Dubai offers many investment opportunities for international investors seeking to do business in any sector. Investors are attracted to Dubai primarily due to the welcoming nature of the Dubai government, their fast-growing economy, and future centric programs. With access to world-class infrastructure and transportation, many new business owners open shop in Dubai Mainland, which is a favorite choice among other locations. Startups in Dubai also receive advantages on investments and taxes when compared with other regions.
With a mainland license, also known as an onshore license, you can run your business both inside the UAE and internationally.
For any business activity, trade licenses issued by the Department of Economic Development is required and should fall under any of the below categories of licenses:
1) Choose the business activity and trade name in accordance with Dubai laws.
2) Check for suitable locations in Dubai to operate the business.
3) Determine the structure of the company
*UAE law mandates that LLC companies need to have a local sponsor and will hold 51% shares of the company.
4) Get the initial approvals for trade licenses and other approvals like DED approvals, MOA Notarizations (Memorandum of Association).
5) Setup corporate bank accounts and rent office space.
6) Get the establishment card and start applying for residence visas.
Several factors need to be considered while establishing a company in Dubai. Some of these factors are:
There are different zones of business jurisdictions in Dubai to increase the competence and productivity of businesses. Companies can be started in any of the following jurisdictions, each with its own benefits and processes:
Choosing the right jurisdiction will depend on the nature of your business activity. Business owners need to evaluate whether their company adheres to Dubai standards during the decision stage as not all activities are permitted in Dubai. The Department of Economic Development (DED) is the regulatory body that decides, classifies, and permits business activities. This is not applicable to Free zones and Offshore business setup.
All approved businesses need to be registered with the Department of Economic Development (DED). The name of your company must conform to the standards set forth by the Department of Economic Development (DED). Trade names serve as an identity for your business, and thus DED emphasizes the importance of matching the name to the type of license. Registration takes about three days, and the trademark is valid for six months.
To start a Limited Liability Company (LLC) in Dubai Mainland, business owners need to find a reliable local who can become your business partner.
Operating a company in Dubai Free zones won’t require a local sponsor and offers 100% ownership to the foreign investors. However foreign investors who intend to operate an LLC in Mainland UAE are required to have either a local Emirati sponsor or a local service agent. The local sponsor could be a corporate, individual or a local service agent.
Local Sponsors are Emirati nationals who can provide sponsorships to foreign nationals within their capacity. These sponsors will hold the 51% shares and liability of the company, but they can transfer the power of attorney to their foreign partners in the exchange of the decided fees which they will charge for their services. It is not necessary for these local sponsors to do the investment in the business because they charge the fees of the services which they provide in form of taking responsibility of foreign investors.
Corporate Sponsors are UAE-owned companies and will hold 51% shares and liabilities of the business. They operate just like the individual sponsors and can be any local or government authority. These authorities can have different fee structures depending upon business factors.
Local Service Agents are the representatives of professionals like Doctors, Engineers, and Artisans etc. Local agents do not hold any shares or liabilities in the business and will merely act as representatives of the company. They charge pre-approved fees from the professionals in return for their service.
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