Comprehensive Guide on Business Setup in Dubai & UAE

United Arab Emirates Overview

UAE: A Thriving Economy

The United Arab Emirates (UAE) is a confederation of seven emirates – Abu Dhabi, Dubai, Sharjah Ajman Ras Al Khaimah Umm al Quwain, and Fujairah. The United Arab Emirates is a land with an enticing mix of cultures and traditions. It’s easy to do business here, as it has one clubbed population that accounts for 80% or more of total expatriates living on the coastlines near Dubai opposite Abu Dhabi

The UAE is a place where business relationships are seen less like transactional contracts and more long-term partnerships. Networking plays an important part in this culture, as it does elsewhere throughout the Middle East region for expats who want to make their mark on these shores or simply visit family members living here full-time from abroad with plans that do not always work out as expected.

How to Set Up Your Business in the UAE
How to Start a Business in The Mainland
How to Start a Business in Freezone
The Difference between MainLand and Freezone
Documentation, Guide, Timeline
Running and Operating Business in UAE
Employment Contract Types
Business Setup in UAE – Compliance, and Regulations
Frequently Asked Question

Introduction to Business Setup in Dubai & UAE

This guide provides an introduction to business setup in Dubai & UAE, including an overview of the various types of business entities that can be established and the steps involved in setting up a business

There are four main types of business entities that can be established in the UAE: sole proprietorships, limited liability companies (LLCs), civil companies, and branches of foreign companies

Sole Proprietorship:

Sole proprietorships are the simplest type of business entity and can be established by UAE nationals and expatriates. There is no minimum capital requirement and the business is registered with the Department of Economic Development (DED).

Limited Liability Company:

LLCs offer limited liability protection to their owners and are the most common type of business entity in the UAE. The minimum capital requirement for an LLC is AED 2 million and the business must be registered with the UAE Ministry of Economy.

Civil Companies:

Civil companies are similar to LLCs but are designed for businesses that will be carrying out activities that require a professional license, such as engineering or architecture. The minimum capital requirement for a civil company is AED 10 million and the business must be registered with the UAE Ministry of Economy.

Branch Offices:

Branch offices of foreign companies are a popular option for businesses that want to operate in the UAE but do not want to establish a separate legal entity. The branch must be registered with the UAE Ministry of Economy and must have a local sponsor

Process of Setting Up Business

The process of setting up a business in the UAE can be complex and time-consuming, so it is important to seek professional help to ensure that everything is done correctly. There are a number of agencies that can assist with business setup, including the Dubai Chamber of Commerce and Industry, the Abu Dhabi Chamber of Commerce and Industry, and Invest AD

When setting up a business in the UAE, there are a number of important considerations, such as choosing the right business structure, obtaining the necessary licenses and permits, and opening a bank account

It is also important to be aware of the UAE’s labor laws, which set out the guidelines for hiring employees and managing work relations. The UAE’s labor laws are governed by the Federal Law No. 8 of 1980, as amended

Freezones

The UAE has a number of freezones that offer benefits such as 100% foreign ownership, tax exemptions, and relaxed visa requirements. These freezones are designed to encourage investment and business growth, and they are located in all seven emirates

Some of the most popular freezones in the UAE include the Dubai International Financial Center (DIFC), the Abu Dhabi Global Market (ADGM), and the Jebel Ali Freezone (JAFZA)

How to Set Up Your Business in the UAE

There are many reasons to set up a business in the United Arab Emirates. The UAE has a strong economy and offers many opportunities for businesses to thrive. It is also a convenient location for businesses to operate, with good infrastructure and access to markets in the region.

If you are thinking of starting a business in the UAE, there are a few things you need to do first.

Here is a guide on how to set up your business in the UAE.

1. Choose a business structure

The first step is to choose the right business structure for your company. The UAE has a number of different business structures, including limited liability companies (LLC), freezone companies, and partnerships. You need to decide which one is best for your business.

2. Register your company with the Ministry of Economy

Once you have chosen a business structure, you need to register your company with the Ministry of Economy. This can be done online or in person. You will need to provide some documents, including your business plan, company name, and address.

3. Get a trade license

Your company will need a trade license to operate in the UAE. This can be obtained from the Department of Economic Development (DED). You will need to submit an application form and pay the relevant fees.

4. Open a bank account

You will need to open a bank account for your company. This can be done at any of the UAE’s banks. You will need to provide some documents, including your trade license and company registration certificate.

5. Obtain visas for your employees

If you have employees, you will need to obtain visas for them. The UAE offers a number of visa options, including visit visas, work visas, and residence visas. You can find more information on the UAE’s visa requirements on the Department of Immigration website.

6. Market your business

Once your business is set up, it is time to start marketing it. The UAE offers many opportunities for businesses to grow and succeed. There are many potential customers in the region, so make sure you target them correctly. You can find more information on marketing your business in the UAE in our guide on How to market your business in the UAE.

