Documents and Certificates Required For a Business Setup in Dubai

Company Formation UAE,Dubai

Documents and Certificates Required For a Business Setup in Dubai

 You need to follow all of the company registration and business license procedures 

In Dubai, company registration and business licensing are a parallel process. Once the company is registered by DED, the business license will be processed and could be collected duly. Business licenses are provided mainly depending on the nature of the business activity and the jurisdiction of the business. The most prominent licenses for business setup in Dubai are: commercial license, industrial license, and professional license. It takes around one week or more to get the trade license from the time you receive your initial approval. This mainly depends on the business activity and the external documentation. Here is the general list of documents and certifications that are required for business setup in Dubai.

  • License Application
  • Attested LLC agreement
  • Governmental forms
  • Name reservation certificate
  • Initial approval certificate
  • External departments approval
  • Tenancy contract
  • EJARI registration certificate
  • Passport copies partners and NOC for partners (if any)
  • Dubai Chamber of Commerce and Industry Registration
  • Endorsements from Governmental Agencies (For Gas and Oil Companies)
  • UAE Central Bank Approval and License (For Financial Institutions)
  • Finance and Industry Ministry Certification (For Manufacturing Companies)
  • Economy and Commerce Ministry Certification (For Insurance Companies)
  • Health Ministry Certification (For Medical & Pharmaceutical Firms)

You need to collect your business license to start your activity A payment voucher or transaction number will be provided by the DED on submission of the all the listed documents. The final payment needs to be made to collect the business trade license. Once you collect your trade license, you become a full-fledged business entity.

Based on the preceding details, it is evident that Dubai company registration is an extensive process! Nevertheless, you can make it quick and cost-effective by appointing a business setup consultant. With a knowledgeable business consultant, you won’t waste your money on unwanted documents. Also, as they are well-verse.

For Business Setup in UAE/Company Formation in Dubai.

Alya Auditors Dubai,Leading CA Firm in Dubai providing professional services in the field of Auditing,Accounting,VAT/TAX Consultation etc in UAE  also provides complimentary UAE and Dubai company formation consultation to existing and potential clients. We offer many company formation options here in the UAE for Onshore, Offshore and Free Zone companies. Company formation application process begins once all necessary documents are acquired.

For more details contact us @ Tel: +971 4 876 9377, Mob: +971 52 975 0690, +971 52 475 4007

Key steps to start a business

company-formation-in-dubai-uae

Company Formation |Key steps to start a business in UAE Free Zones

Setting up a business in a free zone is relatively easier. Free zone authorities require minimum paperwork and duration. Here are the key steps to set up a business in a free zone.

  • Determine the type of legal entity
  • Choose a trade name
  • Apply for a business licence
  • Choose an office space
  • Get pre-approvals, register your business and get your licence

Determine the type of legal entity

Determine the type of legal entity your business would take up. In a free zone, you can set up one of the two types of companies:

  • Free Zone Limited Liability Company (FZ LLC) or Free Zone Company (FZ Co.)
  • Free Zone Establishment (FZE)

The differences lie in the number of shareholders and whether the shareholder is a natural person or a legal person. All free zones might not register both types of companies. You need to check with individual free zone authorities about the type of company they can register. Refer to the list of free zones and their authorities.

Dubai Multi Commodities Centre (DMCC) allows forming a limited liability company, which could be a newly formed entity with single or multiple shareholders or wholly owned subsidiary of local or foreign company.

Branches

Existing local and foreign companies may set up a branch of their company in free zones.

Capital requirement

There is no minimum capital requirement at twofour54 Abu Dhabi.

In KIZAD, you can form an LLC for which the minimum paid-up capital should be AED 150,000.

In Dubai Airport Free Zone, you can form an FZ Co. with a minimum share capital of AED 1000. Each share should be in the denomination of AED 1000.

In DMCC, the minimum share capital for forming a free zone company is AED 50,000 per company and AED 10,000 per shareholder. For a company to be issued a General Trading Licence, it should have a minimum of AED 1 million share capital.

In Hamriya Free Zone, you can form an FZE with a share capital of AED 150,000.

Choose a trade name

While you are deciding upon the type of legal entity your business should take, you should choose a trade name.

In most cases, you should check either with the respective free zone authority or the respective with the Department of Economic Development about the permitted trade names and whether the intended name has already been registered.

As per the website of twofour54, you cannot use ‘Abu Dhabi’ and/or ‘United Arab Emirates’ in the name of the FZ-LLC or the branch.

