FAQ’s

The UAE is a vibrant country that offers some of the best locations to set up a business. Being centrally located on the world map, it acts as a gateway between the East and the West, so you are always open for business to the world. Here are the key advantages of starting your own business in the heart of the Middle East – the UAE:

1. The Booming EconomyThe UAE has one of the most open trade policies – an open economy with a high per capita income and a large yearly trade surplus for the past 50 years. Businesses are relocating their headquarters to the UAE and setting up offshore entities there, and several start-ups and multimillion-dollar companies are now based in the UAE. The state’s ability to provide stable financial conditions to all businesses has driven a significant influx of foreign capital, strengthening the economy even further.
2. The Legal FrameworkThe UAE government is looking to boost the economy by attracting international capital. To that end, the legal structure has been updated for international investors who want to launch a business. Red tape is minimal, all legal processes are expedited, paperwork requirements are light, and licensing & registration procedures are straightforward.
3. The Facilities and InfrastructureThe UAE government has spared no effort to ensure that overseas investors have no difficulties operating their enterprises. World-class infrastructure and amenities are available in business parks, offices, warehouses, transportation, connectivity, and utilities.
4. The Availability of LaborWorkers from all over the world, particularly from India and other south-eastern countries, migrate to the UAE in search of employment. As a result, business owners in the UAE don’t have to worry about finding employees to run their operations – a very favorable climate for both employers and employees.
5. The Tax ExemptionsOne of the most difficult aspects of starting a business in a foreign country is learning its tax laws and structuring your company to pay the fewest taxes. The UAE provides a variety of business ownership patterns and tax categories.
6. EntrepreneurshipIn the UAE, foreign business owners can benefit from 100% business ownership under several company formations. In many other countries, foreign investment is typically limited to 49% of the business share, with the local partner entitled to 51%.
7. Global PlacementThe UAE business environment is regarded as one of the best in the GCC region, according to the World Bank.
8. Effective Healthcare and Education PolicyFamous tertiary and multi-specialty hospitals and healthcare institutions are located here. The literacy rate in the UAE is an astounding 95.5%, and well-known international universities such as INSEAD, MIT, and NYU have established themselves here.
9. The Strategic LocationThe UAE is well situated halfway between the three continents of Asia, Europe, and Africa, with around 1,100 flights every week between nations. The GCC and the broader Middle Eastern market are accessible; China and India – key trading partners and suppliers of raw materials – are on one side, and the European Union, a significant trading partner, on the other.

1. Determine the business activity: Identify the type of business activity you want to engage in and ensure it complies with the UAE’s legal requirements.
2. Choose the legal structure: Select the appropriate legal structure for your business, such as a mainland LLC, free zone company, or offshore company, based on your requirements and the nature of your business.
3. Reserve a trade name: Choose a unique trade name for your business and get it approved by the relevant authorities.
4. Apply for a license: Submit the necessary documents and apply for a trade license from the relevant licensing authority based on your business activity and location.
5. Secure office space: Ensure you have a physical address for your business. This could be a leased office space or a flex desk in a free zone, depending on the chosen business structure.
6. Obtain necessary approvals: Obtain any additional approvals or permits required for your specific industry, such as health and safety approvals or certifications.
7. Register with relevant authorities: Register with the Chamber of Commerce and other relevant authorities based on your business location and activity.
8. Open a bank account: Set up a business banking account with a UAE bank, which may require providing relevant documents and meeting the bank’s requirements.
9. Hire employees and obtain visas: If you plan to hire employees, follow the procedures to obtain work permits, visas, and any required employee registrations.

* The specific requirements and procedures may vary depending on the emirate and the type of business activity. It is advisable to seek professional assistance or consult with local authorities to ensure compliance with all legal and regulatory obligations.

In the UAE, there are several types of business entities available for entrepreneurs and investors. The main types include:

Mainland Companies

If you want to gain a business advantage within the UAE, or if you prefer not to be located within a free zone, then a mainland company is the option that suits you best. “Mainland” refers to the areas outside the free zones; the Dubai Department of Economy & Tourism (DET) manages registration and licensing of mainland companies. Companies here can operate both within and outside the UAE, including the broader GCC region and in free zones. Since 2020, foreign investors have been able to enjoy 100% ownership in many sectors.

Mainland companies are free to operate across a wide range of sectors and can trade with individuals and businesses within the UAE as well as internationally. Most activities now allow 100% foreign ownership, although some may require an Emirati partner, depending on the business type.

A number of business licences are available, depending on how you plan to structure your company and which sector it will operate in:

• Industrial licence
• Commercial licence
• Professional licence
• E-trader licence
• Dual licence

Free Zone Companies

Free zones are designated areas that offer various incentives and 100% foreign ownership. These entities cater to specific industries and provide a business-friendly environment with streamlined processes. It is important to note that companies set up in a free zone cannot trade within the UAE without a specific mainland licence.

