The best way to start a business in Dubai?

In Dubai, the government has made a conscious effort to establish an atmosphere that is well-organized without being overly constraining. As a result, Dubai provides businesspeople with some of the most tolerant and alluring operating circumstances in the area.

For foreign businesses looking to partner with Dubai, there are numerous possibilities available.

In the Middle East, having a presence can offer significant business benefits. Personal relationships are far more crucial to conducting business in the Arab world than they are in western Europe or America since businessmen in the region prefer to work with people they know and trust.

Licensing

One of the following three categories of licenses is a prerequisite for all commercial activity in Dubai:

• Commercial licenses encompassing all forms of trading.
• Professional licenses for occupations, services, artisans, and craftspeople.
• Industrial permits for starting a manufacturing or industrial operation.

The Dubai Department of Economic Development is responsible for granting each of these licenses. However, several ministries and other authorities must approve particular business license types before they can be issued: for instance,

1. Banks and financial organizations from the UAE’s central bank.
2. Insurance Authority’s list of insurance providers and affiliated organizations.
3. Production permit issued by the Ministry of Finance and Industry.
4. Drugs and healthcare supplies from the Ministry of Health.
5. Contracting, building maintenance, and a few other municipal activities (see here for a list of the activities that call for municipal approval).
6. Road and Transport Authority transportation and vehicle rental services (click here for a list of services requiring RTA approval).
7. National Media Council’s printing, publishing, and advertising operations;Activities from Dubai Maritime City related to cargo clearing, cargo packaging, canal dredging contracts, and fishing cage production;
8. Travel and tourism-related activities (now subject to direct DED approval). There is no requirement for Department of Tourism and Commerce Marketing DTCM approval.
9. A gym club activity sponsored by the Dubai Sports Council.
10. The Community Development Authority must complete Social Club registration and licensing.
11. The Dubai Municipality’s Environment Protection Section manufactures tents, awnings, and tarpaulins.
12. Only places with gas stations are permitted to issue car wash licenses. To lease the space at their gas station, an agreement must be made with the aforementioned oil corporation. Other safety and environmental regulations must be adhered to in accordance with set standards.
13. Businesses involved in the production of gas or oil, as well as associated industries, must follow more specific procedures.A financial guarantee from a bank with operations in Dubai is required in order to engage in certain trade activities (such as jewelry and insurance).

Generally speaking, the Dubai Chamber of Commerce and Industry requires registration from all commercial and industrial firms operating in Dubai.

Tourism businesses, A bank deposit of Dh100,000 must be made for inbound tourism. A bank deposit of Dh200,000 must be made for outbound tourism. Until the license is revoked, these deposits are final.

1. Travels: To be deposited to the Department of Tourism & Commerce Marketing is $100,000 for the travel agency. Until the license is cancelled, this deposit is final.
2. Building Contracting Company: The Department of Economic Development will charge an additional Dh10,000 when issuing a license for a building contracting company for the first time.
3. General Trading: The Department of Economic Development will charge an additional Dh15,000 when issuing a general trading license.
4. Dubai Customs: Would accept a deposit of Dh50,000 from the customs broker. Until the license is cancelled, this deposit is final.
5. RTA Activities (after paying costs for initial RTA approval)
   1. Rent a Car: 5000 dirhams
   2. Rent a bus for $1000.
   3. Renting a bus to transport passengers costs Dh1000.
6. Trading in telephones and telecom equipment: Requires a payment of Dh5500 to the Telecommunications Regulator Authority (TRA). The cost is one-time only.
7. Security services: include individual guarding, party security, and property guarding.
   Department of Protective Systems, Dubai, gave initial permission. Tel. 04-2048312
8. Activities connected to oilfields: and natural gasinitial endorsement by the Ruler’s Court
9. Money Transfer: initial endorsement from the Department of Protective Systems and the Central Bank of the UAE
10. Trading mobile SIM cards: creating stamps and seals, and jewelry Department of Protective Systems’ initial clearance

Setting up Business in the Jebel Ali Free Zone

In 1985, the Jebel Ali Free Zone was created with the express intent of promoting investment. As a result, the steps for setting up in the zone are rather straightforward.