If you follow these steps, you will have everything you need to set up your business in the UAE. The UAE is a great place to do business, so make sure you take advantage of all it has to offer

How to Start a Business in The Mainland

The UAE Mainland is an incredible place to start your own business. From 15 minutes of application, you can be operating within the country’s borders. There are many steps and approvals that need to happen before this happens. This guide lists down steps and the investor’s journey to start a business in the UAE Mainland.

Starting an Online Business

The UAE Government has introduced a new service called Bashr that allows investors to start their businesses in under 15 minutes. This integrated e-service connects with federal and local government entities, providing commercial license services for those who need them – all from one simple online platform!

The Abu Dhabi Business Center is a one-stop shop for investors looking to start their businesses in the emirate. Their instant license service provides an easy way of getting started without having you visit their office or deal with any paperwork, all from your home computer!

The Dubai Government has launched a new program called Virtual Commercial City which will allow entrepreneurs and freelancers across the world to start their business in UAE even if they do not live there. This is possible because of this program’s online platform that facilitates all transactions between companies, employees

Initiating a Business Regularly

Starting a business is not always easy and the process of starting can be difficult. But with hard work, dedication to your business goals, and following these steps you will find success in no time! There are a few ways that will help you

Identifying a business activity
Selecting an appropriate legal form
Registering the trade name
Considerations for Trade Name
Applying for an initial approval
Legal Agreements
Select a business location
Submit documents

1. Identifying Business Activity

Businesses that generate profit and/or have employees should consider the type of license they need to operate legally. There are six different types, including industrial, commercial, professional tourism-related activities such as hotels or restaurants with tourist amenities.

2. Choosing the Legal Form

The legal form depends mainly on the business requirements. The legal form is used to identify applicable laws and regulations. In the UAE, an investor can select one of these legal forms

General partnership
Limited partnership
Limited liability company (LLC)
Public joint stock company (PJSC)
Private joint stock company (PrJSC)
Civil company
Local company branch
GCC company branch
Foreign company branch
Freezone company branch
Sole establishment
Holding companies

3. Registering Trade Name

A trade name is an important identifier for businesses. It also shows what type of business you’re in and how your company operates, so it’s vital that the right one be chosen when starting out or expanding.

4. Considerations of Trade Name

The trade name must:

be followed by the business structure acronym such as: LLC, EST, PJSC, PrJSC
not violate the public morals or the public order of the country
be compatible with the required type of activity and the legal status of the company
not contain names of any religion, or governing authority
not have been previously registered

5. Initial Approval

The UAE is a country of opportunity with many business opportunities for both local and foreign investors. In order to start your own venture in the United Arab Emirates (UAE), you will need initial approval from The General Directorate Of Residency And Foreign Affairs. Scrutiny by this agency ensures that there are no customs or other issues regarding entering another nation as well as ensuring compliance standards within their borders while also protecting consumers who may be potential clients/customers once they start their business.

6. Legal Agreements

Limited partnership
Limited liability company (LLC)
Public joint stock company (PJSC)
Private joint stock company (PrJSC).

The formation of your new business is not complete without a signed Memorandum of Association (MoA). This document ensures that you are following all regulations and laws in regards to how it must be conducted professionally, which can result from completing this form for any legal entity type. These agreements are required for the following business forms:

7. Choosing Business Location

To start a business in the UAE, you must have an address. The location and ownership of your company will be compliant with both local Emirate laws as well as Department for Economic Development requirements; make sure to check if there are any other specific standards that apply where you live

In order to conduct business, it is necessary for you as a company owner or manager to have relevant permits from government entities. The following list contains some examples of these types of permission required

Ministry of Justice

Legal activities and legal consultancy

Local municipal department

Architectural and engineering affairs

Telecommunications and Digital Government Regulatory Authority (TDRA)

Telecommunication activities

Executive Council

Travel and tourism, general services, charter trading, ship, and maritime agencies, car clubs, charter air transport, and foreign company branches

Ministry of Economy

Insurance activities and insurance consultancy

Collecting Business License

Once the investor has completed these steps, they can collect their business license from either Service Centers or through websites of Economic departments.

8. Documents Required for Acquiring License

Initial approval receipt and all the previously-submitted documents
Copy of the lease contract duly attested by the Real Estate Regulatory Agency (RERA) in Dubai
Duly attested memorandum of association
Approvals from other government entities concerned, as may be required
Duly attested service agent contract

How to Start a Business in Freezone

In this guide, we will discuss the different steps you need to take when setting up your company.

For starters- determine what type of legal entity is right for you (limited liability partnership or stock corporation), select an industry that matches with where they do their manufacturing/production facilities located within freezones.

