Setting up a business in Dubai

What is the process of setting up a business in Dubai?

So here is my step-by-step guide to moving to Dubai and setting up a business, including:

• Apply for a trade license (also called a business license or commercial license) from the Department of Economic Development (DED) to form a Free Zone company.
• Apply for a residency visa to live in the UAE.
• Get a medical.
• Apply for an Emirates ID, once you have your VISA.
• Get biometrics done, i.e. finger and thumbprints.
• Set up a corporate bank account.

Step 1 - apply for a trade license in a free zone

In order to apply for your trading license, you must first decide which Free Zone is best for your needs. Then you must clearly outline your business activities, seek approval for your company name, select the right business structure and acquire an office address.

Choose a free zone

In Dubai and UAE, there are various 'free zones', i.e. geographic areas with their own regulations and incentives to attract foreign investors. Free zones provide business owners with tax exemptions, full foreign ownership, and simplified customs and import-export procedures.

Here are a few of the prominent UAE Free Zones:

• Meydan Free Zone
• IFZA (Dubai Silicon Oasis)
• DMCC
• DIFC
• Ajman Free Zone
• Fujairah Free Zone

If you’re a content creator and influencer and most of your income is derived from outside the UAE then most free zones should be able to accommodate your intended activity.

The location of the free zone is not usually a big issue as you rarely have to go there except for tasks like registering your car. However, it can be a hassle to go to a different Emirate if you're based in Dubai. While free zones outside Dubai may be a bit cheaper, we suggest choosing one in Dubai for the sake of convenience. It's worth it.

Outline your business activities

You need to ensure your chosen Free Zone can accommodate your business activities. The Dubai authorities are strict on the type of business activity you will be undertaking (unlike the UK where you can have a company and pretty much operate any trade within it under ‘general commercial activities’).

Your company name - rules to adhere to

When naming a company in Dubai, it is crucial to adhere to DED regulations and get their approval on your chosen name. The name must accurately reflect your business activity and contain no prohibited or offensive words.

The legal form of your company, e.g. LLC (limited liability company) or FZ-LLC (free zone limited liability company), must be included, and the name should not violate existing trademarks or intellectual property rights. Abbreviations for personal names are discouraged, and generic terms may be rejected.

Business structures

In Dubai, there are two types of companies: mainland companies and free zone companies. To have a mainland company, you need a local partner who will own the majority stake in your business. Therefore, for most people, the only viable option is to establish a free zone company to achieve 100% ownership.

Office space rental/lease

To conduct business in a free zone, you must have a business address and office space. If you don't need your own private office space, free zones can provide shared workspace.

Shared office space can provide more seats if you start to take on employees. However, note that free zones have various limits on the number of employees (and dependents) you can sponsor on your business license.

For Capture Accounting Dubai we went for the Meydan Free Zone that overlooks the lovely Meydan Racecourse that you can see below 👇🏼

How long does it take to get a Dubai trade license?

Once you have decided on which Free Zone to register with, you need to gather and supply all your documents - there are a lot of them! However, it’s a fairly efficient and quick process and company formation can take as little as two weeks or even less.

Also, it's important to remember that you don't need to be in Dubai for company formation - it can all be done remotely. However, you can’t open up a business bank account without a personal Emirates ID - and for that, you must be in Dubai.

Now you can book your flight to Dubai (preferably Emirates Business Class - it’s a business expense after all! 😉)

Step 2 - Apply for residency VISA

Once your company is formed, you will be granted an e-visa. When you book your trip to Dubai to complete the rest of the process, you will enter the UAE using this e-visa. Upon completion of your medical examination and the issue of your medical certificate, your e-visa will be converted into a Residence Visa.

Book a medical

On arrival in Dubai, the first thing you need to do is to book a medical. Here, they will take an X-ray and do a blood test (to test for HIV). A valid medical certificate is required to apply for your Emirates ID.

You can book your examination at a medical centre like Smart Salem Centre. I would recommend booking an appointment, but it’s possible to walk in and get it done. I visited the centre in the City Walk area, but there is also one near DIFC, close to the typing centre (see next section).

