The United Arab Emirates, specifically Dubai and Abu Dhabi, are among the world’s most prominent destinations for business and investment, thanks to their dynamic business environment and advanced infrastructure. Starting a company in the UAE represents a golden opportunity for investors and entrepreneurs to achieve success and growth in a thriving market. The process of establishing a company in the UAE is a strategic step towards expanding into new markets, as the country provides an encouraging investment climate characterized by flexibility and innovation.

The UAE boasts advanced free zones that offer multiple benefits such as full foreign ownership, tax exemptions, and easy business laws that are in line with international standards. These dedicated environments offer diverse opportunities for investors across various sectors, including trade, services, technology, and industry, making it an ideal place to start a business.

However, establishing a company in the UAE requires familiarity with a number of basic steps and legal procedures that ensure full compliance with local laws. It is essential to be familiar with the regulations and requirements for registering companies, choosing the appropriate legal form, and obtaining the necessary licenses and permits. This article provides a comprehensive overview of the basic steps for establishing a company in the UAE, with a focus on how to adapt to the regulatory environment to ensure success.

How to set up a company in the UAE

Here are the basic steps to establish companies in the Emirates :

1. Determine the type of company: Determine the type of company you want to create, whether it is a limited liability company (LLC), a joint-stock company, or a sole proprietorship. The type of company will affect the legal and financial requirements.
2. Choosing a trade name: Choose a trade name that suits the company’s activity and check its availability through the electronic portal of a local regulatory body such as the Department of Economic Development.
3. Prepare a business plan: Prepare a clear business plan that includes details of the business, target market, costs, and projected revenue.
4. Apply for licenses: Apply for business licenses from the Department of Economic Development or the competent authority in the free zone if you intend to operate in one of the free zones.
5. Open a bank account: Open a business bank account in the company’s name to facilitate money management and meet official requirements.
6. Renting an office: Find a suitable location to set up the office. In some cases, it may be necessary to rent an office in a specific area, especially in free zones.
7. Company Registration: Register the company with the relevant authorities and complete all required legal procedures, including registering the company with the Ministry of Human Resources and Emiratisation.
8. Obtaining Visas: If you will be hiring employees, you will need to apply for their work visas and residency.
9. Insurance and Licenses: Make sure you have the necessary licenses and insurance to operate your business legally.
10. Comply with local requirements: Follow all local laws regarding taxes, advertising, and operational procedures to ensure you are fully compliant.

Licenses required to establish a company in the UAE

The licenses required to establish a company in the UAE vary depending on the type of business activity and location (emirate or free zone). However, in general, there are a set of basic licenses that you may need to establish a company in the UAE:

• Commercial License: Granted by the Department of Economic Development in the emirate in which the company will operate. This license covers all commercial activities, sales and general trade.
• Professional License: Required for professions such as consulting, legal services, accounting, and other professional activities. Issued by the Department of Economic Development or the relevant authority.
• Industrial License: If the company will carry out industrial or production activities, it needs an industrial license issued by the Economic Department or the competent authority.
• Free Trade License (in Free Zones): If you intend to establish your company in a free zone, you will need a free trade license issued by the relevant free zone authority. This license covers general trading, export and import activities.
• Tourism License: If the company operates in the tourism and hospitality sector, you will need a tourism license issued by the Department of Tourism and Antiquities in the emirate.
• License for financial or banking activities: If the company provides financial, banking, or insurance services, it will need a license from the Emirates Financial Markets Authority or the Central Bank of the UAE.
• License to employ workers: You will need a special license to employ workers from the Ministry of Human Resources and Emiratisation, which usually requires providing evidence that the company is complying with local laws regarding employment.
• Environmental Licenses: For some industrial activities or activities that affect the environment, you may need an environmental license from the Ministry of Climate Change and Environment.
• Special Certificates: You may need additional certificates or permits depending on the type of activity, such as health certificates for restaurants or certificates for medical activities.