Refer to DMCC’s list of restricted trade names (PDF, 207 KB).

In general, for DED to approve the proposed trade name, the key requirements are that the trade name:

  • must not violate the public morals or the public order of the country
  • must be followed by the legal form of the company, for example (LLC, FZE, DMCC etc.)
  • has not been previously registered
  • is compatible with the required type of activity and legal status
  • should not contain names of any religion, or governing authority, nor names or logos of any external bodies.

Related links:

Apply for a business licence

The type of business licence you will apply for depends on the primary activity of your business.

Types of business activities you can conduct

In twofour54, you can carry out the following businesses:

  • Content production
  • Advertising
  • Animation
  • Corporate Film production
  • Corporate Print Material
  • Digital content production (e.g. CGI, 3D etc)
  • Educational content material
  • Film production
  • Gaming development
  • Graphic design
  • Illustration
  • Mobile media (e.g. content for interactive media services on mobile phones)
  • Music production and recording
  • Music videos
  • Online electronic content production (e.g. websites, e-books, travel guides etc.)
  • Performing arts and theatre
  • Photography/videography
  • Print content production (e.g. magazines, journals, periodicals, newsletters, guides, and handbooks etc.)
  • Radio content production
  • Script writing
  • Software development (e.g. applications)
  • Song writing and composing
  • TV production
  • Web design and development (e.g. portal, search engine, community site, web production, online library)

Other business activities

  • Branding Agency
  • Events/Festivals
  • Exhibitions/Conferences
  • Information Services (e.g. media related market research)
  • Marketing Communications
  • Media content management (e.g. digital archiving)
  • Post Production (e.g. Film, TV, editing services)
  • Professional Association (e.g. non-profit)
  • Public Relations
  • Rights Management
  • Training (media related)

Publishing and broadcasting

  • publish a book
  • publish a magazine
  • publish a newspaper
  • broadcast a satellite/terrestrial television channel
  • broadcast a satellite/terrestrial radio channel

In this case, you would need to apply for a dissemination licence.

In DMCC, you can choose from over 600 business activities ranging from over 20 sectors such as energy, commodities, gold and diamonds, technology, constructions, FMCG, healthcare, aviation, shipping, education, media, professional services, financial services and personal and community services. Refer to the list of businesses you can conduct in DMCC.

In DIFC, you can conduct financial and non-financial businesses. Financial businesses include banks, insurance, wealth management and capital markets. Non-financial businesses include retail shops, restaurants, five-star hotels, art galleries and academic institutions. Read more on the page about areas of business in DIFC.

Accordingly, some types of business licences are:

  • Commercial/trade
  • Consultancy/services
  • Industrial
  • Educational
  • Media
  • eCommerce
  • Offshore
  • Freelancer
  • Warehousing
  • Manufacturing.

Dubai Multi Commodities Centre (DMCC) allows establishing ‘single family offices’. These have the standard FZ LLC structure. They can provide services to a family member, family business, family entity (corporate structure) or family trust. It can be owned by one or more individuals or a corporate entity where all shareholders are of the same family.

Choose an office space

You can either buy or lease office spaces in free zones. Office requirements depend on the number of employees and type of business activity of your company.

In DMCC, you can choose from a flexi desk of 20-30 sq. m., a flexi office of 200-265 sq. m., or offices running through multiple floors totalling up to 2,000 sq. m. each.

In Dubai Airport Free Zone, you can choose between ‘Office Packages’, ‘Smart Desk Office Packages’ and ‘Executive Office Packages’.

Hamriyah Free Zone Authority provides over 100 executive offices suits ranging in size from 15 m2 to 42 m2 with conferencing and internet facilities. Refer to its leasing and licensing guide (PDF, 200 KB).

Get pre-approvals, register your business and get your licence

Companies established in free zones are governed by the rules of the respective free zones. To get the necessary approvals, you need to apply with the documents. The list of documents varies on the type of business activity, the type of company and the requirements of the free zone authority. Below is a general guideline of steps and documents needed for approvals.

