What Are the Key 8 Legal Steps to Setup Business in Dubai?

What Are the Key 8 Legal Steps to Setup Business in Dubai?

The United Arab Emirates (UAE) continues to attract more businesses around the world due to its strategic locations and business-friendly ambiance. To set up a business in Dubai legal procedures and documentation must be followed for ensuring the Legal Setup of your Business in Dubai. Once you've completed all of your legal procedures, starting a business in the UAE should take no more than a week.

The UAE is strict when it comes to new business setup in Dubai, especially regarding legal requirements. If you want to start a business in Dubai or any other part of the UAE. It is important in Dubai to maintain all the legal standards before setting up a business. So let’s run down the details about the legal activities you need to get done.

Company Formation in Dubai and Tax Laws

There 3 top reasons behind setting up your business in Dubai:

1. The corporate tax, withholding tax, Value Added Tax (VAT), import-export tax, and capital gains tax does not apply to companies incorporated in Dubai. Tax Benefits in the UAE free zones.
2. The UAE has signed more than 66 international double tax treaties with major countries such as China, the United States, and the majority of The European Union (EU) members.
3. Foreigners can easily obtain local currency because there are no exchange controls in place.

The population of Dubai is made up of investors from all over the world. As a result, the city is always up to date on the latest trends and developments. The business setup cost in Dubai is also relatively low which acts as a bonus point. It is a foodie's paradise for those who want to try new cuisines. Dubai is also a shopping paradise because the city does not levy Value Added Tax (VAT). Residents and businessmen planning to start new ventures in Dubai are exempt from paying personal income tax.

Why Do Entrepreneurs Prefer Investment in the UAE?

Here are just a few of the numerous reasons why entrepreneurs from all over the world choose to establish themselves in the UAE.

1. There are no personal or corporate taxes.
2. Rapid Economic Expansion.
3. There are no foreign exchange controls.
4. Gaining access to a diverse economy.
5. Infrastructure and facilities that are modern.
6. Advantages of a free zone.
7. Import duty is low.
8. Adaptable Government Regulations.
9. Booming Industries in Dubai.

8 Common Questions to Ask Before Setting Up a Business in Dubai

A business setup in Dubai can be a lucrative opportunity to expand the company's reach internationally and establish a reputable brand name. Whether you're a small, medium, or large business, you can take advantage of Dubai's cutting-edge infrastructure, strategic location, easy access to nearby markets, superior connectivity that makes it out of the world. This is why in the Middle East, the formation of business in Dubai is trending.

Here is the list of questions you should ask yourself before setting up a company in Dubai.

1) Who will be your target audience?

2) What Products and Services you can offer in Dubai?

3) What would be my physical Business setup Location?

4) Can a foreigner set up a company in Dubai?

5) What are the main options for business setup in UAE?

6) What do I need to start a business in Dubai?

7) How to Get Visa in Dubai?

8) Do I need a bank account to start a company in Dubai?

What Are the Key 8 Legal Steps to Start a Business in Dubai?

Below are the key legal steps to starting a business in Dubai.

1. Identify Legal Form and Activity

The first approach to apply for a business license is determining the type of business activities that will be intended to start. Furthermore, the exact nature of the business must be determined, such as whether this is an establishment, a branch of a foreign company, or a limited liability company. Furthermore, depending on the type and nature of the activity, the rules, conditions, provisions, and fees for establishing a business in the UAE differ.

2. Registering a Trade Name

Following the identification of the activity and legal status, a distinct trade name must be chosen for the business to distinguish it from other entities. Keep in mind that the trade name's title must reflect the nature of the activity as well as its legal status.

In general, trade name registration is subject to the following conditions:

1. Trade names must not have previously been used or be registered in the same business industry.
2. It should be well-matched to the type of activity and legal status required.
3. It must not violate any public law or order.
4. It must not be identical to any local or international trade name registered with the Ministry of Economy, and it must not be deceptive to consumers.
5. The Department of Economic Development (DED) has the authority to cancel a trading name if it discovers that it is identical to an existing trade name or fails to meet the department's terms and conditions.

