Dubai continues to be one of those global cities that are friendly and supportive of foreign investors. Its huge and diverse marketplace and multicultural population make the city one of the best countries to open a business in. There are other advantages to owning a business here as well so if you have always wanted to expand overseas, you won’t go wrong with choosing this city as your next expansion target.
Opening a company in Dubai, though, can be a huge step to take. Investing in the right business setup services in Dubai will help ensure you are on the right path to opening your company or branching out in this city. Knowing some important facts about setting up a business in Dubai will also help you have an easier time as you go through this process.
Below are four facts you have to know about starting a business in Dubai:
Even if you are a foreign entrepreneur, you can have sole ownership of your business. You won’t need a local sponsor or agent to set up and run your business. You can do this by setting up your business in one of Dubai’s free zones.
Aside from owning 100 percent of your company, if you set up your business in a free zone, you will enjoy the following benefits:
One hundred percent return of capital and profits
Zero income tax
Exemption from import and export duties
Eligibility to open a local bank account
Easy recruitment procedures
At present, there are 45 free zones in Dubai. These include the Jebel Ali Free Zone, Dubai Airport Free Zone, Dubai Media City, Dubai Knowledge Village, and the International Media Production Zone.
Whether you will open your business in a free trading zone or in the mainland area of Dubai, you need to have a license to operate.
There are three main business licenses you can apply for: commercial, professional, or industrial. The license will define the basis of your operations and, as such, you have to choose the best one that covers and best represents your business.
Certain activities or operations such as food trading, jewelry trade, veterinary activities, and legal consultancy require additional approvals from other governmental departments. You can find out what these are from your business setup consultants or by researching online.
The Dubai Department of Economic Development or DED has a list of over 2,100 activities you can choose from. If you can’t find the most relevant for the nature of your business, contact the DED or get help from your consultants.
Depending on the free zone you choose and the type of business you will set up, you will have to follow certain rules regarding the structure of your firm.
In Dubai, there is a large number of free zones that can cater to your business requirements, depending on your trade or area of specialization. Popular Dubai free zones include the following:
Dubai Airport Free Zone
Dubai Internet City
Dubai Media City
Dubai Auto Zone
Dubai Biotechnology & Research Park
Dubai Flower Centre
Dubai Gold and Diamond Park
Dubai Healthcare City
Dubai International Financial Centre
Dubai Knowledge Village
Dubai International Academic City
Dubai Logistics City
Dubai Maritime City
Dubai Multi Commodity Centre
Dubai Outsource Zone
Dubai Silicon Oasis
Dubai Studio City
International Media Production Zone
International Humanitarian City
Jebel Ali Free Zone
Dubai Internet City (DIC), for example, is a massive information and communications technology business park located along Shaikh Zayed Road established to support the ICT industry. Along the same main road, you will find Dubai Media City (DMC) which is already a well-established regional and global media hub. It also hosts freelancers as well as budding entertainment and media professionals.
Each free zone is governed by a particular local authority and has to adhere to industry-specific regulations. And since professionals in different industries have different qualifications (e.g. licenses and certificates), it follows that the requirements needed to operate in each free zone will also vary as well as the procedures to be followed.
To know if the business structure you have in mind will be approved, look it up on the official website of the free zone you are interested in. You can also get this information from your business setup consultant.
Additionally, in some free zones, license processing can be completed within a few days. However, in others, it might take around 30 to 40 days before you get issued a license.
The minimum investment differs depending on the type of business you want to establish. However, in Dubai, it is not compulsory for the majority of businesses to have an initial investment.
There are certain instances wherein capital investments are emphasized during the company formation stage. It can also be stated on the memorandum of association of your proposed company. Although the initial outlays are highlighted, you may not need to immediately pay even the minimum capital at the time of setting up your business.
Earlier this year, an initiative to reduce the cost of establishing a business in Dubai was also put in place. This is another great reason to strongly consider starting a business in Dubai as soon as possible.
As long as you know the basics of setting up a business in Dubai and work with a trusted business setup consultancy firm, you will certainly find success in your plan to expand in this thriving city.