Dubai is the dream destination for entrepreneurs, and business owners to expand their businesses internationally. The environment of Dubai welcomes foreign investors with open hands. The ease of doing business in Dubai is nowhere to be found on the planet.
The prime business environment of Dubai has helped in raising the number of non-resident entrepreneurs who have established their businesses here. The 0% tax on corporate and personal income further attracts business people to open their companies in Dubai. Plus, the world-class infrastructure, the introduction of long-term visas, strategic global location, and an ever-growing economy has additionally solidified the city’s reputation in the eyes of foreigners.
If you are also a foreigner and looking to start your business in Dubai, this step-by-step guide will help you out. With the right advice, assistance, and guidance from experts at Riz and Mona Consultancy, you can get your business up and functional in this business hub. Read on to get a fair idea of setting up a business in Dubai as a non-resident.
Benefits of Starting a Business in Dubai as a Foreigner
Dubai is home to countless business opportunities for non-residents and non-natives across the globe. Entrepreneurs choose Dubai to get benefitted from its flourishing economy due to a huge number of reasons. Some of these reasons are mentioned below:
Strategic Location: Dubai offers a firm strategic regional location for a business looking to international markets for growth. It is so because it serves as a doorway to Asia and Africa.
Elite Sea and Airports: You will find outstanding airports and seaports in Dubai for non-stop trading between various international markets of Asia, Africa, and the Middle East.
Zero Tax: No income, corporate, import/export, customs, or any other taxes are imposed on companies operating in Dubai. Prime businesses established in Dubai are subjected to above 66 international double tax avoidance treaties.
Easy Currency Exchange: There are currently no exchange controls in place in Dubai for easily moving the funds.
Immensely Diverse Economy: Besides natural gas reserves and petroleum products, transportation, innovation, tourism, trade, and technology are mainly involved in boosting Dubai’s economy.
Low Crime Rate: Dubai is one of the safest cities to live and work with comfort and ease.
100% Foreign Ownership: Opening a company in the free zones of UAE offers you 100% foreign ownership.
No Geographical Barriers: You can perform your trading business activities without facing geographical barriers and enjoy 100% repatriation of capital and profits as well.
Business-Friendly government: The DED is the government body that supports business ventures and helps in establishing businesses.
Types of Business Licenses in Dubai, UAE for Non-Residents
Foreigners planning on expanding their business in Dubai can get their hands on two common types of business licenses; free zone license and mainland license.
Free Zone License
Fresh entrepreneurs or individuals who are new to the business should opt for a free zone license. In general, this license is the most cost-effective and straightforward way to set up a company in the Emirates as a non-resident or foreigner. Working in various free zones offers you 0% corporate tax, no restriction on currency, and 100% customs tax exemption.
Foreign investors prefer Dubai mainland over any other destination for company formation. This is so because business owners can do business anywhere in UAE. No capital is required for a local Dubai mainland license. However, as a foreigner, you may need to collaborate with a local sponsor to make your business functional.
Documents Required to Set Up a Business in Dubai as Non-Residents
The documents that you would need to submit with your application for setting up a company in Dubai, UAE are enlisted below:
- Filled out the application form
- NOC from your local sponsor (for entrepreneurs)
- Copy of existing trade registration certificate or license (if you have an existing business, applicable only for local company)
- Colored passport copies of the director, manager, and shareholders of the company
- Certificate of reference from a bank of the company’s shareholder or audited financial reports of two years for the corporate entity
- Sign of the appointed director or manager for the new company and company’s shareholders
- Your business plan
- Articles of incorporation (if necessary)
Steps to Start a Business in Dubai, UAE as a Foreigner
Follow these steps and you can open your own company in Dubai, UAE right away.
Step 1. Applying for Visa
Before forming your business, you should apply for a Dubai visa to avoid any inconvenience in the application process. Without a visa, you cannot enter the city. You will have to visit the Immigration Department and submit the following list of documents:
- Business plan
- Visa application
- Security amount
- Passport or copy of passport
- Details of your ticket
- Purpose of your visit
- Your personal bank statement
- Your latest colored photographs
Step 2. Choosing Business Activity
Choosing a specific business type solely depends on your personal preference or on your existing company/established business. The type of business license depends on your chosen business activity.
Step 3. Selecting Business Name
Then, you will choose a unique business name for your company. Keep in mind that there are some restrictions that you have to consider when selecting a trading name. You can include your initials or surname if you want to include your name in the company name. Anyways, the restrictions are as follows:
- The business name should not contain any name or logo of external bodies nor name of a religion, or governing authority
- The business name must not violate the public order of the country or the public morals
- The business name must not have been already registered
- The business name must be compatible with the needed type of legal status and activity
- The business name must be followed by the business structure or legal form of the company
Step 4. Find a local sponsor
Finding a local partner is not a requirement for everyone. It is necessary to search for a local sponsor only for those who opt for establishing a business on the mainland of Dubai. Your local partner will own major ownership of your business.
Step 5. Acquiring Initial Approval
Next up, you will get initial approval from the DED. In order to acquire initial approval, you will submit your application and supporting documents.
Step 6. Drafting Memorandum of Association
The next step is to draft the MoA (Memorandum of Association). The MoA is a document that represents the charter of the company and governs the external activities of your business. It is notarized in the Dubai court.
Step 7. Submitting Fees
You will get a payment voucher after submitting your application and relevant documents. Within 30 days of obtaining the payment voucher, you have to submit the license fees and clear the payment. Once the payments are made, you will receive your license.
Step 8. Registering your business
Finally, you will visit the Dubai Chamber of Commerce and Industry to register your business.
Step 9. Renting Office Space
You might need to rent an office space to set up your company and perform your business activities physically.
Start your Business in Dubai as a Foreigner with Riz and Mona
That was all about how to start a business in Dubai as a foreigner. We are confident this comprehensive guide will clear your doubts and confusion about the company formation process in UAE as a non-resident. The whole process isn’t that complicated when you have enriched yourself with the essential knowledge.
Having said that, it is crucial to get equipped with some level of prior knowledge of the company formation process in Dubai. Furthermore, you should be mindful of the fact that if your license application is error-free and completed at the time of submission, only then the process is simple, effortless, and straightforward.
If you want your application to be free from errors and easily establish your business in Dubai, we recommend getting in touch with Business Set up consultants. Working with experts at Riz and Mona is a great idea to select a suitable jurisdiction and figure out the best possible business structure for your company. Not only that but you will also be walked through available options and provided help in selecting the best solutions for your business.