All you need to know about business setup in UAE
How Starting Low-Cost Business is Cheap, Trouble-Free in Dubai?
December 10, 2019
Flexibility to run business in any part of the UAE; unlimited visas; a great number of business activities for licensing; and no business or personal taxes. Mind you, all this will be your advantages as you set up a business in the heartland of UAE.Key entities in government
For registering a trade name, you need to obtain the initial nod from Department of Economic Development of the respective emirate. This you can do by walking to the office of Department of Economic Development or online called the eServices. Keep in mind that without the prior approval of the department, you will not be able to proceed further for additional approval mandatory for some kinds of business activities. You can contact the Department of Economic Development in the emirates of Abu Dhabi, Dubai, Sharja, Ras Al Khaimah and Ajman. For Fujairah, it is Fujairah municipality that takes care of the activities in Fujairah.There are situations when you will need approval of Ministry of Economy at first for business setup. For instance, the Ministry of Economy should grant you permission to start private joint stock company (PrJSC).How will you start? The following are details you must learn if you are planning to set up business in the mainland.The Cost Capital investment is central to setting up a business. You need to know the real cost of paying for licences and employee visas. The expenditure of launching a business can be estimated by taking into account,
- The kind of activity and licence required; if it is commercial, industrial or service-oriented
- The legal form of the company; whether it is an establishment, a company, or a branch of a company.
- Capital requirements for a company on the mainland
As per the legal form of business, capital requirements can vary for companies set up on the mainland. The minimum capital is AED 30 million for PJSC while it should not be less than AED 5 million paid in full for PrJSC.
When it comes to other kinds of business, the UAE Commercial Companies Law did not set a minimum capital, but a minimum capital should be specified in the Memorandum of Association. I has to be a ‘sufficient capital’ to win the purpose of the business incorporation. It is mandatory to know guidance on the present
practice of the emirate on minimum share capital for overseas companies looking to launch a Limited Liability Company
Partners’ nationality
This is a vital part to decide on what kind of business you are going to establish on the mainland. It is only UAE citizen who have the right to establish the companies such as Joint liability companies (partners must be UAE nationals); simple commandite companies; An industrial or commercial type sole proprietorship; licence for home-based businesses; and SME licence (in Dubai).
However, those from other countries (other than those of the other GCC countries), can operate the other kinds of businesses provide that they need to involve a UAE national as a sponsor. In your business, you can involve sponsors such as a partner with at least 51 per cent ownership of the business or a local service agent (LSA), with the investor having a 100 per cent ownership of the business.
Company types needing a UAE national partner are LLC companies; Public Joint Stock Companies (it must have at least 5 founding members who are UAE nationals, owning between 30 per cent and 70 per cent of the capital shares); PrJSC Companies; and civil company with an engineering activity;
Company types requiring LSA are a professional type sole establishment; civil company sans engineering activity; and foreign company branch. Other than a representative office and simple commandite companies, a GCC national can be a partner in any form of business.
