Can you start a business while still being employed in Dubai?

start a business while being employed

There has never been a better time to start a business in Dubai. The government has made strides to make Dubai a great place to start a business in recent years as it strives to move away from an economy relying on oil by putting in place various measures to support a wide range of businesses from grants to hi-tech business campuses.

A major pull for entrepreneurs is the more than 30 free zones that have been set up in Dubai. These enable non-nationals to own all their business, as well as providing numerous other benefits.

If you are thinking of striking out on your own, but are still working for another employer, this article covers what you need to know. It focuses on the following topics:

  • Can you start a business while still being employed in Dubai?
  • Steps to obtain a no-objection certificate (NOC)
  • What to do if your NOC is rejected

Can you start a business while still being employed in Dubai?

Yes, you can start a business while still being employed in Dubai – even if you are working full-time for another employer – is the short answer. But there are many things that entrepreneurs need to be aware of if they want to start their own business. For example, employers can have a say in whether the person can set up a business and there are various forms that need to be completed.

Setting up a business can be a complicated process, and it is always advisable to seek the services of company formation specialists such as Worldwide Formations. For more information, please contact us.

However, it should be remembered that many big businesses were started by their owner as a side line to their main employment, and only when the business starts making enough money will the owner leave their job and go full-time into their own venture.

As mentioned, Dubai is regarded as a centre for commerce and there is plenty of help and resources available for entrepreneurs to give them the best chance of making their business a profitable endeavour. An added advantage of Dubai as a place to base a business is the low tax regime and easy access to transport across the world.

Steps to obtain a no-objection certificate (NOC)

The most important documents that people in employment who want to establish a business in Dubai need is a NOC from the company that employs them and a trade license under their visa.

The NOC is a legal requirement under UAE labour laws and allows an employed person to set up their own company. But, importantly, it is up to the employer whether they allow or deny the NOC application. Gaining the employer’s acceptance is often the most difficult part of the process, as employers can deny a request for various reasons, such as compliance, security policies or worries about competition, if the business the employee wants to establish is in the same sector.

Various documents are required to be submitted by the person to their employer to get an NOC, including: copies of the passports of all partners in the business being set up; a copy of the name reservation of the new business; Memorandum of Association and Articles of Association; a cash or bank guarantee of AED50,000 and a letter of undertaking that the UAE partner has signed.

To get an NOC, a person should first file a request for one via the Dubai Trade Portal, including submitting the various documents required for it. A fee of AED500 is also required, which is for NOC issuing fees. Then the person must get the NOC approved by the Department of Economic Development (DED). Once this has been gained, the NOC document should be saved in the company’s record.

When – or if – the NOC is granted, the employee is free to establish their business anywhere in the UAE.

What to do if your NOC is rejected

However, as mentioned above, it is at the employer’s discretion as to whether the NOC is granted. But if it is rejected, there are still several options open to the would-be entrepreneur.

For example, the person can choose to set up their business in one of the various free trade zones in the UAE that do not need an NOC from the person’s employer.

Alternatively, people in employment can establish their business under their spouse’s name or that of a relative. They can be appointed as a partner or managing director, but control of the business can be kept by the person.

Another avenue for employed people is to apply for an instant license from the DED. This allows a person to undertake activities related to their business under special guidelines set out by the government. To obtain this license, the person setting up a business does not have to send any physical documents with the application.

The process of applying for an instant license can be broken down into steps:

  • Firstly, the applicant has to go to a DED counter to apply for the instant license. If the person is applying for themselves, they require a UAE pass.
  • To obtain a UAE pass, a person needs to register on the DED portal using their Emirates ID and then inputting the details requested. Following this, they will need to go to the DED website and amend their business profile.
  • To get the instant license, there is a step-by-step process to be followed on the DED website. Various details are required for this, including the name of the business, who its stakeholders are, what the planned business activities are, and details of the UAE sponsor. This step can also be completed manually.
  • Following this, an electronic MOA has to be signed and submitted for the DED to approve.
  • Approval of all business partners – if there are any – also needs to be provided. All partners are sent an automatic message of consent.
  • Finally, the payment voucher for the license must be generated. Once it has been activated, the payment needs to be made and completes the process.

Why work with Worldwide Formations?

As described above, business setup in the UAE can be complicated, and the process does take time and comes with risks if the person does not have detailed knowledge of the local laws and business norms. There are also various costs of setting a business up that entrepreneurs need to be aware of. This is why it is prudent to seek the help of experienced business consultants such as Worldwide Formations, which can manage this process and make it as smooth and cost-effective as possible.

Worldwide Formations are vastly experienced in setting up businesses in Dubai in a way that is optimal for the owner. With our local knowledge, our consultants can navigate the complexities of business law with skill and speed to ensure your business is operational as soon as possible and you can focus on building it and making profits.

For more information and a personalised quote, please contact us.

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The Fairmont Dubai,

Sheikh Zayed Road

PO 33964 Dubai, UAE

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