A. Initial approval

First, you need the initial approval. You are required to provide:

  • Completed application form
  • Business plan
  • Copy of existing trade licence/registration certificate (if you are an existing company, applicable for local company only)
  • Coloured passport copies of the company’s shareholder/s and the appointed Manager/Director for the new company
  • Specimen signature of the company’s shareholder/s and the appointed Manager/Director for the new company
  • 2 years’ audited financial reports for corporate entity or certificate of reference from a personal bank of the individual shareholder
  • NOC from current sponsor (for individuals)
  • Unit title deed
  • Letter of Intent
  • Registry Identification Code Form (RIC) for Manager/Director (Original and notarised)

Freelancers need to submit fewer documents. In most cases, they need to submit:

  • Application for registration
  • CV
  • Bank reference letter
  • Registry Identification Code Form (RIC) (Original and notarised)

B. Registration

After getting initial approval, you need to pay registration fees and licence fees. The fees depend on the type of licence required. Then, you need to submit:

  • Completed application for registration
  • Board Resolution appointing Manager/Director (Notarised and attested)
  • Power of Attorney given to Manager/Director (Notarised and attested)
  • Memorandum and Articles of Association (Notarised and attested)
  • Specimen signature of Manager/Director (Notarised and attested)
  • Passport-size photo of Manager/Director against white background
  • Share capital information

C. Licensing and visa process

  • Lease agreements will be prepared by the authority
  • Then trade licence will be issued
  • Visa processing will start

Note that certain activities may be subject to approval from external authorities. Refer to special cases.

Authorities regulating free zone activities

Refer to the websites of free zones and the authorities in:

The emirate of Abu Dhabi

The emirate of DubaiUnder Dubai Creative Clusters Authority :

Under Dubai Multi Commodities Centre Authority:

Others:

The emirate of Sharjah

The emirate of Ras Al Khaimah

The emirate of Ajman

The emirate of Umm Al Quwain

The emirate of Fujairah

Special cases

Apart from the respective free zone authorities, certain industries/sectors of businesses are additionally governed by other government entities. Some of them are mentioned below.

Media

The following entities govern media organisations in the UAE:

Food and beverage

The following entities govern food and beverage businesses in the UAE:

What We Do

  • Deliver strategic ideas on identifying the suitable free zone area for the client
  • prepare all incorporation documents
  • Name approvals and other governmental approvals
  • Assistance  in Bank account opening
  • Acting as your personal advisors for all business registration and continuity
  • Assistance in Audit reports & Book keeping
  • Feasibility and project reports for the new incorporations and much more….

Alya Al Marzooqi Auditing Chartered Accountants (Alya Auditors) can surely help you in setting up your business dream in Dubai.

For all assistance please feel free to contact us Tel: +971 4 876 9377, Mob: +971 52 975 0690, +971 52 475 4007 or Email us at : audit@alya auditors.com

Company Formation in DMC

start-a-company-in-dubai-media-city

BUSINESS SETUP IN DUBAI MEDIA CITY

Media City in Dubai (DMC) was established in 2001 as a companion free zone to Dubai Internet City. It is regulated by the Dubai Creative Clusters Authority (DCCA) which oversees all related procedures in both Dubai Media City and Dubai Internet City. The intention of Dubai Media City is to establish a pro-business environment for media companies, advertising companies and any corporations primarily concerned with creative media products. It was also conceived as a regional media hub.

Business types and allowed activities

Dubai Media City offers three licensing options for businesses in the free zone:

  • A Free Zone Limited Liability Company (FZ-LLC) exists as an independent business entity in the free zone. This business type must have at least one director and paid capital investment of AED 50,000. *Broadcast TV and radio businesses require AED 2,500,000 minimum capital investment
  • A Branch of an existing foreign company or existing UAE company is a place of business dependent on a parent company and doing business as the parent company. There is no minimum capital requirement for Branch Companies.
  • The DMC Freelance permit is somewhat unique among free zones. It is allowed only in Dubai Media City. This permit allows an individual to do business as a freelance professional under his/her own name. There is an expansive list of allowed professional activities ranging from Actors to sound engineers and visual artists.

Licenses are issued for companies doing business in several business sectors such as Advertising and Communication; Media and Marketing Services; Event Management and support services; and non-profit Associations.

Required Documentation

Business Formation Process for a shareholder-based Free Zone Limited Liability Company begins with the application to the DCCA. The list of required documents includes:

  • The original application
  • A Company Incorporation Certificate notarized by the UAE Embassy in the origin country
  • A certificate of good standing from the business licensing authority in the origin country – also notarized by the UAE Embassy
  • Memorandum of Association or Articles of Association for the parent company – notarized by the UAE Embassy
  • The board of directors of the parent company must provide documents stating the intention to establish a Free Zone Limited Liability Company
  • Completed personal information form for Shareholders, Directors and the designated Manager of the new business
  • Copies of passports for shareholders and directors. Passport copy and CV (resume) for the Manager
  • Proof of deposit of the required capital

These documents must be in Arabic and/or English or accompanied by a certified translation. The authority may request additional documents when necessary.

