: Extension of a parent company based abroad. Requires a local service agent.
  • Representative Office: Market research and promotional offices of foreign companies. Cannot engage in direct business.
  • Free Zone Company: Business formed in designated free zones with 100% foreign ownership. Cannot operate outside the free zone.

Each structure has its own advantages, limitations, and setup procedures. Consult with legal experts to choose the right one for your business.

See: Small business setup in Ajman

Obtain Licenses and Approvals

Based on your business activity, location, and structure, you’ll have to obtain specific licenses and registrations from relevant authorities such as:

  • Trade License from the Department of Economic Development (DED): Allows commercial business activities.
  • Industry-Specific Licenses: For certain activities like financial services, tourism, healthcare etc.
  • Municipality Approval: For activities based out of a physical commercial location.
  • Free Zone Registration: For setting up in a free zone.
  • Local Service Agent (LSA) Appointment: If opting for certain structures like LLC branch, LSA required.
  • Initial Approval Certificate: Pre-approval before final DED license for activities like alcohol sales.

The documentation requirements, fees and timelines will vary. It’s advisable to engage a business setup consultant to guide you through the licensing process.

Find Business Location and Office Space

An important step is determining a suitable physical location and office space for your company based on the nature of your work.

Mainland vs. Free Zone: Free zones allow 100% foreign ownership while mainland requires Emirati partners. Free zones are also known for reduced tax incentives, streamlined business setup and global connectivity.

Office Space Options: Coworking spaces offer flexible shared work areas on short-term contracts. Leased offices allow long-term occupy under a contract. Buying an office gives you permanent commercial property.

Proximity and Accessibility: Consider proximity to target markets, supply chains, transport links as well as accessibility for employees and customers.

Amenities and Facilities: Look for spaces with amenities like meeting rooms, reception, IT infrastructure, parking, etc. as required.

See: How to Check Residence Visa Status in UAE

Comply with UAE Labor Laws

Being compliant with the UAE’s employment and HR laws is crucial when hiring workers and staff. Key requirements include:

  • Recruiting via approved channels like authorized employment agencies.
  • Ensuring adequate medical insurance coverage.
  • Signing MoHRE-approved employment contracts.
  • Registering employees in the online Taw teen system.
  • Paying for and issuing valid residence visas and Emirates IDs.
  • Contributing towards pension, social security, health insurance etc.
  • Avoiding breach of labor rights like delayed salaries, unlawful deductions etc.

Non-compliance can lead to warnings, fines and work permit suspensions by the Ministry of Human Resources & Emiratization (MoHRE).

Open a Business Bank Account

A crucial step is opening a business bank account to manage transactions and funds for your company. Main requirements are:

  • The minimum capital to open an account varies by bank.
  • Copy of valid trade license and incorporation documents.
  • Emirates ID and passport copies of owners/signatories.
  • Residency visa copy if expatriate owner/signatory.

Choose a reputable bank like Emirates NBD, Mashreq, ADCB with a wide branch network and digital banking facilities.

Get Your Accounting, Tax and Legal Aspects Right

Proper bookkeeping, accounting, taxes and compliance with business laws are essential:

  • Appoint an accountant to maintain accounts and financial records.
  • File regular VAT returns and pay due taxes.
  • Comply with corporate/commercial laws of the UAE.
  • Follow reporting requirements of the regulatory authority like DED.
  • Ensure adequate insurance coverage for employees, assets, inventory etc.
  • Protect intellectual property by registering trademarks, patents and copyrights.

Abiding by laws and regulations will keep your company compliant and avoid legal problems.

Following these key steps and procedures will get your business up and running successfully in the UAE. The country offers great infrastructure, connectivity, resources, and consumer markets primed for growth. With proper planning and preparation, the UAE provides an excellent ecosystem for entrepreneurs and companies worldwide looking to establish themselves and capture opportunities in the region. Reach out to our business setup consultants at Makateb for personalized assistance with getting your company off the ground seamlessly.

With many factors to consider, choosing the right business structure can be confusing. Contact Makateb’s experts today for a free consultation on picking the best entity for your company.

Don’t miss: Pro Services in UAE

After the “Obtain Licenses and Approvals” section:

Navigating the licensing requirements for your business can be complex and time-consuming. Let Makateb’s knowledgeable team handle the license application process for you to ensure quick approvals. Get in touch to kickstart your licensing formalities today.

After the “Comply with UAE Labor Laws” section:

Don’t risk non-compliance with employment regulations – partner with Makateb to leverage our HR expertise for 100% labor law adherence. Contact us to craft compliant employment contracts and policies for your workforce.

After the “Get Your Accounting, Tax and Legal Aspects Right” section:

Get your business off to a legally compliant start by having Makateb review your accounting, tax, insurance, and legal aspects. Our consultants can identify any gaps and provide expert guidance for smooth sailing. Schedule a consultation with us for complete business compliance.

At the end:

Starting a business in the UAE involves many moving parts – Makateb is your trusted partner to guide you through the process seamlessly. Contact our experts to kickstart your UAE business setup journey today.

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