Available licences include:

• Industrial licence
• Commercial licence
• Professional licence

• Limited Liability Company (LLC)An LLC has a minimum of two partners but not exceeding 50. Each partner is liable only to the extent of his/her share in the capital. Partners’ shares aren’t represented in negotiable instruments.
• Limited Liability One Person Company (OPC)A company that a UAE national or other nationality (whether natural person or company) may establish and own. All laws and regulations that apply to limited liability companies apply to the limited liability one person company.
• Sole EstablishmentSuitable for small businesses owned by a single individual. The owner is personally liable, and the business does not have a separate legal entity.
• Branch of a Foreign CompanyForeign companies can establish a branch office in the UAE to conduct commercial activities. The branch operates under the parent company’s name and is subject to UAE regulations.
• Public Joint Stock CompanyA company with a capital divided into equal negotiable shares. The founders subscribe to a portion of such shares, while the rest are offered to the public through a public offering. A shareholder’s liability is limited to his/her share in the capital.
• Private Joint Stock CompanyCan be established provided the number of shareholders is not less than two and not more than two hundred, and the capital is divided into equal shares of nominal value paid in full.
• Private Joint Stock – One Person Company (OPC)A company that one legal person can establish and fully own its shares. The holder of the company’s capital is only liable for its obligations to the extent of the capital set out in its memorandum of association (MOA). The company name shall be followed by the phrase “Private Joint Stock – One Person Company (OPC)”.

The specific requirements for obtaining a trade license in the UAE may vary slightly depending on the emirate and business activity. However, the general requirements include:

1. Business plan: Prepare a detailed business plan outlining your proposed activities, market analysis, financial projections, and other relevant details.
2. Legal structure: Choose the appropriate legal structure for your business, such as an LLC, Sole Establishment, or Branch of a Foreign Company, based on your activity and requirements.
3. Trade name reservation: Select a unique trade name for your business and get it approved by the relevant authorities. The name should comply with the naming conventions and guidelines provided by the authorities.
4. Premises and tenancy contract: You’ll need a physical address for your business – a leased office space or a flexi-desk, depending on your chosen legal structure. A tenancy contract or lease agreement is typically required as proof of your business location.
5. Share capital: Determine the minimum required share capital based on your chosen legal structure and activity. In some cases, the share capital may need to be deposited in a bank account and a certificate of deposit obtained.
6. Approvals and permits: Depending on your business activity, you may need specific approvals, permits, or licenses from regulatory authorities or industry-specific bodies, such as health and safety permits, environmental permits, or professional licenses.
7. Application submission: Prepare the required documents and submit your application for a trade license to the relevant licensing authority. These typically include application forms, passport copies, visa copies, NOC letters (if applicable), and legal entity documents (such as a Memorandum of Association or Articles of Association).
8. Fees and processing time: Pay the necessary fees for the license application and processing. Approval typically ranges from a few days to a few weeks, depending on the type of license and the emirate.

Yes, there are restrictions on foreign ownership of businesses in the UAE, but these vary depending on the emirate and the business activity. Here are some key points to consider:

• Free Zone Companies: Free zones in the UAE offer 100% foreign ownership for businesses within their respective zones. Each free zone has its own regulations and procedures, and the type of license obtained limits business activities to within the free zone or allows for offshore operations.
• Mainland Companies: Those based outside a free zone are free to operate across a wide range of sectors. They can trade with individuals and businesses within the UAE as well as internationally. Most activities now allow 100% foreign ownership, although some may require an Emirati partner, depending on the business type.
• UAE Commercial Companies Law Amendments: In 2020, the UAE introduced amendments to the Commercial Companies Law, allowing more flexibility in foreign ownership rules. These changes permit certain companies to have 100% foreign ownership outside free zones and provide mechanisms for public joint-stock companies to offer higher percentages of shares to foreign investors.

* Specific regulations and requirements may vary depending on the emirate and the type of business activity.

The UAE has a favorable tax environment for businesses, with several key considerations regarding tax implications:

• Value Added Tax (VAT): The UAE introduced a 5% VAT on the majority of goods and services in January 2018. VAT is applicable to businesses meeting certain turnover thresholds; they are required to register for VAT, charge VAT on eligible transactions, and file regular VAT returns.
• Corporate Tax (CT): The UAE introduced a 9% Corporate Tax on all businesses conducting business activities under a commercial license in the UAE.