The required documents for a single-shareholder Free Zone Limited Liability Company license are:

  • The completed application form
  • A company incorporation certificate if the single shareholder is a corporation. Notarized by the UAE Embassy in the country of origin
  • A UAE Embassy notarized certificate of good standing from the Registrar of companies in the origin country
  • Memorandum of Association or Articles of Association for the parent company – notarized by the UAE Embassy
  • Passport copy and C.V. of natural person applicant or designated Manager
  • A bank reference letter for shareholder/applicant
  • A document of resolution from the board of directors of the parent company expressing the intent to establish the FZ-LLC
  • Completed personal information sheets for Shareholder(s), Directors, and Managers
  • Proof of deposit of required capital
  • Additional documents may be required/requested by the authority

Formation of a Free Zone Branch of a Foreign Company requires these documents:

  • The completed Registration application
  •  A notarized (by the UAE Embassy in the origin country) Certificate of Incorporation for the parent company
  • A UAE Embassy notarized certificate of good standing from the Registrar of companies in the origin country
  • Memorandum of Association or Articles of Association for the parent company – notarized by the UAE Embassy
  • A Board of Directors resolution expressing the intent to create a Branch Office in the Free Zone
  • Registry Information Certificate for the Manager

These documents must be in Arabic and/or English or accompanied by a certified translation. The authority may request additional documents when necessary.

For formation of a free zone Branch of an Existing UAE company the list of required documents is:

  • The completed application form
  • A notarized copy of the Parent Company’s Trade License
  • Notarized (by the UAE Embassy in the origin country) Memorandum of Association or Articles of Association for the parent company
  • Resolution from Board of Directors of the parent company expressing intent to establish a free zone Branch
  • Registry Information Certificate for the Manager

The application for permit as a Freelance Professional must include these documents:

  • The completed application form
  •  A copy of the Freelancer’s C.V. Or resume
  •  A bank reference letter for the Freelancer
  • Registry Information Certificate for the Freelancer
For More Details on Company Formation in UAE

Alya Auditors Dubai,Leading CA Firm in Dubai providing professional services in the field of Auditing,Accounting,VAT/TAX Consultation etc in UAE  also provides complimentary UAE and Dubai company formation consultation to existing and potential clients. We offer many company formation options here in the UAE for Onshore, Offshore and Free Zone companies. Company formation application process begins once all necessary documents are acquired.

For more details contact us @ Tel: +971 4 876 9377, Mob: +971 52 975 0690, +971 52 475 4007

Want to Setup a business in Dubai?

Company Formation in Dubai

Company registration/Formation steps in UAE

Starting a business in the UAE is relatively easy. Although there are certain jurisdictions with rigorous processes, most free zones are rather straightforward and get you running the company right off.

The challenge, however, is the budget. Your startup money or working capital is a vital component that fuels and sustains the business from company formation to business operation. Luckily in the UAE, there are a good number of licensing options to choose from that fit every budget.

For startups, the free zone often comes as the first choice because of its affordability and top-tier benefits. If you are on the verge of deciding which free zone to incorporate your business and your primary concern is the affordability of doing so, here are some of the top recommendations from the expert business setup consultants at Decisive Zone.

Dubai is by far one of the most appreciated business destinations in the Middle East. With years of tradition in welcoming foreign investors, the local government is currently working on a legislation which enhances the right of overseas businessmen seeking full ownership of onshore companies.

Those who are interested in Dubai company registration must follow a few steps in order to have their companies here.

Below, we invite you to read about the main steps related to company registration in Dubai. We can help foreign investors who want to incorporate businesses in the Emirate.

Both local and foreign investors must complete a series of steps in order to open a company in Dubai. For overseas entrepreneurs, the first step will be to obtain a business visa for the UAE, followed by starting the company registration procedure.

Here is what one must do in order to register a company in Dubai:

  1.        choose an appropriate business form and prepare the incorporation documents;
  2.        find and suitable name for the company and reserve it with the Dubai Trade Register;
  3.        set up the corporate bank account for the company and deposit the share capital;
  4.        file the Memorandum and Articles of Association with the Department of Economic Development;
  5.        register for taxation purposes and obtain a VAT number with the Dubai tax authorities.

