Starting a business in Dubai is an amazing opportunity for entrepreneurs since this city offers a lot of benefits for businesses. As one of the biggest economies in the world, the United Arab Emirates has a diversity of business startups as well as regulations to support these businesses. Dubai, the commercial capital of UAE, is one of the biggest cities that attract entrepreneurs and investors. Although Dubai offers investment opportunities and tax advantages, there are many rules and regulations you must be aware of before starting a business there to avoid unpleasant surprises. Here is what you need to know.
Mainland, Free Zone, and Offshore Jurisdictions
Each jurisdiction differs in terms of taxation, business requirements, company’s commercial activity, and ownership status, among other things. If you opt for a mainland jurisdiction, then you need a local partner as you will have 49% ownership. On the other hand, you get 100% ownership if you choose to open a Free Zone company. Depending on the nature of your business and how and where it will operate, choose the right jurisdiction for your company.
The business structure will determine if your business will succeed or fail in Dubai. There are several company structures you can choose from such as Limited Liability Company (LLC), sole proprietorship, joint venture, and other structures. The most famous structures for a business setup in Dubai include setting up an LLC or a Free Zone company. You will enjoy a variety of benefits if you opt for an LLC as you will experience minimal taxation within a simple tax structure that will facilitate opening and running a business.
Business Activity Approval
Although Dubai is a modern diversified city, the traditions are still prevalent and everyone must work within them. Not all business activities are allowed, some of them have restrictions and some are not allowed at all. The Department of Economic Development (DED) is responsible for regulating, permitting, and licensing economic activities in Dubai and you must consult with them to know if your business activity is allowed within the city. However, approval is not required from the free zone and offshore business setups.
Time and Cost of Starting a Business in Dubai
The time and cost differ based on jurisdiction and approvals required from related authorities. In most cases, it takes 3-5 days to open a Free Zone company and 10 days for a mainland one after the trade license is issued. Investors can expect to obtain a visa and UAE residency in approximately 2 weeks. Setting a budget for starting a business in Dubai is necessary but the cost differs from one startup to another. Company type, number of shareholders or owners, office requirements, trade license type, and number of business activities are some of the aspects you should take into consideration while setting a budget for the process.
Knowing these things before starting a business in Dubai will make the whole process easier. Doing your research beforehand will save you money, time, and effort that are best directed toward growing your company. If you are going to employ the assistance of a company to help set up your business, make sure you are dealing with a reputable company with great reviews and the required licenses.