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A lot of my friends have been asking me how to start a business in Dubai.
Due the ongoing COVID-19 pandemic, lot of my friends lost thier jobs in Dubai and have been thinking about starting a business in Dubai.
I have done in-depth research on how to start a business in Dubai and in this post we will look at various aspects of starting a business in Dubai such as documents required, fees, opening bank account, classification of businesses etc.
Before going full-fledged into a business in Dubai, you can also check out these work from home jobs in Dubai that pay decent amount of money.
I have also listed best ways to earn money online and some resources to help you make some side income at the bottom of the post.
Future market trends for Dubai indicate that there will be significant opportunities for investors to invest and run a successful business, especially in imports and exports. As soon as the COVID-19 situation becomes under control, tourism industry in Dubai is going to boom and the city will provide great infrastructure and potential for many businesses across various industries.
In this post, we look at different aspects of a business in Dubai right from starting up, paperwork required and most common problems new businesses run into in Dubai. It helps to know these so that you can avoid them and focus on growing your business rather than other operational issues.
How to start a business in Dubai
Dubai is a city with great tech-penetration and you should be able to launch your business in a matter of 7-10 days if you have all the paperwork in place.
However, before jumping into starting your business, let us look at some of the factors you need to consider when registering and starting your business in Dubai.
Type of Business Activity
As with any other country, you will have to first define the nature of your business.
Depending on the nature of your business, you need to procure the necessary license and approvals to start your business. It could be commercial, industrial or even professional license that you need to launch your business.
As you might know, there are different “free zones” in Dubai and depending on the nature of your business, you can choose the home base of your business in a zone that offers maximum benefit.
For example, if your business is into import and export, it makes sense to have your business based out of a freezone in the airport or the seaport.
Choose your company name
The next step to starting your business in Dubai is to choose a company name.
Dubai has some requirements when it comes to naming companies.
You cannot choose a company name that is offensive in language, refer to Allah or refer to any other religion.
Another thing to note is that, if you are naming your company after the name of a person, that concerened person should be the owner or a partner in the company.
Finalise the incorporation paperwork
Along with the application for your company name and the acivity, you need to provide copies of the shareholders’ passports.
In some free zones, you will also require to submit additional documentation such as an NOC or No Objection Certificate from your current sponsor thereby confirming you are allowed to set up another business in Dubai.
Different Free Zones have different requirements, so it is best to check free zone website for details of the requirement.
This is the official website of Dubai free zone: https://www.dafz.ae/en/
Receive your license notification
As a next step, once your application has been processed, the government of Dubai will notify you when and where your license will be issued.
Open a bank account
After your application for business has been processed, you need to open a bank account for your company.
Dubai is home to some reputed and global brands when it comes to bank and you can choose between Emirates NBD, Abu Dhabi Commercial Bank, HSBC, Citibank and Barclays depending on your preference.
The final step to starting a business in Dubai is processing Visa.
Visa could either be for yourself, staff or partners.
In many free zones you can apply for visa on behalf of your staff, partners and other support personnel required to run your business.
The Visa process can be summarized to 4 stages.
- Entry permit
- Status adjustment
- Medical fitness test
- Emirates ID registration
- Visa stamping
Once these steps are done, you can start your own small business in Dubai.
Cost of forming business in Dubai
As with any country, there is a cost involved in regsitering your business in Dubai and this includes the statuatory fees you need to pay the government.
These fees can change from time to time, so please check the official Dubai government website or free zone website before planning your registration.
|S. No.||FEE||TYPE OF FEE||PERIOD||AMOUNT(AED)|
|License and Sponsor Fees|
|1||Initial Approval + Tasheel||Gov’t Fees||One time||220|
|2||Name Approval||Gov’t Fees||One time||620|
|3||Typing of MOA||Typing centre||One time||575|
|4||Notarization of MOA||Gov’t Fees||One time||1800|
|5||Sponsorship Fees||Sponsor/PRO services||Every Year||15000|
|6||License Fee||Gov’t. Fees||Every year||7960|
|7||Office on Rent for LLC Business Setup – Starting from 45000 AED (Per Annum)||Gov’t. Fees||Yearly||Starting from 45,000|
|Additional fees as per the requirement|
|1||Market fees 5% of Premises annual rent to be paid to Economic Department.||Gov’t. Fees||Every Year|
|2||Foreign name charges (If You take an Arabic Name the charges can be avoided because the /Arabic Name is Free)||Govt. Fees||Every Year||2000||To be added later|
Documents required for forming company in Dubai
- Approved document from the Legal Affairs Department
- Approved documents from the Ministry of Economy and other government authorities.
- Copies of visa, passport, NOC, residential proof, ownership certificate, National ID and family book
- Certified copy of tenant contract.
- License Application form
- Partnership contract certificate from a public notary
- Copies of Technical Evaluation Report
- Trade name certificate
- Stamped visa from the Immigration Department
Tax for small business in Dubai
Dubai is a free economy and has been designed to attract investment and businesses of all types. Dubai government has tried its best to make the business regulation as seamless as possible and most of the regulation is in compliance with international business best practices.
Low value-added tax (VAT)
VAT was introduced in the GCC in 2018 and is currently at 5% with exemptions for many key items such as edible foods, health, education and social services
No Income Tax
Dubai does not implement income tax.
No Direct Taxes
There are no direct taxes on corporate profits or personal income (except for oil companies and branches of foreign banks).
Low Customs Duties
Customs duties are at 4% with many exemptions and 100% repatriation of capital and profits is permitted.
Things to Keep in Mind When Setting Up Your Business in Dubai
- Before registering your company in a Free Zone, check the availability or offices and general working conditions.
- Make business plans only after thorough research and understanding the market.
- Do research on license category before applying for your business
- Ensure you check the bank charges before opening an account.
- Always have a written document on sponsorship with your local sponsor.
Frequently Asked Questions about How to Start A Business in Dubai
How much does it cost to start a business in Dubai?
An onshore business in Dubai will cost you around Dh 34,340 or $9350.
How can I start a business with no money in Dubai?
You will need the required funds to incorporate your business and get necessary license. You can start an online business in Dubai with minimal investment after that.
Is Dubai a good place to start a business?
Absolutely. Being one of the trade and tourism capitals of the world, you can find lot of opportunities to start business in Dubai.
What is the best business to start in Dubai?
Depends on your initial investment. If you have good capital to invest, you can start with any offline business such as restaurants, shops etc. or look at online businesses.
What is the most profitable business in Dubai?
There is no direct answer for most profitable business in Dubai, but anything related to do with trade and commerce is profitable in Dubai.
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