The same steps must be completed upon Dubai free zone company registration.

Our local specialists can prepare and file the incorporation documents on behalf of foreign businessmen setting up companies in Dubai.

Business forms suitable for foreign investors in Dubai

One of the main steps for Dubai company registration is to select a type of structure for the future company. For foreign investors, the private limited liability company and the free zone company represent good choices because they offer access to many industries and they benefit from simple company formation requirements in Dubai.

With a vast experience in registering companies in Dubai, our consultants can help you establish a business here in any field of your choosing.

Company name reservation in Dubai

The company name reservation procedure is very important as the Company Law requires every type of business to run its activities under a specific name by which it can be recognized. The company name reservation process is simple, and investors need to propose several names (usually 3) among which the one they prefer and wait for the approval of the Dubai Companies Register.

Incorporation documents for Dubai company registration

The Memorandum and Articles of Association are the most important documents when starting a business in Dubai. These must contain complete information on:

  •           the company’s shareholders and managers;
  •           the business’ registered address in Dubai;
  •           the share capital for starting and completing the activities;
  •           the business’ main object of activity (and secondary ones, if any).

The documents must be accompanied by an application form when filed with the Trade Register in Dubai.

Our Dubai company formation advisors can help with the drafting, notarization and filing of the paperwork related to starting a business here.

Licensing requirements for company registration in Dubai

Another important step in Dubai company registration is obtaining the license for conducting business activities. The general trading, the commercial and the industrial licenses are the most important permits under which companies in Dubai usually operate. There are also special licenses which can be obtained when setting up businesses in specific sectors such as food and beverages and oil and gas exploitation.

If you want to open a company in Dubai and need help in applying for the right type of license, our local agents can help you.

Final steps for opening a business in Dubai

Introduced not long ago, the value added tax has led to the creation of another step in the Dubai company registration procedure: that of registering for this tax. The procedure is simple and is completed with the Dubai tax authorities.

Our consultants can explain how the VAT is levied in Dubai.

Why register a business in Dubai?

Dubai is one of the most prolific business centers in the UAE and in the Middle East, and according to statistics:

  •           the newly passed Foreign Direct Investment (FDI) Law is expected to lead to a 20% increase in FDIs in 2019;
  •           the UAE’s Gross Domestic Product (GDP) is forecast to register a 3.7% increase in 2019, compared to the 2.9% registered last year;
  •           the non-oil GDP is also expected to grow from 2.6% in 2018 to 3.4% in 2019;
  •           the average FDI increase rate per year until now was 8%.

For complete assistance in Dubai company registration, do not hesitate to contact us.

Forming A Company In Dubai

Business Setup in Dubai

Company Formation in Dubai

This year has seen a raft of banking and business regulations sweep across the UAE. There have been new tax laws, changes in Central Bank guidelines, and a general shift in bank compliance criteria.

This means if you’re a budding entrepreneur looking to start or grow a company in the UAE, you need to get up to speed with these changes.

To help, we’ve detailed three important company formation changes and explained how they could affect you.

1. Banking regulations are tightening across the UAE

This last year has seen a number of announcements by the UAE government that have forced businesses to adapt quickly to stay competitive.

Just under one year ago we saw the introduction of Value Added Tax (VAT) in the UAE. This has already impacted how companies negotiate with customers and suppliers, as well as influencing pricing structures, cash flow, and business processes.

Just before this, excise tax –an indirect tax on goods that can cause harm to human health, such as tobacco– was introduced. These are big changes for a country known for being tax light.

The biggest change: The UAE government has joined over 100 countries in agreeing to a Common Reporting Standard (CRS). This is an exchange of information between different tax authorities to increase transparency.

CRS means the UAE Central Bank demands that local banks are now much more stringent in performing due diligence and compliance. As a resident or a non-resident, this could impact you in particular as your accounts would now be reportable under the CRS system, if the banks feel you are not a resident for banking purposes. This means that an Ejari (lease agreement), and DEWA bill, in Dubai’s example, are needed to support your VISA and EMID from the bank’s point of view in order for them to bank you as a resident for non-exchange.

Why is this all happening now?

Well, the more skeptical among us might suggest it has something to do with the UAE being temporarily dragged onto the EU’s tax blacklist in late 2017.