Steps in Starting a Business

The process of setting up a business in freezones can be easy and straightforward. All that is required for this type, or any other kind if it with the right paperwork will do-you just have to follow some simple steps:

Determine the type of legal entity
Choose a trade name
Apply for a business license
Choose an office space
Get pre-approvals

Some businesses choose to establish a company in the freezone, while others may have their own private equity or franchise. The type of legal entity that you choose will depend on your needs for this project and what is best suited at first glance with regards as far as commercializing goes

The differences between public and private companies can be seen in the number of shareholders. When an individual has shares in a company, they are called natural persons while legal entities such as partnerships or corporations have many more people holding onto their stock. That’s why it is important for you to check with any freezones near you before starting up your business.

List of Free Zones in United Arab Emirates

Determine the Legal Entity

The first step is to determine the type of legal entity you would like to establish. The most common types of entities in the UAE are limited liability companies (LLCs) and branches of foreign companies. LLCs can be either wholly owned by a single person or jointly owned by two or more persons. Branches of foreign companies can be either 100% owned by the parent company or less than 100% owned

Choosing a Trade Name

While deciding on the type of business entity your company should take, trade names are important. You can check either with authority from freezones or the Department of Economic Development about approved logos and whether they have been registered already in USDIA (United States). As per the twofour54 website, there is no name that starts ‘Abu Dhabi’ or UAE.’ However, according to the DMCC list restricted trader companies cannot use these words within their firm’s moniker either

To approve a proposed trade name, the requirements are that:

It must not violate the public morals or the public order of the country
must be followed by the legal form of the company
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

Applying for a Business License

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

Types of business activities you can involve in:

Content production
Advertising
Animation
Corporate Film production
Corporate Print Material
Digital content production
Educational content material
Film production
Gaming development
Graphic design
Illustration
Mobile media
And much more.

Other business activities

Branding Agency
Events/Festivals
Exhibitions/Conferences
Information Services
Marketing Communications
Media content management
Post Production

Publishing and broadcasting

publish a book
publish a magazine
publish a newspaper

For this, you need to apply for a dissemination license.

DMCC is a business-friendly environment that offers many opportunities for entrepreneurs. In this case, you would need to apply for a license from DIFC’s Dissemination and Financial Services Office (DIFSO). The list of allowed sectors in DMCC includes energy companies like oil firms or power grids; commodities traders such as those who trade gold futures & Fashion industry category along with other luxury items made out of plastic material designs

Accordingly, some types of business licenses are:

Commercial/trade
Consultancy/services
Industrial
Educational
Media
eCommerce

The Dubai Multi Commodities Centre (DMCC) offers a new type of company structure that can be set up to allow families and their businesses access some extra help with trading commodities. These single-family offices have the same standard FZ LLC form, which means they’re authorized for providing services only within your immediate household

Choosing an Office Space

Office requirements depend on the number of employees and the type of business activity in your company.

The DMCC offers three different options for offices: A Flexi desk-sized at 20-30 sqm, a larger space ranging from 200 – 265 square meters called “Flexible” or Executive Offices running through multiple floors totaling up to two thousand square meters each! There is also Hamriyah Freezone Authority which provides 100 executive office packages varying greatly by size.

Pre-Approval Process

The list of documents varies on the type and requirements for an entrepreneurial business, but there are some general guidelines when applying.

For example: If you want to open up a business in a freezone specializing in technology companies then it’s recommended that your company submit applications with tax clearance certificates as well passport photos. The process can be difficult; however, it will likely pay off because these zones offer significant advantages such things low taxes or reduced rates on utilities like electricity

Pre-Approval

First things first, you need to get initial approval

Completed application form
Business plan
Copy of existing trade license/registration certificate
Colored passport copies of the company’s shareholder
Specimen signature of the company’s shareholder
2 years audited financial reports for corporate entity or certificate of reference
NOC from current sponsor
Unit title deed
Letter of Intent
Registry Identification Code Form for Manager/Director

Registration:

After the initial approval, you are required to pay registration fees and license fees. Then the next step of documentation comes in:

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

License and Visa Process

This process includes:

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

Is there a need for a local partner or sponsor?

No, there is no need for a local partner or sponsor in the Freezone business in UAE. These are unique, self-contained business areas that provide ample opportunities for businesses to operate without the need for a local sponsor. However, businesses should be aware that they may need to obtain certain licenses and permits from the relevant authorities in order to operate in these areas. For more information on the requirements for doing business in a freezone

What is the Cost of Setting Up Business in the UAE?

If you are looking to set up a business in the UAE, you will need to pay a company registration fee. The exact fee will be between AED 9,000 and AED 10,000. This fee will cover the costs of setting up your company and registering it with the relevant authorities.

