How to start a travel agency in Dubai
Many people dream of turning their passion for travelling into a successful business, and why not? The success of industry giants like Booking.com, Agoda, Kayak, and others exemplifies the vast potential in this field and the lucrative opportunities for those with a vision for success.
Dubai stands out as the ideal place to establish a travel agency. Recognized as the world’s number 1 tourist destination in 2022 and 2023 by TripAdvisor Travellers’ Choice Awards, the city attracts over 14 million tourists annually, creating a significant market for travel services. When combined with its easy connectivity to various international destinations and international appeal to a global customer base, Dubai offers unparalleled opportunities for aspiring travel entrepreneurs to tap into a thriving and diverse market.
This article looks at the main considerations for establishing a successful travel agency business Setup in Dubai, as well as the key steps required to navigate the setup process effectively.
1. Establish your business activity
In Dubai, tourism activities are regulated by the Department of Tourism and Commerce Marketing (DTCM). It offers the following types of licences for travel-based businesses:
Appointed representative for airlines: An individual designated as a commercial agent for one or more airlines, licensed to sell air tickets for destinations outside the UAE. This agent is permitted to arrange outbound tourism programmes offered by these airlines or develop independent tourism programmes.
Travel and tourism specialist: An individual engaged in selling flight tickets for destinations outside the UAE. This professional provides ancillary services like handling residency and visa applications, orchestrating tours, and offering transportation. Additionally, they retail tourism programmes organised by outbound tour operators.
Outbound tour organizer: An individual who organizes tourism programmes outside the UAE and sells them through travel and tourism specialists.
Inbound tour oganiser: An individual responsible for planning and organising domestic tours, as well as coordinating inbound tourism activities such as conferences, exhibitions, and local events. This encompasses handling visa applications, arranging transportation and hotel accommodations, and delivering similar services.
2. Select legal structure and jurisdiction
This is a pivotal decision that affects the operational framework and legal obligations of your business as well as its trading scope and the availability of resources and support.
Some of the most common legal structures include:
- Limited Liability Company (LLC) – The most common business structure, blending limited liability and operational flexibility with the ability to engage in diverse activities and access the local market.
- Sole Proprietorship – offers a straightforward business structure, granting complete ownership and control to a single proprietor who assumes full personal liability. While suitable for small ventures with low-risk operations, it may lack the flexibility needed for the dynamic and complex nature of the travel industry.
- Foreign Branch – A direct extension of a foreign parent company. Useful for enabling the foreign entity to establish a physical presence and conduct business activities within the UAE. The branch’s activities are typically limited to those specified in the parent company’s licence and the foreign company is fully responsible for the financial obligations and liabilities of its Dubai branch.
Once you’ve chosen the appropriate legal structure, you must then consider the right jurisdiction for your business. Generally, there are two options: Setting up onshore or in one of Dubai’s free trade zones. One of the main limitations of free zone companies is that they are restricted to only doing business within the jurisdiction of the free zone in which they are incorporated or abroad. They cannot do business with companies on the mainland. In contrast, mainland companies have no such restrictions and are free to do business anywhere in the UAE or abroad.
3. Choose a company name
Choose a name that complies with the DED guidelines and naming conventions, reflects the nature of the business and is unique from other existing companies.
4. Apply for a business licence
The trade licence is issued by the Department of Economic Development (DED) or relevant free zone licensing authority. You’ll need to submit an application along with the following documentation:
- Passport copies of shareholders and stakeholders.
- Memorandum of Association (for LLCs).
- Tenancy contract for the business premises.
- Approval from relevant authorities for specific business activities.
- NOC (No Objection Certificate) from sponsors for expatriate shareholders and employees.
5. Apply for DTCM approval
Once you have the trade licence, you’ll be able to submit your application for the chosen DTCM activity (outlined above). You must have secured an independent office space of at least 40 sq.m for each activity selected and you’ll be required to submit recent certificates of good conduct for both the owner and the manager in charge of the establishment. The manager must have 3 years of work experience in the tourist activity if he/she holds a university degree or a certificate with a major in tourism and travel, or five years of work experience in the tourist activity, if he holds a general secondary school certificate. It will also be necessary to provide a bank guarantee to the DTCM for two hundred thousand Dirhams (AED 200,000.00) per activity.
6. Obtain employment visas
With all the groundwork for your travel agency in Dubai now laid down, the next crucial step is securing employment visas for yourself and any staff you plan to hire. This involves submitting visa applications through the General Directorate of Residency and Foreigners Affairs (GDRFA), subsequent medical tests, biometric data collection, and other screenings, then awaiting approval. Once received, you can obtain an entry permit for yourself and your staff, then proceed with obtaining medical insurance coverage and Emirates ID cards.
7. Open a corporate bank account
There are a number of local and international banks which offer corporate banking services. It’s worth doing some prior research since minimum deposit requirements and monthly balance maintenance amounts can vary considerably. It’s also worth considering the bank’s accessibility through branches, ATMs, and online platforms.
Generally, you’ll need to schedule a meeting with the chosen bank and provide essential documents including the company’s trade licence, Memorandum of Association (MoA), passport copies of shareholders and directors, and the company’s resolution to open a bank account. The bank will then conduct a due diligence process to verify the authenticity of the provided documents and the legitimacy of your business.
How can Global Link help?
Global Link has over 16 years’ experience working with local and global businesses, providing Pro Services for company incorporation and financial services in Dubai and the wider UAE.
We can help you with setting up a travel agency in Dubai, advising you on the appropriate business activity, legal structure and jurisdiction, then assisting you in securing the right licenses, navigating regulatory requirements, and ensuring a seamless incorporation process.
If you need advice on this or any other company incorporation, visa or PRO Services Company in UAE please get in touch with us on +971 4 553 9901 or email us at [email protected] and we will be happy to assist you.