Business setup process in Dubai
Business setup process in Dubai
2022-09-27
A question often asked by investors who intend to register a company in the UAE/Dubai is: What is the process of company registration in the UAE/Dubai? This is a very basic but difficult question to answer. The reason is that you will have different registration regulations (and different procedures) to form a company in different Emirates, for different company types, and with different authorities.
So before going to that questions, it is important for us to know some differences:
- Differences in the registration process in different Emirates. The UAE is made up of seven emirates, including Abu Dhabi, Dubai, Sharjah, Ajman, Ras Al Khaimah, Fujairah, and Umm Al Quwain. It is a federal system in the form of government, hence the name "United Emirates". Each Emirate has great independence in economic policies and tariffs. As far as company registration is concerned, each Emirate has its own laws and regulations, and more importantly, the business licenses of different emirates are not interchangeable. For example, if you have a construction company license in Abu Dhabi, your relevant construction license and qualifications in Abu Dhabi will not automatically be recognized in Dubai. If your construction company wants to undertake projects in Dubai, you must re-apply for a new company or a branch, for relevant licenses and qualifications in Dubai.
- Differences between different company types. The UAE can currently register mainland companies (including branches of foreign companies), free zone companies and offshore companies. The difference between these three companies is actually the first thing you may want to know when considering setting up a UAE company. When it comes to the registration process, the differences between onshore companies (including mainland companies and free zone companies) and offshore companies are huge. Simply put, the registration process of an offshore company is much simpler than that of an onshore company, and the fees and documents required are much less.
- Differences between different governing bodies. According to the current company registration system in the UAE, the Department of Economy Development (DED) of each Emirate is responsible for the issuance of licenses for its mainland companies; each free zone has a free zone authority responsible for the issuance of company licenses; and free zones with offshore laws are also responsible for the issuance of offshore company licenses. Since the UAE has more than 60 free zones and free zone authorities, and three offshore registration places, it is conceivable that their company registration process varies greatly.
Having said so much, I will briefly introduce the basic registration process of all three types of companies (mainland company, free zone company and offshore company) for your reference:
The basic process of mainland company registration is as follows:
- If applicable, choose a sponsor or local service agent and negotiate the terms of them;
- Submit an application to set up a company;
- Payment for name approval and initial approval;
- Choose an office space and apply for a lease certificate;
- Obtain external approval (if required);
- Sign the MOA;
- pay a fee to obtain a license;
- Follow-up procedures such as PO Box, Establishment Card etc..
A typical company formation process of a free zone company is as follows:
- submit an application for registration;
- Applicant background check;
- Initial approval for payment;
- Sign the office space lease agreement;
- Obtain external approval (if required);
- pay a fee to obtain a license;
- Follow-up procedures such as PO Box, Establishment Card etc.
And finally, the basic process of offshore company registration is the following:
- It is mandatory to set up an offshore company through a registered agent. So, the first step is to check the list and find a suitable registered agent who will prepare the registration documents;
- The registration application is submitted by an agent, and the applicant cannot submit by itself to the offshore authority;
- Applicant background check;
- Application approval;
- Get a license.
The above is a general introduction to the company formation process in the UAE/Dubai. The actual process will vary from the basic process, depending on different Emirates, different free zone authorities and different business nature, but "every change remains the same"; you can always use the processes mentioned above as reference.
Should you have any questions, feel free to let us know.