In addition to this registration fee, you will also need to pay for a business license. The cost of a business license will depend on the type of business you are setting up. For example, if you are setting up a restaurant, you will need to pay for a food and beverage license, which will cost around AED 10,000.

You will also need to pay for office space. The cost of office space will depend on the location and size of the office you need. For example, if you are looking for a small office in Dubai, you can expect to pay around AED 5,000 per month.

Finally, you will need to pay for any other costs associated with setting up your business, such as equipment, staff salaries, and marketing expenses. If you are unsure about the costs associated with setting up a business in the UAE, it is best to speak to an expert

Can You Start a Business in the UAE Yourself?

The UAE is a great place for entrepreneurs, and there are many opportunities available for those who want to start their own businesses. However, there are some restrictions on who can actually start a business in the UAE.

Local residents and nationals of GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia) can start a business in the UAE without any restrictions. However, non-GCC nationals must obtain a license from the Department of Economic Development (DED) to start a business in the UAE.

The DED is the government agency responsible for regulating business activity in the UAE. They offer a number of different licenses depending on the type of business you want to start, and you can find more information on their website.

The Difference between Mainland and Freezone

When setting up in the UAE, there are two main options available to you. These include mainland and freezone setups.

The corporate laws in the UAE are some of the most advanced and well-established around. All mainland companies have to be registered with either DED or an equivalent local municipality, depending on where they’re incorporated. You can incorporate your new business anywhere throughout Dubai’s Economic Sphere (the country), trade directly between yourself and to its founder/CEO without any intermediaries like other industries might need sometimes when dealing locally, etc…

Freezone Companies in the UAE are incorporated within special economic zones that have been self-regulated by their managing authority so there is no requirement to register with DED or any other equivalent. Freezone entities can trade only locally with assistance from a local service agent and not outside of these designated regions unless granted permission from either federal law (Federal Law No 36) or provincial laws which vary per province within the country’s borders

The UAE is home to many freezones, with each catering specifically for the industry. For example, Dubai Healthcare City was developed as a place where medical professionals can conduct business and house their equipment; while Media city was built specifically so that those in the media field could take advantage of generous tax incentives offered thereby Dubaians!

Freezone companies have many benefits that mainland ones don’t. They can take on government contracts, which is not possible for the latter type of business in most cases due to their lack of taxation exemption on income from special economic zones – an incentive offered by countries or regions with low rates to attract investment into such areas so they may grow at faster speeds than if left unchecked

Freezones also allow foreign investors greater access since there are no limitations set forth within your home country’s laws when doing transactions through this particular formality unlike what might happen otherwise where certain behaviors would become illegal under federal regulations

Mainland vs. Freezone

Mainland Company

Mainland Companies have been formed to meet the needs of modern-day business. They are based in Dubai and have obtained licenses from both Department of Economic Development and Municipality, depending on where they’re located.

The company’s products are available in the local UAE market and can be traded internationally or internally with other companies.
Can work on government contracts
Has the liability of paying custom taxes
The authorities will not allow any non-GCC investors to own 100% of the company
The company can theoretically apply for unlimited employee visas. The number is tied to the size of business premises

A business visa is a great option for those looking to bring their employees with them. The theoretical maximum number of visas available per company depends on the size and type

Mainland companies must get approval from more than just their employer. You will need to consult with the Ministry of Labor, as well as other agencies like it in order for this plan to work properly and without incident.

Freezone Company

This company is incorporated by a freezone authority.
This company can trade both domestically as well internationally.
It requires service agents in the UAE to trade with the UAE’s internal market.
It cannot involve in a government contract
It has a 100% tax exemption
It can be entirely owned by a foreign entity
It can apply for limited visas
It isn’t required to lease a functional workplace
There are not additional approvals required to trade
It has the option to fully refund the capital and profits.
There are no restrictions on currency

What’s the difference between Setting up your Business in Mainland and Freezone?

There are a few key differences to keep in mind when setting up your business in Mainland Dubai versus a Freezone.

Mainland Dubai is subject to UAE Federal Law, whereas Freezones have their own independent legal system. This can make it easier to do business in a Freezone, as there are often fewer restrictions and red tape.

Another difference is that businesses in Mainland Dubai tend to be geared towards the local market, while businesses in Freezones are often more international in scope. This is due to the fact that Freezones attract foreign investors and offer many incentives for companies to operate there.

Finally, businesses in Mainland Dubai are required to have a local sponsor, whereas businesses in Freezones do not need a local sponsor. This can be an advantage for businesses looking to set up in Dubai, as it can be difficult to find a local sponsor who is both reputable and understands your business.

Overall, there are some key differences between setting up your business in Mainland Dubai versus a Freezone. It’s important to understand these differences before making a decision about where to set up your company

UAE Freezones

By investing in the UAE, you can enjoy many benefits including 100% foreign ownership and no customs tax exemption. There are also zero currency restrictions which mean that your money will not be impacted by fluctuations of different currencies when it comes to making investments or withdrawals from an account abroad (i). With these incredible opportunities offered only for businesses who own property within this country as well – there really is nothing else like them!

