In recent years, the UAE has risen from a small trading region into one of the most important countries in the world for international trade.
It is home to numerous booming industries, from technology and tourism, to healthcare, hospitality, manufacturing and trading. The country’s rise to prestigious business hub has been driven by multiple factors, not least its incredibly attractive tax rate of zero percent. That’s on both corporate and personal income. In fact, the only tax you’ll likely encounter here in the UAE is VAT which currently sits at a flat 5%.
The UAE’s welcoming business environment is another factor behind its popularity with business owners from every corner of the world. The country actively encourages entrepreneurial spirit and is home to numerous startup hubs and incubators designed to help businesses grow and flourish.
Then there is its unrivalled location. Situated at the centre of the Middle East, the UAE is perfectly placed for international travel and trade with the majority of the world’s population a relatively short plane ride away.
Business setup in the UAE is also famously easy, provided you have an understanding of the country and its licensing practices. To help you gain a better understanding, we’ve pulled together a simple, six step guide to starting a business in the UAE.
How do I set up a business in the UAE?
The best advice for anyone looking to start a business in the UAE is to work with an expert throughout the process – be it a free zone consultant or a company formation agent. Business setup in the UAE is not particularly complicated, providing you understand how to accurately undertake each step.
Six simple steps to starting a business in the UAE
Step 1. Choose your name and activities
The first step for starting your business in the UAE is to outline your business activities and choose a company name.
Your chosen activity must align with a pre-approved list issued by the UAE authorities. It is important that you decide on your activities before undertaking any other steps as this will dictate the type of licence that you require. If you wish to undertake a commercial activity, you’ll need a commercial licence. If you wish you undertake an industrial activity, you’ll need an industrial licence, and so on.
At this stage you should also decide on your company name. A company formation expert can help you choose a name that fits with the UAE’s naming conventions, most of which are common sense – such as not using any word that can be offensive to others. Again, you’ll need to choose your name upfront as you will need to check that it is available to be registered before making your licence application.
Step 2. List your business needs
It is possible to apply for a standalone trade licence in the UAE. However, you also have the option to apply for a licence package through a free zone. These packages include added benefits such as visa eligibility or the use of co-working facilities. Your package could even include a fully furnished office, warehouse or land on which to develop your own premises. Applying for your licence as part of a package through a free zone is often the most cost-effective way to establish a business in the UAE.
Step 3. Submit your application
Once you have decided upon your company name, determined your business activities and outlined exactly what you require from your licence package, it is time to make your application.
If you have decided to set up in the UAE mainland, you can make this application either to the Department of Economic Development or the Municipality of the emirate that you intend to do business in.
If you have chosen to set up in a free zone, then you must make your application directly to the managing authority of that free zone. In many cases, the initial application can be completed online. In addition to completing the application form, you will usually also be required to provide:
- Colour passport copies for all shareholders, directors and managers
- Copies of visas / entry stamps for all shareholders, directors and managers
- A No Objection Certificate
- A business plan
Step 4. Receive your licence
The next step is an easy one. Simply wait to receive your documentation. Your licence along with your registration set and bank letter will be issued upon completion of the licensing formality, then the visa application process can begin.
Step 5. Apply for visas
If you have opted for a free zone package with an eligibility for a visa, your visa application process will begin as soon as your licence has been issued. If you are applying for your own visa, you are able to do so as soon as you receive your trade licence.
The UAE visa process involves an application, followed by a medical test and biometric capturing. As this is such an important step in the process, it is again a good idea to work with an expert to ensure your application is successful and not unnecessarily delayed.
Step 6. Open a bank account
The final step before you’re ready to trade is opening a corporate bank account. Usually, in a free zone, you will be issued with a Bank Letter that you can present to any UAE bank of your choice to open a corporate bank account. Once again, working with a company formation expert can help you to accomplish this step in a breeze.
What is the cost of setting up a business in the UAE?
This is not an easy question to answer. The cost of setting up a business in the UAE can vary greatly depending on whether you set up in the mainland or a free zone, whether you take on premises, and the number of visas you require.
The best way to get an idea of cost before starting your application is to approach a free zone to discuss business packages. Once you outline your exact requirements, you will receive a quote for the total cost of setup. While it is not easy to estimate startup costs without knowing specific requirements, you can be sure that there is a package available for all budgets.
Ready to start your UAE business?
Need help getting to grips with UAE company formation? Get in touch with RAKEZ.
We always place our clients at the heart of everything that we do, providing them with cost-effective setup packages, modern facilities and first-class services to help them reach their full potential.
Blessed with a strategic location, we connect investors to growing markets in the Middle East, North Africa, and Europe, as well as South and Central Asia.
When you work with us, you simply outline your requirements and we’ll do the rest – taking care of the entire application process on your behalf.