CT rates (as per the Ministry of Finance):

• 0% for taxable income up to AED 375,000
• 9% for taxable income above AED 375,000

CT will not apply to:

• An individual earning salary and other employment income, whether received from the public or the private sector.
• Interest and other income earned by an individual from bank deposits or saving schemes.
• A foreign investor’s income earned from dividends, capital gains, interest, royalties, and other investment returns.

There are specific industry regulations and licenses required in the UAE, depending on the nature of the business. Some key examples include:

1. Professional Licenses: Professions such as doctors, engineers, accountants, consultants, and artists require specific professional licenses issued by the relevant regulatory authorities.
2. Healthcare: Businesses operating in the healthcare industry, such as hospitals, clinics, pharmacies, and medical equipment suppliers, must comply with the regulations of the UAE Ministry of Health and Prevention (MOHAP).
3. Education: Schools, universities, training centers, and educational institutions must obtain licenses from the relevant educational authorities, such as the Knowledge and Human Development Authority (KHDA) in Dubai.
4. Food and Beverage: Restaurants, cafes, catering services, and food production businesses must comply with regulations from the local authorities, such as the Dubai Municipality’s Food Safety Department.
5. Construction and Contracting: Companies involved in construction, engineering, and contracting activities must obtain licenses from the respective emirate’s Department of Economic Development, along with compliance with building regulations and permits.
6. Manufacturing: Manufacturing companies need to comply with industry-specific regulations regarding safety, environmental standards, and product certifications.
7. Financial Services: Financial institutions, including banks, insurance companies, and investment firms, must obtain licenses from the relevant regulatory bodies, such as the Central Bank of the UAE or the Insurance Authority.
8. Tourism and Hospitality: Hotels, travel agencies, tour operators, and event management companies must obtain licenses from tourism authorities, such as the Department of Tourism and Commerce Marketing (DTCM) in Dubai.

* These are just a few examples; requirements can vary depending on the specific industry and emirate in which the business operates.

The procedures for hiring employees and obtaining work permits in the UAE involve several steps. Here is an overview of the process:

1. Job Offer: Extend a written job offer to the selected candidate, outlining the terms and conditions of employment, including salary, benefits, and other relevant details. The job offer will be in Arabic & English.
2. Employment Contract: Once the job offer is accepted, prepare an employment contract in compliance with UAE labor laws, specifying the rights and responsibilities of both the employer and the employee. The contract will be in Arabic & English.
3. Entry Permit and Visa: As an employer, you need to apply for an entry permit and employment visa. This involves submitting the required documents, such as the employment contract, passport copies, photo, and relevant educational and professional certificates.
4. Ministry of Human Resources and Emiratization (MOHRE): Register the employment contract with the MOHRE and complete other required procedures, such as providing employee data, paying applicable fees, and obtaining a labour card.
5. Medical Fitness Test: The employee needs to undergo a medical fitness test at an approved center to obtain a medical fitness certificate, which is required for the residence visa.
6. Emirates ID and Visa Stamping: After the entry permit is approved, the employee completes the Emirates ID application process and undergoes biometric registration. Following this, the residence visa will be issued.

The banking and financial requirements for setting up a business in the UAE may include the following:

• Capital Requirements: Depending on the legal structure and business activity, there may be minimum capital requirements to be met.
• Bank Account Opening: To open a business bank account you will typically need a valid trade license, company memorandum, passport copies of shareholders and directors, proof of address, and a completed account opening form.
• Personal Visit: In some cases a personal visit to the bank is required for identification; some banks offer remote account opening for certain structures.
• Business Activities & Compliance: Regulated activities may require additional compliance procedures and licenses.
• Maintaining Minimum Balances: Some banks require a minimum balance for business accounts to avoid penalties.
• Bank Services: Online banking, trade finance, foreign exchange, debit/credit cards, merchant services, and payroll solutions may be available.

Additional requirements often include:

• Managers holding a UAE residence visa.
• Incorporation documents including the office lease (Ejari) with photos of the office.
• Recent high-value credit and debit invoices.
• A company profile / business plan with supplier and client details.
• Expected turnover.

The timeline to start a business in the UAE varies depending on the type of business, the chosen legal structure, the emirate, the responsiveness of authorities, completeness of documentation, and any additional requirements specific to your activity.

1. Initial preparations: Research and business planning – 1–3 days.
2. Trade name reservation: Usually 1–3 days for approval by the relevant authority.
3. Approvals and documentation: Gathering and preparing all required documents (Memorandum of Association, tenancy contract, and supporting documents) – varies with the complexity of the structure.
4. License application: Submitting the completed application and documents to the licensing authority – a few days, depending on the emirate and activity.
5. Visa and employment procedures: Once the license is issued, obtaining visas and work permits for employees takes 1–2 weeks, including medical fitness tests, Emirates ID application, and visa stamping.