Some of the most important benefits that you can get from an investment in a freezone include:

A) Avoiding customs fees and taxes on imports/exports.

B) The ability to carry out business transactions without having them vetted through your home country’s sensitive sectors board

C) Protection against Legislation imposing controls such as those introduced by disasters like fires or floods etc., which might prevent us from doing any trading at all

Freezones offer a variety of opportunities for entrepreneurs, with many including license packages, inclusive visa costs, and more.

Legal Structure

Legal entities are the most common form of business organization in both developed and developing countries. They range from partnerships to corporations, joint ventures, or sole proprietorships; they may be structured as single-owner companies (simplified partnership), multiple-owner companies limited by shares/partnership.

There are many different company structures in the UAE, and they all have their pros/cons. The most popular choice for companies looking to expand is a Mainland vs Freezone setup; however, this isn’t your only option! Other possibilities include

Sole Proprietorship

The Sole Proprietorship is a type of business structure that can be 100% foreign-owned. This means you, as the sole owner and entrepreneur will have full control over your company’s fate without any limitations or restrictions set in place by law

Limited Liability Company (LLC)

A Limited liability company is a type of business structure that provides limited responsibility and accountability to its members. The maximum number of shareholders for an LLC can be up to fifty, though only one hundred or fewer may take part in management decisions

Freezone

Freezone companies are formed within special economic freezones. They benefit from 100% customs tax exemption, no currency restrictions, and capital and profit repatriation. Freezones must work with a local service agent to trade with the local UAE market.

Freelancers

Freelancers with certain industries can register in the mainland or some UAE-Freezones that are permitted industries which include arts, education, and media as well as tech work such as software development or web design to name a few!

Branch Company

The branch company is a unique and flexible business structure that can be tailored to suit your needs. This type of corporate subsidiary has some benefits over other forms, such as the ability for them to stay independent from their parent while still being part-owned by it

Documentation, Guide, Timeline

The process of starting a business in the UAE is as easy and straightforward. You can get your trade license after just three steps

Step 1: Choosing between Freezone or Mainland

One of the most important considerations when establishing your UAE business is whether to set up in a freezone or on the mainland. There are many advantages and disadvantages with both options, so it’s imperative for you as an entrepreneur seeking success that make this decision carefully consider what will work best based on all factors involved

The process itself can be done quickly at either location but there may be certain perks only available through one specific site which could ultimately lead someone down a less promising path than another due solely because they didn’t know about them beforehand

Step 2: Choosing Company Name

Making sure your company name is available to register should be the first thing you check when starting up in UAE. You don’t want something that’s offensive or blasphemous, so make sure it adheres to these guidelines! It also helps if people can spell out what they think of as soon as possible – after all, we’re human too and sometimes our thoughts flow easier than writing them down on paper.

Step 3: Apply for License

The final step in the process is making your license application. If you are setting up on the mainland, apply directly to the Department of Economic Municipality or local equivalent; if have chosen a freezone setup then go straight for Freezone Hall’s office where they will handle everything related to establishing one

Documents Required to Obtain Trade License

Whether applying in the mainland or a freezone, you will only have to provide basic documentation and information about yourself.

Attested copy of shareholder and director passports
Proof of address
Minimum of three months’ bank statements
Education/qualification certificates (if applicable)
Certificate of share capital deposit (if required)
Signed lease agreement or coworking contract

To work in the UAE, you will need to apply for a visa and open up a corporate bank account.

Bank Account Opening

Opening a corporate bank account in the UAE can be an intimidating process for international business owners. The country has strict due diligence regulations and there are only 46 licensed banks that offer these services, so you’ll need to do some research before choosing one!

Some of the best banks in Dubai are local and international ones alike. The big four include Emirates NBD, National Bank of Abu Dhabi, First Gulf Bank, or adeb Commercial bank for example – all reputable financial institutions with extensive branch networks across UAE’s capital city as well other locations such as their hub cities like Sharjah

You should make sure you are applying with the right bank. Take time to research different financial institutions and compare their services, such as interest rates on savings accounts or loan amplitudes (the amount of money that can be withdrawn immediately). It might seem like there’s plenty out here: international banks in Dubai have been popping up left and right – but what about those local ones? Make certain before making an application which one will work best for your needs!

You need to have a UAE business license in order to open a corporate bank account
There are few banks that consider it mandatory for the shareholders to hold a residency visa
There are some accounts that requires a minimum balance of AED 10,000 – 150,000
If everything is accepted, the account gets opened within the time frame of two to four weeks

Documents Required to Open a Corporate Bank Account In UAE

To avoid rejection, it is important to have all of your documentation in order. The most common reason for account rejection includes an inconsistent business plan and a lack of presence – such as a residence or office address/phone number -in the UAE

In order to increase your chances of success when applying for a corporate bank account in the UAE, you should aim at least to provide these things.