Despite being removed from the black list fairly rapidly in early 2018, the UAE is still sitting precariously on the grey list. As a result, the central bank and local banks have increased the requirements to prove your residency for banking purposes which is not a bad thing, and a sign of the progression and willingness of the UAE to evolve as it has always done over the last 50 years.

What this means for you in 2019

Every year, the country does more to align itself with its international partners.

As with any country, you need to stay on top of the tax laws and banking regulations. The problem now is that things are changing so fast that information on the internet quickly becomes obsolete. So always check the date when the information was written and double check any advice.

This may all sound ominous, but in the long-term it’s actually positive for you as a business owner. Such changes show the UAE’s willingness to adapt and move with the times. They will create new opportunities for FDI and ensure compliance with international standards.

But this also means it’s more important than ever to find a trusted advisor in the UAE. One with local knowledge and expertise, who will be able to guide you through the process of setting up a company step by step.

2. Dubai and Abu Dhabi are becoming the go-to places for new business

A knock-on effect of these tax and bank regulations is a physical shift in where companies are choosing to locate their office.

New Central Bank guidelines require a UAE residency visa and Emirates ID if you want to open a corporate account. Also, as a signatory, you will need a local corporate address that is a physical office. A flexi-desk will no longer cut it in many cases, plus you will need a residential address to support any application, to show you are based here.

In the past, one of the great attractions of the Northern Emirates’ free zones was their flexi-desk options. But no more. Now there are only a few places where banks are prepared to consider a flexi-desk and they’re all in and around Dubai or Abu Dhabi. Examples include DMCC, Dubai South, DWTC, JAFZA, DIFC, DSP, and ADGM.

Added to this, the Northern Emirates are no longer the cost-effective option they used to be.

The E-Channel Immigration System is a unified immigration system implemented in five of the seven Emirates back in 2017. The Northern Emirates have been forced to introduce the system, but Dubai and Abu Dhabi continue to use their own independent ones for now.

While E-Channel has many benefits, such as online processing and faster approval, it comes with a high outlay of AED 7,000 to 8,000.

Take Ras Al Khaimah Economic Zone (RAKEZ) as an example. Registration costs AED 2,000. Then there is an AED 5,050 guarantee fee (although bear in mind this is refundable). Annual re-registration then costs around AED 1,200.

What this means for you in 2019

With Northern Emirate free zones costing more, clients are looking more closely at options in Dubai and Abu Dhabi.

But that doesn’t make it an easy choice. Where you locate depends on several factors including your business activity, size of operation, overall visa requirements, and amount of capital you have to invest.

Something else to be aware of: Moving into 2019, the UAE government is introducing dual licenses that allow companies to hold one license to operate in the mainland and one to operate in a free zone without needing office space for both companies. This widens your options, but of course it can also make your decision more complex. But it does bring massive benefits for business planning.

Again, it will pay to take one-on-one advice to find the best option for your company and receive help dealing with local banking regulations.

3. Banks are favouring different business activities

If you’re looking to start a general trading or management consultancy company then things might be tougher for you in 2019. Business activity choice is coming under greater scrutiny as banks clamp down on what they deem ‘high-risk’ or ‘vague’ activities.

It doesn’t help that UAE federal law is very stringent about companies not deviating from their registered activities.

‘The company shall obtain all the approvals and licences as required for the activity to be conducted by the company in the State prior to commencement of its activity.’

Unfortunately, banks are also becoming warier when it comes to certain nationalities. Some people are viewed as riskier than others from a geopolitical standpoint, leading to more compliance paper work and background checks. Ultimately, this can mean higher costs, delays and in some cases rejection of your application, where a proper business plan is not submitted or where supporting information is not available and in place.

What this means for you in 2019

Think carefully about how you would define your business activities. Given how lax some other countries can be with upholding activity registration, it can be tempting for entrepreneurs to assume the same for the UAE.

This would be a big mistake. Even if the bank accepts your application, things may go awry further down the line. You may encounter issues when it comes to audits. You may face questions about your suppliers or clients. You even run the risk of fines.

But the above pitfalls can be avoided if you seek out a specialist consultant with a reputation for offering a high-quality service. Ultimately, this is how you can ensure your venture gets off to the best possible start.

Keep your ear to the ground

The past couple of years have seen rapid change to how companies operate across the UAE. There is little to suggest 2019 will be any different. So make sure you keep up-to-date with changes as and when they happen.

