How to start a business in Dubai as a foreigner

The UAE’s reputation as a thriving trade and logistics hub has reached every corner of the world. So, it’s understandable that – can a foreigner start a business in Dubai? – is such a commonly searched question.

And the good news is, the answer is yes. With the right assistance, foreign investors can set up in Dubai and take advantage of its low tax regime, ease of doing business, and incredible location in just a few simple steps.

But before starting any license application, it’s a good idea to familiarise yourself with the emirate, its processes, and its regulations. Here’s an overview of what to expect when doing business in this part of the world.

Types of business licenses in Dubai

Before we get into licenses, it’s best to cover the two most common business types in Dubai. They are free zone and mainland.

Free zone businesses operate from designated zones. They benefit from a series of allowances such as 100% customs tax exemption, no currency restrictions, and the ability to repatriate capital and profit. Foreign investors are also able to retain 100% ownership in all instances.

However, this type of business is unable to trade directly with the mainland UAE market without the assistance of a local distributor or service agent.

Mainland businesses can set up anywhere in Dubai or the wider UAE. They are permitted to trade directly with the local market but cannot take advantage of free zone benefits or tax advantages.

Following a recent change to the law, 100% ownership is now permitted for mainland businesses in most industries. It is not permitted in industries considered strategically important to the UAE. These include oil and gas exploration, utilities, and transport.

Several license types are available to both free zone and mainland businesses. Most fall under the umbrellas of commercial, industrial, and professional.

The type of license you require will depend on your business activities. Commercial covers all manner of physical and online trading activities, industrial covers manufacturing and processing, while professional covers services such as consulting and marketing.

Documents required to start a business in Dubai

Once you have understood the business and license types on offer in Dubai, it’s time to get your documents in order. To make a trade license application, you will need:

  • A copy of your passport
  • A copy of your visa
  • CV or brief business plan
  • No Objection Certificate from your employer (if you are already in the UAE on an employment visa)

In certain industries, such as health or education, you will also need to prove your qualifications and credentials. Any overseas certificate will need to be certified by the UAE consulate in the country of origin or by the UAE Ministry of Foreign Affairs.

How to start a business in Dubai as a foreigner

When you’re ready to make your license application, it’s a good idea to engage with a local company setup agent. Here at Worldwide Formations, we can assist with every step of the company formation processes, managing your application on your behalf.

First, we’ll help you outline your business activities. It’s important that you list every activity that applies to your business when making your application. Failure to do so can lead to fines or even license revocation. With over 2,000 permitted activities, we’re sure to match you with one that fits the bill.

 At this stage, we can also help you choose and register your company name. As well as choosing a name that’s catchy and captures the essence of your business, you’ll also need to stick to the UAE’s clearly defined naming conventions.

In short, UAE company names must not contain any blasphemous or offensive language, any references to well-known institutions or any abbreviations of your name – though your full name is acceptable.

Your name should also have a legal entity attached to it, such as FZE or LLC. It must also relate to your business activity, not resemble the name of any other company and be available to register.

Now we come to the most critical step – applying for your business license.

If you’re setting up in the mainland, we’ll make your application to the Dubai Department of Economic Development. If you’ve chosen a free zone setup, we’ll liaise with the managing authority of your chosen free zone.

Finally, you’ll need a residency visa and corporate bank account to work in the UAE. 

The visa process involves four stages, including a medical fitness test and biometric capturing. In all, it usually takes less than a week. As the holder of a UAE business license, you can also sponsor others such as children, a spouse, or domestic staff for their visas too, providing you meet the eligibility criteria.

When it comes to banking, there are many local and international names operating in the UAE. That said, it’s not always easy for foreign nationals to access banking services. That’s why, once again, it is highly advisable to work with a local expert such as Worldwide Formations. We can assess your needs and eligibility before putting you in touch with the financial institution that’s right for you. 

Start your UAE business with Worldwide Formations

When setting up as a foreigner in Dubai, getting the right guidance beforehand is key. That’s why it’s always advisable to undertake the above steps with the assistance of a registered company formations agent to eliminate any potential hassles that might arise.

With more than 15 years of experience in company incorporation, Worldwide Formations can help you get your business up and running within a matter of weeks. We’ll manage the entire process on your behalf and correspond with all relevant authorities for you. All you need to do is wait for the green light to start doing business.

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