What You Need to Know Before Starting your Business in Dubai
Dubai has been an ideal location for business investors for the past years. It is among the top destinations to start up your business. And that is for an endless number of reasons among which are its economic stability, diverse and flexible policy and tax free system. Add to this its open trade system, low cost and of course the availability of a strong workforce.
Owning your business in Dubai will grant you copious advantages, which will vary depending on the type of your business and the area and category you will choose when setting up your company. Whether onshore, offshore, or a free zone, each category has its own benefits and limitations. And it is crucial to know each of them in details to choose the most suitable for your business type. In addition, there are some vital procedures that you will have to go through for guaranteeing setting up your company without any barriers, lags or extra costs.
So if you are thinking of starting your own business in Dubai it is vital to get familiar with the steps and procedures you will have to go through, and the kind of decisions you will have to take.
1 –Having a Local Sponsor
If you wish to set up your business in the Dubai Mainland Area, you need to find a local sponsor in Dubai. A local sponsor will own 51% of the company, while you will own 49%. Having a local sponsor will give you the advantage of choosing where to set up your business in Dubai freely and without any restrictions. A local sponsor will not share any of your business profits, however they will have to be paid an annual fixed fee based upon agreement. Beside letting you maintain 100% of your profit share, a local sponsor will grant you many other benefits such as opening global bank accounts easily.
2- Choosing a Free Zone Area
If you wish to fully own your business without any partners, then choosing a free zone area might be the suitable category for you.
Free zone areas will let you enjoy different advantages beside 100% ownership. This includes a faster process of setting up your company and getting assistance in many business matters such as recruitment procedures.
A free zone seems an optimal option, however if your business is a trade type, it is important to note that a free zone might not be the suitable choice. A free zone area, does not allow direct trading with the UAE market and a 5% custom duty is added when trading in the local market.
3 – Issuing a Trade License
Issuing your trade license is done from The Department of Economic Development in Dubai. A trade license gives you the permission to run your business in Dubai. Having a trade license is an important procedure to start up your business. There are different types of trade licenses in Dubai, it is important to know which one do you need to issue and know what are the steps you need to do to get it depending on the type of your business.
Trade licenses categories include:
Commercial License – issued for trading types of businesses.
Industrial License – issued for manufactural or industrial businesses.
Professional License – issued for businesses that provide services or for professional businesses.
4 – Visa Requirements
Getting a visa for yourself and your employees is a must so you can live and work in the UAE. The number of visas that you can issue for your employees depends on the type and size of your business and also the category it is registered under. If you have a sponsor for your business, he can apply for your visa.
Owning your business in Dubai can be very easy if you know the exact steps that you should follow. However, it is advised to have a business consulting firm to ease and fasten the procedures for you and guarantee that you start your business quickly and with the lowest costs.