Economists said the UAE has been working on several other bold reform initiatives, including the bankruptcy law, to boost investor confidence over the past several years. The UAE bankruptcy law, which allows companies in financial distress to restructure, has already come into effect.

Company Formation in Dubai

Alya Auditors Dubai,Leading CA Firm in Dubai providing professional services in the field of Auditing,Accounting,VAT/TAX Consultation etc in UAE  also provides complimentary UAE and Dubai company formation consultation to existing and potential clients. We offer many company formation options here in the UAE for Onshore, Offshore and Free Zone companies. Company formation application process begins once all necessary documents are acquired.

For more details contact us @ Tel: +971 4 876 9377, Mob: +971 52 975 0690, +971 52 475 4007

Company Formation Tips |11 things nobody tells you about starting business in the UAE

Company Formation

Setting up business in the UAE is easier than anywhere else in the Middle East and North Africa (Mena). According to the World Bank’s Ease of Doing Business 2016 report, the nation ranks 31.

With numerous free zones, excellent infrastructure, low taxes, low import duties and a strategic location, the UAE scores far ahead of neighbours such as Bahrain (65), Qatar (68) and Saudi Arabia (82). For instance, it takes only six procedures and eight days to open a company in the UAE, compared to 8.2 procedures and 18.8 days in Mena, and 4.7 and 8.3 worldwide.

The report commended how the UAE has reformed contract enforcement, with commercial disputes resolved in 495 days, compared to an average 538 days in high-income OECD economies.

However, starting a business here has its own hurdles. GN Focus asked those who have set up companies in recent years about their top challenges.

1. No one tells you about admin

“Admin is the number one thing,” says Rachel McArthur, Managing Editor of Digital Ink, a Dubai-based digital content company in Dubai Silicon Oasis.

“There are plenty of how-to guides in the UAE, but realistically, nobody will ever know the steps to setting up a business in the UAE until they have done it themselves. In the initial stages I had to repeat a journey to the client service centre due to not having a certain document, or I hadn’t paid for something.

“Oh, and I soon got into the habit of carrying the company stamp everywhere. So many documents needed that thing!” 

2. You need to make a big investment

From paid-up capital requirements to mandatory office space and trade licence fees, entrepreneurs need to set aside as much as $10,000 (Dh36,730) in annual costs, depending on the kind of company they are starting. 

“Compared to our experience in Singapore, the cost of setting up was a big consideration to decide if we should be expanding into this market or not,” says Jaya Maru, a Singaporean and founder of social fitness platform Flabuless, which has an office in Fujairah.

“Thankfully it has paid off and we are happy to have strong clients and partners supporting us.” She now has more than 50 clients, ranging from Mashreq bank to InterContinental Hotels. 

3. Operational finance may be a problem

Many companies we spoke to used personal resources or loans from friends and family to start businesses. This is largely because banks in the country have a limited appetite for lending to start-ups, preferring to examine business performance for a couple of years before approving a loan.

“Availability of easy loans from banks is a challenge for SMEs in the initial years,” says Navin Navendran, an Indian entrepreneur who started GoLive in 2014. The DMCC-based company creates mobile apps that address an untouched pain point in employees’ or consumers’ lives.

“While banks claim to extend support, most need a minimum turnover of Dh2 million. If we had that kind of turnover we would probably look elsewhere to raise funds rather than from the bank.”

4. Being a corporate evangelist 24/7

The UAE is one of the “smartest” countries in the world in terms of internet penetration and infrastructure, making it ideal for connected start-ups.

However, social media-based businesses, in particular, may face difficulties during the incorporation and licensing stages. That was the case for Alan Devereux, a British national who started Cave Chalk, an Umm Al Quwain-registered company, with his wife a couple of years ago. 

“One challenge has been the literal sense in which the government works in terms of trade names,” he says. “Trying to explain what a social media company was to secure the trade licence was difficult. In the end the licence name is not the trade name.

“This issue continues each year on renewal as the inspector wants to see desks and PCs, but Cave Chalk works on the internet and we work from home. There is no need for an office.” 

5. Talent is hard to come by

The UAE’s convenient location as a hub for three continents and good connectivity with the rest of the world make it home to expat professionals from nearly 200 countries.

Even so, finding the right team can be difficult.

“Finding the right fit for your business is no easy process, says Maru. “[This is] more so for start-ups, since you need to find people who believe in your vision. It took me more than four months of hunting and 30 candidate interviews to make my first hire in Dubai.” 

