Insurance is one of the most developed industries in Dubai, and one of the best financial centers in the Middle East. This is why businessmen should launch an insurance company in the UAE. If you are a new entrepreneur and are in this sector, you must be looking to know how to start an insurance company in Dubai, UAE. This informative guide will provide you with the basic steps that you need to follow to set up your insurance company in UAE. Stay tuned.
Insurance Law in the UAE
Federal Law No. 6, which is related to the establishment of the insurance authority and regulation of insurance operations, is the primary law governing insurance and reinsurance firms within the United Arab Emirates. The short name for this law is the Insurance Law. Federal Law No. 9 of 1984 on Insurance Companies and Agents and the Amending Laws were replaced by the new legislation. The law is applicable to onshore insurance businesses that are authorized to operate general insurance, cooperative insurance, takaful insurance, and reinsurance.
This law governs both traditional insurance and Takaful, which complies with Islamic law. The Insurance Law’s Article 7 outlines the responsibilities and obligations of the law, while Article 8 specifies that the law’s composition must contain an executive body, board, and director general.
The Best Economic Zone to Start Insurance Company in the UAE
One of the most popular free zones in Dubai that encourages the establishment of financial enterprises, including insurance companies, is the Dubai International Financial Center (DIFC). The jurisdiction has its own laws and regulations related to the launch of insurance companies.
It is home to one of the top start-up insurance companies in the UAE. DIFC is one of the most profitable free zones in Dubai that encourages the start of financial companies such as insurance enterprises. The laws imposed on the insurance industry in this Emirate are thoroughly explained by company registration experts in Dubai, UAE like Riz and Mona. You can contact us for more details.
Types of Insurers in Dubai
Different kinds of insurers are permitted to operate legally in Dubai. These insurers are as follows:
- Adjusters for loss and damage
- Insurance companies
- Insurance agents
- Insurance consultants
- Insurance brokers
You have to first register with the Dubai Economic Department (DED) and then receive a license from the Insurance Authority in order to launch a firm in the insurance sector in Dubai. Depending on the kind of services offered, an operating license is granted.
When creating a company in the insurance sector, our company incorporation specialists in Dubai can help with the company formation procedure.
Licensing requirements to start an insurance company in the UAE
With the help of documents associated with the business activity to be conducted and documents of incorporation, one can determine a corporation within Dubai’s insurance industry. The bank guarantee differentiates businesses in the insurance sector of the UAE. This guarantee for insurance brokers is AED 3 million. Insurance companies offer various services in Dubai, UAE.
Insurance consultants and agents in the UAE linked with any insurance company can apply for the license. Keep in mind that the license requirements and fees differ from each other. It is mandatory to obtain a license to start an insurance company in the UAE. There are three types of licenses available: sole, commercial, and professional.
At Riz and Mona Business Consultancy, we offer top-notch client support for obtaining a trading license in Dubai and help our clients form companies in the UAE region. Our solutions are customized for the customers since we give a higher priority to our client connections. Whether it’s in a free zone or the mainland, we help clients launch their businesses on time.
Please feel free to contact us to get further details on how to set up a firm in Dubai’s insurance industry. In the free zones of Dubai, our specialists for Dubai company formation can help you establish insurance companies in a smooth way.
How to Start an Insurance Company in Dubai, UAE?
There are specific steps that must be taken in order to establish an insurance firm in the United Arab Emirates. The steps are listed below:
Step 1. Trade Name Registration
Registering a trade name with the Department of Economic Development (DED) is the first and most important step when starting an insurance firm in the United Arab Emirates. The name of your company will be accepted if it is available for registration. You must provide three name options for registering a name. The brand name reservation initial approval will include the operation code as a category.
Step 2. Obtain Initial Approval
Once your business name is registered, the next thing to do is to get initial approvals. List your planned business operations to get initial approval. In general, you have to choose a business operation from the list of activities given by the relevant authorities upon registration. The required documents including the submitted application are forwarded to the Department of Economic Development for review and approval. Once everything is approved, you will be issued an initial approval certificate for LSA (Local Service Agreement). You have to send some basic documentation to the DED, they will ask you to submit it.
Step 3. LSA Agreement
An LSA (Local Service Agreement) agreement or contract is drafted after you acquire DED’s initial approval. Depending on your requirements, the LSA agreement can be prepared in Arabic, or English and Arabic. A legal consulting firm must legalize a notary public if the LSA is written in both English and Arabic.
Step 4. Court Agreement
All spouses and native partners must show up in court when the MoA (Memorandum of Association) agreement is finished so that it can be notarized in front of a court representative. Four copies of the agreement are required:
- One for the spouse
- One for the Court’s Initial
- One for Local
- If necessary, one for the service provider
Step 5. Send Documents to the DED
To receive the Payment voucher, send all documents to the DED. Payment Vouchers serve as trade licenses, and the DED will enter the company into the Commercial Registry.
Required Documents for Starting an Insurance Company in the UAE
The documents that you have to submit to the DED are:
- DED trade license payment receipt
- Filled application form
- Trade license copy
- copy of visa and passport
- List of business partners
- LLC Agreement
- Commercial register (3 pages of trade license)
Step 6. Obtain the License
Payment vouchers can be paid with cash or credit cards inside the DED, and trade licenses can be collected immediately. Get the license and update the information, such as adding a PO box.
Insurance Activities Allowed in the UAE
Following insurance activities are allowed to be conducted in the UAE:
- Health insurance
- Vehicle insurance
- Accidents & liabilities insurance
- Public liability insurance
- Credit & savings insurance
- Fire insurance
- Building and contents insurance
- Insurance agent
- Insurance brokers
- Mechanical breakdowns insurance
- Transportation risk insurance
- Personnel insurance
- Home Insurance
- Surveyors & loss adjusters
- Life insurance
- Life reinsurance
FAQs – Frequently Asked Questions
How do I set up an insurance company in UAE?
Follow the steps given ahead to set up an insurance company in the UAE:
Step 1. Trade name registration
Step 2. Obtain initial approval
Step 3. LSA agreement
Step 4. Court agreement
Step 5. Send documents to the DED
Step 6. Obtain the license
How can I get an insurance license in UAE?
The following requirements must be met by the companies in order for the Insurance Law to grant a license:
- Must be an organization with paid-up capital of AED 3 million dirhams or more
- registered under the Commercial Companies Law
- Must have the purpose of engaging in the insurance brokerage activity.
How much money should you save to start an insurance agency?
It depends from case to case as the requirements and goals of every case are different. You should approach a reputable company formation expert in the UAE like Riz and Mona for more information on it.
Is starting an insurance company profitable?
Yes, starting an insurance company is profitable, especially in Dubai. You can make good money out of it if your firm does good business in the UAE.
How many insurance companies are there in UAE?
According to available data for 2021, there are 62 health insurers in the UAE, of which 35 are national insurance companies established in the UAE and 27 are foreign insurance companies currently operating in the Emirates.
Contact RIZ & MONA to Start an Insurance Company in Dubai, UAE
Our well-experienced & qualified business consultants at RIZ & MONA offer our top-quality services to our clients to help them start their companies in Dubai and the UAE. We have unmatched expertise in company formation services in Dubai, UAE so that the business setup requirements of our clients can be met. We also make sure the task of company formation can be completed on time with outstanding results. Get in touch with us to start your insurance company in Dubai, UAE, and make a good income out of it.