• A complete account application form

• A signed directors resolution sanctioning the opening of the account

• A copy of your passport and Emirates ID

• Proof of a residency visa (not required by all banks)

• Proof of residence address, from the home country if not a resident of the UAE.

• Certified company documents – including share certificates, certificate of incorporation, and articles of association.

• A business plan and company profile.

• Bank statements for the past 3-6 months.

With the help of an existing UAE residency visa, you can get a corporate bank account. You may also order cheques if have access to your Emirates ID

It’s important that when applying for any business-related documents like flyers or visas they are handled professionally so as not to jeopardize negotiations with potential clients but more importantly because these applications require careful consideration due process

The advantages of opening a call account are that you will not receive an actual checkbook or debit card, but it does come at the cost of having less access to your money. The upside is there’s no need for extensive paperwork when dealing with transactions online since they can be done through websites without any trouble whatsoever!

The final step in establishing your business is to have certified documents from the appropriate UAE ministry. In order for these certificates, which include an attestation by both Ministry of Finance and Embassy or Consulate-General determining that you’re actually a company headquarters within their borders

Running and Operating Business in UAE

The growth of your business in the UAE will likely require you to employ staff. It’s important at this stage, when it comes down to labor laws here versus other countries around worldwide (or even just locally), know that there are some key differences between how employees are treated under UAE law compared with what they might be accustomed to otherwise; namely regarding wages and benefits

With the exception of certain small businesses, all employees in Dubai are bound by standardized contracts which dictate their working hours and length of service. The only people excluded from this list include:

• Federal and local government employees

• Armed forces, police, and security staff

• Domestic staff in private residences

• Agriculture workers

• Employees of Dubai International Financial Centre (DIFC)- and Abu Dhabi Global Market (ADGM)-related companies.

Employees working in freezones are subject to the standardized UAE contract as well any additional conditions set out by that particular facility.

Employment Contract Types

Under UAE law, there are two main types of employment contracts that an employee can sign. Limited-term or fixed-term engagements fall within a specific period and expire after its expiration date while unlimited contract periods last indefinitely until they’re terminated by either party upon proper notice given at any time for reasons such as lack in performance; however, unlike limited terms which limit what can happen during this period. Under unlimited agreements, both parties will always know how long the relationship lasts so it doesn’t matter if one person leaves midstream because he/she has been replaced. The contract must include:

• Contract duration

• Start date

• Nature of work

• Working location(s)

• Details of remuneration

Under UAE labor law, employment contracts give employees minimum standards and protections, including:

• Maximum working hours

• Vacation allowance

• Medical leave

• Safety standards

• Gratuity payments on termination of contract or end of service

Working Hours

The UAE has labor laws that apply to all employees, outside of the industries listed above.

The maximum working hours are eight per day or 48 in total;
They can be reduced by two during Ramadan
Never exceed two overtime hours each day unless there is a special circumstance involved with it being more than this amount

Business Setup in UAE – Compliance, and Regulations

Regulatory Compliance

It is crucial for an organization’s to be in compliance with regulations so they can continue doing what needs to be done.

In the UAE, business owners are able to maintain an attractive environment for both investors and employees because of their continued efforts in creating a regulatory framework that ensures stability. The country’s economic model has been balanced so it can continue providing opportunities with sustainable growth potentials throughout all sectors while also preventing anyone sector from dominating over others at local or international levels

In order words, the UAE’s government is meticulous about keeping everything running smoothly

Taxes

The United Arab Emirates is a tax haven that offers one of the most attractive environments in the world for business owners. The country’s 0% personal and corporate income taxes combined with customs duty make it an excellent location to do your international trade, especially if you’re looking forward to enjoying some luxury items or carts

Customs

The customs tax is a flat 5% on all goods valued at over 1,000 AED – with the exception of tobacco and alcohol products which are subject to 50 percent or 100%.

Value Added Tax

Value Added Tax (VAT) was rolled out in the UAE on 1 January 2018 at a flat rate of 5%.

You must register for VAT in the UAE if your taxable supplies and imports exceed AED 375,000

The amount of VAT you owe is determined by your taxable supplies and imports. If these exceed AED 187,500 per year (or any other threshold that has been passed), then it’s compulsory for businesses to register with the government so they can claim back some money from their customers as well!

Economic Substance Regulation

The new economic substance regulation requires businesses located in the UAE, including those situated at freezones or elsewhere, and engages with certain activities defined as ‘relevant’ to maintain an adequate presence for themselves. These firms must file annual notifications through a government e-platform that will track their activity levels overtime on this front

The UAE has a duty to ensure that all businesses operating within its borders are complying with local regulations. This includes any revenue-generating activities.

