Introduction to starting a business in Dubai as a foreigner

starting a business in dubai as a foreigner

You will find excellent options to start a business in Dubai as a foreigner due to its strong economy and strategic location. In addition, it has a business environment that can be welcoming if you are a foreigner investing in the country. Also, when doing business in the country, you have the attractive opportunity to maintain 100% of ownership in almost all circumstances.

In this article, you will be able to learn about the benefits that Dubai offers for foreign entrepreneurs, and what the requirements and types of licenses are. Furthermore, we will show you the process and documents necessary to start your company in the nation.

Dubai Permits Non-Residents to set Up Businesses

starting a business in dubai as a foreigner

Foreigners are generally allowed to start businesses in Dubai without any problems. However, you may have certain conditions depending on the type of business you want to create. Likewise, the conditions will depend on your nationality of origin or where you reside.

Additionally, there are circumstances in which you must work having a local sponsor to whom you will give a 51% stake in the company. However, these business partners do not make decisions within the company and their percentage of the business will be agreed upon in advance.

On the other hand, you will be able to take advantage of the Emirates tax rate of 0% on corporate income as a foreigner. However, the benefit of this will depend on your tax residence

Types of business licenses available to foreigners

In Dubai, there are various types of trade licenses to start a business in Dubai as a foreigner. Likewise, the most common types of license are:

  • Commercial license. It is a license necessary for commercial activity including the purchase, sale, import, and export of goods, among others.
  • Professional license. This license allows you to offer your experience and skills to your clients. In addition, it is useful for service providers, craftsmen, and professionals.
  • Industrial license. This is what manufacturing businesses or any industrial activity needs. Also, they are suitable for people who work converting natural materials or raw materials into finished items.
  • Tourism License. This is indicated for people who work in tourism companies. Likewise, these include visa agencies, hospitality services, and tour operators.

All these licenses have their particular requirements and processes for applying. Also, keep in mind that some business activities will require approval from other official departments. Likewise, to have the best business license to start a business in Dubai as a foreigner, you will need to apply for it based on the type of business and the business area.

However, if you are not sure which license you require, consult a business formation expert.

The process to start a business in the UAE as a foreigner

When you want to start a business in Dubai as a foreigner, you will need to follow the regulatory steps including visa processes. Below are the details of the process:

  1. Decide on the nature of your business. This will determine the type of license that you must acquire, for them you must
  2. Choose a business name. Choose a unique name that conforms to naming conventions in the UAE.
  3. Adopt a business structure. Various forms of business structures are available in the emirates sole proprietorship, free zone company, and limited liability company. Likewise, the choice of structure will depend on the level of control you want to have, your budget, and your business.
  4. Select a location. You can locate your business in the free zones and the continental territory of the Emirates. Also, each space has its particular advantages and regulations.
  5. Proceed to register your business. To do this, you will present the documents required by the authorities, such as the business plan, application forms, and a copy of your passport.
  6. Purchase a commercial license. You must request a license following the commercial activity you will carry out. This license can be professional, commercial, tourist, or industrial.
  7. Open a corporate bank account. You must open a corporate account after registering the company. For this, you must present the company registration documents and the requirements that the bank asks of you.
  8. Get a Visa. Every foreign businessman will need a visa to live and work in the Emirates.

This is the process that is generally done to start a business in Dubai as a foreigner or a non-resident or foreigner. However, the steps may vary depending on the requirements depending on the commercial activity and whether it is continental or in the free zone.

When should you renew your business license in Dubai?

Once you have started your business, you must be sure to renew your business license annually as required by law. Likewise, you must present the documentation to renew it before the expiration date. Otherwise, if you do not renew it on time, you will be required to pay a fine for late renewal.

Furthermore, for your convenience, the renewal can be done by a company formation service provider in the UAE.

Things to consider before starting a business in the UAE and Dubai

To make the process of starting a business in Dubai as a foreigner easier, keep the following in mind:

  • Knowledge of local business customs. When you are going to start a business outside your home country you must know the local business practices and customs.
  • Choose the right location for your type of business. To start your business, choose between the continent and a free zone since each one offers different benefits.
  • Take costs into account. Check the cost of starting a business including visa costs, licensing fees, and operating expenses.

Company setup options in Dubai for foreigners

In the Emirates, there are several options at your disposal to start a business in Dubai as a foreigner. Likewise, the categories in which you can establish a company are the following:

Continental company

This type of company will allow you to do your negotiations anywhere in the United Arab Emirates. The so-called free zones of the country are also included. Additionally, you can opt for any of the legal forms such as LLC or Limited Liability Company, Civil Society, or Professional license.

However, if you decide to start a continental company-type business, you will need to have a local sponsor or service agent. Likewise, the sponsor must be a citizen of the Emirates and own 51% of the shares of the company. Likewise, if you partner with a foreign investor, you must provide them with 49% of the shares.

If the license is professional, it will not require granting the agent any action; however, it is necessary to be able to communicate with government entities.

