How to Start a Business in Dubai as a Foreigner?
Dubai has been experiencing robust growth with its foreign direct investment growing to almost 21 billion in December 2021. At the end of the first half of 2022, Dubai has already issued 45,653 business licenses, reporting a growth of 25% from last year.
Business setup in Dubai has been mainly facilitated by the UAE government’s strategic approaches and investor-friendly policy amendments over the last 3 years, reviving the economy with an influx of foreign investment.
If you are planning to start a business in Dubai as a foreigner, you can expect some excellent benefits from Dubai’s various economic zones.
Although we have talked about the perks of setting up a business in Dubai in our business setup guide for UAE, just to give you a brief idea, the benefits include 100% ownership & profit repatriation, tax exemptions, and leading-edge business-friendly infrastructure. All this makes Dubai an ideal to base a multinational business from one location.
Our guide today answers some of your most essential questions regarding foreigners starting a business in Dubai, the types of businesses they can launch, and how to register a business in Dubai as a non-resident.
Can a Non-resident Start a Business in Dubai?
Yes, most foreigners and non-residents can start a business in Dubai, with some very attractive benefits. In certain cases, investors may need to work with a local sponsor who usually holds a 51% stake in the business.
That said, there are three factors that may restrict foreigners from establishing a business in the UAE, including their nationality, their tax residency status, and the type of company enterprise they wish to establish.
At Airzone we offer you the exclusive knowledge and insights you need to start a business in Dubai, just like almost 85% of expatriates already do in the region.
Dubai’s investor-friendly laws, cutting-edge business tech infrastructure, and profit repatriation laws make it the ideal spot to reach three continents from one location.
Types of Business Licenses in Dubai
A non-resident business setup in Dubai requires a business license to operate. Licenses are issued for two regions including Mainland Dubai and Dubai Free Zones.
The Mainland license is meant for businesses that wish to operate both within the UAE local market and international markets. This type of business license generally requires working with a resident sponsor who gets a 51% share in the company as a sleeping partner.
The Free zone license is probably the most ideal option to set up a business with any of the dedicated free economic zones of Dubai. This license is very easy to secure, offers 100% ownership to foreigners, gives a 0% tax advantage, eliminates trade duties, and provides you with a ready-to-use business infrastructure.
The Dubai Department of Economic Development permits four types of trading licenses to foreign business investors. These include
- Commercial – For commercial trading of goods.
- Professional – For service provision like accounting, legal, consultancy, etc.
- Industrial – For manufacturing, packaging, etc.
- Tourism – For Travel and hospitality providers.
How to Start a Business in Dubai as a Foreigner?
Here is the general process followed to get a trading license in Dubai.
Step 01 – Choose a business activity and develop your project plan
The first step is to choose the business activities you will conduct. This will determine what type of license you will need to operate as a foreign company in Dubai. You can choose from industrial, professional, commercial, and tourism licenses.
Step 02 – Select the ideal location, Mainland or free zone for your business
You may require professional assistance to choose the perfect location to conduct your business in Dubai. Airzone can provide you with the necessary assistance and knowledge to determine if you should incorporate your business in a free zone or in the mainland.
Step 03 – Select the type of company you wish to establish – Free Zone Enterprise, Free Zone, Corporation, or Foreign Branch of a Company
Investors and entrepreneurs can choose from four types of companies that can be incorporated in Dubai. You can choose to create a privately owned enterprise, a public corporation, a branch of an existing UAE company, and a branch of a foreign company.
Step 04 – Register your business name
In general, the UAE free zones and mainland zones adhere to strict rules when setting a name for businesses. The country abides by rigorous name rules to ensure businesses do not carry offensive words and stereotypes in their names.
Step 05 – Apply for a trading license
The license application is made to the authority where you are locating your new business. The Dubai mainland application is made to the DED (Dubai Department of Economic Development), and free zone applications are made to their relevant authority.
Documents Required for Business Setup in Dubai as Non-resident
A non-resident business setup in Dubai requires several documents. Here is a list of the necessary documentation you will need:
- The official application form from the relevant authority – Mainland or Free Zone
- A professional business project plan
- Copy of any existing trade licenses – (learn how to get a trade license in UAE)
- Colored passport copies of the Directors, Managers, and Shareholders
- Authenticated signatures of the Managing Directors, Managers, and Shareholders
- Financial audit reports for two years attested by a UAE-based bank
- NOC from the current sponsor – for individuals
Dubai Company Formation Costs
The formation costs for a foreign business in Dubai can differ depending on the location and type of license you choose. Dubai company formation costs are different for the Mainland and the Free Zones.
On the Mainland, a professional license costs around AED 16,000 while a commercial license costs close to AED 21,000. Mainland-registered businesses also require a local sponsor and additional documentation.
In Dubai Free Zones, the license and registration can cost between AED 15,000 and AED 20,000. Many of the Free Zones offer business packages that include visas, office spaces, and utilities for foreign businesses.
A simplified registration process and attractive investment laws make the country an excellent opportunity for foreign investors looking to launch a business setup in Dubai. The strategic location and facilitation of businesses themselves are growth drivers, especially for entrepreneurs who wish to reach a global audience.
Get in touch with the Airzone today to learn more about how we can help you get in touch with the right company formation service providers for your business. With the right knowledge, you’ll be able to start a company in Dubai as a foreigner in no time.