The government wants their citizen’s tax dollars spent wisely; they’ll be checking up on everything from how much profit was made by each business unit over certain time periods what type or industry each establishment belongs to

Notification

The deadline for submitting an economic substance report is usually six months after the end of your fiscal year. You must provide regulatory authorities with all preliminary information about activities, including what they are and how much money you expect them to make.

Relevant Activities:

· Banking Business

· Insurance Business

· Investment Fund management Business

· Lease – Finance Business

· Headquarters Business

· Shipping Business

· Holding Company Busine

ESR

A maximum period of 12 months is granted from the end of the financial year-end.

Relevant Activities

· Banking Business

· Insurance Business

· Investment Fund management Business

· Lease – Finance Business

· Headquarters Business

· Shipping Business

· Holding Company Business

· Intellectual property Business

The punishment for breaking the regulations is severe. It can result in penalties like losing your trade license or permit, being passed onto an international body that has more power than national governments do (the ” Foreign competent authority”), and even submitting yourself to torture if you’re captured by another country’s military forces!

The failure rate of adhering to this law has been low so far because its consequences are quite harsh; however, there have still been cases where people who did not follow them were caught

The Emirates Authority for Employment Growth and Placement (EAEG&P) has announced that it will be imposing a fine of 20 thousand Emirati Dirham on those who do not submit their notifications properly, as well as an ESR report late. The penalties are meant to encourage employers in submitting reports timely so they can ensure there is no delay or backlogs with paperwork at any point during operations

Ultimate Beneficial Ownership

The UAE has passed a new regulation that requires businesses to disclose their beneficial owners. This move aims in part to contribute towards developing the country’s business environment and economic status by regulating minimum commitments for registered companies, as well a second step toward transparency within your company’s operations when dealing with interested parties like investors or customers who may not know exactly where you stand on certain issues–such is what we call “transparency” here at my firm!

The provisions of this resolution are applicable to all legal entities, including freezones in the UAE.

The law requires that you identify and verify the beneficial owner of any company, which is useful for preventing fraud. The licensing or registration process also includes checking whether they are an exempt person like celebrities in their native country who cannot be registered themselves but must have someone else do it on behalf of them with appropriate documentation such as proof from authorities about where this person lives now so we know if there has been any change since our last update regarding his/her citizenship status

For your submission to be considered, it’s important that you include documents with information about yourself and any shareholders.

What constitutes a UBO?

To be a UBO, you must own at least 25% of the company. It also includes anyone with significant control over it – like board members or managers who can be dismissed right from their job if they don’t agree on something with other executives’ directors

In order for someone to become a qualified umbo, there need two criteria: one being ownership percentage which should minimum reach25%, secondly this responsibility requires exercising substantial sway within said organization. These includes:

Nominated Directors and Managers

Directors and Managers often have their hands full with employees that they must motivate, whilst also ensuring productivity within an organization stays high on all fronts – financially as well aesthetically

Shareholders & Partners

The UAE Commercial Companies Law classifies shareholders as either partners or non-partners. Shareholders who are not licensed under this law will need to obtain a license in order for them to maintain their status with the company and continue receiving dividends from its profits

Administrative Penalties

The Cabinet Resolution No (53) of 2021 Concerning the Administration Penalties addresses individual penalties which will be issued upon failure to disclose, register or verify UBO information. This resolution details violations with fines as well as suspension licenses due for non-adherence

Anti-Money Laundering System

The UAE is an international leader in combating terrorist financing and regulating the financial system. They have created a robust anti-money laundering program to help prevent illegal transactions, which will ultimately harm all Emirati citizens as well!

Underpinning the UAE’s anti-money laundering system is Federal Decree No. 20 of 2018, which was issued to develop a legislative and legal structure within this rich country with an aim:

1) To combat terrorism financing;

2) discourage money launderers from leveraging deals involving real estate purchases or sales (in addition efforts already being taken by banks);

3) Forge stronger partnerships between international investigators so they can share information on cases related both at home & abroad

4) Strengthen ties between federal law enforcement agencies

5) Facilitate monitoring activities

The UAE’s economic position has been consolidated through an innovative regulatory environment that guides businesses.

GoAML

A system for monitoring financial activity was released by the UAE’s Financial Intelligence Unit, or FIU. The GoAML reporting platform has been created in partnership with UNODC and aims to combat money laundering across all industries within Dubai’s economy

This innovative platform was created to help regulatory bodies combat financial crime, including money laundering and terrorist financing.

Organized crimes are on the increase, and businesses need help to keep themselves safe.

