Company formation process in Dubai or any another country can be daunting, especially when it comes to understanding the local rules and regulations. For those looking to start a business, Dubai is one place which offers enticing business opportunities for non-citizens with its tax-friendly policies and zero personal income tax.

This article will guide you through the simple steps to set up your own company in Dubai, no matter where you’re from. Let’s explore everything you need to know about starting a business as a foreign citizen and find out the answer to the question of “Can a foreigner start a business in Dubai?” now!

Can a Foreigner Start a Business in Dubai: Is it Possible?

Setting up a business in a foreign country is can seem like a major task, especially when it comes to selecting the location. Fortunately, Dubai solves that issue for most people. Now that you know a bit about Dubai, let’s find out if you can start your business in Dubai as someone from another country.

The answer is – Yes, indeed! As a foreigner to start a business, you can conveniently do company formation in Dubai and other UAE emirates.

With free zones across the city, foreigners find it easy to keep full control over their businesses without needing a local sponsor. This means  that after business formation, you can own all of your company yourself.

What’s more, the government in Dubai, UAE offers long-term visas for folks who want to start a business and stay and grow it for many years. These visas mean people don’t have to worry about leaving soon or often renewing their paperwork.

They make it simpler for smart and wealthy individuals from around the world to come and invest in Dubai’s future.

Benefits of Establishing a Business in Dubai for Non-residents

Now that we know starting a business in the UAE (Dubai) as a foreigner is possible, let’s explore the perks. Non-residents get many great things when they set up shop as Dubai actively welcomes foreign investors and entrepreneurs with open arms. 

Types of Business Licenses Available for Foreigners in Dubai

In Dubai, a myriad of business licenses caters to foreign entrepreneurs’ diverse commercial pursuits. In general, there are four types of business licenses, but two are very popular. The type of license actually depends on the nature of your business which you are looking to start. Moreover, if you are looking to start your business, know before starting a business that besides the type of license, the setup cost is based on your business. Let’s dive into the details to discover the perfect fit for your venture.

Free Zone License

A Free Zone License in Dubai lets foreign individuals own their business 100%. This is great for people who want to keep all control and make decisions without a local partner. With this license, your business does not have to pay taxes on profits or income.

Plus, setting up business is usually easier than elsewhere. Free zone companies can trade around the world and do lots of different work. They’re perfect for entrepreneurs who want to reach global markets. After getting a Free Zone License, the next step in starting a business is looking at Dubai Mainland Licenses for doing business inside Dubai, i.e., in mainland or downtown Dubai.

Mainland License

Moving away from the Free Zone License, a Mainland License is another path for foreign nationals aiming for company formation set up a business in Dubai. With this type of trade license, it is possible to start a business that can trade directly with the local market and take on governmental projects.

A big change has come for mainland companies as they used to require a local partner who owned 51% of the business. But now, certain businesses in tech, media, and health don’t need a local sponsor thanks to recent Dubai government updates.

Getting your Mainland business license means working with the Department of Economic Development (DED) in Dubai. They’ve made it easier for non-residents by simplifying how you get your business license since January 2023.

This helps foreign nationals set up their businesses quicker and tap into Dubai’s dynamic markets without much hassle.

Essential Steps to Start a Business as a Non-resident in Dubai

Navigating the entrepreneurial landscape of Dubai, individuals belonging to foreign countries can successfully establish their ventures by meticulously following essential procedures tailored to non-resident business enthusiasts – discover how to start and register a new business in our detailed guide.

Deciding on Business Type

You must pick what kind of business you want to open in Dubai. This choice will shape how you run your company and can affect your profits. The main options are a mainland company, a free zone company, or an offshore one.

Each type has different rules and benefits.

Think about what fits best for your goals and where you want to do business. A mainland company lets you trade directly with the local UAE market without needing a local agent. Opening a free zone business means you get special tax rates, less trade hurdles within that area, and non-citizens can own 100% of their companies.

Offshore firms work well if someone needs privacy while handling global dealings from Dubai but not actually operating a business in Dubai on a daily basis. Choose wisely; your decision will guide the next steps in starting up.

Choosing a Trading Name

Picking the right trading name for your business is a big deal in Dubai. It’s not just a label, it tells people what your business does. Make sure the name matches your business activity and doesn’t break any of Dubai’s naming rules.

Check with officials to see if the name you want is free to use.

Get creative but stay respectful when making up your company name. It has to work well for branding and stick in customers’ minds. The process in the UAE may seem tricky, but getting it right helps set up for successful activities in the UAE market.

Acquiring License

To start your Dubai business, you need the right trade license. The Department of Economic Development gives out four kinds: Commercial, Professional, Industrial, and Tourism licenses. Choose one that matches what your business does.

With new rules in 2023, non-residents can get these licenses easier now.

You fill out forms and give them to the DED with some other documents about your business. They check everything and if it’s all good, they say yes to your license. This lets you do business in Dubai legally.

Business Registration and Incorporation

Getting your business officially recognized in Dubai means registering your business with the UAE government. This is a key step and varies based on where you want to set up: free zones or mainland.

For a non-citizen aiming for 100% ownership of their company, free zone registration is often the best choice. You will need to pick out a business name that follows local rules and then fill out forms to incorporate your company as a legal entity, like an LLC.

After choosing the right type of license for your work, like commercial or professional, you’ll move forward with incorporation. This process creates your limited liability company (LLC), sole proprietorship, or whatever structure fits best.

With help from experienced business setup experts who know about Dubai’s laws and paperwork, setting up becomes smoother. They can guide you through each form and make sure all details are correct before submission.

Obtaining a Business Visa

Once your business is registered, the next big step is to get a business visa. To start the process, you need to apply for a Dubai visa. This allows you to live and work in Dubai while running your company. Non-citizens need this visa to legally hire employees and open a bank account for their business dealings.