There are two options for your medical examination: normal and VIP. It takes 24 hours to get a medical certificate using the normal service, but only 30 minutes using the VIP service. The normal service costs around 400AED and the VIP service is around 750AED. I went for the VIP option so I could get everything done the same day and speed up the process of getting my Emirates ID during my short stay.

Once you have your certificate (it will be emailed to you), you must send it to the free zone authority to complete the application for your residency visa. Then, you must attend a ‘typing centre’ to apply for your Emirates ID.

Step 3 - Apply for Emirates ID

An Emirates ID is required to do anything in Dubai - from opening up a bank account to getting a local SIM to renting an apartment. You won’t get far without it!

Once you have your medical certificate, go to a typing centre to complete this application. The typing centre I used is called ATI Solutions in the DIFC. This one is convenient if you are also having your biometrics done close by.

At the typing centre they will ask for the following:

1. Medical certificate
2. E-visa
3. Digital passport photo (studio quality)
4. Local address and number for the delivery of the Emirates ID

If you don’t have a good enough passport photo of you on your phone, then you can head to a place called DESCO to get a good quality photo within minutes. There are many of these around, and lucky for me there was one in the same mall I was in to do the application!

When completing your application, they will ask for a local phone number (they won’t accept international). As such, make sure you take a free tourist SIM which is normally given out at the airport and take a spare phone with you that you can put it in. If you don’t get one at the airport, then head to the Du phone shop in Dubai Mall where you can get one (other Du shops don’t offer it).

The application process takes around 20 mins and costs around 400AED. Once your application is submitted, you will get a paper copy and can head off to have your biometrics done to complete the process.

Step 4 - Get your Biometrics done

The next step of the process is to have your biometrics done i.e. finger and thumbprints - of each finger and thumb you have! I did this in Dubai Mall at a company called DIFC Services.

When you arrive there, you take a ticket and join the waiting queue.

If you want to get it done faster, arrive early morning and avoid lunch times, as the officials normally go for a full hour-long lunch break. I arrived just before lunch, so I had to wait an hour. However, it wasn’t too bad as the mall has lots of places to go and grab a bite or coffee.

Once your fingerprints are submitted, you will receive an email update as the application is going through the motions from the government department known as the Federal Authority for Identity, Citizenship, Customs and Port Security. The email will come from ICP Smart Services.

The steps are normally:

1. Application in process
2. Application approved
3. Card being printed
4. Card being dispatched

Once you get to the last stage, you’ll hear from a courier by text or WhatsApp to arrange delivery to your local address. You need ID to take delivery of your Emirates ID, so you need to be there in person.

How long does it take to get an Emirates ID?

You should receive your Emirates ID in 5-8 working days (remember, Friday is not a working day in Dubai). I was lucky as mine took six days, from the day of application to the day I received it. But ideally, allow eight working days if you are just coming to Dubai to complete the process and then heading back home.

Step 5 - open up a company bank account

You now have your Emirates ID - hurrah! Once you have this in hand, you can set up a personal and business bank account. There are many banks in Dubai, from local ones like Emirates NCBD and RakBank to international banks like HSBC. Usually, to open a bank account, you have to go into a branch to complete the bank's KYC checks.

I went for an online bank called Wio Business. The set up is done via their app available on the App Store or Google Play store. I had all my documents to hand on my phone and found the process quite painless.

You’ll need the following documents:

1. Your trade license
2. Memorandum
3. Emirates ID
4. Passport copy
5. Shareholder resolutions (to show you have authority if more than one shareholder)
6. Official ‘stamp’ on license

Summary

I was lucky and was able to register my company in Dubai in 10 days. However, I was well-prepared and opted for the VIP fast-track options available. To leave room for error, it's wise to allow at least 14 days in case there are any unexpected delays in the process.

If you’re serious about moving to and running your business in Dubai, then book a call with Capture Accounting. We can talk you through the benefits and give you advice based on your goals and personal circumstances. Brendan, our expert Dubai consultant, will happily answer all your questions and save you research time!