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Marhaba: the golden keys to establishing your business in the UAE

The UAE is a booming business hub that offers a lifestyle comparable to a few places in the world. With its strategic geographic location, it is within an eight-hour flight to two-thirds of the world’s population, and the economic landscape is geared towards attracting foreign investment and business owners.

In fact, establishing a business in the UAE became significantly easier in 2020. Amendments to the UAE Commercial Companies Law saw the removal of the requirement for a UAE national to own at least 51% of the shares in the capital of a UAE company, and the requirement for branches of foreign companies in the UAE to appoint a UAE national agent.

The steps to creating a business entity have been streamlined across the seven emirates, with firms in each offering guidance to finalise the fine print. The steps are straightforward, and some can be eliminated if the business is an expansion of an existing entity.

Conduct your research or appoint a professional

Astute business owners know that market research is key when launching a business venture. Obtaining an accurate and timely analysis, with research and commentary on all sectors of the market, will put you strides ahead of competitors and in good stead to lead the race.

Local knowledge is a powerful asset, so securing guidance from an entity based locally is highly beneficial. Firms such as Savills, which has more than 40 years’ experience in the region, can assist private, institutional and corporate clients looking to acquire, lease or develop a property. Sectors catered to include residential, retail, commercial, logistics, hospitality, healthcare, leisure, education, car parks and more.

Your business activity will dictate the type of licence required for operation. There are six types of licences: industrial, commercial, professional, tourism, agricultural and occupational.

Select the legal form and jurisdiction

The legal form of your business is the basis for identifying applicable laws and regulations, and must match the business activity. Each emirate has its own guidelines and requirements, so it’s important to familiarise yourself on the details of your chosen jurisdiction.

The UAE market has three economic zones: mainland, free zone and offshore. Each of these has its own set of laws and regulations pertaining to specific business setups, so selecting the jurisdiction will depend largely on individual business requirements and activities.

Commercial and retail properties are available for rent and sale, and property management services are offered by firms like Savills which treat each business individually, whether working on behalf of a landowner, developer, investor, housing association, bank or public sector group.

Register your trade name

The Department of Economic Development needs to approve the trade name of your company before the process of setting it up can begin. The business activity you select is also attached to this process.  Once given the go-ahead, documents to apply for a UAE trade license can be submitted and the process to officially open a company in Dubai can begin.

If your business is being established in the UAE mainland, your trade licence will come under one of the above-mentioned categories. Free zone licencing is structured differently, so guidance may be beneficial at this stage of the process.

Obtain initial approval

Essentially, an initial approval means that the UAE Government has no objection to your business being established, giving the green light for the next steps. It does not, however, grant the authority to run or practice the business activity.

Foreign investors are required to obtain the approval of the General Directorate of Residency and Foreigners Affairs before getting the initial approval.

Memorandum of association (MoA) or a local service agent agreement (LSA)

A completed and signed MoA or LSA is needed to proceed, and the legal form of your business will determine which is required for you. Both can be prepared and attested by UAE-based law firms, courts and notary public, and it should be noted that businesses owned completely by non-GCC residents will require a local service agent from the UAE.

Designate a physical address

All businesses in the UAE must have a physical address, with premises and a location that complies with the requirements of the respective emirate’s Department of Economic Development and land planning regulations.

Obtain additional government approvals

Depending on your business activity, you may require additional approvals from government entities. The types of activity are sorted by ministry, and examples include architectural and engineering affairs, legal services, travel and tourism, health-related activities and more.

Collect your business licence

Once all the above steps have been completed and approved, you’re one step closer to success. Your business licence will be available for pickup from a designated economic department service centre, and you will be required to bring some documents, regardless of the legal form of the business.

These include:

Initial approval receipt and all the previously-submitted documents

Copy of the lease contract duly attested by the Real Estate Regulatory Agency (RERA) in Dubai

Duly attested memorandum of association (for all types of companies)

Approvals from other government entities concerned, as may be required

Duly attested service agent contract (for civil establishments and companies that are 100% owned by non-GCC nationals), in the UAE involving a local service agent.

Welcome home

Or as they say in the UAE, marhaba. Now it is time to choose an office, retail, commercial or warehousing space that suits the needs of your business ventures. Welcome to your new home.


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