The process involves submitting an application with the immigration department along with your passport, photos, and other key documents required to start the procedure.

Long-term visas can also be granted so you can stay in Dubai longer or even retire there later on. This makes it easier to plan for the future of your business without worrying about leaving too soon.

It’s all part of making sure that expats have what they need to succeed in Dubai’s thriving economy.

Necessary Documents for Business Setup in Dubai as a Foreigner

Starting a business setup company in Dubai, UAE as a foreigner or non-resident requires certain documents. This helps the government check who you are and what your business will do, which is vital since the government in the UAE offers an open opportunity for tons of foreign nationals to come forward and start a business. Here are the documents necessary for the business setup process in the UAE:

• Passport copies: You need clear copies of the passports for all business owners and partners.
• Visa pages: Show your entry stamp or current visa if you’re in the UAE.
• Photos: Color passport photos with a white background for each owner and partner.
• Application form: Fill out the application form for the type of license you want—commercial, professional, or industrial.
• Business plan: Write down your plans for your business. This includes what you will sell or what services you will offer.
• NOC from sponsor: If you already have a UAE residence visa, get a ‘No Objection Certificate’ from your visa sponsor.
• Memorandum of Association (MOA): This is an agreement that shows how your company will work and who’s in charge.
• Local partner agreement: If you’re starting a mainland company, make an agreement with your local partner or sponsor.
• Premises lease agreement: You must show where your business will be located. Get papers for this place, like a lease.
• Bank reference and statement: Some businesses need to share bank statements or get letters from their banks about their money.

Costs Associated with Starting a Business in Dubai, UAE as a Foreigner

The process of starting a business in Dubai as a non-citizen involves several costs that vary depending on the chosen business structure and location. Careful budgeting is essential to cover all financial requirements.

Registration and Licensing Fees: Non-citizen entrepreneurs must pay for the registration of their company and the necessary business licenses for foreigners in Dubai. Fees can range from AED 10,000* to AED 50,000* ($2,725 to $13,625) or more, depending on the business activity in the UAE and license type.

Office Space Rental: Renting office space is obligatory in most cases. Costs depend on the location, with prime areas commanding higher prices. Even in free zones, where shared workspaces are available, you should budget for this expense.

Visa Fees: Obtaining a business visa is a mandatory step. Visa costs include application and processing fees and can vary approximately between AED 3,000* to AED 5,000* ($817 to $1,361) per visa.

Legal and Accounting Fees: Professional services for legal advice and accounting are often required to start a business as a foreigner. Fees can vary widely based on the complexity of your business needs but expect to budget several thousand dirhams.

Miscellaneous Costs: These can include various administrative expenses, such as notary fees, translation services, or any specific endorsements required by Dubai authorities.

Initial Capital Requirement: Depending on the type of business you want, the business environment, and the location, there may be a minimum capital requirement to be deposited in a corporate bank account. Amounts can be significant, especially for businesses outside free zones.

Marketing and Website Development: Your new business in the UAE will need branding, a website, and marketing efforts to attract customers. These costs can start from a few thousand dirhams and increase with the scale and reach of your marketing campaigns.

Insurance Costs: Business insurance is another essential, with costs determined by the level of coverage needed. Expect to pay more for comprehensive policies.

Each of these expenses contributes to the overall financial investment needed to have a successful business in Dubai as a non-resident. 

Key Considerations for Expats Starting a Business in UAE

Before jumping into a business venture in the UAE, expats should think about cultural sensitivities. It is important to know how culture affects business there. This means learning what you can and cannot do.

Respect for local customs goes a long way.

For those coming from overseas, understanding labor laws and employment contracts in the UAE matters a lot. These rules are different than in other places. Expats must follow them when hiring staff or making work deals.

Also they must look after their workers’ rights according to UAE law.

Conclusion

Starting a business in Dubai as a foreigner is not just possible, it’s full of chances to grow as Dubai is home to countless possibilities. With the right plan and help, anyone can tap into Dubai’s rich market. The city welcomes you with open arms, offering low taxes and lots of support for recently-established businesses.

So go ahead, take that step and watch your business dreams come alive in Dubai!

FAQs

1. Can a non-citizen establish a business in Dubai?

Yes, non-citizens can do business incorporation in Dubai. They need to get the right license like commercial, professional or industrial to get started with their company in the major business hub that Dubai is.

2. What are some benefits of starting a business in Dubai?

Starting a business in Dubai means you can send profits back home and grow wealth since there’s strong economic growth and low taxes. This is why Dubai is known to be the favorite spot for foreign business owners. 

3. Do I need lots of money to begin a business in Dubai as an expat?

Not always! While the cost of starting a business might be more, there are also options for people with less money to start small ventures or freelance work. Thus, the process in Dubai for setting up a new business as an individual belonging to another country does not always require ample funds. Moreover, in specific cases, there is a low cost of doing business. 

4. Will I get help with things like visas and finding workers?

Yes! When the time comes to set up your business, you can get free consultation on visas, work permits and hiring the right people with the help of business setup consultants and business setup services.

5. Is it easy for me to do market research for my new business in Dubai?

Market research is important when starting a Dubai international business and thanks to technology every detail needed such as target market segment is easy using e-mail or Whatsapp!

6. Are there any special areas where my tech company could grow well in Dubai?

Dubai has places like DMCC which attracts many companies because it’s aiming to be super modern – perfect for innovative tech business setups in the UAE!

Disclaimer:
This blog is intended for informational purposes only. The content is provided “as is” and we make no representations or warranties of any kind regarding its accuracy, completeness, or suitability. Any reliance on the information is at your own risk. We are not liable for any losses or damages arising from the use of this blog.

* – Fees and Costs Mentioned are for Reference Only.