Jebel Ali’s legal position is significantly different even though it was created to support and contribute to Dubai’s expansion and development. For legal purposes, businesses operating there are regarded as being “offshore,” or outside the UAE. Therefore, Jebel Ali is the best location for businesses who want to use Dubai as a regional manufacturing or distribution hub and have a large portion of their revenue generated outside of the United Arab Emirates.

Jebel Ali Incentives:

• Completely foreign ownership.
• A complete waiver of import taxes.
• 100% of profits and capital will be returned home.
• Corporate tax exemption is available across Dubai, and the Free Zone also offers a 15-year guarantee that is renewable.
• Abundant, affordable energy; simple and effective hiring practices that guarantee the availability of a competent and experienced workforce that is competitive.

Licenses:

The following categories of licenses will be given to businesses permitted to operate in the Jebel Ali Free Zone: Trading, Industrial, Service, or National Industrial. As long as the business has a current lease with the Free Zone Authority, these licenses are renewed annually.

• Companies with a current license from the Dubai Economic Department or a comparable UAE entity, as well as companies formed outside of the UAE, will be awarded trading licenses. The permissible activities on the Free Zone license must, in each instance, match those on the current license. Free Zone Establishments (FZE) are also granted trading licenses.
• Companies incorporated outside of the UAE as well as Free Zone Establishments are granted industrial licenses.
• Only businesses with an active UAE license are eligible for service licenses.
• Industrial businesses registered inside or outside the UAE may be granted a national industrial license if they meet the requirements of having at least 51% AGCC equity and at least 40% of their value added coming from local manufacture. The UAE Ministry of Finance and Industry’s provisional clearance is required for such businesses. Products exported to AGCC states are exempt from customs taxes, and holders of National Industrial licenses have the same privileges as national and AGCC firms.

Setting Up a Branch of a Foreign Company:

Any business that wants to launch a project in the Jebel Ali Free Zone must first respond to a brief questionnaire. The Free Zone Authority can determine the feasibility of meeting the company’s needs based on the information given. Following review of this questionnaire, the following information will be given to the company:

• A license application with information on the supporting documents needed for the company’s legal status in the appendix.
• A template for the data needed for planning
• An electrical supply request from a customer.

The Free Zone Authority will review the proposal after it has received these materials. The business will be asked to create and submit the required documentation included in the appendix to the license application if provisional permission is granted.
A meeting will be called to discuss and finalize the project details following the review of these materials. The Authority will grant the project conditional permission if everything is satisfied. The Authority will next draft a lease agreement and, if necessary, a personnel secondment agreement for the company to sign.

The applicant must present the insurance policies necessary by the contracts at the time of signing and shall pay the agreed-upon rental and license price before collecting.

Joint Venture Company:

A joint venture is an arrangement in writing between a foreign party and a local party who has the necessary permits to carry out the intended activity. Despite the profit and loss distribution being able to be dictated, the local equity participation in the joint venture must be at least 51%. Neither the joint venture nor the agreement need to be licensed nor published. Unless the agreement is made public, the local partner, who is responsible for all obligations, is used by the foreign partner when dealing with third parties. In reality, joint ventures are seen to provide a good structure for businesses collaborating on particular initiatives.

Setting Up Free Zone Establishment (FZE):

An establishment created, registered, and governed completely by the Free Zone Authority is known as a Free Zone Establishment, or FZE. Liability for such enterprises is restricted to the paid-up capital, which must be at least Dh1 million. A FZE is a separate legal entity that only needs to have one shareholder.

Any business, organization, or person interested in establishing a free zone establishment must submit a completed application to the free zone authority’s FZE Department. After receiving the application and any additional information or evidence needed, a decision about whether permission has been granted will be made within 30 days.

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