6. Information can be hard to come by

Although every licensing authority has a website, with detailed information about incorporation, fees and regulations, some entrepreneurs say this could be simplified.

“There is a lack of clarity of the set-up process,” says Jaya Maru, a 33-year-old Singaporean, who founded Flabuless FZE, a social fitness platform is incorporated in Fujairah.

“To start a business, one would obviously try to do things themselves to minimise the initial investment before you realise there is a viable market for your services and establish a cash flow cycle.

“However, finding out the process of what is required and trying to do it yourself can be an uphill task – it is almost a given that you need to engage PRO services and work with firms that specialise in company set up to get your business going. It would be great to have this process streamlined and be able to do all this yourself – online preferably.” 

Girish Narayanan, the 46-year-old Founder and Managing Director of Granteq, a distributor of integrated AV, Control and IT technologies, was able to get angel investors to fund his Indian company’s expansion into the Middle East in 2013.

“Being a start-up, we had to find our own money to establish and then create a sustainable business model,” he says.

“When we were reasonably established, we approached the banks for proper structured finances and today we can even boast of high-value cross-border financial instrutments that cover three continents.”  

7. Time is money

Living in Dubai can be expensive without a paycheck. Those starting businesses without external investment will therefore need to have enough in the bank to support their lifestyle for up to a year.

“Time is a bigger currency than money when working for oneself. If an entrepreneur decides to spend nine months building an app, it equals nine months on nothing and nine months for your competitors to either catch up or pull away,” says Ben Walton, 33, the co-founder of Styck, a fitness app and step tracker that rewards users for reaching specific goals.

The company is licensed by Creative Zone in Dubai, with a trade licence from Fujairah Creative City.

“We chose to build our first app in a mere four weeks, release it and iterate it from there. This also enabled us to adapt what we were building to how our customers were using our product, rather than making many too many assumptions,” he adds. 

8. Diversity matters

The UAE’s relatively small population base requires that large businesses operate across borders. However, commercial opportunities in one country may not be the same as in another.

Anand Kapoor the 42-year-old Indian Founder and Vice-Chairman of Midcom, runs businesses in the UAE and Africa. His DMCC-based company spans four verticals from distributing mobile handsets to consumer electronics, dairy and education.

“Diversify to avoid dependencies on one industry or geography, and never chase money. Instead look to build sustainable businesses to reward yourself in the long run,” he advises.

“The UAE is highly sophisticated and competitive. Setting up business in the UAE is relatively easy compared to some of our markets, and it is supported to great infrastructure, but as a result it becomes a highly competitive environment which where one needs to be careful.” 

9. You need to factor in cultural values

Doing business in the UAE may be different from your home market for a variety of reasons. The county’s Islamic values underpin everything from its legal systems to working life, and entrepreneurs will need to consider these.

“When I launched, it was the summer/ Ramadan period and I was shocked to learn that people were away for a few months for holiday,” says Maru.

“However, it gave me an excellent time to network and understand the UAE market – since then, there’s been no looking back!”   

10. Travel is essential to stay on top of your game

In many industries, being first to market with a new product or service differential can make a significant impact on the corporate bottom line.

However, the UAE’s culture of innovation is only just beginning to take off. Staying on top of tech trends and educating the audience here is a challenge, says  Hudson.

“The USA and Europe have always been ahead in the world of tech. When you offer a product that can be used globally as we do – it is hard to always be on top of your game and be cutting edge. We overcome this by attending events across USA and europe frequently throughout the year,” he says. 

11.  It can be hard to stick to your principles

With people from different parts of the world bringing their own beliefs and value systems with them, sticking to your guns can be hard.

The rules for doing business in your home country don’t apply here – and may not apply in your peers’ home countries either.

“Never forget your ethics,” advises McArthur. “In the short time Digital Ink has been around, we’ve had numerous encounters where certain individuals/ companies pretended they wanted to partner with us, when in reality all they wanted was to find out how to take our business.

“Dubai is small and word gets around, and you can lose trust in a second. Worry more about your business than about your competitors. There’s work for everyone, and every company will get their fair share. You don’t need to step on others to get ahead.”

Alya Al Marzooqi Auditing provides all services including Company Formation,Auditing (Due Deligence Auditing,Forensic Auditing,Statutory Audit,Internal Audit,External Audit etc.),Accounting,VAT/TAX Consultation Services. Our main office is at Business Bay.
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Courtesy to Gulf News