3. What Types of Business Allowed to Operate in The Free zone?

The legal form is primarily determined by the needs of the business types. Furthermore, the legal form serves as the foundation for identifying applicable laws and regulations. In the UAE, an investor can choose from the following legal structures:

1. General partnership Company Formation.
2. Limited partnership Company Setup.
3. Limited liability company (LLC) Set up in Dubai.
4. Public joint-stock company (PJSC) Formation in the UAE.
5. Private joint-stock company (PrJSC) Formation.
6. Civil company Establishment.
7. Sole Company establishment.

4. What Kind of Business Entities Can I Set Up in the UAE?

Determine the legal entity that your company will use for the setup of business in Dubai. As a new business owner in Dubai, you can establish one of three types of businesses:

1. Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.).
2. Free Zone Establishment (FZE).
3. Mainland Company Establishment (MCE).

The distinctions are based on the number of shareholders and whether the shareholder is a natural or legal person. Some free zones may not allow both types of businesses to be registered. You should check with the Dubai trade authorities to see what kind of company they can register. Refer to the list of free zones and their authorities for more information.

5. Initial Approval from Authorities

After registering a trading name and obtaining a certificate, preliminary approval from the DED is required to obtain all other approvals easily and quickly. A DED (Department of Economic Development) Trader License assists start-ups in establishing companies in Dubai so that they can conduct business activities online and through social networking accounts. The purpose of this license is to direct businessmen in the right direction as they enter the business world. Dubai's Economy seeks to regulate and improve the ease of doing business electronically through DED.

If a person wishes to open a business in Dubai, he must first register with DED Dubai. Business people should be aware that the preliminary approval will be only valid for three months from the date of issuance. If the certificate expires, the business owner must obtain a new one before proceeding to the next step. These business activities fall into one of six categories of business industries, each of which requires a different type of DED (Department of Economic Development) license:

1. Industrial License
2. Commercial License
3. Professional License
4. Craftsmanship License
5. Agriculture License
6. Tourism License

6. Licensing for Business Setup in Dubai

The next step is to obtain the business license after obtaining all necessary approvals. The documents needed to obtain a business license are determined by the business's economic and legal status. It is important to note that foreign documents must be translated into Arabic by a legal translator and attested by the Ministry of Justice.

First, you need to make sure you have the correct documentation in place. As well as your business license, you’re likely to need:

• A corporate account opening form.
• A board of directors’ resolution sanctioning the opening of the account, and the signatories to the account.
• A copy of your company’s certificate of incorporation.
• A copy of your share certificates.
• A copy of the company’s memorandum and articles of association.
• Copies of passports for all partners in the company.

7. Police Clearance certificate in Dubai

Good Conduct Certificates also called Police Clearance Certificates can be obtained from Dubai Police for citizens and residents inside the UAE as per the following procedure. Certificates of Good conduct certify that you have a clean record and fall under a ‘good resident’ category in UAE.

In Dubai, the certificate can be applied either through the Dubai Police website or its app. To apply, go to the website. You must either access your user profile via the MYID link or apply directly by filling out the form.

The service fee for obtaining the clearance certificate is AED 100 for UAE nationals and AED 200 for residents. The fee is AED 300 for foreigners trying to get a certificate in Dubai.

Documents Required For Police Clearance:

1. Emirates ID Original + Copy
2. Passport-size photographs
3. Passport Original + Copy

8. Approval from the Ministry of Economy (MOE) 

The Ministry of Economy must approve the establishment of a Representative Office in the UAE. Details about the parent company, such as the head office address, nature of the business, shareholding agreement, Memorandum of Association, and other company documents, must be submitted to the Ministry of Economy (MOE). Additional approvals from government entities governing specific business activities may be required in some cases.

Examples of such activities, organized by ministry, are as follows:

1. Ministry of Interior.
2. Ministry of Justice.
3.  Local municipal department.
4.  Telecommunications and Digital Government Regulatory Authority (TDRA).
5.  Executive Council.
6. Ministry of Economy.
7.  Local health departments.
8. Supreme Petroleum Council.

Setting Up Business in Dubai - Now Made It Easier With Danburite Corporate  

Are you planning to start a business in Dubai? however, the legal process is too daunting for you? If so, contact Danburite Corporate, an international business setup consultant in Dubai who has guided thousands of business owners to set up a business successfully in Dubai. You can be confident that your business setup is in good hands as we have a team of experienced professionals who has cutting-edge knowledge of Dubai's business and market culture.