Free zone Company

In the UAE there are 40 free zones that serve different business sectors such as healthcare, media, design, commodities, and technologies, among others. Additionally, an advantage when you start a company in one of these free zones is that you will be able to maintain 100% of the ownership. Likewise, you may retain 100% distribution of capital, profits, and exemption from import and export taxes.

Moreover, in free zones the process of setting up your business is simple and you will not need a local sponsor. However, businesses that are in the free zones will be able to do business only within the free zone itself or outside the Emirates. However, this may change if a local distributor opens a branch of his business outside of this area

Offshore company

Offshore companies are extraterritorial companies that are used for investments or some international businesses. Likewise, they have tax and confidentiality benefits but are not allowed to conduct business within any emirate.

Benefits of starting a business in Dubai as a foreigner

starting a business in dubai as a foreigner

Dubai is the right option for thinking about how to start a business in UAE as a foreigner. This is because it offers commercial benefits that you will see below:

It is a commercial city

Among the main commercial centers worldwide, Dubai is ranked number 17. Therefore, this emirate provides foreign citizens with multiple advantages as a growth base for new companies. Furthermore, Dubai is considered a world-renowned leader for the following reasons:

  • Excellent administrative infrastructure
  • Generous tax policies for startups
  • Commercial Real Estate Options with High Return on Investment
  • Diversification towards a non-oil dependence

Business opportunities in Dubai

The government policy and the regulatory environment with facilities, start a business in Dubai as a foreigner. Furthermore, in the country, the opportunities are very large and diverse and that is exactly what has led to commercial success. Likewise, due to its consolidated position as an economic force, it has attracted international investors to start their businesses here.

Great tax benefits

There are excellent tax benefits in Dubai because the UAE government has built ecosystems with advantages for foreign investors. For example, an investor of international origin will not have to pay taxes on his profit or capital.

Furthermore, the VAT in the country is 5%, which represents a very low figure compared to other commercial capitals worldwide. Likewise, tax policies favor the establishment of conglomerates and the creation of new companies in Dubai.

Perfect air connectivity

Air connectivity is an important issue for business in Dubai for foreigners and locals. Thus, the government pays special attention to the frequencies of its flights as well as the accessibility to its airports. Consequently, there is good air connectivity in the country for foreigners doing business in the country.

Easy trading setup

The regulatory measures and tax procedures for forming a company in Dubai, although they may seem overwhelming, are not. You only need to submit a name for your business and passport copies to start a business in Dubai as a foreigner. Starting from there, seek the help of business setup consultants for managing licenses and legal procedures.

Ease of doing international business

This additional benefit is useful when you are starting a business in Dubai because it will allow you to win initial clients. This is because in this country actors of almost all types converge which can benefit B2B and B2C companies. Also, there is abundant labor available in ports, which makes commercial companies grow very easily.

Optimal commercial spaces

Plug-and-play office spaces allow companies to move into the area as well as make transitions quickly. Moreover, these spaces called Coworking are a current commercial trend in Dubai. However, adaptable and affordable Coworking is available in the country.

Documents required to start a business in Dubai as a foreigner

As we have mentioned, when you start a business in Dubai for foreigners, you must decide the type of business activity. Likewise, the documents that you must generally present are the following:

  • Copy of passport
  • Copy of visa if you are not a UAE resident
  • A business plan outlining your business objectives, strategies, and financial projections
  • Letter of intent from a local sponsor if applying for a continental license. this is necessary for very limited activities
  • Certificate of Good Conduct issued by representatives of the law
  • A financial statement showing your financial assets and liabilities is important to demonstrate your financial ability to manage a business

Additionally, you may be required to provide other documents that are specific to the area and business you operate.

Company Formation Cost in Dubai

There are many variables when you are starting a business in Dubai which makes it difficult to set a fixed rate. Likewise, the initial cost of the business will vary depending on the type of business, location, and other factors. However, you may think that the commercial license may cost you between AED 15,000 and AED 25,000.

An example of this cost diversity is the license for Fujairah Creative City. Likewise, this includes the visa in its price and the use of a coworking space in the free zone can cost you AED 24,775. To have a clearer idea of how much the license you need may consist of; consult professionals, this way you will save time and effort.

Start your business in Dubai with ConnectFZ

We can say that; start a business in Dubai as a foreigner is promising because of the favorable location, strong economy, and good business environment. Furthermore, if you have the guidance of expert professionals in these areas, you will be able to do all the processes to start your business successfully.

At ConnectFZ we can provide you with all the comprehensive advice and services for having business setup in Dubai mainland for foreigners . In this particular, our team of professionals can provide support at each step that will guarantee its fluidity, just contact us.

Harneet Bhatia

Harneet-Bhatia-imgHarneet BhatiaShe is a renowned Business Sales and Golden Visa Expert, specializing in facilitating business setups in Dubai. With a comprehensive portfolio of services, she adeptly assists clients in navigating the complexities of corporate bank account creation, addressing fines issues, and managing visa services. Her expertise extends to providing VAT services and obtaining necessary DM approvals, ensuring a seamless and efficient process for her clients.

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