The government is providing this through reporting tools that allow companies access the knowledge of criminal activity in their area- information that can then be used for prevention or detection purposes

In order to combat money laundering and terrorist financing, all relevant persons within the UAE must register with GoAML. This includes DNFBPs like lawyers or engineers who may not be aware that they need an account on this website in order for their firm’s business practices to meet compliance standards set forth by law hereinafter referred to as “the Federal Law”.

DNFBPs:

• Real estate brokers and agents,

• Dealers of precious metals and stones,

• Auditors and accountants,

• Company Service Providers, and

• Legal Consultancy Firms

Insurance

The UAE is a country with different insurance policies for companies and entrepreneurs. Some of these are mandatory, while others can be optional based on the type or nature

of your business as well how many employees you have working under you (and where they’re employed).

Common policies include:

• Group health insurance

• Group life insurance

• Workmen’s compensation insurance

• Public liability insurance

Group Health Insurance

Group health insurance is a great way to protect your company from the financial implications of illness or injury. Group policies provide benefits including death compensation, major medical care coverage with no waiting periods for treatment onsite at a hospital if necessary

Workmen’s Compensation Cover

Workmen’s compensation insurance protects you and your family from the financial impact of an injury or illness that occurs at work.

It also covers medical costs, lost wages, temporary total disability benefits as well as expenses related to returning home after being abroad injured on an employer’s business trips.

Public Liability Insurance

Public liability insurance is a legal requirement and it covers damages to third-party property as well any accidents that happen due to negligence.

This is a must if your company undertakes:

• Regular customer visits or interaction with the public

• Regular off-site work

• Access to client equipment or hold other people’s property

• Office premises with a liability towards neighbors

Frequently Asked Question

What is the Cheapest Business to Start in the UAE?

The cost of setting up a company in the UAE can range from AED 50,000 to AED 1 million. But, If you’re looking for a cheaper option, there are a few businesses you can start in the UAE with a lower investment. Here are some ideas

1. Social Media Consultant

In today’s digital world, social media is essential for businesses. If you’re good at promoting brands on social media, you can start your own social media consulting business.

2. Event Planning

The UAE is a country that loves to celebrate. Events are constantly being held, and there is always a need for event planners. If you’re good at organizing events, you can start your own event planning business.

3. Personal Trainer

With its many expats and its love of fitness, the UAE is a great place to start a personal training business. If you’re a qualified personal trainer, you can start your own business by offering your services to clients.

4. Business Consultant

If you have experience in business, you can start your own consultancy firm in the UAE. There is always a demand for business consultants, and you can use your expertise to help businesses in the UAE grow.

5. English Tutor

There is a high demand for English tutors in the UAE, as many residents are not native English speakers. If you’re a native English speaker with teaching experience, you can start your own English tutoring business

What is the Best Business to Start in the UAE?

There is no one-size-fits-all answer to this question, as the best business to start in the UAE will vary depending on your specific skills and interests. However, some of the most successful businesses in the UAE are those that cater to the local market, such as restaurants, retail stores, and service businesses. If you have an entrepreneurial spirit and are willing to put in the hard work, starting a business in the UAE can be a very rewarding experience

What is the cheapest Freezone in the UAE?

There are a number of Freezones in the UAE, each with its own unique benefits and pricing structures. So, what is the cheapest Freezone in the UAE?

According to industry experts, the cheapest Freezone in the UAE is Shuraa Business Center. Shuraa offers a number of advantages for businesses looking to set up in the UAE, including low-cost business setup packages and a wide range of business support services

How do I get a DED license?

The DED trader license is obtained through the Dubai Economic Department. The application process is simple and can be done online. Once you have submitted your application, you will need to pay the relevant fees and receive the license electronically

Is there income tax in Dubai?

Yes, Dubai has introduced corporate income taxes for the first time, set to come into effect in 2023. The UAE had previously been one of the few countries in the world without any form of taxation, but this is changing with the introduction of VAT in 2018 and now corporate income tax. These taxes are designed to help diversify the economy and make it less reliant on oil revenues. The tax rates in Dubai are relatively low, starting at just 3% for companies with taxable income of up to AED 500,000 (£105,000). The maximum rate is set at 20%, which will apply to companies with taxable income of over AED 100 million

Conclusion

There is no one-size-fits-all answer to the question of what is the best business to start in the UAE. However, some businesses that are particularly successful in the UAE include those that cater to the local market, such as restaurants, retail stores, and service businesses. If you have an entrepreneurial spirit and are willing to put in the hard work, starting a business in the UAE can be a very rewarding experience. The process of starting a business in the UAE can be relatively simple, and there are a number of advantages to setting up your business in one of the many Freezones in the country. The introduction of corporate income taxes in Dubai in 2023 is likely to increase opportunities for businesses in a wide range of industries. So, if you’re thinking of starting a business in the UAE, now is a great time to get started