Types of companies available for establishment in the UAE

Here is a table showing the types of companies available for incorporation in the UAE, with an explanation of some of the basic advantages and characteristics of each type:

Each of these types of companies suits different needs and the choice of type depends on the type of business, ownership requirements, and strategic goals of the investors.

Basic costs of setting up a company in the UAE

Establishing a company in the UAE requires a set of basic costs that depend on the type of company, its location, and the type of activity. Here is an overview of the basic costs you may face:

1. Licensing fees: include the fees required to obtain a commercial, professional or industrial license from the competent authorities, which vary according to the type of activity and location.
2. Rental costs: These include the costs of renting an office or facility, which depend on the location and size of the space. In free zones, the cost may also include rental fees for virtual offices or dedicated offices.
3. Legal fees: These fees may include the costs of consulting an attorney to prepare legal documents, draft contracts, and file formal applications.
4. Insurance: Includes insurance necessary to cover the company from potential risks, such as civil liability insurance and workers’ insurance.
5. Work and Residence Visas: Includes costs for issuing work and residence visas for employees, as well as visa fees for investors or shareholders.
6. Registration and stamp duty costs: These include fees paid to register the company in the official records and submit the required documents, in addition to any stamp duty that may be required.
7. Bank account costs: Includes fees for opening and managing a business bank account.
8. Office fit-out costs: These include the costs of equipping the office with basic equipment such as furniture, electronics, and computer software.
9. Licensing and compliance costs: These may include costs of compliance with local requirements such as special activity licenses, environmental permits, or certifications required for certain activities.
10. Other costs: Includes any additional costs such as consulting services, marketing, and training.

Key Advantages of Setting Up a Company in the UAE

Setting up a company in the UAE offers many advantages that make it an attractive destination for investors and businessmen from all over the world. Here are some of the main advantages:

• Encouraging business environment: The UAE offers a flexible and supportive business environment, with simple and fast incorporation procedures. The UAE is considered one of the best places in the world to set up a company, thanks to the government’s support to facilitate the process.
• Tax exemptions: The UAE offers significant tax incentives, including no corporate tax in many free zones. There are also lower tax rates in non-free zones.
• Access to global markets: The UAE is strategically located between the East and the West, making it an ideal starting point to access multiple markets in Asia, Europe and Africa.
• Advanced Infrastructure: The UAE has a modern infrastructure that includes logistics, communications, and transportation facilities, making it easier for companies to manage their operations efficiently.
• Financial and banking facilities: The UAE provides an advanced financial and banking system, with access to a variety of financial and banking services to meet the needs of companies.
• Multiple free zone options: The UAE has several free zones that offer various benefits such as full foreign ownership and customs exemptions, giving companies options to suit their needs.
• Political and economic stability: The UAE enjoys a stable political and economic environment, which provides security and stability for investors.
• Skilled workforce: The UAE offers a qualified and diverse workforce of different nationalities, which enhances the ability of companies to attract the talent needed for the success of their operations.

At the end of our article on establishing a company in the Emirates , it is clear that the investment environment in the Emirates provides great opportunities and multiple advantages for investors and entrepreneurs. The Emirates, especially Dubai, is one of the most prominent business destinations in the world thanks to its advanced infrastructure, supportive legal system for business, and facilities available in free zones.

The steps to set up a business in the UAE are complex yet streamlined with guidance and services provided by government agencies and service centers. From choosing the right type of business, submitting the necessary documents, to obtaining the right trade license, every step helps pave the way to success. Understanding the costs associated with setting up a business, including fees and rents, can help with effective financial planning and increase your chances of success in the market.

It is also essential for investors to have a good understanding of the legal and tax requirements to ensure full compliance and avoid any future hurdles. Applying for work visas, registering trademarks, and insurance are all vital aspects to ensure the stability and growth of businesses in the UAE.

The most important frequently asked questions about establishing a company in the Emirates